Part 4: Planning and guidance for monitoring activities
4.1
Monitoring of Crown entities can involve a wide variety of tasks. Some of these need to be carried out so that the Minister can meet their statutory obligations. Others may provide the Minister with assurance or advice about specific matters in relation to the Crown entity.
4.2
It is important that departments carefully plan the monitoring work that they intend to carry out. This is necessary to ensure that their work is focused on supporting the responsible Minister, covers the matters it needs to, and can be carried out in a timely way. In deciding the focus of their monitoring work, departments must consider issues and risks for each Crown entity.
4.3
As some monitoring activities have specific, detailed requirements or involve specialised skills, staff may need guidance to help them carry out these activities.
4.4
In this Part, we discuss how the departments:
- planned for monitoring activities; and
- provided guidance to help staff carry out monitoring activities.
Key messages
4.5
We make one recommendation in this Part about departments taking account of each Crown entity’s issues and risks when they plan and carry out monitoring work.
4.6
In most cases, the departments did not use information about issues and risks to help them plan and prioritise monitoring work. The main exception to this was the work that MED carried out linking information about issues with its work programme for two Crown entities it monitored. We identified a number of benefits resulting from this work.
4.7
The departments had carried out some work to plan when they would carry out monitoring activities. This included sharing information about when particular outputs were due from Crown entities.
4.8
MED had prepared comprehensive guidance to help staff carry out their monitoring activities. This is good practice.
Planning for monitoring activities
The departments could plan more comprehensively to provide a better focus for monitoring activities.
Using information about issues and risks to plan and carry out monitoring work
4.9
The departments could improve the way they use information about each Crown entity’s issues and risks in planning and carrying out their monitoring activities.
4.10
In most cases, it was not clear whether or how the departments were using information about the issues and risks for Crown entities to direct the way they carried out monitoring activities.
4.11
In one example, which we discuss below, a department did not take action in response to significant problems.
Example 1
Lack of planning to address issues and risks
| We saw one example where a monitoring department* had identified significant problems in a Crown entity’s governance and operations that would take some time to address. The department advised the responsible Minister of the findings. The Minister asked the entity to take action to address the problems. The entity carried out some of this work. The department took no action to monitor whether the entity addressed the problems. We saw no evidence of the department identifying the entity as a “high-risk” or “high-priority organisation”, requiring closer monitoring attention than usual. We saw no evidence of the department assessing the extent to which the entity had addressed the problems. A better course of action would have been for the department to form a clear view on how it would monitor and report to the Minister on the entity’s progress in addressing the problems, and to carry out this work. |
* This is a report commenting on the departments’ performance, not the Crown entities’. To protect the anonymity of the Crown entity in this example we have not identified the department.
4.12
By comparison, MED carried out work linking information about each Crown entity’s issues with MED’s work programme for two of the entities it monitored. It had a monitoring plan for each entity for the 2008/09 financial year. The plans set out information about issues for the entity and used this to provide a clear focus for monitoring activities. Each plan described how tasks would be carried out, and included reference information about the entity and the fit between the entity’s strategic direction and government policy.
4.13
In our view, the plans were useful because they provided staff with an overview of what MED was trying to achieve and enabled staff to plan monitoring activities more effectively. Specifying a one-year time frame for the plan was practical, because it complemented other annual processes for MED and the Crown entity, and suggested that the plan would be reviewed at least annually.
4.14
Documents that MED prepared for entities that it had monitoring plans for had a sense of consistency and purpose. One of the plans, and the information resulting from it, showed that staff who were monitoring the Crown entity had a clear view of how they wanted to improve their monitoring activities and were doing so.
4.15
DIA had made good progress in preparing monitoring plans for the Crown entities we reviewed. This work included useful background information about the entities. We encourage DIA to continue with this work.
4.16
Where the departments did not have an established plan, the monitoring activities for a Crown entity often appeared to be disconnected from each other and carried out only as a compliance exercise. It was also difficult to determine whether staff had a common understanding of significant issues for the entity and any monitoring priorities that resulted from these issues.
4.17
Departments may wish to plan monitoring work through means other than an entity-specific monitoring plan. Regardless of the method they choose, it is important that they have a clear means of taking account of each Crown entity’s issues and risks when they plan and carry out monitoring work.
| Recommendation 3 |
|---|
| We recommend that the departments have a clear means of taking account of each Crown entity’s issues and risks when they plan and carry out monitoring work. |
Planning when monitoring activities will be carried out
4.18
The departments carried out some work to plan when they would carry out monitoring activities and to share this information with Crown entities.
4.19
All the departments had a schedule of dates for important monitoring milestones or tasks – for example, when a Crown entity’s quarterly reports were due, or when meetings between the responsible Minister and the Crown entity were scheduled.
4.20
The schedule of dates was often included in the output agreement or memorandum of understanding between the responsible Minister and the Crown entity. This information was brief and usually set out dates for when the entity would provide the monitoring department with particular information (for example, performance reports).
4.21
It was practical to include the schedule of dates in output agreements or memoranda of understanding. Doing so provided the Crown entity, the responsible Minister, and the monitoring department with a common understanding of when outputs were expected or meetings were likely to be, and they could plan for them.
4.22
In Parts 5, 6, and 8 (where we discuss financial planning, SOIs, and board appointments processes), we comment on the operational planning or processes that the departments had for carrying out specific monitoring activities. In most cases, the planning or processes could be improved. Within each Part, we have made recommendations or suggestions for improvements.
Providing guidance to help staff carry out monitoring activities
MED provided comprehensive guidance to help staff carry out monitoring activities.
4.23
Monitoring of Crown entities encompasses a wide range of activities. Each activity requires detailed knowledge and is sometimes carried out infrequently. This means that easily accessible guidance is important for staff to plan and carry out particular tasks (for example, board appointments processes). Such guidance can help staff gain a better understanding of what is involved in the monitoring of Crown entities.
4.24
MED had a manual to help staff carry out general monitoring activities for Crown entities. It also ran occasional workshops for staff about particular monitoring activities. The information in MED’s manual and the workshops were a good way of capturing and providing guidance to staff to help with their monitoring activities, particularly because monitoring staff were located in different business units throughout the department. We encourage DIA and MCH to consider preparing guidance to help staff carry out their monitoring activities.