3.3 Reporting on operations
Statutory requirement: Section 45(2) of the PFA
The annual report must provide the information that is necessary to enable an informed assessment to be made of the department's performance during the financial year (including an assessment against the intentions, measures and standards set out at the start of the financial year in the information on the department’s future operating intentions in accordance with sections 40 and 41)
There is no prescribed format for reporting on the department's operations and performance. Departments should determine a format that suits their particular organisation and that they believe will best promote Members of Parliament (and other users) understanding of the department's operations and performance.
The annual report must include an assessment against the relevant intentions, measures, and standards set out in the department's SOI. This will generally encompass reporting against:
- the specific impacts, outcomes and objectives the department sought to achieve or contribute to; and how it intended to conduct its operations to achieve those impacts, outcomes and objectives
- the department's main performance measures and standards for:
- the impacts, outcomes and objectives of the department
- the cost-effectiveness of the department's interventions, and
- the organisational health and capability of the department
- any other matters discussed in the SOI as being necessary to understand the department's performance.
Performance information presented in the annual report (or used for evaluative purposes in any forum) should be SMART (specific, measurable, attributable, relevant and timely), while avoiding measures that are too detailed to be meaningful in the context of annual reporting. For more information on performance measurement see the SSC and Treasury guide on performance measurement.[4]
The relevant intentions, measures and standards are those the SOI indicates apply to the financial year in question. Forecast figures should be included for comparison, and where there is a marked difference between forecasts and actuals this should be discussed in the annual report. It may be valuable to include benchmarks of current (and past) departmental performance against similar organisations, both nationally and internationally.
For those SOI intentions and standards that are set only for out-years, the department should look at whether it can report on progress made to date towards meeting those intentions or performance standards.
If the reader is to make an informed assessment of the department's performance, departments may need to continue the development of their performance indicators after the SOI is published. We encourage departments to include these new indicators in their annual report, where these are meaningful (that is, not overly detailed for an annual report). This also applies to reporting on any major evaluative activity performed during the year. Annual reports should note any plans being developed or major evaluative activity started if departments are not at a stage to report on completed findings.
Notes
- [4]This can be found at http://www.ssc.govt.nz/performance-measurement.
