Every year, government agencies invest hundreds of millions of dollars in new products and services. Ministers need to know that there is a system for encouraging and providing adequate incentives for the effective and efficient use of capital resources.

Gateway™ reviews are independent peer reviews of a project or programme and are repeated at key points in the project or programme's life cycle. These reviews provide advice and support to the project sponsor. The reviews focus on how to help the project or programme progress successfully rather than finding out what might have gone wrong.

Gateway reviews were introduced in New Zealand in 2008, among a range of initiatives to strengthen capital asset management in the public sector. Up to 31 May 2016, there have been over 180 reviews covering more than 80 projects and programmes, involving about 40 departments and agencies.

Examples of projects and programmes that have had Gateway reviews are the Transmission Gully project, a patient information system for South Island district health boards, the refurbishment of Government House, the New Zealand Defence Force's new Pilot Training Capability programme, and the Inland Revenue Department's Business Transformation programme.

Each Gateway review costs the agency $75,000. This fee covers the direct costs of the reviews as well as the cost of administering the reviews. With 25-30 reviews carried out each year, Gateway reviews have an annual cost of about $2 million.

Initially run by the State Services Commission, Gateway reviews moved to the Treasury at the end of 2013. The reviews are currently managed by the Treasury's Investment Management and Asset Performance team.

We carried out a performance audit to assess whether Gateway reviews have been designed and implemented to deliver benefits to major projects and programmes in New Zealand.

Summary of our findings

• Gateway reviews have delivered benefits to individual projects. Sometimes Gateway reviews help projects by providing a sounding board for the project sponsor. In other instances, Gateway reviews have suggested specific actions, which have directly affected a project's success.
• The effectiveness of Gateway reviews in New Zealand has not been measured. Analysis in the United Kingdom found that Gateway reviews delivered cost savings to projects. This analysis was complex and has not been reproduced here. However, in our view, Gateway reviews are likely to have resulted in cost savings for New Zealand projects.
• One way that Gateway delivers value is through the recommendations made by review teams. These recommendations are of mixed quality. Most, but not all, are implemented. Poor-quality recommendations substantially reduce the value that Gateway reviews can add to a project.
• Gateway reviews can benefit more than just the individual projects that are reviewed. The skill level of people taking part in reviews are improved by giving them exposure to different projects in different agencies and from working with different reviewers.
• There is scope to improve the way lessons from Gateway reviews are shared. Currently, the Treasury categorises Gateway review recommendations by themes and publishes the results. Not everyone we spoke to knew about this. The Treasury has started to collect information about examples of good practice observed during reviews, but is not yet collating and analysing this information. Sharing lessons more effectively could benefit all projects.
• Confidentiality is an important part of a Gateway review, and it does bring benefits. However, it also conflicts with transparency and accountability, which are important values in New Zealand's public sector.

We recommend that the Treasury:

• determine how to more effectively share lessons learned through Gateway reviews, including examples of good practice;and
• ensure that the work it has under way to consider new types of investment review takes into account:
  • the limitations of Gateway reviews;
  • the specific needs of projects and programmes in New Zealand; and
  • the information and assurance needs of stakeholders such as Ministers, chief executives, boards, and the Corporate Centre.