This Act comes into force on 1 July 2001.

The purpose of this Act is to—

• (a) establish the Controller and Auditor-General as an officer of Parliament; and

• (b) reform and restate the law relating to the audit of public sector organisations.

In this Act, unless the context otherwise requires,—

(1) In this Act, public entity means each of the following entities:

• (a) the Crown:

• (b) each office of Parliament, except where another auditor has been appointed for that office under section 45F(1)(b) of the Public Finance Act 1989:

• (c) an entity of a class described in Schedule 1:

• (d) an entity listed in Schedule 2:

• (e) an entity in respect of which the Auditor-General is the auditor under any other enactment (other than section 19):

• (f) an entity which is controlled by 1 or more entities of the kinds referred to in paragraphs (a) to (e).

(2) For the purposes of subsection (1)(f), an entity is controlled by 1 or more other entities if—

• (a) the entity is a subsidiary of any of those other entities; or

• (b) the other entity or entities together control the entity within the meaning of any relevant approved financial reporting standard; or

• (c) the other entity or entities can together control directly or indirectly the composition of the board of the entity within the meaning of sections 7 and 8 of the Companies Act 1993 (which, for the purposes of this paragraph, are to be read with all necessary modifications).

(3) Despite subsections (1) and (2), an entity is not a public entity if,—

• (a) but for this subsection, it would be a public entity only by virtue of the application of both subsection (1)(f) and subsection (2)(c); and

• (b) it is specifically referred to in an enactment (either by name or otherwise); and

• (c) that enactment expressly requires or permits its financial statements to be audited by a person other than the Auditor-General.

This Act binds the Crown.

(1) There is an officer of Parliament called the Controller and Auditor-General.

(2) The Controller and Auditor-General is appointed by the Governor-General on the recommendation of the House of Representatives.

The Auditor-General is not capable of being a member of Parliament or of a local authority and must not, without the approval of the Speaker of the House of Representatives, hold any other office or take on any other occupation.

The Auditor-General must act independently in the exercise and performance of the Auditor-General's functions, duties, and powers.

(1) The Auditor-General is a corporation sole with perpetual succession and a seal of office.

(2) The Auditor-General has and may exercise all the rights, powers, and privileges and incur all the liabilities and obligations of a body corporate of full capacity.

(1) There is an officer of Parliament called the Deputy Controller and Auditor-General.

(2) The Deputy Controller and Auditor-General is appointed by the Governor-General on the recommendation of the House of Representatives.

(3) Sections 8 and 9 apply to the Deputy Auditor-General as if references in those sections to the Auditor-General were references to the Deputy Auditor-General.

(1) The Deputy Auditor-General has and may exercise, to the same extent as the Auditor-General, all the functions, duties, and powers of the Auditor-General.

(2) The exercise by the Deputy Auditor-General of the Auditor-General's functions, duties, and powers is subject to the control of the Auditor-General.

(3) If there is a vacancy in the office of the Auditor-General, or if the Auditor-General is absent from duty for any reason, the Deputy Auditor-General has and may exercise all the functions, duties, and powers of the Auditor-General for as long as the vacancy or absence continues.

(4) The fact that the Deputy Auditor-General exercises any function, duty, or power of the Auditor-General is, in the absence of evidence to the contrary, conclusive evidence of the Deputy Auditor-General's authority to do so.

The provisions set out in Schedule 3 apply to the Auditor-General, Deputy Auditor-General, and employees of the Auditor-General.

(1) The Auditor-General is the auditor of every public entity.

(2) Nothing in sections 15 to 19 limits subsection (1).

(1) The Auditor-General must from time to time audit the financial statements, accounts, and other information that a public entity is required to have audited.

(2) In the case of an audit of a department (within the meaning of section 2(1) of the Public Finance Act 1989) or an Office of Parliament, the Auditor-General must also audit the appropriations administered by the department or Office.

(1) The Auditor-General may at any time examine—

• (a) the extent to which a public entity is carrying out its activities effectively and efficiently:

• (b) a public entity's compliance with its statutory obligations:

• (c) any act or omission of a public entity, in order to determine whether waste has resulted or may have resulted or may result:

• (d) any act or omission showing or appearing to show a lack of probity or financial prudence by a public entity or 1 or more of its members, office holders, and employees.

(2) An audit under this section may relate to 1 or more public entities.

(3) Subsection (1)(a) does not apply to the Reserve Bank of New Zealand or any registered bank (as defined in section 2(1) of the Reserve Bank of New Zealand Act 1989).

(4) If subsection (1)(a) applies and there is an applicable government or local authority policy to which the public entity is required to adhere, the examination is to be limited to the extent to which activities are being carried out effectively and efficiently in a manner consistent with that policy.

The Auditor-General may, with the agreement of a public entity, perform for that entity any services of a kind that it is reasonable and appropriate for an auditor to perform.

(1) The Auditor-General may inquire, either on request or on the Auditor-General's own initiative, into any matter concerning a public entity's use of its resources.

(2) Subsection (1) does not apply to the Reserve Bank of New Zealand or any registered bank (as defined in section 2(1) of the Reserve Bank of New Zealand Act 1989).

(3) If subsection (1) applies and there is an applicable government or local authority policy to which the public entity is required to adhere, the inquiry is to be limited to the extent to which the public entity is using its resources in a manner consistent with that policy.

(1) At the request of an entity that is not a public entity, the Auditor-General may enter into an arrangement with that entity to be its auditor.

(2) Before entering into an arrangement, the Auditor-General must be satisfied that—

• (a) the entity exists for a public purpose; and

• (b) the entity is, or ought reasonably to be, accountable to any or all of the Crown, the House of Representatives, the public, or a section of the public for the exercise of its functions and the management of its resources; and

• (c) it is not practicable for those to whom the entity is, or ought reasonably to be, accountable to appoint an auditor of the entity; and

• (d) it is practicable and in the public interest that the Auditor-General accepts the appointment.

(3) An arrangement may be for any term not exceeding 3 years and may be renewed from time to time.

(4) The following sections and Parts apply to an entity audited by arrangement as if references in those sections to a public entity were references to the entity and with any other necessary modifications:

• (a) section 15 (financial report audit):

• (b) section 17 (other auditing services):

• (c) section 21 (reports to Minister, committees, etc):

• (d) section 23 (publication of auditing standards):

• (e) Part 4 (information-gathering powers and disclosure of information):

• (f) Part 5 (appointments and delegations):

• (g) section 41 (protection from liability):

• (h) section 42 (audit fees).

In addition to the annual report prepared under section 37, the Auditor-General must report at least once every calendar year to the House of Representatives on matters arising out of the performance and exercise of the Auditor-General's functions, duties, and powers.

The Auditor-General may report to a Minister, a committee of the House of Representatives, a public entity, or any person on any matter arising out of the performance and exercise of the Auditor-General's functions, duties, and powers that the Auditor-General considers it desirable to report on.

If the Auditor-General has prepared a report under section 20 or section 21 relating to a public entity named or described in Schedules 1 or 2 of the Local Government Official Information and Meetings Act 1987,—

• (a) the Auditor-General may direct the public entity to table the report during a meeting of the public entity that is open to the public; and

• (b) the public entity must do so at the next such meeting.

(1) The Auditor-General must publish, by way of a report to the House of Representatives, the auditing standards that the Auditor-General applies, or intends to apply, to the conduct of audits and inquiries, and the provision of other auditing services, under this Part.

(2) A report under subsection (1) must be prepared at least once every 3 years.

(3) If requested to do so by any person, the Auditor-General must supply a copy of any report under subsection (1) to that person on payment by that person of a reasonable fee determined by the Auditor-General.

(4) In each annual report prepared under section 37, the Auditor-General must include a description of any significant changes made to the auditing standards during the year covered by that annual report.

The chief executive and the governing body of a public entity must ensure that the Auditor-General has access at all times to the documents of the entity relating to the performance and exercise of the Auditor-General's functions, duties, and powers.

(1) For the purposes of exercising or performing the Auditor-General's functions, duties, or powers, the Auditor-General may require a public entity or any person to:

• (a) produce to the Auditor-General a document in the entity's or person's custody, care, or control:

• (b) provide the Auditor-General with information or an explanation about any information.

(2) If any information is required from a person who is not a member, employee, or office holder of the public entity, the Auditor-General must—

• (a) advise the person in writing of the nature of the information; and

• (b) state that it is required under this section; and

• (c) if the person is an individual and the information required is personal information about that individual, comply with information privacy principle 3 of the Privacy Act 1993.

(3) The Auditor-General may pay the person referred to in subsection (2) the reasonable costs and disbursements of providing the information and may recover those costs and disbursements from the public entity to which the information relates.

(1) The Auditor-General may, in the course of the exercise or performance of the Auditor-General's functions, duties, or powers, require a person to give evidence.

(2) The Auditor-General may require the evidence to be given either orally or in writing.

(3) For the purpose of examining a person, the Auditor-General may administer an oath.

(4) Section 108 of the Crimes Act 1961 (which relates to perjury) applies to an examination under this section.

(5) The Auditor-General may pay a person the reasonable costs and expenses incurred by that person in giving evidence to the Auditor-General.

(6) The Auditor-General may recover those costs and expenses from the public entity to which the evidence relates.

(1) For the purpose of exercising or performing the Auditor-General's functions, duties, or powers, the Auditor-General may examine or audit the account of any person in any bank and, for that purpose, may—

• (a) require any officer of the bank to produce any document or provide any information relating to that account in the bank's custody, care, or control; and

• (b) take copies of any document so produced.

(2) The powers conferred on the Auditor-General by subsection (1) must not be exercised unless the Auditor-General is authorised to do so by warrant issued by a District Court Judge on the grounds that the Auditor-General has reason to believe that money belonging to a public entity has been fraudulently or wrongfully paid into the person's account.

(1) A person who is required by any enactment to maintain secrecy or not to disclose information relating to a matter may be required by the Auditor-General to do any of the things referred to in sections 25, 26, and 27 even though the person would otherwise be in breach of that person's obligation of secrecy or non-disclosure.

(2) Compliance with a requirement of the Auditor-General under the sections referred to in subsection (1) is not a breach of the relevant obligation of secrecy or non-disclosure or of the enactment by which that obligation is imposed.

For the purpose of obtaining documents, information, or other evidence relevant to any matter arising in the exercise or performance of the Auditor-General's functions, duties, or powers, the Auditor-General may, at all reasonable times,—

• (a) enter into and remain on—

  • (i) a public entity's premises; or

  • (ii) any other premises if so authorised by warrant issued by a District Court Judge on the grounds that there is reasonable cause to suspect that documents, information, or other evidence relating to the activities of that public entity are or may be held at those premises.

• (b) carry out a search for a document, examine a document, and make copies of a document or parts of a document.

(1) This section applies to the disclosure of information by the Auditor-General.

(2) The Auditor-General may disclose such information as the Auditor-General considers appropriate to disclose in the exercise of his or her functions, duties, or powers.

(3) Before disclosing any information, the Auditor-General must consider—

• (a) the public interest:

• (b) an auditor's professional obligations concerning confidentiality of information:

• (c) the interests described in sections 6, 7, and 9(2) of the Official Information Act 1982.

(4) This section does not affect an individual's entitlement to request access to information under information privacy principle 6 of the Privacy Act 1993.

(1) A person is not excused from answering a question or giving any information or document under this Act on the ground that to do so may incriminate or tend to incriminate that person.

(2) A self-incriminating statement or document made or given under this Act is not admissible as evidence in criminal proceedings against that person except on the prosecution of that person for an offence against section 108 of the Crimes Act 1961 or section 39(1)(c) of this Act in relation to that statement or document.

(1) The Auditor-General may from time to time appoint any of the following persons or bodies to act as an auditor and to carry out 1 or more audits of entities under section 15, or to provide a specific service under section 17, on the Auditor-General's behalf:

• (a) an employee of the Auditor-General:

• (b) a person qualified to be an auditor of a company under section 199 of the Companies Act 1993, regardless of whether the entity concerned is a company:

• (c) subject to subsection (2), a partnership, if all or some of the partners are persons who are qualified to be appointed as auditors of a company under section 199 of the Companies Act 1993.

(2) If a partnership is appointed under subsection (1)(c),—

• (a) the appointment of the partnership is to be treated as an appointment of all the persons who are partners in the firm from time to time; and

• (b) if the partnership includes persons who are not qualified to be appointed as auditors of a company under section 199 of the Companies Act 1993, the persons who are not qualified to be appointed as auditors must not act as auditors.

(3) An appointment must be in writing and may be made subject to any restrictions and conditions that the Auditor-General thinks fit.

(1) The Auditor-General may from time to time appoint to carry out 1 or more performance audits under section 16 or inquiries under section 18 any person who, in the opinion of the Auditor-General, is suitably qualified for the purpose.

(2) An appointment may be made for 1 or more public entities and for any period of time.

(3) An appointment must be in writing and may be made subject to any restrictions and conditions that the Auditor-General thinks fit.

When appointing an auditor under section 32 or section 33, the Auditor-General may authorise the appointed auditor to exercise such of the following powers of the Auditor-General in relation to the public entity concerned as the Auditor-General specifies:

• (a) report under section 21:

• (b) have access to information under section 24:

• (c) require a public entity or other person to produce a document or to provide information under section 25:

• (d) inspect bank accounts under section 27:

• (e) apply section 28, which relates to the disclosure of information despite an obligation of secrecy or non-disclosure:

• (f) exercise the powers under section 29:

• (g) disclose information under section 30.

(1) The Auditor-General may from time to time, either generally or particularly, delegate all or any of the Auditor-General's functions, duties, and powers (including this power of delegation) to an employee of the Auditor-General.

(2) However, the Auditor-General must not delegate—

• (a) the power of appointment of auditors under section 32 or section 33; or

• (b) the function of reporting to the House of Representatives; or

• (c) the power to require the tabling of a public report by a local authority.

(3) A delegation—

• (a) must be in writing; and

• (b) may be made subject to any restrictions and conditions the Auditor-General thinks fit; and

• (c) is revocable at any time, in writing; and

• (d) does not prevent the performance or exercise of a duty, function, or power by the Auditor-General.

(4) A person to whom any functions, duties, or powers are delegated may perform and exercise them in the same manner and with the same effect as if they had been conferred directly by this Act and not by delegation.

(5) A person purporting to act under a delegation is presumed to be acting in accordance with its terms in the absence of evidence to the contrary.

(1) At least 60 days before the beginning of each financial year, the Auditor-General must prepare and submit to the Speaker of the House of Representatives a draft annual plan that—

• (a) describes the Auditor-General's proposed work programme for that year; and

• (b) [Repealed]

(2) The Speaker must present the draft annual plan to the House of Representatives as soon as reasonably practicable.

(3) The Auditor-General, after considering any comments of the Speaker or any committee of the House of Representatives that considered the draft annual plan, may amend the plan as the Auditor-General thinks necessary but must indicate in the plan the nature of any changes to the Auditor-General's work programme priorities requested by the Speaker or any committee of the House of Representatives but not included in the plan.

(4) The Auditor-General must present a completed annual plan to the Speaker before the beginning of each financial year and the Speaker must then present it to the House of Representatives.

(5) If the annual plan is completed in time, the Auditor-General may include it with the final information about the Auditor-General's future operating intentions that the Auditor-General must provide to the Speaker under section 45G(1)(c) of the Public Finance Act 1989.

(1) As soon as practicable after the end of each financial year, the Auditor-General must prepare and present an annual report to the House of Representatives in accordance with section 43 of the Public Finance Act 1989.

(2) The report must include—

• (a) [Repealed]

• (b) an account of the implementation of the annual plan required under section 36; and

• (c) a list of entities audited by the Auditor-General under an arrangement in accordance with section 19.

(1) The House of Representatives must, by resolution, in respect of each financial year appoint an independent auditor to audit the financial statements, accounts, and other information relating to that year and for this purpose the Auditor-General is to be regarded as a public entity under this Act.

(2) Parts 3 (except section 23) and 4 and section 42 apply in respect of each audit referred to in subsection (1) as if references in those provisions to the Auditor-General were references to the independent auditor and references to a public entity were references to the Auditor-General.

(1) Every person commits an offence who, without lawful justification or excuse,—

• (a) intentionally obstructs, hinders, or resists the Auditor-General or any other person in the exercise of the Auditor-General's or other person's powers under this Act:

• (b) intentionally refuses or fails to comply with any lawful requirement of the Auditor-General or any other person under this Act:

• (c) makes a statement or gives information to the Auditor-General or any other person exercising powers under this Act, knowing that the statement or information is false or misleading:

• (d) represents directly or indirectly that the person holds any authority under this Act when that person knowingly does not hold that authority.

(2) A person who commits an offence against subsection (1) is liable on summary conviction,—

• (a) in the case of an individual, to a fine not exceeding $2,000:

• (b) in the case of a person or organisation other than an individual, to a fine not exceeding $5,000.

(1) Despite section 14 of the Summary Proceedings Act 1957, any information in respect of any offence against this Act may be laid at any time within 2 years from the time when the matter of the information arose.

(2) Despite the Summary Proceedings Act 1957 or any other Act, proceedings against any member of a local authority, as such, under any Act may be commenced at any time within 2 years after the commission of the act in respect of which the proceedings are taken.

(1) This section applies to—

• (a) the Auditor-General in his or her personal capacity; and

• (b) the Deputy Auditor-General in his or her personal capacity; and

• (c) every person employed by the Auditor-General, whether acting as an appointed auditor or not, in connection with the performance or exercise of the Auditor-General's functions, duties, or powers.

(2) No person to whom this section applies is personally liable for an act or omission in connection with performing or exercising a function, duty, or power under this Act, unless the act or omission was done in bad faith.

(3) Subsection (2) does not limit any disciplinary functions, powers, or duties of any person or body that apply to any of the persons to whom this section applies by virtue of their membership of a professional body.

(1) The Auditor-General may charge fees to a public entity for the provision of services under any of sections 14, 15, 16, and 17.

(2) The fees must be reasonable, having regard to—

• (a) the nature and extent of the services provided; and

• (b) the requirements of auditing standards published under section 23; and

• (c) the qualifications and experience of the persons necessarily engaged in providing the services; and

• (d) any other matters the Auditor-General thinks fit.

(3) The Auditor-General may permit an appointed auditor to recover fees directly from the public entity.

(4) The public entity must pay any fees to the Auditor-General or to the appointed auditor on the completion of the whole or any part of the audit when requested to do so in writing.

(5) If the Auditor-General and the public entity fail to agree as to the reasonableness of a fee, the matter must be submitted to arbitration and the provisions of the Arbitration Act 1996 apply.

For the purposes of sections CW 38 and CW 39 of the Income Tax Act 2007, the Auditor-General is a public authority.

(1) The Governor-General may from time to time, by Order in Council on the recommendation of the Minister of Finance, amend Schedule 2—

• (a) by adding the name of an entity that is to be a public entity; or

• (b) by omitting the name of an entity that no longer exists; or

• (c) by correcting the name of an entity.

(2) The Minister of Finance must not recommend the addition of the name of an entity to Schedule 2 unless the Minister of Finance is satisfied that paragraphs (a) to (d) of section 19(2) apply in respect of the entity.

Section 190 of the Local Government Act 1974 is amended by repealing subsection (2), and substituting the following subsection:

Every reference to the Audit Department or the Audit Office in any enactment is to be read as a reference to the Auditor-General.

The enactments listed in Schedule 4 are amended in the manner indicated in that schedule.

(1) The following enactments are repealed:

• (a) Public Finance Act 1977 (1977 No 65):

• (b) Public Finance Amendment Act 1994 (1994 No 18).

(2) The Public Finance (Poutama Trust Audit) Order 1990 (SR 1990/6) is revoked.

Despite the enactment of this Act, each of the persons holding office as Controller and Auditor-General or Deputy Controller and Auditor-General immediately before the commencement of this Act continues, after that commencement, to hold office on the same terms and conditions as those on which they held office before that commencement.

The Audit Department is abolished.

(1) Despite any Act, rule of law, deed, or agreement, and for such consideration and on such terms and conditions as the Minister of Finance may agree with the Auditor-General, that Minister may, on behalf of the Crown,—

• (a) transfer to the Auditor-General assets and liabilities of the Crown; and

• (b) authorise the Auditor-General to act on behalf of the Crown in managing assets or liabilities of the Crown; and

• (c) grant to the Auditor-General leases, licences, easements, permits, or rights of any kind in respect of any assets or liabilities of the Crown.

(2) The Minister of Finance must present to the House of Representatives any contract or other document entered into under subsection (1) within 12 sitting days after the date of that contract or document.

(1) If there is a transfer or grant of any asset, liability, authority, or rights to the Auditor-General under any of paragraphs (a) to (c) of section 57(1),—

• (a) the transfer or grant does not entitle any other person to terminate, alter, or in any way affect the rights or liabilities of the Crown or the Auditor-General under any Act or any deed or agreement:

• (b) if the transfer or grant is registrable, the person responsible for keeping the register must register the transfer or grant immediately after written notice of the transfer or grant is received by that person from any person authorised for this purpose by the Minister of Finance:

• (c) the presentation to the House of Representatives of any contract or other document relating to the transfer or grant is to be treated as notice of the transfer or grant and, after the date of the contract or document, any affected third party is to deal with the Auditor-General in place of the Crown:

• (d) the Crown remains liable to any third party as if the transfer or grant had not been made, but the Auditor-General must indemnify the Crown in respect of any liability to the third party:

• (e) any satisfaction or performance by the Auditor-General in respect of the asset, liability, authority, or rights is to be treated as also satisfaction or performance by the Crown:

• (f) any satisfaction or performance in respect of the asset or liability, authority, or rights by any third party to the benefit of the Auditor-General is to be treated as also to the benefit of the Crown.

(2) No provision in any deed or agreement limiting the Crown's right to sell any assets to third parties, or for determining the consideration for the sale of any assets to third parties, or obliging the Crown to account to any person for the whole or part of the proceeds of sale by the Crown of any assets to third parties, or obliging the Crown to pay a greater price than otherwise by reason of or as a consequence of the sale of any assets to third parties, has any application or effect in respect of any contract or other document or transfer entered into or effected under this Act or under such a contract or other document or transfer.

(3) Any asset, liability, authority, or rights of the Crown may be transferred or granted to the Auditor-General under this Act whether or not any Act or deed or agreement relating to the asset, liability, authority, or rights permits such transfer or grant or requires any consent to such a transfer or grant.

Every person employed in the Audit Department immediately before the date of commencement of this Act is, on and from that date, an employee of the Auditor-General and is employed under the same terms and conditions as applied to that employee immediately before that date.

For the purposes of every enactment, law, contract, and agreement relating to the employment of a person referred to in section 59,—

• (a) the contract of employment of that employee that applied immediately before the commencement of this Act in respect of that person's employment in the Audit Department is to be treated as unbroken; and

• (b) the employee's period of service with the Audit Department and every other period of service of that employee that was recognised by the Audit Department as continuous service is to be treated as a period of service with the Auditor-General.

A person to whom section 59 applies is not entitled to any compensation for redundancy by reason only of the person ceasing to be employed in the Audit Department.

If a person to whom section 59 applies was a contributor to the Government Superannuation Fund under the Government Superannuation Fund Act 1956 immediately before the date of commencement of this Act,—

• (a) that person is to be regarded for the purposes of the Government Superannuation Fund Act 1956 as being employed in the Government service for so long as the person continues to be employed by the Auditor-General; and

• (b) the Government Superannuation Fund Act 1956 is deemed to apply to the person in all respects as if the person's service with the Government service were continuous.

Nothing in this Act—

• (a) limits or affects any duty or power that the Auditor-General had before the date of commencement of this Act to undertake and complete an audit of an entity for any financial year ending before that date; or

• (b) requires the Auditor-General to undertake or complete an audit of an entity for any financial year ending before that date if the Auditor-General was not the auditor of the entity before that date.