The Three Waters reforms, Covid Recovery Fund, Provincial Growth Fund, Māori health and education – there's an urgent need to take action on the lack of accountability to New Zealanders, says Auditor-General John Ryan
“I don’t trust CEOs of government agencies... you want trust, you gotta earn it, front up.”
That was the damning assessment from one participant in a study commissioned by the Auditor-General this year, as his office warns of widespread failings in the public accountability of government.
For the study, Bay of Plenty-based consultancy Haemata interviewed Māori representing iwi, hapū, whānau, public servants, professionals, academics and recipients of public services. It was investigating the Auditor-General's concerns that Māori have low levels of trust in the public sector.
Its report is the final straw in a series identifying flaws in public accountability – prompting the Auditor-General this week to take action.
The Haemata report finds that there will need to be positive and observable shift in the way the public sector and the Office responds to the things that matter most to Māori. The study's participants call for a comprehensive monitoring and accountability system.
The Government and public sector must "front up" and take responsibility for their failings. "In the public sector, there is a lack of consequence for failure to meet Māori outcomes, particularly at senior management levels. Participants spoke of cases where senior managers continued to be rewarded with higher remuneration despite continually failing to achieve positive outcomes for Māori.
"Poor Māori health and Māori education outcomes were highlighted as examples of this, with participants claiming that a lack of observable consequences for continual system failures exacerbates issues of mistrust in the accountability system."
"Public sector information and accountability processes are falling short of what is expected by Parliament and the public in the 21st century." – Greg Schollum, Deputy Auditor-General
This week, the Office of the Auditor-General has mounted a two-pronged attack.
Auditor-General John Ryan has written to Parliament's Speaker, Adrian Rurawhe, expressing his concern about a lack of transparency and accountability over the spending of public money on new initiatives.
It comes after he warned of a "serious diminution in accountability" in the proposed governance and management of water assets in the Government's Three Waters reforms (subsequent changes provided for more effective public accountability, he said) and it pre-empts the publication next month of the central government audit reports.
And his deputy, Greg Schollum, has written to the Productivity Commission calling for a wider first-principles review of public accountability across all of government.
Ryan had already highlighted concerns about the Covid Response Fund and the Provincial Growth Fund – but he says the problems are more widespread. A law change is needed to ensure a cohesive picture of how $150 billion a year of public money is spent and what has been achieved as a result.
It can be difficult (even with new initiatives) to track how and where some government spending is directed, he says. Reporting is often fragmented and spread between different organisations. "These shortcomings are systemic, and they raise questions about how governments can improve their transparency about, and accountability for, spending of public money...."
What is public accountability?
In essence, public accountability is about public organisations demonstrating to Parliament and the public their competence, reliability, and honesty in their use of public money and other public resources, says Schollum.
This information has value for central and local government decision-making, parliamentary scrutiny, and the public’s understanding, support, and trust.
"We have for some time now been concerned about the state of public accountability in New Zealand," he explains. "Our recent work suggests that while parts of the system continue to operate well, public sector information and accountability processes are falling short of what is expected by Parliament and the public in the 21st century."
He argues the public sector needs to find better ways to engage with, and communicate to, Parliament and the public about what it does, why it does it, and how it contributes to the outcomes that are important for New Zealanders.
He points to findings in an interim report from the Productivity Commission, which is also seeking a review of public accountability.
Failings in accountability are a "major barrier" to addressing the complex and intergenerational issues associated with persistent disadvantage, he says.
The report notes a lack of cohesive leadership in public accountability, suitable measures that demonstrate what is important, mechanisms for being accountable to future generations, a range of voices to properly inform public accountability processes, and retrospective analysis or evaluations of what was achieved for the public money spent.
"The challenge therefore is to reshape the public accountability system so that it encourages and supports organisations (within and outside central and local government) and communities to work together towards reducing persistent disadvantage," Schollum says.
The Office of the Auditor-General says the review should go beyond the public management system. "Any such review should start with the nature of the relationship between the public, Parliament, and central and local government," Schollum argues. "The review could include, for example, a focus on what is needed to ensure that Parliament and the public are appropriately engaged and informed about the outcomes government is intending to achieve, how they will achieve these outcomes, and what progress is being made."
