Glossary

This glossary explains the technical terms used in this publication and provides definitions from other relevant sources (see the shaded text).

Appropriateness refers to the usefulness or suitability of various aspects of the non-financial performance report and is a term that can be applied to:

• the overall non-financial performance reporting framework;
• the elements reported;
• the performance measures; and
• the targeted levels of performance or historical results.

Specifically, appropriateness means that the reported subject matter provides an adequate basis for an informed assessment of the entity’s service performance. In assessing whether the service performance report is appropriate, consideration is given to whether the information is relevant to the interests of users, reliable (that is, faithfully represented, supportable, neutral, complete, and balanced), understandable, and comparable.

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, and cost.

Elements of non-financial performance reporting include inputs, outputs, impacts, and outcomes – all of 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. Often referred to as “intermediate outcomes”, impacts represent the relatively immediate or direct effect on stakeholders of the reporting entity’s outputs.

Inputs are the resources used by the reporting entity to produce its outputs.

Non-financial performance reporting framework, for the purpose of published, statutory accountability reports, this kind of framework will typically be made up of the following components:

• A medium-term component that incorporates an outcome-oriented statement of intended or actual achievements. This should include information on the public entity’s objectives, outcomes, impacts, and operating intentions, together with related performance measures and targets and other information required by legislation and generally accepted accounting practice (GAAP).
• An annual component that incorporates a service performance report (often referred to as a “statement of service performance” or “SSP”). This is an output-oriented statement of forecast or historical service (that is, output) delivery, together with related performance measures and targets and other information required by legislation and GAAP.

To constitute a “framework”, these components need to give 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 explain the rationale for, and the relationships among, the contextual information, elements, performance measures, and performance targets. The framework, including the two components described above, should be evident both in the forecast non-financial performance report and in the historical (or “actual”) non-financial performance report. The historical non-financial performance report is typically included in the annual report and should report historical outcome and output performance against the targets set in the forecast non-financial performance report, together with related performance measures and targets and other information required by legislation and GAAP.

Non-financial performance reports provide primarily non-financial information that records the performance of a public entity against specified objectives. Such reports can encompass a comprehensive range of performance elements (including outcomes, outputs, inputs, and capability), and the information can be presented in various statements (for example, Information Supporting the Estimates of Appropriation, statements of intent, statements of corporate intent, long-term council community plans, annual plans, statements of service performance, and other statements within annual reports).

“Service performance reports” are non-financial reports concerned primarily with output performance information.

Non-financial performance reports can be:

• forecast performance reports, which are before-the-event statements that express intended, expected, or targeted performance for the period, or
• historical performance reports, which are after-the-event statements on results or achievements for the period, ideally against the forecast levels of performance.

Outcomes refer to changes in the state, condition, impacts on, or consequences for the community, society, economy, or environment resulting from the existence and operations of the reporting entity. (The outcomes sought provide the rationale for the range of outputs delivered by the entity.)

Output classes are groups of outputs of a similar nature. (They are sometimes referred to as “groups of activities”.)

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 (such as services provided by legal, research, human resources, and information technology functions to other functional areas within the same entity, which are often referred to as “internal outputs”).

Performance measures are the specific criteria or means used to measure performance (most commonly of outputs produced and outcomes achieved). They may be expressed as (but are not limited to) absolute numbers, percentages, ratios, point estimates, or ranges. They might also be qualitative in nature.

Performance targets are the specific levels of performance (usually relating to outputs produced and outcomes achieved) that the entity aims to meet. Various pronouncements and literature on performance reporting often use the term “performance standards” to refer to levels of planned performance. This term carries the nuance of levels established by legislative or other mandatory requirements; by contrast, the term “targets” is often reserved for levels that are aspired to or otherwise discretionary. This discussion paper uses the term “targets” as an over-arching concept to describe performance levels and, therefore, the term “performance targets” encompasses the notion of “performance standards”.

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 measures and targets. 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, Information Supporting the Estimates of Appropriation, statements of intent, statements of corporate intent, long-term council community plans, and annual plans).

Users are those persons who rely on published (that is, 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. Regarding the public sector, specific users of published, general purpose, non-financial performance reports may include: customers (that is, the recipients of public goods or services); funders and financial supporters (including taxpayers and ratepayers); 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, some grant providers, and employees in management at entities are also users of published reports, they have access to, or are able to request, additional financial and non-financial performance information (that is, special purpose reports) in carrying out their governance, monitoring, or management responsibilities.