Auditor-General pings six DHBs for poor financial systems

One department, one SOE and three DHBs need to improve both financial systems and management controls

The Auditor General has released the overall results for government agency audits for 2008 and 2009, finding improvements could be made to the management control environment of 43 percent of all central government entities and to the financial information systems and controls of 57 percent. District Health Boards appear to be more challenged in both categories than either central agencies or state-owned enterprises. Only one earned a very good rating for management controls and none for financial information systems. "It is disappointing that five entities (one government department, one SOE, and three DHBs) received needs improvements grades for both their management control environment and their financial information systems and controls," the report notes. The three DHBs in particular need of improvement are Capital and Coast DHB, Hutt Valley and Tairawhiti, which need to improve both their management controls and financial information systems. Canterbury, MidCentral and Whanganui DHBs are noted as needing to improve their financial information systems, but not their management controls. The report describes the findings as "pleasing" with 137 of the 150 entities (91 percent) receiving either a very good (no improvements needed) or good (only beneficial improvements needed) grade for their management control environment. Where financial information systems are concerned, 138 entities received either a very good or good grade. Government departments exclude the Offices of Parliament, the Government Communications Security Bureau, and the Security Intelligence Service. School boards of trustees and tertiary education institutions are not included in the analysis either. Air New Zealand has been included as if it were a State-owned enterprise.

Financial information systems and controls – grades for 2006/07 to 2008/09, as percentages

"We examined the detailed recommendations for improvement in the 9 percent of all entities that received needs improvement grades in 2008/09 for both the management control environment and financial information systems and controls. We did not find any particular recurring themes or issues. However, we will continue to carry out such analysis to see if there are any particular common themes or issues on which we can provide further guidance to both entities and auditors," the report says. The Auditor-General has published entity names and grades only for the DHB sector. "Although this information is available to the public through other means, we consider that there would be benefit in making this information more accessible to the public. We intend to look into this further," the report notes.

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