The Ministry of Education is questioning the credibility of the senior school assessment system after finding that students are two to three times more likely to get "excellence" grades if they are internally assessed - by their own teachers.
A ministry paper prepared for a review of the National Certificate of Educational Achievement (NCEA) reveals that 28 per cent of internally-assessed papers at Level 3 are graded "excellent", compared with only 11 per cent of those with external exams.
"There are higher proportions of merit and excellence grades awarded in internal assessment than in external assessment, which conveys the impression that internal assessment is easier," it says.
"Along with the decreasing trend in external assessment for NCEA, this is a risk to NCEA's credibility and robustness."
The strong language is a reversal of the ministry's position when the New Zealand Herald last reported on the gap between internal and external assessment in 2014, when a deputy secretary Rowena Phair said the gap reflected NCEA's "flexibility".
Since then the gap in excellence grades between internally and externally assessed papers has widened - from 8 percentage points to 11 points at Level 1, from 11 to 13 points at Level 2 and from 16 to 17 points at Level 3.
Briar Lipson of the business-backed NZ Initiative thinktank said internal assessment created an inevitable conflict of interest for teachers.
"It places a huge professional contradiction on teachers that we just don't talk about in New Zealand," she said.
"You are charged with doing the best you can for your students. But then you are also charged with being an independent agent of the qualifications authority. The contradiction in that is so obvious."
The NZ Qualifications Authority (NZQA) requires class teachers to check a sample of their internal assessments with other teachers of the same subject in either the same school or another school.
NZQA itself also checks a random sample of internally assessed papers each year.
But Lipson said New Zealand was "a complete outlier internationally" in its reliance on internal assessment.
"Most countries, even Finland, have a standardised exam at the end of school," she said.
"The UK has just rolled back from a small reliance on internal assessment. There used to be some of it but they have reduced it dramatically recently, partly because it's unreliable and partly because of the workload."
In New Zealand, external assessment has declined from 37 per cent of Level 3 papers in 2008 to 24 per cent last year.
Some schools, such as Kia Aroha College in Ōtara, now have no external exams at all, although others such as Auckland Grammar School still require externals for almost all subjects.
Partly as a result, students achieving NCEA with excellence, by passing enough individual papers with excellence, have roughly trebled - from 7 per cent to 20 per cent at Level 1, and from 5 per cent to 16 per cent at both Levels 2 and 3.
The ministry said: "This raises the question of the levels of credibility for an excellence endorsement. Is an endorsement at Level 1 'devalued' because almost 20 per cent of candidates gain an excellence?"
In May, a ministerial review group proposed moving even further towards internal assessment, dropping external exams at Level 1 and requiring a quarter of credits at Levels 2 and 3 to come from "pathway" courses such as a trades, research projects and "community action projects".
However review chairman Jeremy Baker told the Weekend Herald that dropping external exams did not necessarily mean abandoning any external assessment.
"There are many different ways that you can assess externally. All it means is that someone other than the classroom teacher is doing the assessment," he said.
He said the review group was looking for a balance of assessment methods that would assess young people's "full range of capabilities".
"It's a balancing act. That's why we have a mixture of internal and external assessment," he said.
The Ministry of Education yesterday released a summary of public feedback to the review; 16,000 people engaged in review process and feedback covered positives, negatives and areas they believed where it "could be strengthened".
The review group will hold a "co-design lab" on the future of NCEA with education, business and community groups at Wellington's Westpac Stadium next Wednesday and Thursday.
Education Minister Chris Hipkins declined to comment before receiving the group's final recommendations early next year.