The Controller and Auditor-General - usually known by the shorter title of Auditor-General - is responsible for auditing all of New Zealand's public entities. This helps to show whether public money is being spent the way that Parliament intended.

The current Auditor-General is Lyn Provost.

The Auditor-General is an officer of Parliament.¹ The role and functions of an auditor-general have been in place in New Zealand since the 1840s. The current role and functions are set out in the Public Audit Act 2001 and the Public Finance Act 1989.

As an officer of Parliament, the Auditor-General is independent of the Executive Government.² The Auditor-General is sometimes referred to as a “public watchdog”. The Auditor-General acts as a check and balance on how public money is being spent. The Auditor-General is accountable to Parliament for the use of public money spent to do the job.

The Auditor-General has two functions - that of Auditor-General (the audit function) and that of Controller.

Why is there an Auditor-General?

In New Zealand's system of government, Parliament authorises all government spending and is the source of the statutory powers that public entities have.

Public sector organisations are therefore accountable to Parliament for their use of the public resources and powers that Parliament gives them. As part of this accountability, Parliament seeks independent assurance from the Auditor- General that public sector organisations are operating and accounting for their performance in the way Parliament intended.

The need for independent assurance also covers local government. Local authorities are accountable to the public for how they use the resources they fund through rates and other sources.

It is not the role of the Auditor-General to question the policies of the Government or local authorities.

How does the Auditor-General maintain independence?

To be effective and credible, the Auditor-General and the people working for the Auditor-General must be independent of the public sector organisations being audited. To ensure independence, the Public Audit Act provides that the Auditor-General:

• is an officer of Parliament and can report directly to Parliament and anyone else;
• reports to the Officers of Parliament Committee, chaired by the Speaker of the House;
• is appointed by the Governor-General on the recommendation of Parliament for a once-only term of no more than seven years;
• has a Deputy who is also an officer of Parliament and can perform all the functions and exercise all the powers of the Auditor-General;
• is paid by standing authority from Parliament, with the amount determined independently by the Remuneration Authority; and
• makes requests for funding directly to Parliament (rather than through the Executive Government).

Auditors are appointed by the Auditor-General to carry out annual financial audits on the Auditor-General's behalf. Appointed auditors must also be independent - both in fact and appearance. There are strict constraints on appointed auditors in the Auditor-General's auditing standards that cover such matters as:

• personal involvement with an audited entity (such as between family members);
• financial involvement with the entity (such as financial investments);
• providing other services to the entity (such as carrying out valuations); and
• doing other work for the entity.

1: Parliament makes laws and holds the Executive Government to account for its policies, actions, and spending. Parliament consists of the Sovereign (represented in New Zealand by the Governor-General) and the House of Representatives (comprising all elected Members of Parliament). There are three offices of Parliament: the Auditor-General, the Office of Ombudsmen, and the Parliamentary Commissioner for the Environment (and that Commissioner's Office).

2: “Executive Government” means the Prime Minister and other Ministers, who are supported by the public service (government departments).

Page last updated: 5 October 2009