Appendix 1: Our work on service performance information in 2007/08

Central government: Results of the 2006/07 audits.

Our audit emphasis involved reviewing 2007/08 SOIs for most government departments and Crown entities to understand the strategic and outcome context for annual SSP performance measures, as well as entities’ processes and rationale for including these in the SOI. Our reviews covered the following information required under the Public Finance Act 1989 for government departments and the Crown Entities Act 2004 for Crown entities as related to the two components of service performance reports:

The SOI medium-term, outcomes-oriented component:
  • As the contextual base for the forecast SSP.
  • As a major reference for drawing conclusions on the “appropriateness” of the forecast SSP elements (outputs and output classes, measures, and standards).
Public Finance Act, section 40.

Crown Entities Act, section 141.
The SOI annual, outputs-oriented component (forecast SSP):
  • As the framework against which the actual performance is to be reported in the annual report.
Public Finance Act, section 41.

Crown Entities Act, section 142.

Overall, we expected that entities would have a performance reporting framework comprising:

  • the medium-term component, including information on the reporting entity’s objectives, outcomes, impacts, and operating intentions, together with related performance measures and standards and other information required by legislation and generally accepted accounting practice (GAAP):
    • clearly identified outcomes and supporting discussion on the entity’s role, functions, strategic priorities, challenges, and risks to provide the context for the entity’s role and functions; and
    • main measures and standards for outcomes, objectives, or impacts that are clearly specified and that cover a period of three years and provide baseline data that places measures and standards in a more meaningful context and allows progress to be tracked;
  • the annual forecast SSP component, including information on the reporting entity’s intended outputs, together with related performance measures and standards and other information required by legislation and GAAP:
    • logically aggregated output classes/outputs with clearly specified outputs that focus on external impacts; and
    • clearly specified performance measures and standards that are relevant and balanced, and provide baseline data for measures and standards; and
  • a coherent structure and integrated contextual information that makes evident, through linking within and between the information in the two components:
    • the reasons for the entity’s outputs; and
    • the focus of its reporting including the rationale for, and the relationships among, the elements, performance measures, and standards.

We based the content and qualities expectations against which we reviewed SOIs mainly on the following sources:

  • applicable public accountability information requirements - for example:
    • Public Finance Act 1989 (and related Treasury/SSC guidance);1
    • Crown Entities Act 2004 (and related Treasury/SSC/DPMC guidance);2 and
    • Local Government Act 2002; and
  • Statement of Concepts for General Purpose Financial Reporting (ICANZ), interpreted and modified by us for application to service performance reporting:
    • TPA-9, Service Performance Reporting (ICANZ); and
    • AG-4, Audit of Service Performance Reports (OAG).

1: The Treasury and the State Services Commission (March 2007), Guidance and Requirements for Departments: Preparing the Statement of Intent.

2: The Treasury and the State Services Commission in consultation with the Department of the Prime Minister and Cabinet (September 2005), Preparing the 2006/07 Statement of Intent - Guidance and Requirements for Crown entities.

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