Mai Chen
Public and employment law specialist Mai Chen on current events

Mai Chen: Watchdog with bite helps keep the system honest

David Shearer. Photo / Getty Images
David Shearer. Photo / Getty Images

Our politicians have been reminded on two occasions recently of what an asset we have in the Office of the Auditor-General.

The first was when the OAG accepted the Green Party's request to inquire into the SkyCity Convention Centre deal.

The second was its agreement to David Shearer's request to inquire into his front-bench colleague Shane Jones' handling of the Yan matter as Associate Minister of Immigration (with Jones' agreement).

As the terms of reference in both these inquires show, the Auditor-General is much more than the financial auditor of the Crown.

The Auditor-General is an important constitutional watchdog and one of only three Officers of Parliament.

In the SkyCity inquiry, the OAG will investigate the overall process for seeking and assessing proposals for an international convention centre; the adequacy of the assessment of the likely costs and benefits of each proposal; and any other matters the Deputy Auditor-General considers desirable to report on.

In the Yan inquiry, the OAG will inquire into the policies and practices of the Department of Internal Affairs when advising the minister on citizenship applications, in particular where the applicant's "good character" is in question, how and why the minister decided to grant citizenship to Mr Yan; and any other matters considered pertinent.

The great strength of the OAG is its ability to cut through politics and focus impartially on the question of what constitutes good-quality government.

Both the SkyCity and Yan inquiries are being made under the Public Audit Act, section 16, which allows the Auditor-General to examine whether a public entity is carrying out its activities effectively and efficiently, or whether any act or omission shows or appears to show a lack of probity or financial prudence. Section 18 allows the Auditor General to inquire into any matter concerning a public entity's use of its own resources.

These broad powers give the Auditor-General enough scope to ensure the public have confidence in how public decisions are made, which also helps those investigated if the OAG inquiry clears their conduct. Those two sections are backed up by significant powers. For example, section 25 lets the Auditor-General obtain any information or explanation about any information from a public entity or any person, and section 29 allows for accessing premises to search for or examine documents.

The OAG also releases helpful good-practice guidelines such as on proper procurement practices for departments and Crown agencies - the issue in the SkyCity inquiry - and on how to manage conflicts of interest - an issue in the Yan inquiry.

All these reasons explain why the Prime Minister says the Government will continue with negotiations but will be cautious about signing a deal with the SkyCity casino until the OAG has completed its inquiry.

Most of the OAG's recent recommendations have been adopted, and are always actively considered.

The Auditor-General tracks the progress of its recommendations with an annual report which is tabled in Parliament, and outlines which public entities have implemented recommendations and how they have done so. Where recommendations will not be or have not been implemented, the report gives reasons.

The fact the Auditor-General is being used more by politicians to resolve difficult political issues shows how highly the office's apolitical constitutional watchdog status is regarded.

But it's important to remember its inquiries do have bite.

For example, in 2006, the OAG reported on concerns regarding parliamentary advertising and spending during the 2005 election campaign, which resulted in changes to electoral spending laws.

Treasury also came in for attention when the Auditor-General said it had been asleep at the wheel over the Retail Deposits Scheme. An OAG inquiry can be a real wake-up call.

Mai Chen is a partner in Chen Palmer and author of the Public Law Toolbox.

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