Trends in the use of performance information

September 1, 2006
TRENDS IN THE USE OF PERFORMANCE INFORMATION Conference hears from legislators, auditors, senior officials Public servants rarely have an opportunity to hear legislators and legislative auditors speak frankly about how legislators use government performance information. A recent conference in which CCAF participated presented just such an opportunity. This Update encapsulates, in easy-to-read bullet format, highlights of several sessions from Re-energize: The 2006 Summit on Results-Based Management. The conference took place in Victoria, B.C. on May 8-9, 2006. Note: You can find more information and some of the speakers & presentations on the conference Web site: www.reenergize.ca. Finding the Political Champions CCAF Executive Director Michael Eastman chaired a panel that looked at how political leaders are using information on performance. Panel members included: Rita Dionne-Marsolais, a member of the Quebec National Assembly and Chair of the Assembly's Committee on Public Administration Ken Stewart, a former member of the B.C. Legislative Assembly, former Chair of the Assembly's Select Standing Committee on Crown Corporations and currently a councillor for the B.C. Municipality of Maple Ridge Fred Dunn, Auditor General of Alberta Doug Griffiths, a member of the Legislative Assembly of Alberta and Deputy Chair of the Assembly's Standing Committee on Public Accounts. Michael Eastman CCAF's recent Parliamentary Oversight Committees research found that committees must have access to credible, reliable and appropriate information Committees tend to concentrate on the reports of the legislative auditor rather than reports from government because the former are more understandable and tend to comment on issues of interest for legislators CCAF's "Users and Uses" research looked at how legislators, the media and the general public use the public performance reports that governments produce Many governments in Canada have invested enormous time and resources in publicly reporting their performance However, the primary intended audiences for performance reports – legislators, the media and the public – have generally made little use of them We identified six reasons why legislators tend not to use performance reports: Public performance reports do not reflect legislators' interests and how they view the world Legislators feel that public performance reports lack credibility The system offers few rewards or incentives to legislators who scrutinize the government's performance Legislators have information overload and limited time Legislators need staff support to effectively use public performance reports Public performance reports are not written from the perspective of the legislator Public performance report producers could communicate with report users to determine what information users need in reports, and find practical ways to meet those needs They could design reports to include the user's perspective and encourage increased use of public performance reports The "reward" for government would be producing information that is used because it has value That could lead to increased trust between government and legislators, the media and the public Rita Dionne-Marsolais There is a major lack of public trust and confidence in government We therefore need to better communicate to the public, in simpler terms, the challenges we face and the seriousness of addressing these challenges Quebec's Public Administration Committee (PAC) attempts to play a role in this Reduce or stop the growth of public expenditures Review and allocate estimates to priority services (e.g. health and education) Ensure the responsible management and use of public funds Quebec Public Service Modernization Plan: Evolving from a culture of processing to one of results Assuring optimal use of resources (rather than reviewing resource allocation) Ensuring accountability of management before Parliament Quebec's PAC is non-partisan; the chair (Opposition) and vice-chair (Government) issue joint releases that are clear and non-partisan The PAC's tools include: A monthly examination of ministries' financial commitments over $25,000 Discussions with the Auditor General on his semi-annual reports to the Assembly Hearings with deputy ministers on their annual management reports in relation to their four-year strategic plans Legislators come from a variety of backgrounds Government language can be scary to them We need public servants to help us understand Ken Stewart B.C.'s Crown Corporation's committee developed 11 criteria that it uses to review the annual reports and service plans of the organizations it reviews Along the lines of the 9 principles for better public performance reporting developed by CCAF The committee asks organizations to provide their annual reports and service plans two weeks prior to appearances before the committee It is difficult to get MLAs to read these reports In hearings, the committee focuses on these key issues: What do you do? Why do you do it? Who told you to do it? Show us you are doing what you say. Prove it (with measurement). What is your plan for the future? Fred Dunn In 1993, Alberta's Financial Review Commission recommended better government accountability The 1995 Government Accountability Act created a requirement for: a government-wide fiscal plan and consolidated budget a three-year cross-government business plan a consolidated capital plan quarterly financial reports (updated fiscal forecast) an annual report with consolidated financial statements It also required ministries to produce: three-year business plans annual reports with a consolidated financial plan, performance measures, and results analysis The business plans are used by MLAs for debates in the Legislative Assembly on estimates The annual reports are referred to the Public Accounts Committee for review and questioning Doug Griffiths Alberta's Public Accounts Committee: Helps ensure that government accounts for its operating policies and actions and its management and use of public resources Is concerned with value for money in the administration of government policy rather than with government policy itself Members use the performance information in ministry annual reports to: Hold management accountable for results achieved and the use of public resources Assess whether value for money is achieved with resources spent Inform future policy decisions and debates Members' questions focus on: Goals, strategies and actions Why were they effective? How does the ministry know? Performance measures Are the results adequate? If not, what will change? Are the targets appropriate? Types of performance measures used: are they appropriate to assess performance (inputs, outputs or outcomes)? Financial results Reasons for significant variances from budget? Alberta's Public Accounts Committee: Needs to continue to improve its review and use of public performance information Plans to examine the performance reports of government agencies, boards and commissions Innovations and Approaches for Advancing Results-Oriented Government at Executive and Management Levels Grant Robertson Ministerial Liaison, Alberta Finance Alberta's 1995 Government Accountability Act created "Measuring Up" The first annual performance report in Alberta and Canada Implemented in a period of restraint, crisis Leadership from the top was critical Statement in 1995 Alberta Budget Benchmarks, targets Current focus: More strategic, less operational Inter-linked to more detailed information (able to "drill down") Introduction of standards Auditor General will report based on standards Finance has to police the use of standards User-friendly reports Objective: shorter, friendlier reports Use of new technologies Challenges: Budget surpluses: hard to get the system to respond How to link government outputs to outcomes? How to focus on just a few measures and goals? How to consolidate non-financial performance measurement? How to recognize and describe legitimate political goals? How to bridge language differences between political and managerial levels? Who's listening? Compare attention received by Budget vs. performance reports Haven't been able to interest media unless there's a "car crash" Lessons: Need a political champion Management must walk the talk Keep simple, short Use it or lose it Accept ambiguity Get the targets right Governance: Adopting a Results-Oriented Approach to Governance of Agencies and Boards Brenda Eaton Chair, BC Housing It is difficult to do performance management and measurement well, especially in the public sector What to measure? Too many things. But still critically important to do Work through what is truly important to the organization, even if it is almost impossible to do BC Housing's accomplishments: Great alignment, working relationships between Minister, Board, staff Shared input Few measures Focus on areas of prime importance Concrete ties to organizational performance Needs work: Obtaining meaningful input from the Board Paying balanced attention to core issues, not just "new stuff" Benchmarking not just with previous year, but with other organizations, realistic targets Considering the Role of Assurance: What is the Role of Assurance in Advancing Results-Oriented Government? Ron Salole Vice-President, Canadian Institute of Chartered Accountants CICA's Task Force on Public Performance Reporting was created in April 2004 to draft a Statement of Recommended Practice regarding public performance reporting based on CCAF's principles Rationale: Sound public performance reporting can be a powerful tool in promoting better understanding and debate about how resources were used, what was achieved in comparison to what was planned, and how to improve performance In turn, this understanding and discussion can contribute to: a better system of governance better management better decisions greater public trust and confidence Emphasis is on content, not structure, of public performance reports Include financial and non-financial performance information It's a framework describing the nature and extent of information to be disclosed – not prescriptive Practitioners generally support efforts to produce guidance Desire for audit stronger than expected Variety of perspectives exist about users and their needs – need to enhance guidance in this area Various stages of readiness among entities that would use this SORP Note: CICA released the final SORP in June 2006 Ronda White Assistant Auditor General, Alberta The Alberta Auditor General's Office produces audit reports on the performance measures of the government and all 24 ministries It provides assurance on performance information because: Users rely on public performance information to assess performance (i.e. value for money) and to make key decisions Assurance adds credibility to the performance information Current report: Verify that the measures are reliable, comparable, understandable and complete in relation to the business plan No opinion on whether the set of measures are relevant and sufficient to assess the performance of the Ministry in achieving its goals The Public Accounts Committee is starting to use the information, but is it useful to the public and other stakeholders? Where to next? Need to evaluate the state of managing for results and public performance reporting and assess the level of assurance required on public performance information Is the information used and does the user require assurance? If so, what level of assurance is required? Assessment of relevance and sufficiency? If so, how and when? Assurance on all performance information and reports? Cost-benefit of providing assurance on performance information for both preparer and auditor? Susan Jennings Assistant Auditor General, British Columbia B.C.'s Budget Transparency and Accountability Act requires ministries and Crown agencies to report publicly on their performance There is little public use of these reports because they lack credibility Public servants therefore do not want to produce them The B.C. Auditor General's Office is responding to demand from the Public Accounts Committee among others for third-party assurance regarding the reliability of information Assurance is the process of adding credibility to reported information The demand for assurance exists not only in B.C. but elsewhere in Canada and in Europe and the U.S. The B.C. Auditor General's Office conducts annual assessments of the quality of performance reporting and reports its findings The Office found that the WorkSafe BC 2004 Annual Report is a leading edge document This is a new field and there is still much to learn.

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