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Estimates of appropriations

Vote Audit - Finance and Government Administration Sector - Estimates 2020/21

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 2020/21 covering the following:

  • a total of $16.676 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 $94.579 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 $1.099 million for remuneration expenses for both the Auditor-General and the Deputy Auditor-General, and
  • a total of $2.525 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 2019/20 2020/21
Final
Budgeted
$000
Estimated
Actual
$000
Budget
$000

Departmental Output Expenses

     

Audit and Assurance Services RDA (M78)

This appropriation is limited to audit and related assurance services as required or authorised by statute.
85,573 85,573 94,429

Audit and Assurance Services (M78)

This appropriation is limited to audit and related assurance services as required or authorised by statute.
2,450 2,450 150

Total Departmental Output Expenses

88,023 88,023 94,579

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.
1,099 1,099 1,099

Total Departmental Other Expenses

1,099 1,099 1,099

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.
1,926 1,926 2,525

Total Departmental Capital Expenditure

1,926 1,926 2,525

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.
15,421 15,421 16,676

Departmental Output Expenses

     

Performance Audits, Inquiries, and other studies

This category is limited to undertaking and reporting on performance audits, inquiries, and other studies 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.
9,939 9,939 11,040

Supporting Accountability to Parliament

This category is limited to reporting to Parliament and others as appropriate on matters arising from audits, inquiries, and other studies, 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.
5,482 5,482 5,636

Total Multi-Category Expenses and Capital Expenditure

15,421 15,421 16,676

Total Annual Appropriations and Forecast Permanent Appropriations

106,469 106,469 114,879

Capital Injection Authorisations

  2019/20 2020/21
Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Controller and Auditor-General - Capital Injection (M78) - - 1,508

Supporting Information

Part 1 - Vote as a Whole

1.1 - New Policy Initiatives

Policy Initiative Appropriation 2019/20
Final Budgeted
$000
2020/21
Budget
$000
2021/22
Estimated
$000
2022/23
Estimated
$000
2023/24
Estimated
$000
Information Systems Strategy Statutory Auditor Function MCA - Performance Audits and Inquiries
Departmental Output Expenses
- 423 850 937 1,168
  Statutory Auditor Function MCA - Supporting Accountability to Parliament
Departmental Output Expenses
- 333 668 736 917
  Controller and Auditor-General - Capital Expenditure PLA
Departmental Capital Expenditure
- 1,508 1,800 1,904 738

Total Initiatives

 

-

2,264

3,318

3,577

2,823

1.2 - Trends in the Vote

Summary of Financial Activity

  2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24
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 77,586 78,915 83,764 82,720 88,023 88,023 94,579 - 94,579 94,923 97,744 105,376
Benefits or Related Expenses - - - - - - N/A - - - - -
Borrowing Expenses - - - - - - - - - - - -
Other Expenses 972 1,052 739 1,064 1,099 1,099 1,099 - 1,099 1,099 1,099 1,099
Capital Expenditure 1,100 1,432 968 1,090 1,926 1,926 2,525 - 2,525 3,035 3,533 2,028
Intelligence and Security Department Expenses and Capital Expenditure - - - - - - - N/A - - - -
Multi-Category Expenses and Capital Expenditure (MCA)                        
Output Expenses 9,758 9,524 9,425 9,670 15,421 15,421 16,676 - 16,676 17,365 17,530 17,932
Other Expenses - - - - - - - - - - - -
Capital Expenditure - - - - - - N/A - - - - -

Total Appropriations

89,416 90,923 94,896 94,544 106,469 106,469 114,879 - 114,879 116,422 119,906 126,435

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.

1.3 - Analysis of Significant Trends

Forecast increases in capital expenditure and operating expenses reflect future investment in technology to support the Office's work. Costs also vary with fluctuations in the amount of audit work completed each year. The financial years ended June 2018 and 2021 include the triennial audits of Local Authorities' long-term plans, which drives higher costs.

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
  2019/20 2020/21
Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 85,573 85,573 94,429
Revenue from the Crown - - -
Revenue from Others 85,573 85,573 94,429

Estimated actual results do not take into account the effect of Coronavirus disease (COVID-19) on audit fee revenue. The amount of audit work completed to 30 June 2020 is likely to be reduced, which will impact revenue for the year.

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 and the public 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
Assessment of Performance 2019/20 2020/21
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"

100% 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% 95% 100%

Number of audit opinions withdrawn

No audit opinions withdrawn New measure No audit opinions withdrawn

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% 82% At least 85%

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

At least 85% New measure At least 85%

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

At least 80% 82% (see Note 1) At least 80%

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

Less than 10% 10% (see Note 1) 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% (see Note 1) 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

100% 92% 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

Note 1 - These results do not take into account the potential effect of COVID-19 on the timeliness of annual audits.

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 2020/21.

End of Year Performance Reporting

Performance information for this appropriation will be reported in the Auditor-General's 2020/21 Annual Report.

Reasons for Change in Appropriation

The increase in this appropriation for 2020/21 is mainly due to additional fee revenue for the triennial audits of Local Authorities' long term plans which are due to be completed in 2021. 2020/21 budgets also allow for costs associated with investment in technology to support the Office's operations.

Memorandum Account
  2019/20 2020/21
Budgeted
$000
Estimated Actual
$000
Budget
$000

Name of Memorandum Account

     
Opening Balance at 1 July 1,820 1,820 199
Revenue 85,573 85,573 94,429
Expenses 87,194 87,194 93,133
Transfers and Adjustments - - -

Closing Balance at 30 June

199 199 1,495

Estimated actual results do not take into account the effect of COVID-19 on audit fee revenue. The amount of audit work completed to 30 June 2020 is likely to be reduced, which will impact the financial results for the year.

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
  2019/20 2020/21
Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 2,450 2,450 150
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 2020/21 Annual Report.

Reasons for Change in Appropriation

The decrease in this appropriation for 2020/21 is due to the appropriation reverting to the level of Crown funding for small entities. In 2019/20, the portion of this appropriation that was not funded by the Crown related to the use of Audit and Assurance Services memorandum account funds.

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
  2019/20 2020/21
Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation 1,099 1,099 1,099
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 2020/21 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
  2019/20 2020/21
Final Budgeted
$000
Estimated Actual
$000
Budget
$000
Forests/Agricultural - - -
Land - - -
Property, Plant and Equipment 1,127 1,127 685
Intangibles 419 419 1,688
Other 380 380 152

Total Appropriation

1,926 1,926 2,525
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 2020/21 Annual Report.

Reasons for Change in Appropriation

The increase in this appropriation for 2020/21 is due to the planned investment in technology to support the Office's work.

Capital Injections and Movements in Departmental Net Assets
Controller and Auditor-General
Details of Net Asset Schedule 2019/20
Estimated Actual
$000
2020/21
Projected
$000
Explanation of Projected Movements in 2020/21
Opening Balance 8,047 6,427  
Capital Injections - 1,508 This capital injection will fund capital expenditure relating to the Office's investment in technology to support its work.
Capital Withdrawals - -  
Surplus to be Retained (Deficit Incurred) (1,620) 1,296 These amounts reflect the forecast movements in the Audit and Assurance Services memorandum account.
Other Movements - -  

Closing Balance

6,427 9,231  

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, Inquiries, and other studies
This category is limited to undertaking and reporting on performance audits, inquiries, and other studies 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, inquiries, and other studies, 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
  2019/20 2020/21
Final Budgeted
$000
Estimated Actual
$000
Budget
$000

Total Appropriation

15,421 15,421 16,676

Departmental Output Expenses

     
Performance Audits, Inquiries, and other studies 9,939 9,939 11,040
Supporting Accountability to Parliament 5,482 5,482 5,636

Funding for Departmental Output Expenses

     

Revenue from the Crown

14,633 14,633 16,233
Performance Audits, Inquiries, and other studies 9,939 9,939 11,040
Supporting Accountability to Parliament 4,694 4,694 5,193

Revenue from Others

788 788 443
Supporting Accountability to Parliament 788 788 443

Estimated actual results do not take into account the effect of COVID-19 on the Office's work programme. This is likely to result in lower costs for the year.

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 2020/21.

Our estimated actual results for the Statutory Auditor Function performance measures do not take into account the potential impact of COVID-19.

What is Intended to be Achieved with each Category and How Performance will be Assessed
Assessment of Performance 2019/20 2020/21
Final Budgeted
Standard
Estimated
Actual
Budget
Standard

Departmental Output Expenses

     

Performance Audits, Inquiries, and other studies

     

This category is intended to achieve:

     

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

New measure New measure 100%

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

100% 100% 100%

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

At least 85% 89% At least 85%

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

At least 75% 42% At least 75%

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

100% 100% 100%

Percentage of requests for inquiries or self-initiated issues which are considered and a view is reached within 4 weeks

New measure New measure At least 90%

Percentage of pieces of inquiry work (except major inquiries) that are concluded within 6 months

100% 80% At least 90%

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

At least 75% 66% 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 (see Note 1)

At least 90% 96% At least 90%

Supporting Accountability to Parliament

     

This category is intended to achieve:

     

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

100% 100% 100%

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

100% 97% 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)

All 9 reports All 9 reports 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

At least annually 3 reports issued At least annually

Note 1 - At least 90% within 15 working 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 2020/21 Annual Report.

Current and Past Policy Initiatives
Policy Initiative Year of
First
Impact
2019/20
Final Budgeted
$000
2020/21
Budget
$000
2021/22
Estimated
$000
2022/23
Estimated
$000
2023/24
Estimated
$000

Current Parliament

           

Supporting Accountability to Parliament

           
Investing in technology to support our work 2020/21 - 333 668 736 917
Investing in our strategy - increasing impact 2019/20 1,169 1,402 1,402 1,402 1,402
Investing in our capability 2019/20 491 422 422 422 422

Performance Audits and Inquiries

           
Investing in technology to support our work 2020/21 - 423 850 937 1,168
Addressing demand and improving timeliness 2019/20 1,368 2,042 2,042 2,042 2,042
Investing in our strategy - increasing impact 2019/20 258 310 310 310 310
Investing in our capability 2019/20 1,736 1,690 1,690 1,690 1,690
Reasons for Change in Appropriation

The increase in this appropriation for 2020/21 is due to the policy initiatives listed above.

For the initiatives that commenced in 2019/20, the increases in 2020/21 represent the new ongoing funding levels which will enable the Office to deliver on its strategy in to the future.

The initiatives relating to investment in technology represent the Crown funded part of the Office's information systems strategic plan which will enable the implementation of systems and tools to support the work of the Office.

Last updated: 
Friday, 16 October 2020