Offices of Parliament — Appointment of Auditors—Controller and Auditor-General

I move, That, pursuant to section 38(1) of the Public Audit Act 2001, this House appoint CST Nexia as the independent auditor to audit the financial statements of the Office of the Controller and Auditor-General for the financial years ending on 30 June 2013, 30 June 2014, and 30 June 2015 commencing with effect on 21 December 2012. This appointment, as the motion clearly states, is for an auditor to look at the financial probity of the Office of the Controller and Auditor-General. But it does raise the very interesting question, in my head at least, as to who it is, apart from the cursory time that we get at a select committee, who actually takes a look at the work of the Office of the Controller and Auditor-General.

There is a very, very considerable capacity for that office to look at almost anything in New Zealand that deals with issues of public finance, whether that be at a local government or a national government level. I think there is a question, though, about where the investigative powers of the Auditor-General should be appropriately used, and where they interconnect with what are the perfectly legitimate rights of elected Governments or elected councils to engage in activities that will deliver on promises that they have made to the wider voter community.

I think that we are rapidly seeing a number of reports coming out of the Office of the Controller and Auditor-General that will mean that Parliament has to look at how that intersection is more transparent, so that we do not end up with reports that are somewhat self-generated, that are often naive in their content, and that are occasionally nothing more than self-congratulating for ever having been undertaken in the first place, and, ultimately, with conclusions that simply justify the reason for starting an investigation in the first place. That ends up being a waste of time, it ends up being a brake on activities that are legitimate for elected bodies to undertake, and I think it also starts to weaken the formal and accepted role of ensuring that the financial probity of activity, and therefore the appropriate expenditure of funding provided by ratepayers and taxpayers, is handled in a proper way. I do hope that CST Nexia is able to engage with the Office of the Controller and Auditor-General in a positive way to give us confidence about the probity of that office.

The issue here is that the Office of the Controller and Auditor-General supervises the auditing of the entire public sector, in its widest sense, and it does so with the assistance of a number of private sector firms that have audit expertise. In the nature of things, those firms tend to be the larger and better-resourced ones. They tend to be, in large part, the international accounting firms with audit practices.

When the Officers of Parliament Committee comes to consider who, in fact, ought to audit the auditors, obviously the committee has to consider firms that have the expertise but also lack the conflicts. It cannot very well look at the larger firms that perform work customarily for the Audit Office itself, and that is why it must look at other firms to ensure that it finds one that has the reputation and the ability to have a look at the very work of the auditors themselves.

The committee has settled upon the well-respected firm of CST Nexia. It is a small firm. It has, I think, five partners, maybe six, and the work that it will perform will be very valuable in terms of ensuring the continuing confidence of this House in the Office of the Controller and Auditor-General and its functions.

I do not think the comments of the Leader of the House about the Office of the Controller and Auditor-General can go unanswered as we join in the motion, because I would not want it thought that, although we support the motion, we also agree with his comments about the scope and role of the Audit Office.

There is a real danger, I think, when the Government of the day becomes annoyed and gets tetchy with individual aspects of work of the Officers of Parliament, who exist not to serve the Government of the day in any way but to ensure that Parliament can, in the widest sense, do its job of holding the executive to account.

There is no doubt in New Zealand that the Office of the Controller and Auditor-General for many years has performed that role in an exemplary fashion. There is no justification whatsoever to call for the curtailing of its “own motion” powers of investigation. To say that those powers should not exist and that it should be able to investigate only matters that are referred to it would be an absolute travesty, and I am sure that that is not what the Leader of the House was suggesting in his contribution.

I want to put on record my own gratitude for the way in which the Auditor-General performs her work. I want to put on record the Labour Opposition’s appreciation of the way in which her predecessors have performed their role. And I want to say that we have utter confidence in the office to perform the important role that it currently does.

The question is that the motion be agreed to. Those of that opinion will say Aye—

💬 Denis O’Rourke: Mr Speaker—

I have started putting the vote.

💬 Denis O’Rourke: It’s all right.

To the contrary, No. The Ayes have it. I did wait. I looked around. The member needs to be a little more alert.

Motion agreed to.