Auditor-General's report, Reflections from our audits
Auditor-General's report, Reflections from our audits: Investment and asset management
The Auditor-General’s Reflections from our audits: Investment and asset management was presented to the House of Representatives today. This is the fourth reflections report from the Auditor-General.
Our work programme theme for 2015/16 was Investment and asset management. This report brings together some reflections from our work under this theme.
Investment and asset management are critical to New Zealand’s future. Public entities are stewards of physical assets worth about $260 billion and financial assets worth about $145 billion. Public money must be wisely invested in these assets, if they are to continue to deliver essential services to New Zealanders in the long term.
To make good investment decisions there needs to be effective engagement by public entities with the people receiving the services about the service levels they expect and the affordability of those expectations. Public entities tend to have well-reasoned business cases for investing in assets, but the cases do not always take into account the whole of life of the proposed asset.
Public entities should also work co-operatively with other entities, where it is sensible to do so, to address the challenges and opportunities that can affect investment and asset management. This includes central and local government working more effectively together for the benefit of New Zealanders.
Often, better information is needed about the condition and performance of assets in order to make good choices and judgements about maintaining, renewing and replacing assets to optimise the delivery of public services.
Public entities with significant investments in financial assets have reasonably good structures and systems for managing and governing those assets. However, at a whole-of-government level, thought needs to be given to financial asset risks and the challenges and opportunities that those risks present. There should be an overarching investment strategy for the Crown’s financial assets.
We encourage decision-makers to think about the matters raised in this report. Although aspects of asset management are done well by some public entities, there are significant issues to be addressed and challenges to meet if public assets are to continue to deliver the services that New Zealanders expect over the long term.