Public Audit Bill comes to parliament

A new Bill clarifying the powers of the Controller and Auditor-General and making the position an office of Parliament will be introduced into Parliament tomorrow.

Acting Prime Minister and Minister in charge of the Audit Department Jim Anderton said Cabinet today approved the Public Audit Bill.

It establishes the Controller and Auditor-General as an Officer of Parliament and reforms and clarifies the law relating to the auditing of public sector organisations.

The Auditor-General’s mandate is to be applied consistently to all public entities, with the exception of State-Owned Enterprises, where some limitations on performance audits remain. The Reserve Bank is also added to the Auditor-General’s mandate.

"The existing legislation is now widely regarded as unclear and out of step with modern public sector practices," Jim Anderton said.

"Before the election I called for the Auditor to be given powers to check on whether new programmes actually achieved what they were meant to achieve. This new Bill ensures that effectiveness and efficiency audits can be performed.

"This Bill enshrines the power of Auditors-General to ensure that public money is spent on what Parliament votes and that it has the effects that Parliament intends.

"Calls have been made repeatedly over recent years by Controllers and Auditors General and by constitutional experts for the powers of the office to be clarified. For example, while it is convention that the Controller and Auditor General is an officer of Parliament, this is not stated in the Public Finance Act. It is high time that the Auditor's position as an independent advisor to Parliament was made clear."

The new Bill fully implements the recommendations of the 1998 Finance and Expenditure (FEC) Inquiry into Audit Office legislation.

Extra accountability provisions include arrangements to enable the Auditor-General’s annual plan to be the subject of consultation with the Speaker and a committee of the House of Representatives before it is tabled. The House will also have a power of resolution to direct the Auditor-General as to the work programme priorities.

"This is an important day in the honest and transparent administration of Government. New Zealand was a forerunner in passing the original Audit Act in 1858. But that Act was repealed nine years later, so since 1867 we have not had an Audit Act," Jim Anderton said.

The Bill will be sent to Parliament's Finance and Expenditure Select Committee. The Government hopes to pass it by June.