Social Security Benefits: Accuracy of Benefit Administration.

One of my key objectives for my term as Auditor-General is to promote improvements in the quality of performance reporting in the public sector. I will be building on work begun by my predecessor who published a key guidance document entitled Reporting Public Sector Performance. I am especially keen to see the principles contained in that document reflected in substantial improvements in the quality of many current output performance measures used by government departments and other public entities.

My objective has acquired even greater importance as a result of the initiative known as Managing for Outcomes, which was approved by the Cabinet in December 2001. This initiative requires departments to adopt a strategic and outcome-focused approach to planning, managing, and reporting, while continuing to focus on delivering outputs. As a consequence, output performance measures now need to form part of a comprehensive and coherent information set that describes each department's total performance in the context of its strategic environment.

In 2002-03, the Ministry of Social Development paid $11,743 million to over 800,000 beneficiaries. Given the very large sums involved, it is clearly important to ensure that payments are made accurately. An avoidable error rate of only 1% would represent a sum of approximately $120 million.

Our audit identified a number of areas in which we believe the information on benefit accuracy currently collected and published by the Ministry could be extended and improved.

I thank the Ministry’s staff for their co-operation in the conduct of the audit. I also extend my particular thanks to Professor Stephen Haslett of Massey University, who acted as our advisor on a number of statistical issues.


K B Brady
Controller and Auditor-General

1 December 2003

Note: There is a distinction between “benefits” (which are mostly “monetary benefits” payable under the Social Security Act 1964) and “pensions” (principally New Zealand Superannuation payable under the New Zealand Superannuation Act 2001 – which accounts for nearly half of all income support payments). We have treated both as “benefits” because the Ministry of Social Development employs the same systems and methods to administer them.

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