Estimates of appropriations

Vote Audit - Finance and Government Administration Sector - Estimates 2019/20

Vote Audit#

APPROPRIATION MINISTER(S): Speaker of the House of Representatives (M78)

APPROPRIATION ADMINISTRATOR: Controller and Auditor-General

RESPONSIBLE MINISTER FOR CONTROLLER AND AUDITOR-GENERAL: Speaker of the House of Representatives

Overview of the Vote#

The Speaker of the House of Representatives is responsible for appropriations in the Vote for 2019/20 covering the following:

  • a total of $14.876 million for the Controller and Auditor-General supporting Parliament in ensuring accountability for the use of public resources. This includes providing advice to select committees and other stakeholders, carrying out the Controller function, and carrying out and reporting on performance audits and inquiries relating to public entities
  • a total of $83.467 million for providing audit services to public entities, and other audit-related assurance services. This is largely funded by fee revenue, but includes $150,000 funded by revenue from the Crown for audits of smaller entities such as cemetery trusts and reserve boards
  • a total of $1.064 million for remuneration expenses for both the Auditor-General and the Deputy Auditor-General, and
  • a total of $1.737 million for the purchase or development of assets for the use of the Controller and Auditor-General.

Details of these appropriations are set out in Parts 2-4.

Details of Appropriations and Capital Injections#

Annual Appropriations and Forecast Permanent Appropriations#

Titles and Scopes of Appropriations by Appropriation Type
  2018/19 2019/20
Titles and Scopes of Appropriations by Appropriation Type Final
Budgeted
$000
Estimated
Actual
$000
Budget
$000

Departmental Output Expenses

     

Audit and Assurance Services (M78)

This appropriation is limited to audit and related assurance services as required or authorised by statute.
1,550 1,550 1,850

Audit and Assurance Services RDA (M78)

This appropriation is limited to audit and related assurance services as required or authorised by statute.
80,500 80,500 81,617

Total Departmental Output Expenses

82,050 82,050 83,467

Departmental Other Expenses

     

Remuneration of Auditor-General and Deputy Auditor-General PLA (M78)

This appropriation is limited to remuneration expenses for both the Auditor-General and the Deputy Auditor-General as authorised by clause 5 of the Third Schedule of the Public Audit Act 2001.
1,064 1,064 1,064

Total Departmental Other Expenses

1,064 1,064 1,064

Departmental Capital Expenditure

     

Controller and Auditor-General - Capital Expenditure PLA (M78)

This appropriation is limited to the purchase or development of assets by and for the use of the Controller and Auditor-General, as authorised by section 24(1) of the Public Finance Act 1989.
1,388 1,388 1,737

Total Departmental Capital Expenditure

1,388 1,388 1,737

Multi-Category Expenses and Capital Expenditure

     

Statutory Auditor Function MCA (M78)

The single overarching purpose of this appropriation is to support Parliament in ensuring accountability for the use of public resources.
9,854 9,854 14,876

Departmental Output Expenses

     

Performance Audits and Inquiries

This category is limited to undertaking and reporting on performance audits and inquiries relating to public entities under the Public Audit Act 2001 and responding to requests for approvals in relation to pecuniary interest questions regulated by the Local Authorities (Members' Interests) Act 1968.
6,576 6,576 9,939

Supporting Accountability to Parliament

This category is limited to reporting to Parliament and others as appropriate on matters arising from audits and inquiries, reporting to and advising select committees, and advising other agencies in New Zealand and abroad to support Parliament and governing bodies in holding their executives to account for the use of public resources.
3,278 3,278 4,937

Total Multi-Category Expenses and Capital Expenditure

9,854 9,854 14,876

Total Annual Appropriations and Forecast Permanent Appropriations

94,356 94,356 101,144

Capital Injection Authorisations#

Capital Injection Authorisations
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Controller and Auditor-General - Capital Injection (M78) - - -

Supporting Information#

Part 1 - Vote as a Whole#

1.1 - New Policy Initiatives#

1.1 - New Policy Initiatives
Policy Initiative Appropriation 2018/19
Final Budgeted
$000
2019/20
Budget
$000
2020/21
Estimated
$000
2021/22
Estimated
$000
2022/23
Estimated
$000
Addressing demand and improving timeliness

Statutory Auditor Function MCA - Performance Audits and Inquiries

Departmental Output Expenses
- 1,368 2,042 2,042 2,042
Investing in our strategy - increasing impact

Statutory Auditor Function MCA - Supporting Accountability to Parliament

Departmental Output Expenses
- 1,169 1,402 1,402 1,402
Investing in our strategy - increasing impact

Statutory Auditor Function MCA - Performance Audits and Inquiries

Departmental Output Expenses
- 258 310 310 310
Investing in our capability

Statutory Auditor Function MCA - Supporting Accountability to Parliament

Departmental Output Expenses
- 491 422 422 422
Investing in our capability

Statutory Auditor Function MCA - Performance Audits and Inquiries

Departmental Output Expenses
- 1,736 1,690 1,690 1,690

Total Initiatives

  -

5,021

5,866

5,866

5,866

Summary of Financial Activity
1.2 - Trends in the Vote
  2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23
  Actual
$000
Actual
$000
Actual
$000
Actual
$000
Final Budgeted
$000
Estimated
Actual
$000
Departmental
Transactions
Budget
$000
Non-
Departmental
Transactions
Budget
$000
Total
Budget
$000
Estimated
$000
Estimated
$000
Estimated
$000

Appropriations

                       
Output Expenses 76,503 77,586 78,915 83,764 82,050 82,050 83,467 - 83,467 89,659 87,211 89,029
Benefits or Related Expenses - - - - - - N/A - - - - -
Borrowing Expenses - - - - - - - - - - - -
Other Expenses 950 972 1,052 739 1,064 1,064 1,064 - 1,064 1,064 1,064 1,064
Capital Expenditure 974 1,100 1,432 968 1,388 1,388 1,737 - 1,737 1,145 784 2,726
Intelligence and Security Department Expenses and Capital Expenditure - - - - - - - N/A - - - -
Multi-Category Expenses and Capital Expenditure (MCA)                        
Output Expenses 9,012 9,758 9,524 9,425 9,854 9,854 14,876 - 14,876 15,720 15,720 15,720
Other Expenses - - - - - - - - - - - -
Capital Expenditure - - - - - - N/A - - - - -

Total Appropriations

87,439 89,416 90,923 94,896 94,356 94,356 101,144 - 101,144 107,588 104,779 108,539

Crown Revenue and Capital Receipts

                       
Tax Revenue - - - - - - N/A - - - - -
Non-Tax Revenue - - - - - - N/A - - - - -
Capital Receipts - - - - - - N/A - - - - -

Total Crown Revenue and Capital Receipts

- - - - - - N/A - - - - -

Note - where restructuring of the vote has occurred then, to the extent practicable, prior years information has been restated as if the restructuring had occurred before the beginning of the period covered. In this instance Total Appropriations for the Budgeted and Estimated Actual year may not equal Total Annual Appropriations and Forecast Permanent Appropriations and Multi-Year Appropriations in the Details of Appropriations and Capital Injections.

Adjustments to the Summary of Financial Activity Table Due to Vote Restructuring

There have been no restructuring adjustments to prior year information in the Summary of Financial Activity table.

Output expense variations are driven by fluctuations in the amount of audit work completed each year. The financial years ended June 2015, 2018 and 2021 include the triennial audits of Local Authorities' long-term plans, which drives higher costs. During 2015/16, costs were higher due to deferral of completion of some school audits from 2014/15.

Forecast increases in capital expenditure reflect future investment in the Office's core software systems.

1.5 - Relationship between Individual Appropriations and the Work Programmes#

1.5 - Relationship between Individual Appropriations and the Work Programmes
Programme of work Appropriations
Audit information reported by public entities about their performance Audit and Assurance Services RDA
Audit and Assurance Services
Assess public sector performance and accountability
Carry out inquiries into matters of public interest
Provide advice and support for effective Parliamentary scrutiny
Monitor spending against Parliamentary appropriations
Statutory Auditor Function MCA
  • Performance audit and inquiries
  • Supporting accountability to Parliament
Reflected across all output classes Remuneration of Auditor-General and Deputy Auditor-General PLA
Reflected across all output classes Controller and Auditor-General - Capital Expenditure PLA

Part 2 - Details of Departmental Appropriations#

2.1 - Departmental Output Expenses#

Audit and Assurance Services RDA (M78)
Scope of Appropriation
This appropriation is limited to audit and related assurance services as required or authorised by statute.
Expenses and Revenue
Expenses and Revenue
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 80,500 80,500 81,617
Revenue from the Crown - - -
Revenue from Others 80,500 80,500 81,617
What is Intended to be Achieved with this Appropriation

This appropriation is intended to deliver audit services and other audit-related services to all public entities to provide Parliament with independent assurance that public entities are accounting for their performance, in keeping with Parliament's intentions.

How Performance will be Assessed and End of Year Reporting Requirements
How Performance will be Assessed and End of Year Reporting Requirements
  2018/19 2019/20
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Percentage of audit files subject to quality assurance review during the year that achieve a rating of at least "satisfactory"

New measure New measure 100%

Percentage of appointed auditors with a quality assurance grade of at least satisfactory, based on the most recent quality assurance review

100% 92% 100%

Number of audit opinions withdrawn

New measure New measure None

Percentage of public entities that are "satisfied" with the overall quality of their audit service (as determined by responses to our satisfaction survey)

At least 85% 76% At least 85%

Percentage of Ministers who rate our Ministerial letters (reports to them on our annual audits) as at least satisfactory

New measure New measure At least 85%

Percentage of audit reports and opinions that are signed by the applicable statutory deadline

At least 80% 85% At least 80%

Percentage of entities with audit opinions in arrears as at 30 June

New measure New measure Less than 10%

Percentage of finalised reports to governors about the audit (which incorporate responses from management) that are provided within 6 weeks of signing the audit report

100% 96% 100%

Percentage of Ministerial letters on annual audits that are issued to Ministers and Parliamentary select committees within the expected time period: - where the audit report statutory deadline is 31 October, within 15 weeks of signing the audit report - for all other audits, within 10 weeks of the signing of the audit report

New measure New measure 100%

Annual independent review confirms the probity and objectivity of the methods and processes we use to allocate and tender audits and to monitor the reasonableness of audit fees

Confirmed Confirmed Confirmed

Performance for this appropriation will be assessed by the performance measures listed above. The measures need to be considered in the context of the high-level outcomes outlined in The Auditor-General's strategic intentions to 2025 and in the context of the Auditor-General's Annual Plan 2019/20.

We have reassessed the suitability and alignment of our measures with the Auditor-General's strategic intentions to 2025. As a result, this year we introduce a revised suite of performance measures for this appropriation. These will be reported on in the Auditor-General's 2019/20 Annual Report.

End of Year Performance Reporting

Performance information for this appropriation will be reported in the Auditor-General's 2019/20 Annual Report.

Memorandum Account
Memorandum Account
  2018/19 2019/20
  Budgeted
$000
Estimated Actual
$000
Budget
$000

Audit and assurance services

     
Opening Balance at 1 July 1,793 1,793 1,049
Revenue 80,501 80,501 81,617
Expenses 81,244 81,244 82,642
Transfers and Adjustments - - -

Closing Balance at 30 June

1,049 1,049 24
Audit and Assurance Services (M78)
Scope of Appropriation
This appropriation is limited to audit and related assurance services as required or authorised by statute.
Expenses and Revenue
Expenses and Revenue
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 1,550 1,550 1,850
Revenue from the Crown 150 150 150
Revenue from Others - - -
What is Intended to be Achieved with this Appropriation

This appropriation is intended to provide for audit and related assurance services. Audits of smaller entities such as cemetery trusts and reserve boards are funded by the Crown.

How Performance will be Assessed and End of Year Reporting Requirements

Performance for this appropriation will be assessed through the performance measures listed under Audit and Assurance Services RDA.

End of Year Performance Reporting

Performance information for this appropriation will be reported in the Auditor-General's 2019/20 Annual Report.

Reasons for Change in Appropriation

The increase in this appropriation for 2019/20 is due to the forecast deficit in the Audit and Assurance Services revenue dependent appropriation. The portion of this appropriation that is not funded by the Crown relates to the use of Audit and Assurance Services memorandum account funds in deficit years.

2.2 - Departmental Other Expenses#

Remuneration of Auditor-General and Deputy Auditor-General PLA (M78)
Scope of Appropriation
This appropriation is limited to remuneration expenses for both the Auditor-General and the Deputy Auditor-General as authorised by clause 5 of the Third Schedule of the Public Audit Act 2001.
Expenses
Expenses
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 1,064 1,064 1,064
What is Intended to be Achieved with this Appropriation

This permanent appropriation provides payment to the Auditor-General and Deputy Auditor-General as determined by the Remuneration Authority.

How Performance will be Assessed and End of Year Reporting Requirements

The Auditor-General and Deputy Auditor-General lead the performance of the Office. The performance of the Office's activities, including the above payment, is reflected in the information for departmental output and multi-category appropriations.

End of Year Performance Reporting

Performance information for the Office will be reported in the Auditor-General's 2019/20 Annual Report.

2.3 - Departmental Capital Expenditure and Capital Injections#

Controller and Auditor-General - Capital Expenditure PLA (M78)
Scope of Appropriation
This appropriation is limited to the purchase or development of assets by and for the use of the Controller and Auditor-General, as authorised by section 24(1) of the Public Finance Act 1989.
Capital Expenditure
Capital Expenditure
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Forests/Agricultural - - -
Land - - -
Property, Plant and Equipment 484 484 559
Intangibles 448 448 950
Other 456 456 228

Total Appropriation

1,388 1,388 1,737
What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the renewal of assets that support the delivery of the Controller and Auditor-General's operations.

How Performance will be Assessed and End of Year Reporting Requirements

Expenditure is in accordance with the Controller and Auditor-General's capital asset management plan.

End of Year Performance Reporting

Performance information for this appropriation will be reported in the Auditor-General's 2019/20 Annual Report.

Reasons for Change in Appropriation

The increase in the property, plant and equipment appropriation for 2019/20 is due to forecast costs of maintaining the Office's IT infrastructure and replacing computer hardware. The increase in the intangibles appropriation for 2019/20 is due to forecast investment in the Office's information systems. The decrease in the other appropriation for 2019/20 is due to a lower number of vehicles being replaced in the 2019/20 year.

Capital Injections and Movements in Departmental Net Assets
Controller and Auditor-General
Controller and Auditor-General
Details of Net Asset Schedule 2018/19
Estimated Actual
$000
2019/20
Projected
$000
Explanation of Projected Movements in 2019/20
Opening Balance 8,015 7,421  
Capital Injections - -  
Capital Withdrawals - -  
Surplus to be Retained (Deficit Incurred) (594) (875) The deficit incurred reflects amounts that will be used from the Audit and Assurance Services memorandum account.
Other Movements - -  

Closing Balance

7,421 6,546  

Part 4 - Details of Multi-Category Expenses and Capital Expenditure#

Multi-Category Expenses and Capital Expenditure#

Statutory Auditor Function (M78)
Overarching Purpose Statement
The single overarching purpose of this appropriation is to support Parliament in ensuring accountability for the use of public resources.
Scope of Appropriation
Departmental Output Expenses

Performance Audits and Inquiries
This category is limited to undertaking and reporting on performance audits and inquiries relating to public entities under the Public Audit Act 2001 and responding to requests for approvals in relation to pecuniary interest questions regulated by the Local Authorities (Members' Interests) Act 1968.

Supporting Accountability to Parliament
This category is limited to reporting to Parliament and others as appropriate on matters arising from audits and inquiries, reporting to and advising select committees, and advising other agencies in New Zealand and abroad to support Parliament and governing bodies in holding their executives to account for the use of public resources.

Expenses, Revenue and Capital Expenditure
Expenses, Revenue and Capital Expenditure
  2018/19 2019/20
  Final Budgeted
$000
Estimated Actual
$000
Budget
$000

Total Appropriation

9,854 9,854 14,876

Departmental Output Expenses

     
Performance Audits and Inquiries 6,576 6,576 9,939
Supporting Accountability to Parliament 3,278 3,278 4,937

Funding for Departmental Output Expenses

     

Revenue from the Crown

9,611 9,611 14,633
Performance Audits and Inquiries 6,576 6,576 9,939
Supporting Accountability to Parliament 3,035 3,035 4,694

Revenue from Others

243 243 243
Supporting Accountability to Parliament 243 243 243
What is Intended to be Achieved with this Appropriation

This appropriation is intended to support Parliament in ensuring accountability for the use of public resources through:

  • Services to Parliament - assistance and assurance to select committees and other stakeholders.
  • Controller function - assurance to Parliament that government spending has been properly authorised by Parliament.
  • Reports, Studies and Inquiries - reporting on the results of annual audits, performance audits and other studies and inquiring into a public entity's use of resources.
How Performance will be Assessed for this Appropriation

Performance for this appropriation will be assessed through the performance measures listed below. The measures need to be considered in the context of The Auditor-General's strategic intentions 2025, and the Auditor-General's Annual Plan 2019/20.

We have reassessed the suitability and alignment of our performance measures with The Auditor-General's strategic intentions to 2025. As a result, this year we introduce a revised suite of performance measures for this appropriation. These will be reported on in the Auditor-General's 2019/20 Annual Report.

What is Intended to be Achieved with each Category and How Performance will be Assessed
What is Intended to be Achieved with each Category and How Performance will be Assessed
  2018/19 2019/20
Assessment of Performance Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Departmental Output Expenses

     

Performance Audits and Inquiries

     

This category is intended to provide Parliament with assurance about how well public entities use resources and manage a range of matters and programmes, making recommendations where we consider improvements can be made.

     

Percentage of Parliamentary select committees that rate our reports on performance audits, inquiries, and other studies as at least satisfactory

New measure New measure 100%

Percentage of performance audits that meet the Auditor-General's process and reporting quality criteria (as determined by quality assurance review)

New measure New measure 100%

Percentage of audited entities that rate our performance audits as at least satisfactory

New measure New measure At least 85%

Percentage of performance audits that are concluded and their findings reported within the expected time period

New measure New measure At least 75%

Percentage of inquiries that meet the Auditor-General's process and reporting quality criteria (as determined by quality assurance review)

New measure New measure 100%

Percentage of preliminary investigations and routine inquiries that are concluded within 6 months

New measure New measure 100%

Percentage of major inquiries that are concluded and their findings reported within the expected time period

New measure New measure At least 75%

Percentage of requests under the Local Authorities (Members' Interests) Act 1968 for approval of contracts that are responded to within the expected time period

New measure New measure See Note 1

Supporting Accountability to Parliament

     

This category is intended to provide advice and assistance to Parliament and our other stakeholders to assist them in their work to improve the performance and accountability of public entities. Our Controller function provides independent assurance to Parliament that public money has been spent within authority and lawfully.

     

Percentage of Parliamentary select committees that rate our advice as at least satisfactory

New measure New measure 100%

Percentage of briefing papers that are submitted to select committees by the agreed deadline

New measure New measure 100%

The monthly Controller reports are provided to the Treasury within 5 working days of receiving the Treasury's monthly reports and statements (for September to June)

New measure New measure All 9 reports

We issue a report to Parliament and the public on the Auditor-General's exercise of the Controller function for each financial year

New measure New measure At least annually

Note 1 - At least 90% within 21 days from when we receive the necessary information.

End of Year Performance Reporting

Performance information for this appropriation will be reported in the Auditor-General's 2019/20 Annual Report.

Current and Past Policy Initiatives
Current and Past Policy Initiatives
Policy Initiative Year of
First
Impact
2018/19
Final Budgeted
$000
2019/20
Budget
$000
2020/21
Estimated
$000
2021/22
Estimated
$000
2022/23
Estimated
$000

Current Parliament

           

Supporting Accountability to Parliament

           
Investing in our strategy - increasing impact 2019/20 - 1,169 1,402 1,402 1,402
Investing in our capability 2019/20 - 491 422 422 422

Performance Audits and Inquiries

           
Addressing demand and improving timeliness 2019/20 - 1,368 2,042 2,042 2,042
Investing in our strategy - increasing impact 2019/20 - 258 310 310 310
Investing in our capability 2019/20   1,736 1,690 1,690 1,690
Reasons for Change in Appropriation

The increase in appropriation for 2019/20 is due to the following initiatives:

  • $1.368 million for addressing demand and improving timeliness:
    • improving coverage and timeliness of performance audits, and
    • addressing demand and timeliness of the inquiry function.
  • $1.427 million for investing in our strategy - increasing impact:
    • development and publication of new good practice guidance
    • increasing engagement with entities, and
    • better use of data to generate insight and getting ahead of issues.
  • $2.227 million for Investing in our capability:
    • technical development and quality assurance
    • improving core system development
    • expanding the use of technology to support the Office's work
    • enhancing processes and systems to support delivery, and
    • investing in people.