Thursday, June 20, 2024

Auditor-General calls for greater COVID fund transparency

In a letter to the Treasury, Auditor-General, John Ryan, has called for greater transparency and accountability in relation to the Government’s COVID-19 Response and Recovery Fund (CRRF) spending.

“In my view, the ability of Parliament and the public to see clearly where their taxes are spent and what has been achieved with this public expenditure would strengthen trust and confidence in the public finance management system,” the Auditor-General’s letter stated.

He said legislative financial reporting requirements were not enough to provide Parliament and the public with sufficient information about CRRF expenditure.

“My position is that greater transparency is warranted because of the scale of the funding set aside (now $74.1 billion), the extraordinary circumstances in which funding decisions are being made, and the potential implications for the Crown’s financial position (and public debt) for years to come.”

“Given the public interest in COVID-19 related expenditure, and the extensive work the Treasury has done to include more data and information on its website, I thought it useful to formally record my views about the information now publicly available. My views are based on the several information and data releases provided on the Treasury’s website throughout 2021 and the latest update and data release on 11 February 2022.”

Auditor-General, John Ryan.

The Auditor-General said the publicly available data had addressed many of his concerns about the transparency and accessibility of COVID-19 related financial information.

However, he said an ongoing challenge for Treasury would be to ensure the publicly available information is kept up to date.

“I note that the expenditure-incurred figures include spending up to 30 June 2021. Although I recognise that reliable information is critical, providing this information more regularly would help ensure that the public reporting remains relevant. I understand that the Treasury intends to update the expenditure record shortly.”

“One ongoing concern is that it is not possible for Parliament and the public to know what was spent on some specific Covid-19 related initiatives because the information for Covid-19 funding (by initiative) is organised differently from the statutory reporting on expenditure incurred (by appropriation). For example:

  • The COVID-19 initiative Funding for Family Violence COVID-19 Response: Services for Children and Youth Experiencing Violence is allocated across two Votes: Vote Oranga Tamariki and Vote Police.
  • The COVID-19 initiative Increasing Wellbeing And Mental Health Support To Learners And Education Workforce is similarly allocated across two Votes and, within Vote Education, funding is allocated across four different appropriation categories, all of which also include funding for other initiatives.

“I understand that the public finance management system does not currently record information on the amount of expenditure incurred under each initiative. I believe there is considerable public interest in this information, and additional reporting on some of the major initiatives would be helpful. In this regard, I also note recent comments by the Minister of Finance in the House in support of providing more of this type of information, recognising cost-benefit considerations and the system limitations that currently exist.”

In the absence of special reporting on CRRF initiatives, there should be sufficient disclosure to enable interested parties to track funding decisions on initiatives through to the actual expenditure incurred under COVID-specific appropriations, said Mr Ryan.

“To this end, the Treasury’s cross-referencing of each of the COVID-19 related initiatives to the specific appropriations under which the expenditure is to be authorised is very helpful. I acknowledge the Treasury’s efforts in providing it.”

While recognising the work the Treasury had done to improve transparency in relation to the CRRF, Mr Ryan said his Office would like to see reporting on funding outcomes.

“Parliament and the public should be better able to understand the services delivered and the outcomes achieved with public money,” he said.

In a recent report to Parliament – Observations from our central government audits: 2020/21 – the Auditor-General recommended whole-of-government level improvements on key cross-government and agency level initiative activities.

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