Dunne's Weekly: Beware The All-Knowing Controller And Auditor-General

I am always wary when I hear that the Controller and Auditor-General has commented on or made recommendations to the government about an issue of public policy that does not relate strictly to public expenditure.

According to the legislation, the role of the Controller and Auditor-General is to make sure that public sector organisations are spending public resources well and making good decisions. That is as it should be and consistent with what might be expected of good audit practice.

But the Controller aspect of the role is more problematic. Under the relevant legislation, the Controller "can direct a Minister to report to the House of Representatives if the Controller has reason to believe that expenditure has been incurred that is unlawful or not within the scope, amount, or period of any appropriation or other authority” and “can stop payments from a Crown or departmental bank account, to prevent money being paid out if the Controller believes the payments may be applied for a purpose that is not lawful or is not within the scope, amount, or period of any appropriation or other authority.”

Again, that is reasonable and is an important accountability constraint on Ministers who may think they can do as they like with the funds appropriated to them by Parliament.

But, over the years, successive Controllers and Auditors-General have interpreted the function far more broadly and consequently delved into all manner of specialist areas, delivering a view not just on whether spending complied with the appropriation, but whether the activity in question was even justified in the first place. Recent Controller and Auditor-General’s reports have dealt with topics as varied as “Meeting the Mental Health Needs of young New Zealanders”; “Monitoring importers of specified high-risk foods”; and “The fast-track approvals Bill”. This week, the Controller and Auditor-General issued his words of wisdom on the conduct of the 2023 General Election, specifically the processes for counting votes.

Now, these are all important areas of public policy deserving of critical scrutiny, but it is surely doubtful that this can be provided by an office that is essentially a fiscal bean-counter. However, that constraint has never stopped Controllers and Auditors-General over the years poking their noses into areas where they have limited or no expertise, and then reporting with a confidence and certainty that defied that. As an aside, that may explain why so few of their recommendations, outside the fiscal management ones, ever get adopted by governments.

The report on conduct of the 2023 General Election is important. The smooth, fair, and efficient operation of our election process is critical to the functioning of our democracy. That is why Parliament conducts a full public enquiry, to which anyone can make a submission and be heard, after each election to improve the process for the next one. That process has worked well over the years and does not require the intervention of the Controller and Auditor-General at this stage. His office and time would be far better employed examining the profligate blow-outs in government expenditure that occurred under the previous government, as well as some of the expenditure decisions of the present government.

In the early 1990s, as a member of the Electoral Law Select Committee, I pushed successfully for the establishment of an independent Electoral Commission to oversee all aspects of electoral law, educate voters about the political process, and manage the conduct of elections. I envisaged it would become a strong and authoritative expert body. But unfortunately, over the years it has proven too amateur, timid, and wimpish to do any of those things properly. It seems far more comfortable being a cheap policeman, ticking off politicians and parties when they do not dot every i and cross every t with the level of bureaucratic pedantry the Commission likes to wallow in.

There is no doubt the Electoral Commission mismanaged the conduct of the last election. The Chief Electoral Commissioner and the Chief Electoral Officer should be held to account by Parliament and the public for this failure. But doing so via the route of the office of the Controller and Auditor-General, that has no known expertise in either electoral law or running elections, is of questionable value. It almost certainly means those officers will escape any accountability, which probably ensures nothing will change as a result.

Put bluntly, the office of the Controller and Auditor-General needs to refocus its activities on the specific responsibilities regarding the effective management of public expenditure that its legislation requires it to oversee. That should be its unquestioned area of expertise, which means that the Controller and Auditor-General’s enthusiasm to pontificate on so many other areas of government activity needs to be curbed as a consequence.

Ironically, under the present arrangement where the Controller and Auditor-General’s office can butt its nose in, almost at will, specific departmental and agency accountability is being eroded, not strengthened. The primary role is for government departments and agencies to own the policy and procedures for which they are responsible. A busy-body, know-all Controller and Auditor-General’s office merely gets in the way of that.

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