Retail Deposit Guarantee audit welcomed
Auditor-General Lyn Provost will complete a performance audit of the Crown's Retail Deposit Guarantee Scheme which ended earlier this week.
Tuesday, October 12th 2010, 3:02PM
Provost signalled in her 2010/11 annual plan that she intended to carry out a performance audit to examine aspects of how the scheme was implemented and managed by The Treasury because of its economic and financial significance.
The audit will include an assessment of how effectively and efficiently Treasury has:
- Identified and monitored the risks to the Crown posed by financial institutions covered by the scheme - including The Treasury's monitoring of South Canterbury Finance.
- Identified and monitored how well the scheme has met its objectives.
- Attempted to improve the scheme based on findings of its monitoring.
- Explained the purposes and functions of the scheme to Parliament and the public.
- The audit will identify improvements to the scheme or future similar schemes.
The Auditor-General will not examine whether the scheme was an appropriate response to the international financial crisis or the appropriateness of the scheme's design.
It is expected that the audit's findings will be reported to Parliament by 30 June next year.
Finance Minister Bill English says given the Crown's payout last month under the scheme to South Canterbury Finance depositors, an independent performance audit of the scheme's operation by the Auditor-General is timely and appropriate.
He says in September last year, the Government moved to extend the Retail Deposit Guarantee until the end of 2011 on significantly more restrictive terms than before.
"It's therefore appropriate that the Auditor-General now looks at how the scheme was implemented and managed," says English says.
Meanwhile, The Treasury will later this week publish a large number of documents related to South Canterbury Finance's membership of the Retail Deposit Guarantee and events leading to its receivership in late August.
English says the documents will confirm that the Government and officials worked carefully and thoroughly through the issues on behalf of taxpayers.
"As we've said, throughout this process the Government had three objectives:
"Firstly, making sure South Canterbury Finance depositors had some certainty under the terms of the guarantee. Secondly, we wanted to sure that the cost to taxpayers was minimised. And thirdly, we wanted to keep disruption to the wider economy to a minimum."
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