A survey commissioned by the Office of the Auditor-General has found there is a relatively low incidence of fraud in the public sector, but vigilance is needed to keep it at bay.
The office says that, despite New Zealand's "clean" image, 42% of public and private sector organisations suffered from an economic crime in the year to August 2009.
Of those who took part in the public sector survey, 22.5% of respondents were aware of some form of fraud in the past two years.
The survey found that the incidence of fraud is lowest where organisations are receptive to talking about and dealing openly with fraud, and where matters are referred to enforcement agencies.
Of respondents who said fraud was dealt with internally, 49% knew of incidents in the past two years compared with 21% in organisations where incidents were reported to the police.
Overall, 39.5% of the incidents of fraud known to have occurred were reported to enforcement agencies.