Video transcript: Improving value through better Crown entity monitoring

Frank Faessen (Performance Auditor)

Crown entities carry out a wide range of important public services and functions, such as public broadcasting, and constructing and maintaining national infrastructure. Some examples of Crown entities include ACC, Fire and Emergency, and the Productivity Commission.

These entities operate at arm’s length from the Government. This means Ministers have less influence over a Crown entity than they do over a government department.

Crown entities are usually monitored by government departments. For example, the Ministry of Transport monitors transport-related Crown entities such as NZTA and Maritime New Zealand.

The Crown entity monitoring system is complex, which can make effective monitoring difficult. There are inherent tensions between how monitoring departments can support entities and advise Ministers while respecting the autonomy of a Crown entity board.

We found that monitoring departments effectively support Ministers to carry out some of their responsibilities and that overall there is good guidance available.

However, some opportunities are being missed to add more value through monitoring. Overall, we found monitoring is focused on compliance and monitoring reports to Ministers do not generally include enough information to enable good analysis of performance.

We saw monitoring departments and Crown entities display a genuine willingness to draw more value from the monitoring system. In addition, the Public Service Commission, Te Kawa Mataaho, is well placed to have a leadership role within the system. They are already doing some work in this space.

We have made a number of recommendations.

Monitoring departments and Crown entities should work together to document how they will carry out their monitoring relationship.

Departments and entities should ensure they have meaningful engagement in the development of a Crown entity’s accountability document. And they should also share knowledge and understanding about each other’s operating context.

Monitoring departments should improve the quality of their reports to Ministers.

And we have also recommended that monitoring departments, Crown entities, and responsible Ministers regularly review monitoring arrangements to ensure that they remain fit for purpose.

Finally, we have recommended that the Public Service Commission continues to strengthen its support for the Crown entity monitoring system.

Improving the system overall will be challenging. However, when monitoring is done well, departments can better help entities set strategic outcomes, and direct investment to contribute towards these outcomes. Ultimately, this will help deliver better outcomes for New Zealanders.

Watch this video: https://youtu.be/PTx4GENBB8s