Appendix 1: Glossary
This glossary explains the technical terms used in this discussion paper, and provides definitions from other relevant sources (see the shaded text).
Dimensions of performance are the aspects or properties of performance that may be captured by a particular performance measure. They include, but are not limited to, quantity, quality, timeliness, location, cost, and reliability of delivery.
Elements of non-financial performance reporting are costs (including resources), outputs, and outcomes, which can be measured for the purpose of reporting and assessing the reporting entity's performance.
Impacts are the contributions made to an outcome by a specified set of outputs. They represent the relatively immediate or direct effect on stakeholders of the reporting entity's outputs. The relationship between outputs and impacts is therefore tighter and in closer proximity than the relationship between outputs and outcomes. This is because the reporting entity has more control or influence over impacts than over outcomes, the cause-effect relationship for the latter being looser and more remote. Impacts represent an intermediate step in the cause-and-effect chain between outputs and outcomes (that is, they are intervening factors).
| Impacts are the contribution made to an outcome by a specified set of outputs, or actions, or both. [Public Finance Act 1989] |
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Inputs are the resources used by the reporting entity to produce its outputs.
| Inputs are the resources used to produce the goods and services, which are the outputs of the reporting entity. [ICANZ, Statement of Concepts of General Purpose Financial Reporting (withdrawn); FRS-2: Presentation of Financial Reports (withdrawn); Technical Practice Aid No. 9: Service Performance Reporting (referenced in paragraph NZ 101.2 of the New Zealand Equivalent to the IASB Framework for the Preparation and Presentation of Financial Statements, June 2005)] |
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Non-financial performance reports are reports to users that provide primarily non-financial information that records the performance of a public entity against specified objectives. They can encompass a comprehensive range of performance aspects (including outcomes, outputs, inputs, and capability), and the information can be presented in various statements (for example, Estimates, statements of intent or statements of corporate intent, LTCCPs, annual plans, statements of service performance, and other statements within annual reports).
Objectives are not defined for the purpose of this conceptual framework. In the context of non-financial performance reporting, we use the term in its common, wide-ranging meaning to refer to organisational aims or goals that relate to elements other than outcomes, impacts and outputs.
| Unlike impacts and outcomes, objectives are not defined. Objectives apply where no impacts or outcomes are readily identifiable. This situation is most likely to arise with output expense appropriations for administrative and support services internal to the Crown (intra-government activities) and with some other appropriation types, particularly capital expenditure. [Information Supporting the Estimates of Appropriations: Technical Guide 2008] |
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Outcomes refer to the state, condition, impacts on, or consequences for the community, society, economy, or environment resulting from the existence and operations of the reporting entity.
| Outcomes are the impacts on or consequences for, the community resulting from the existence and operations of the reporting entity. Desired outcomes provide the rationale for action and are the basis on which decisions should be made concerning the outputs as part of the range of possible interventions. [ICANZ, Statement of Concepts of General Purpose Financial Reporting (withdrawn); FRS-2: Presentation of Financial Reports (withdrawn); Technical Practice Aid No. 9: Service Performance Reporting (referenced in paragraph NZ 101.2 of the New Zealand Equivalent to the IASB Framework for the Preparation and Presentation of Financial Statements, June 2005)] Outcome means a state or condition of society, the economy, or the environment; and Includes a change in that state or condition. [Public Finance Act 1989] |
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Output classes are groups of outputs of a similar nature.
| Class of outputs or class means a grouping of similar outputs. [Public Finance Act 1989] Output class or group: For external reporting and appropriation purposes, individual outputs are often aggregated into output classes or groups that are similar in nature. [ICANZ, Technical Practice Aid No. 9: Service Performance Reporting] |
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Outputs are the goods and services produced by the reporting entity. The term refers only to the goods and services produced for third parties – it excludes goods and services consumed within the reporting entity.
| Outputs are the goods and services produced by the reporting entity. [ICANZ, Statement of Concepts of General Purpose Financial Reporting (withdrawn); FRS-2: Presentation of Financial Reports (withdrawn); Technical Practice Aid No. 9: Service Performance Reporting] Outputs means goods or services that are supplied by a department, Crown entity, Office of Parliament, or other person or body; and includes goods and services that a department, Crown entity, Office of Parliament, or other person or body has agreed or contracted to supply on a contingent basis, but that have not been supplied. [Public Finance Act 1989] Outputs means goods or services that are supplied by a Crown entity; and does not include goods and services that are produced for purchase or consumption solely within the Crown entity group. [Crown Entities Act 2004] Activity* means a good or service provided by, or on behalf of, a local authority or council-controlled organisation. It includes the provision of facilities and amenities, the making of grants, and the performance of regulatory or other governmental functions. [Local Government Act 2002] |
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* The Local Government Act 2002 uses the term “activity” to refer to goods and services. In this discussion paper, we use only the term “output” to refer to goods and services, and we use the word “activity” according to its common and wider meaning.
Performance is a comprehensive concept and comprises outcomes, interactions with the public (including outputs and processes), inputs, and capability.
Performance measures are the specific criteria or means used to objectively measure performance (most commonly of output production and achievement of outcomes). They might be expressed as (but are not limited to) absolute numbers, percentages, ratios, point estimates, or ranges. They might also be qualitative in nature.
Performance reporting frameworks typically comprise the following components:
- the medium-term component (that is, the medium-term, outcome-oriented statement of intended achievements), which should include information on the reporting entity's objectives, outcomes, impacts, and operating intentions, together with related performance measures and targets and other information required by legislation and GAAP; and
- the forecast service performance report (that is, the annual, output-oriented statement of forecast service performance – or forecast SSP), which should include information on the reporting entity's intended outputs, together with related performance measures and targets and other information required by legislation and GAAP.
To constitute a “framework”, these components need to provide enough context and links (a) to strategic-level information and (b) within and between the information in the two components to provide a coherent structure for reporting. They need to clearly demonstrate the rationale for, and the relationships among, the contextual information, elements, performance measures, and targets. The components also need to provide enough context and links to the historical annual service performance report (that is, the annual, output-oriented statement of service performance – or SSP). The SSP is included in the annual report and should report actual service performance against the targets set in the forecast SSP, together with related performance measures and targets and other information required by legislation and GAAP.
Performance targets (also referred to as performance standards) set the specific levels of performance (the outputs produced or the outcomes achieved) that the entity aims to meet.
Service performance reports are reports to users that provide primarily non-financial information that records the output delivery performance of a public entity against specified objectives. This information is usually shown in statements of service performance (or equivalent reports) and is compared with information contained in forecast non-financial performance reports (for example, Estimates, statements of intent or statements of corporate intent, LTCCPs, and annual plans).
Users are those who rely on external general purpose reports as their major source of financial and non-financial information about the entity. For this purpose, users are assumed to have a reasonable knowledge and willingness to study the reported information with reasonable diligence. In relation to the public sector, specific users of external, general purpose performance reports include customers (that is, the recipients of public goods or services), funders and financial supporters (including taxpayers, ratepayers, and providers of grants and donations), elected or appointed representatives (for example, members of Parliament and select committees), and interested members of the public (for example, media commentators, academics and other analysts, and members of relevant professional or community groups). Although governors (for example, Ministers and local authority councillors), central agencies, other monitoring agencies, and entities' management are also users of external reports, they have access to, or are able to request, additional financial and non-financial performance information in carrying out their governance, monitoring, or management responsibilities.
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