The Auditor-General's office is to look at the performance of the Government's retail deposit guarantee scheme, including at the Treasury's monitoring of the collapsed South Canterbury Finance.
In a letter to Finance Minister Bill English, Auditor-General Lyn Provost says she expects to report back to Parliament by the end of June next year.
Mr English says given the payout to South Canterbury Finance depositors in September, it is timely and appropriate for the guarantee scheme to be audited.
The miniser says this is preferable to the kind of ill-defined and politically motivated inquiry that Opposition parties called for after the collapse of South Canterbury Finance.
Scheme ends
The retail deposit guarantee scheme, which led to taxpayers paying out $1.6 billion to bondholders of South Canterbury Finance, ends on Tuesday.
The guarantee was introduced to avoid a run on the financial system after Australia introduced a similar scheme at the height of the credit crunch in 2008.
The final cost to the taxpayer is estimated at $400 million after the deduction of fees paid by the scheme's participants and asset sales.
A new guarantee scheme will cover seven finance companies, holding just over $2 billion in deposits, until the end of next year.
Under the old scheme, $133 billion were being held by 93 banks and finance companies.
