Part 1: Introduction

Purpose of this discussion paper

1.1
The purpose of this discussion paper is to provide helpful examples of reporting practice to public sector entities required to produce forecast performance reports under the Public Finance Act 1989 and the Crown Entities Act 2004.

1.2
During 2008, the Office of the Auditor-General carried out in-depth reviews of the 2008/11 statements of intent (SOIs), including statements of forecast service performance (forecast SSPs), of 125 government departments and Crown entities. The results of these reviews have been reported to Parliament.¹They show that the overall quality of performance reporting in the state sector continues to be poor.

1.3
Our observations on the state of public entities’ performance reports have been comprehensively documented in our June 2008 report, The Auditor-General’s observations on the quality of performance reporting. Our Office’s findings from the 2008/11 SOI reviews are consistent with those expressed in that report.

1.4
We were unable to identify one 2008/11 SOI as a model of “best practice”. Further, it is difficult to conclude that any specific sections of the SOIs reviewed can be called definitive “best practice examples” because, without exception, they fall short of being model statements. However, we are confident that entities are improving their external accountability reports, and we hope that we will be able to report more favourable results in the near future.

1.5
Despite the current lack of best practice examples, we were able to identify “better” examples of reporting practice, which might be helpful for other entities. We have reproduced these examples in this paper with a strong, general caveat that although they illustrate features we find useful, there are other aspects that still need attention.

1.6
Therefore, it is important to remember that although this publication gives useful examples of current reporting practice, it is not intended to be a best practice guide, or even a good practice guide. It is descriptive, rather than prescriptive. It does not critique the illustrative examples. We have at times referred to some of the shortcomings in the examples given, but these comments are not an in-depth evaluation of the reported information.

1.7
We have provided a Glossary which includes technical terms and legislative definitions.

Scope of this discussion paper

1.8
The examples in this document are reproduced from the 2008/11 SOIs and the 2008/09 forecast SSPs. For government departments, the forecast SSP information is contained in the Information Supporting the Estimates of Appropriation.

1.9
Our comments are limited to presentation and content issues with the disclosed material. Our comments do not address the overall validity of the SOI contents for the featured entities. To evaluate each report’s relevance and reliability requires an in-depth understanding of each entity’s strategies, operations and priorities, and the performance management arrangements underpinning them. This is outside the scope of this discussion paper.

1.10
The examples of reporting practice in this document focus on outcome, impact, and output reporting. There are other elements of performance reporting (for example, inputs, resources, processes, and other objectives) and specific legislative reporting requirements (like cost-effectiveness measures, organisational health and capability, and risk management approaches) that we do not discuss.

1.11
The commentary in this publication is provided as context for the examples. Several publications are available that provide in-depth commentary on performance reporting matters. These include guidelines issued by the Treasury and State Services Commission for people who prepare accountability reports, as well as other publications we have produced.

1.12
With regard to outcome, impact, and output reporting, we have not tried to cover every issue or provide an example of every facet of performance reporting. We hope that public sector entities will find value in reviewing the examples of reporting practice we have included.

1: Central government: Results of the 2007/08 audits.