Impact 3: The public sector improves its performance and accountability

We look at a range of activities to assess whether we are having a positive influence on the performance and accountability of the public sector.

We look at whether public organisations have improved aspects of their performance in response to our performance audits and inquiries, and whether they have implemented our annual audit recommendations in a timely manner. We also discuss whether government departments are spending money only within the authority provided by Parliament (appropriations).

Controller function

The 2021/22 result represents occurrences of unappropriated expenditure for 2020/21, based on information from the Government’s 2020/21 financial statements.

For 2020/21, there were 11 instances of unappropriated spending identified. This was a considerable decrease from 29 instances in 2019/20 and the lowest number since 2000. We measure this through the number of instances of expenditure incurred in excess of, or without, appropriation or other authority from Parliament. In the table, the results in the score column are from the financial statements of the Government, which are prepared for the previous financial year.

Indicator: Government departments reduce the instances of public spending without parliamentary authority
Target: Reducing

Year	Score
2021/22	Reducing – 11
2020/21	Increasing – 29
2019/20	Reducing – 20
2018/19	Increasing – 28

The results are based on Treasury data for preparing the Government’s financial statements.

The bar graph shows that the frequency of instances fluctuated between 20 and 29 for six of the last seven years, with a significant decrease in 2020/21. The total unappropriated spending during 2020/21 ($133 million) equates to 0.09% of the expenditure authorised in the final, updated Budget.

Number of instances of unappropriated expenditure, from 2014/15 to 2020/21

Annual audits

To help the public sector improve, Audit New Zealand and private sector audit service providers send reports setting out audit findings and recommendations to the governors of public organisations. We measure the impact of our work by assessing large public organisations’ implementation of our recommendations.

Because 2020/21 was the first year we assessed all large public organisations, the result for that year provided a benchmark for reporting. In 2021/22, we reduced the number of public organisations classified as “large”.

We identify and report on how large public organisations have responded to our recommendations as part of our annual audits.

Indicator: Public organisations implement our annual audit recommendations in a timely manner
Target: Increasing (or at least maintained)

Year	Score
2021/22	43%*
2020/21	38%**
2019/20	46%***
2018/19	New indicator for 2019/20

* Due to a change in how we segment public organisations, the number of public organisations changed for the reporting. For 2021/22, this is 128 entities including all larger public organisations such as district health boards, tertiary education institutions, government departments, and councils.

** This is the same as the note above, however 195 public organisations were included in 2020/21.

*** In 2019/20, we only included tertiary education institutions.

Implementing recommendations helps public organisations to manage risks and realise additional benefits of the audit. In 2021/22, we assessed how 128 (2020/21: 195) large public organisations implemented the recommendations from our audits.

Of the 1565 recommendations we made at the beginning of 2021/22, 676 (43%) were effectively implemented by the end of that financial year. Of the 2490 recommendations we made at the beginning of 2020/21, 937 (38%) were effectively implemented. Given that public organisations are working in a challenging environment, we were pleased to see an increase in the percentage of recommendations implemented from 2020/21.  

Performance audits

Our performance audit work helps public organisations improve their performance (effectiveness and efficiency) and accountability.

We continue to look for ways to increase the impact of our performance audit work. We provide more details about the effect of our performance audit work in Service 5: Assess public sector performance and accountability.

Indicator: Public organisations have improved aspects of their performance in response to our performance audits
Target: Increasing*

Year	Score
2021/22	Achieved
2020/21	Achieved*
2019/20	Results not available**
2018/19	Achieved

* We revised this target to “increasing” in 2020/21 to better reflect the work we carry out. Previously, the target was to report on one to two a year.

** We published the results from our follow up work on our website in 2020/21.

Following up implementation of our recommendations

Between 12 and 24 months after a performance audit report is published, we ask the audited organisation to self-assess their progress against each of the recommendations we made in the report. The public organisation’s self-assessment informs decisions about whether we will carry out any further follow-up work and the extent of the work we might do.

In 2021/22, we requested self-assessments for six of our performance audits and published the responses from audited public organisations on our website.

We also carry out our own follow-up audits. This year we published two follow-up reports – Management of the Wage Subsidy Scheme and Preparations for the nationwide roll-out of the Covid-19 vaccine.

Inquiries

Our inquiries function enables us to inquire into issues of concern that are raised with us or that we identify through our work. Our inquiries seek to understand what has happened and what lessons there are for the public sector. Our findings help public organisations improve their performance and accountability. We provide more details of the inquiries process in Service 4: Carry out inquiries into matters of public interest. 

We identify and report on any effects from our inquiries.

Indicator: Public organisations have improved aspects of their performance in response to our inquiries
Target: Report on one to two each year

Year	Score
2021/22	Achieved
2020/21	Achieved
2019/20	Achieved
2018/19	Achieved

In 2021/22, we identified “effects” from our inquiry work. An effect is where the public organisation has taken, or is taking, action in response to the findings of our inquiry. In response to our inquiry into the Strategic Tourism Asset Protection Programme, the Minister of Tourism said that, as we recommended, there will be a formal review of the scheme’s effectiveness against its goals. The Minister has also said that our work provides a roadmap for carrying out similar schemes in the future. It has also been reported that our work has been considered in a recent scheme for providing support to tourism providers. In response to our inquiry about a civic facility project by the Masterton District Council, the Mayor said improvements to processes suggested in our work were already being addressed, which included better documentation and conflicts of interest training for elected members and council staff.