The newly released Pilot Report of the Anti-Corruption Taskforce sheds light on New Zealand’s declining score in the 2025 Corruption Perceptions Index. It also validates the recommendations of TINZ’s 2024 report, An Assessment of the Effectiveness of Anti-Corruption Institutions in New Zealand in Deterring, Detecting and Exposing Corruption, which recommended analysis, data and monitoring of fraud and corruption in the public sector.
This is the first time a systematic assessment has been undertaken of fraud and corruption risks, incidents, and controls across parts of New Zealand’s public sector. While the report identifies some encouraging practices, it also exposes significant gaps that continue to undermine effective prevention, detection, and strategic intervention.
Between July and September 2025, six public sector agencies—five central government departments and one Crown entity—collectively responsible for $5.5 billion in taxpayer funding, assessed their fraud and corruption controls over a 15-month period. They also provided data on incidents and active cases.
Findings
The pilot found that internal fraud and corruption are almost certainly being under-reported. A total of 446 alleged incidents were recorded, ranging from misconduct to potentially serious criminal behaviour. These figures relate only to internal or “insider” threats and do not include external fraud against public funds. If extrapolated across the wider public sector, the true number of incidents could be in the thousands.
While many agencies reported that most cases involved misconduct rather than criminal offending, several serious matters were identified that would warrant enforcement action. Under-reporting was linked in part to limited awareness of corrupt conduct, including attempted bribery, and a failure in some agencies to recognise the intelligence value of recording such incidents.
The report also highlights wide variation in the maturity of fraud and corruption controls. Many agencies demonstrated strong integrity systems, including codes of conduct and gift registers, and reported prompt, professional investigations. However, others had critical gaps in risk management, such as inadequate monitoring of gifts and benefits and insufficient due diligence on suppliers, making undetected misconduct highly likely.
Some agencies showed high levels of maturity, with strong leadership, robust detection systems, and comprehensive policies. Overall, however, the pilot found that agencies tend to prioritise detection over prevention and focus more heavily on external fraud. The Taskforce emphasised that effective prevention is far more cost-efficient than investigating losses after the fact.
Senior leaders generally expressed commitment to tackling fraud and corruption, but translating this commitment into consistent operational practice remains a challenge. The report also warns against a culture of minimising or downplaying corruption risks, noting that identifying misconduct should be seen as a positive step toward stronger integrity. Encouragingly, many agencies hold valuable intelligence that could support the work of the SFO and Police if properly reported.
The pilot also found that most agencies did not attempt to quantify the value of losses prevented through their fraud and corruption controls. However, those that did make such estimates reported saving millions of dollars in taxpayer funds each year, clearly demonstrating that well-designed prevention measures deliver a strong return on investment. This reinforces the case for shifting greater emphasis from detection after the fact to proactive risk management.
Looking ahead
A lack of clear, nationwide definitions of fraud and corruption emerged as a recurring issue, particularly in relation to internal handling and referral to law enforcement. Most agencies also failed to quantify losses prevented, despite evidence that prevention measures can save millions of dollars annually.
The Taskforce has identified the following priorities for strengthening New Zealand’s anti-corruption framework:
- Expanding the initiative across the public sector through a mandatory reporting and compliance framework
- Developing and adopting a system-wide corruption risk assessment tool
- Improving reporting mechanisms and information-sharing processes
- Providing clearer guidance on when matters should be referred to law enforcement
- Building agency capability in line with identified fraud and corruption risks
- Establishing clearer, nationally consistent definitions of fraud and corruption
Together, these measures provide a practical pathway toward a more coherent, proactive, and resilient approach to safeguarding public resources and strengthening public trust.
The critical element now is to have Ministers recognising the threats as broader than organised crime, and championing the necessary work to improve our public sector integrity systems.
Read the full report Assessing fraud and corruption risks in the New Zealand public sector - Pilot report of the Anti-Corruption Taskforce.
