The watchdog tasked with overseeing the country's spy agencies says it is not yet possible to say they have adequate systems in place to ensure correct behaviour.
The annual report by Inspector-General of Intelligence and Security Cheryl Gwyn has been tabled in Parliament by Prime Minister John Key.
Ms Gwyn has powers allowing her to access all premises and documents of the intelligence and security agencies, and to require the appearance of witnesses under oath.
Her annual report must also outline an assessment of the compliance systems of the intelligence agencies, and comes after revelations of illegal spying on New Zealanders.
However, Ms Gwyn said today it was not yet possible to give assurances that the two agencies had comprehensive compliance regimes.
"Due to my limited time in the role and challenges to adequately resource the Office during the reporting year, I am not yet able to certify that either the NZSIS [the New Zealand Security Intelligence Service] or GCSB [Government Communications Security Bureau] has overall systems that are sound.
"That does not necessarily mean the compliance systems are unsound.
"While I am not able at this stage to certify the agencies' compliance, I am encouraged by the significant progress made by the GCSB following the Kitteridge report. The GCSB has devoted significant resources and organisational focus to compliance matters.
"During the reporting period, the NZSIS did not have an overall compliance framework or dedicated compliance and audit staff. However, the current Director has recently appointed a compliance advisor and made clear her intention to have a strong organisational focus on compliance matters, and I expect that progress will be made in the current reporting year."
Ms Gwyn, an experienced lawyer, took over the job of Inspector-General in May last year.
Her office has a larger, more proactive role as a result of GCSB reforms passed into law in 2013.
The reforms increased the scope and resourcing of the oversight regime, and came after a report by former Cabinet secretary Rebecca Kitteridge that found dozens of Kiwis could have been spied on illegally.
Revelations by Edward Snowden about intelligence gathering by the American-led Five Eyes spy system, of which New Zealand is a member, have kept the spotlight on the activities of intelligence agencies.
Today's annual report released today covers the period July 1, 2013 to June 30 last year. Ms Gwyn said she expected the report for 2014/2015 to be more comprehensive.
"My office is now well positioned to carry out a full programme of audit and review that is critical to effective oversight, in addition to strengthened inquiry and complaints work."
By Nicholas Jones of the New Zealand Herald
