Request for all information about an audit

Confidentiality
Free and frank opinions
Legislation display text:
Official Information Act 1982, ss 9(2)(ba)(i), 9(2)(g)(i)
Agency:
Ministry of Social Development
Ombudsman:
Beverley A Wakem
Case number(s):
174281
Issue date:
Format:
HTML,
PDF,
Word
Language:
English

Section 9(2)(ba)(i) OIA applied to staff interview records—implied obligation of confidence—release would be likely to prejudice the future supply of information to auditors—it is in the public interest for staff members to cooperate with audits—s 9(2)(g)(i) applied to auditor’s scoping discussions and working papers—release would inhibit the future free and frank expression of opinions by auditors—quality audits are an essential part of maintaining the effective conduct of public affairs—public interest generally met by disclosure of final audit reports—good reason to withhold staff interview records and auditor’s working papers—availability of final audit report not determined as complaint withdrawn

Background

After receiving allegations against a staff member, the Ministry of Social Development contracted KPMG to conduct an audit of its contracts with a particular trust. An MP requested ‘all documentation pertaining to the audit’.

The Ministry provided a summary of the audit findings and an outline of work undertaken in response to those findings. However, it refused to supply ‘all documentation’ about the audit under sections 9(2)(ba)(i) and 9(2)(g)(i) of the Official Information Act (OIA).

The requester complained to the Ombudsman.

Investigation

The Ombudsman requested a copy of the information and an explanation of the reasons for withholding. 

The Ombudsman noted that the information at issue documented the entire audit process from beginning to end—from internal scoping discussions within the Ministry and external discussions between the Ministry and KPMG—to KPMG’s working papers (including file notes, agendas, handwritten notes of interviews with staff members, and draft material)—to the final audit report.

The Ombudsman formed the opinion that, aside from a limited amount of purely factual material, most of the information leading up to the final audit report was properly protected by sections 9(2)(ba)(i) and 9(2)(g)(i) of the OIA. 

Section 9(2)(ba)(i) applies when releasing information that is ‘subject to an obligation of confidence’ would be likely to prejudice the supply of similar information, or information from the same source, and it is in the public interest that such information should continue to be supplied.

Section 9(2)(g)(i) applies when withholding is necessary to ‘maintain the effective conduct of public affairs’ through the free and frank expression of opinions.

Section 9(2)(ba)(i) was applicable to the ‘raw material’ supplied by staff members, ie, the handwritten notes of their interviews. It was not clear whether explicit assurances of confidentiality were given to the staff members, but the Ombudsman accepted that there was an implied obligation of confidence in respect of the notes. If the notes were disclosed, staff members would be much more circumspect and less cooperative in future interview situations.  They may even decline permission for auditors to take notes.  As a result, the quality of the audits would suffer, as would the quality of the record. It is in the public interest for staff members to be completely candid and cooperative with auditors, because quality audits contribute to sound management and financial practices, and act to prevent or remedy irregularities and undesirable practices.

Section 9(2)(g)(i) was applicable to the various scoping discussions and working papers. In the early and formative phases of an investigation, auditors and officials need to feel free to discuss and debate, and accept or reject, ideas, approaches and tentative conclusions. The requester in effect sought the entire audit file. If the entire audit file was disclosed, then in the future auditors and officials would feel inhibited in what they say, how they say it, and how they record what they say. Inhibition of this nature would prejudice the effective conduct of public affairs. Quality audits are an essential part of ‘maintaining the effective conduct of public affairs’

Sections 9(2)(ba)(i) and 9(2)(g)(i) are subject to a public interest test. This means the need to withhold must be balanced against the countervailing public interest in release. If the countervailing public interest weighs more heavily, the information must be released. If not, it can be withheld.

The Ombudsman recognised ‘clear and compelling countervailing public interest considerations favouring disclosure of information about audits’.  However, in her opinion, the public interest was in disclosure of information about the outcome of the audit, rather than the early investigative phases. Generally, the public interest may be addressed by disclosure of final audit reports, provided they are a full and fair reflection of the conclusions reached by the audits.

Outcome

The Ombudsman formed the opinion that there was good reason to withhold most of the information leading up to the final audit report under sections 9(2)(ba)(i) and 9(2)(g)(i) of the OIA. No opinion was formed on disclosure of the final audit report in this case because the complaint was withdrawn.

Compare this case with 387942 (request for evaluation and audit reports regarding extended supervision orders) and 437269 (request for final audit/operational review in relation to Spring Hill prisoner riot).

This case note is published under the authority of the Ombudsmen Rules 1989. It sets out an Ombudsman’s view on the facts of a particular case. It should not be taken as establishing any legal precedent that would bind an Ombudsman in future.

 

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