Annex 7: 2014/15 Strategic Planning and Reporting

This annex has been added to support departments thinking about changes to their strategic planning and reporting for 2014/15 and subsequent years; subject to amendments being made to the Public Finance Act (PFA) by the State Sector Public Finance and Reform Bill (the Bill).

What can departments can do in preparing for the Bill's enactment?

Using the Bill,[14] (or when available the amended PFA) and the information contained on pages 36-38 of this document, departments can start thinking about which of the amendments they will utilise to support their own performance and (where applicable) the performance of the sector they operate in.

Some matters departments could consider include:

• A department's strategy will need to cover a minimum of four financial years (an increase of one year), and may need to be tabled in Parliament only once every three years.
  
  Should the strategy cover a longer time period than the minimum given the functions and operations of the department/sector? When and at what intervals within that period will the department report on the impact of the component parts of the strategy? Are the department's operating environment, management and reporting systems stable and therefore should the department be thinking about, and talking to the responsible Minister about, preparing a statement of intent that may not need to be renewed for three years?

• With the shift from departments reporting statements of service performance to reporting on what is intended to be, and has been achieved, with each appropriation:
  
  Is the structure of appropriations administered by the department and their scopes, period and measures fit for this purpose? Have the department/sector grouped appropriations in the most useful way taking into account the new multi-category appropriation type and administration and use provisions? Does the department administer appropriation types which will now require performance reporting for the first time?

• Has the department selected the most meaningful measures of performance e.g., outputs or services delivered, outcomes, impacts, capability provided or some combination of these that best demonstrate what is intended to be and has been achieved?
• Can the department group its reporting and/or reporting with other departments and / or Crown entities in different ways so as to provide a better, integrated view of performance?

Next steps:

• Having identified the issues and opportunities talk about it internally.
• Involve the Treasury and/or Audit contact points to assist with shaping the information to support the government’s goals and to take advantage of the new flexibility.
• Let your Treasury sector team know what other support your department may be seeking from the Treasury to implement the Bill.

Key performance information changes arising from the PFA amendments

Changes to reporting

Information against appropriations in the Estimates

For appropriations (excluding borrowing expenses or those otherwise exempted) state:

• what is intended to be achieved with the appropriation
• how performance will be assessed (measures and standards)
• which agency will report performance information
• where performance information will be reported

Statements of Intent (SOIs)

Will be required to be updated at least once every 3 years but should be reviewed annually.

Published online as soon as finalised after Budget Day and tabled in Parliament no later than annual reports.

To help ensure SOIs are focused on strategic information, the PFA will be: less prescriptive - references to “impacts, outcomes or objectives” removed and requirement to report “cost effectiveness” removed.

Annual reports

Will contain extra information relating to the performance of the department previously contained in SOIs: information on organisational health and capability; forecast financial statements.

Greater flexibility in how information is presented; for example, to allow annual reports to be presented as part of a sector volume or group appropriations across departments together.

Changes to appropriations

New multi-category appropriations (MCA)

The purpose of MCAs is to provide an option for more flexible use of resources for a common purpose. MCAs will operate similarly to Multi-class Output Appropriations but will allow departmental and non-departmental output and other expense and non-departmental capital expenditure.

Administration vs. use provisions

The Bill makes it explicit that it is possible for one department to incur expense against an appropriation administered by another department. The purpose of this change is to make it easier for departments to collaborate and re-allocate resources towards a common purpose or result.

Capital injections replace net assets

Net assets schedules in the Estimates will be replaced with information on capital injections to departments.