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Outcome 3: An accountable public sector
For Parliament and New Zealanders to have trust and confidence in the public sector, public organisations need to be effectively held to account for their spending and performance.
Each year, we assess trends for aspects of public sector accountability. These aspects include timely and reliable information, sound management, and good governance.
Indicator: Number and percentage of unmodified audit opinions from our annual audits
Target: The percentage of unmodified audit opinions from our annual audits is an improving trend (or at least maintained)
| Year | Number and percentage of unmodified audit opinions |
|---|---|
| 2022/23 | 2976 (97%) |
| 2021/22 | 2595 (96%) |
| 2020/21 | 3356 (97%) |
| 2019/20 | 2836 (97%) |
| 2018/19 | 3094 (97%) |
The percentage of unmodified audit opinions from our annual audits increased by 1%.
Indicator: Percentage of audit reports that are signed by the applicable statutory deadline
Target: At least 80%
| Year | Audit reports signed off by the applicable statutory deadline |
|---|---|
| 2022/23 | 55% |
| 2021/22 | 57% |
| 2020/21 | 71%* |
| 2019/20 | 63% |
| 2018/19 | 81% |
* Revised measure for 2020/21.
This target has not been achieved since the onset of Covid-19 in March 2020.
In 2022/23, 55% of audit reports were signed by the applicable statutory deadlines. The Covid-19 pandemic caused disruptions to the timely completion of financial statements and audits. We have focused on completing the audits of large public organisations that are most critical to public accountability and parliamentary scrutiny. We are pleased to have completed most audits of large public organisations on time.
For small organisations, we completed 54% of audits on time. The Covid-19 pandemic affected staff availability for public organisations and for audit service providers. This affected the timely completion of audits, particularly for schools.
Indicator: Number of entities with audit reports in arrears, as at 30 June
Target: Decreasing
| Year | Number of audit reports in arrears |
|---|---|
| 2022/23* | 1089 |
| 2021/22 | 1078 |
| 2020/21** | 600 |
| 2019/20 | 848 |
| 2018/19 | New measure for 2019/20 |
Note: “In arrears” means not completed within statutory timeframes and remaining outstanding as at 30 June 2023.
* To improve understanding and provide greater transparency of performance, the wording of this performance measure has been changed from “percentage of entities” to “number of entities”, and the budget standard for 2022/23 has been changed from “less than 10%” to “decreasing”.
** Revised measure for 2020/21.
This target has not been achieved since the onset of Covid-19 in March 2020.
As at 30 June 2023, 33% of audit reports were in arrears. This was mainly due to the Covid-19 pandemic affecting staff availability in public organisations and audit service providers.
More than 70% of the audit reports we must issue each year are for schools, and their statutory deadline for audited financial statements to be completed is 31 May. There were 917 school audits in arrears as at 30 June, which is 84% of the number of organisations with audits in arrears. As at 31 August 2023, 73% of school audits (1,791) had been completed, and arrears of school audits reduced to 27% (672).
Supplementary indicators
We draw on other information sources to assess public sector accountability. These indicators provide only supplementary information.
Indicator: Worldwide governance ranking (Worldwide Governance Indicators)
Target: At or above 90th percentile, with improving trend (or at least maintained)
| Year | Ranking |
|---|---|
| 2022 | Not yet available* |
| 2021 | Above 89th percentile |
| 2020 | Above 90th percentile |
| 2019 | Above 90th percentile |
| 2018 | Above 90th percentile |
| 2017 | Above 90th percentile |
Source: World Bank.
* The 2023 update of the Worldwide Governance Indicators, including data for 2022, will be publicly available after 29 September 2023 at info.worldbank.org/governance/wgi/.
The World Bank’s Worldwide Governance Indicators measure the quality of governance in more than 200 countries for six dimensions of governance:
- Voice and Accountability;
- Political Stability and Absence of Violence;
- Government Effectiveness;
- Regulatory Quality;
- Rule of Law; and
- Control of Corruption.
New Zealand consistently ranked above the 90th percentile for all six governance dimensions from 2017 to 2020. The 2021 results showed that New Zealand ranked above the 90th percentile for five dimensions. However, for Government Effectiveness it ranked 88.9th.