Auditor-General John Ryan calls for law change to compel government departments to improve performance reporting

Auditor-General John Ryan raises concerns over quality of performance reporting in public sector, as Public Service Commissioner seeks to modernise the system. Photo / Mark Mitchell

The Auditor-General is upping the ante, urging the Government to change the law to require departments to better report on what their spending achieves.

John Ryan is worried it can be difficult to track what comes of various government policies or programmes, and wants the issue investigated by Parliament’s finance and expenditure committee.

He raised his concerns with the Herald ahead of his seven-year term ending in the middle of the year, and following Public Service Commissioner Brian Roche last week saying he’d written to chief executives about his desire to modernise the way the public sector operates.

“Often we get Budget announcements at the time the Budget is announced, but that’s the last we hear of them,” Ryan said.

“They then get distributed into multiple agencies, into multiple appropriations within those agencies, and unless it’s required to bring them back together [which it isn’t at the moment], then you can never see them again.”

Ryan pointed to the Provincial Growth Fund – a NZ First initiative launched under the Labour-led Government in 2018.

“There was no easy way to bring that $3 billion back together and say, ‘It was announced as $3b but how’s it all going?’”

With government spending surpassing $160b a year, Ryan said the Government should be able to say what it wants to achieve, how it’s going to do so, how much it will cost, and what progress is being made.

“Current performance reporting by public organisations doesn’t, in my view, provide New Zealanders with clear answers to these questions,” Ryan said.

He wouldn’t go so far as to say accountability and transparency had worsened, but said it certainly hadn’t improved since 2018 when he became Auditor-General.

What’s the solution? Ryan didn’t have a specific fix in mind, but believed improvements could be made via amendments to the Public Finance Act.

Put to Finance Minister Nicola Willis, she said, “I am open to changes to improve performance reporting.

“My understanding is that the finance and expenditure committee will be conducting an inquiry. That’s what it said last year … and I would encourage it to do so.

“If it does, I will be interested in its recommendations. It’s my view that there is more work required in this area, so if it does not, I will seek advice elsewhere.”

Finance and expenditure committee chair Stuart Smith said the committee hadn’t made a decision on an inquiry yet, but he was due to meet Ryan next week.

A problem Ryan identified was departments changing performance metrics, so they couldn’t be fairly compared year-on-year.

He said his office recently looked at reporting done by 33 agencies over a three-year period.

A year after the base year, 30% of measures in the reports were either new or had changed. Two years after the base year, half were either new or had changed.

“You can’t track performance on that basis,” Ryan said.

Ryan said much of the performance reporting he saw also zeroed in on short-term measures, and was fairly internally focused.

Reporting might, for example, look at how many applications were processed, or milestones met on projects.

“Or, the classic one that I quote sometimes is, ‘We drew money down in accordance with Cabinet guidelines,’ which has got absolutely no relevance to you or me as New Zealanders,” Ryan said.

He didn’t want to point the finger at the hardworking public servants, but said improving the status quo was important for building trust and confidence in the sector.

“If the outcomes the Government is trying to achieve are really clear and they are relevant to New Zealanders, then the public engages with the system.

“At the moment, the system’s kind of over here, and the public are kind of over here. And what joins them together is often anecdote rather than actual fact.”

Jenée Tibshraeny is the Herald’s Wellington business editor, based in the Parliamentary Press Gallery. She specialises in government and Reserve Bank policymaking, economics and banking.