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Demonstrating Performance: A Primer for Expenditure Reviews (June 2008)

Pre-condition #3: Systems Are in Place to Verify Performance

Departments and Crown entities must declare how they will report on performance in Statements of Intent. Annual reporting intentions must be declared in the information supporting the Estimates. Results chains lay out the results expected, and help identify appropriate measures for major interventions. Failure at any step in a results chain[2] can signal non-performance, flag risk, and drive managers to make improvements.

Section 40 of the Public Finance Act sets requirements for information on future operating intentions, including the identification of the main measures and standards to be used. Reporting should cover impacts, outcomes or objectives of major interventions, cost effectiveness, and capability. A key metric of current capability is the delivery of results.

(Crown entities are subject to similar requirements under s.141 of the Crown Entities Act.)

Ideally, effectiveness is proven by measuring impact. Even when impact is measured, other indicators are often reported to speed feedback up and to build a richer ‘performance story’. A typical system for demonstrating performance will thus:

  • Require proponents to lay out how the intervention is meant to work (#2, above).
  • Identify what results should be visible and measurable if the intervention is working.
  • Show how results will be measured (i.e. specify measures and comparison groups).
  • Be implemented in advance, so that data can be collected as intervention occurs.

A robust system for managing and demonstrating performance will assess whether:

  • Inputs were used efficiently (or, ideally, cost-effectively).
  • Outputs were delivered in the right quantity, without compromising on quality.
  • Outputs reached those in need who are likely to respond to intervention (coverage).
  • Core outcomes improved by the quantum expected, and in the groups ‘treated’.
  • Intermediate and near-term outcomes are reported (as well as end outcomes) to hasten feedback, confirm output quality, improve attribution and pinpoint problems.
  • Superior performance has been achieved by other jurisdictions, agencies or means.

What gets measured depends on what must be assessed (Appendix 2; table below). This includes key aspects of performance, and risks of unintended consequences.

Type of Result Class Focus On Examples of Common Measures




Real output price trend (inflation adjusted)

Price per unit, vs. benchmarks

% prison beds full / max. capacity used

Trend in real price (eg, per cop or nurse)

QUANTITY Output Volume produced

People receiving training / rehabilitation

Cases / complaints processed


Quality of delivery



% output fully meeting specification

% ministerials / passports / etc on time

% who would use again / recommend use


(or Reach)



Targeting efficiency


% population in need receiving output

% in ‘treated’ group who met entry criteria

% targets who did not access / use service

Time in queue (or other ‘big’ barrier to use)


Completion rate

Knowledge retained

Reduction in queue

Receipt of benefits

Incentives changed

Unintended effects

% finishing / getting qualified / in service

% core messages remembered

Average wait time / number in queue

% impoverished with more money

% believing regulatory change matters

Higher incident or reduced survival rates


Cognitive change

Behaviour change

Risk reduction

Lifestyle change


Unintended effects

% aware of risks / able to use new idea

% investing / saving / quitting / working

Fewer drunken drivers / ‘bad’ incidents

% in jobs / new career / crime free

% alive after 30 days / time event-free

Graduates migrating or excessive uptake

END or FINAL Outcome

More good stuff

More equity

Less bad stuff

Cost effectiveness

Unintended effects

Greater health / wealth / happiness

Less difference across deciles / areas

Fewer deaths / accidents / kids in care

Cost per unit of improvement in outcome

Increased welfare dependency, risk, etc

Remember: ‘major interventions warrant a major effort to demonstrate performance’:

  • Demonstrate ongoing need, efficiency, good delivery, coverage and outcomes.
  • Credible performance stories tie an intervention logic to key performance measures.
  • Focus on robust measures that help leaders reduce uncertainty about performance.
  • You cannot measure everything. But the literature shows what can be measured.


  • [2]Repeat measures may be required before managers accept a problem is real. Triangulation helps.
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