Review of Queensland's Financial Legislation

A Guide to the QueenslandGovernment Performance Management Framework

May 2009

Contents

4Introduction

Background4

Purpose of this guide4

Intended audience5

Scope and application5

Terminology5

Performance Management Framework7

Drivers for a new Performance Management Framework7

The Performance Management Framework8

Roles and accountabilities10

Government objectives for the community17

Ambitions17

Government targets18

Collaborative agreements19

Other Government priorities20

Agency objectives21

Objectives21

Performance indicators22

Agency services24

Services24

Service standards25

Taking steps to improve performance in an agency31

How do these methodologies relate to the Performance Management Framework?33

Policy development34

Incorporating Government targets in policy development processes34

Incorporating Government targets in Cabinet and CBRC submissions34

Toward Q2 co-branding35

Performance management and monitoring36

Monitoring and evaluation of performance36

Benchmarking37

Periodic review of objectives and services39

Performance reporting41

Integration and alignment of performance information41

Fair and balanced reporting43

Telling the performance story43

Whole-of-government service delivery44

Appendices45

Appendix1 History45

Appendix2 Terminology45

Appendix3 Performance Management Framework Explanatory View45

Appendix4 References45

Abbreviations used throughout this guide:

ANAO

Australian National Audit Office

CBRC

Cabinet Budget Review Committee

CEO

Chief Executive Officer

COAG

Council of Australian Governments

DPC

Department of the Premier and Cabinet

ERCC

Expenditure Review Committee of Cabinet

MFO

Managing for Outcomes

PDPMO

Policy Development and Performance Management Office of DPC

PMF

Performance Management Framework

PMSA

Performance Management Systems Audit

PLG

Performance Leadership Group

PSC

Public Service Commission

QAO

Queensland Audit Office

SES

Senior Executive Service

Toward Q2

Toward Q2: Tomorrows Queensland

Treasury

Queensland Treasury

IntroductionBackground

The need to strengthen the ways in which the Government plans for, monitors, manages, analyses, reports on, and makes use of information about the performance of Government services and programs has recently been highlighted by reports by the Queensland Auditor-General, and changes to Commonwealth State relations requiring a stronger focus on performance.

Opportunities exist for agencies to improve organisational performance to better meet the Governments objectives for the community.

At present, there are significant differences in reporting quality and presentation both within and between agencies. Greater consistency in performance reporting is desirable in order to increase its usefulness to Parliament, the public sector and the community.

In August 2008, the Queensland Government approved that the Managing for Outcomes framework be replaced with a new Performance Management Framework. A brief history on performance management in the Queensland Government has been included as Appendix1 History.

The Performance Management Framework is designed to improve the analysis and application of performance information to identify and address risks and opportunities for agencies, the Government and the community.

Purpose of this guide

This guide presents a practical overview of the key concepts of the Performance Management Framework to facilitate improved performance management, monitoring and reporting in the Queensland Government. This guide will help you to develop a greater level of understanding about the Performance Management Framework.

Intended audience

This guide is intended for a wide audience across Queensland Government. In particular, it provides guidance to:

executive management accountable for the performance of their agency

managers and staff who coordinate planning, budgeting, and/or reporting on the performance of their agency

managers and staff who are responsible for the management, measurement and monitoring of their agencys and/or individual business areas performance

stakeholders of Queensland Government, including Parliament, responsible for reviewing performance information

project and program managers who need to ensure that the benefits of a project, a program, or a portfolio of work are well managed, and contribute to the overall performance of the agency

anyone else who is interested in improving performance and strengthening accountability through relevant and meaningful performance reporting.

Scope and application

This guide applies to all Queensland Government agencies, with the exception of Government Owned Corporations.

It acts as an information reference to assist agencies when undertaking planning, resource management and performance management, monitoring and reporting activities.

It should help to encourage better practice and establish a common language, making it easier to integrate performance information between agencies.

Terminology

There are many different terms used in relation to performance management. However, the underlying ideas are usually the same. Definitions of the key terms used are included as Appendix2 Terminology.

To help readability, the term agency has generally been used in this guide, but may be taken to refer to departments and statutory bodies where appropriate.

For further information please contact the Policy Development and Performance Management Office in the Department of the Premier and Cabinet at:

Email:pm@premiers.qld.gov.au

Telephone:07 303 30604

Performance Management Framework

Drivers for a new Performance Management Framework

Performance management is considered to be the system, which integrates organisational strategic management, performance information, evaluation, performance monitoring, assessment and performance reporting.

- Organisation for Economic Cooperation and Development 2002

Performance management is critical to ensure planned objectives are translated into achieved results.

Central and line agencies have widely acknowledged that, while Managing for Outcomes did improve the sectors focus on performance, performance management aspects of Managing for Outcomes were not fully successful in driving improved performance and outcomes for the Government.

Opportunities to strengthen performance management within the Queensland Government have been further highlighted by:

The Queensland Auditor-Generals Report No. 4 for 2007: Are departmental output performance measures relevant, appropriate and a fair representation of performance achievements?, which found that Better performance information is needed for the department, the Minister, and all stakeholders including Parliament for a more informed government.

The Queensland Auditor-Generals Report No. 1 for 2008: Enhancing Accountability through Annual Reporting, which found that, Overall, annual reports fail to answer questions such as Has the agency achieved what it was intended to do?, Is this better than last year?, Is this good enough?, Were these activities needed in the first place?, Could they have done this for less money? .

The Service Delivery and Performance Commissions report on Strengthening Performance Management in the Queensland Government (August 2007), which recommended strengthened integration between planning, resource management and performance information and improved standards for performance measurement and monitoring.

The Performance Management Framework

The Performance Management Framework (the Framework) does not signal a change of direction but represents a progression and intensification of efforts that several agencies have already commenced, to improve performance information, management and monitoring.

The Framework provides the structure within which the Queensland Public Service can:

strengthen the ways in which Queensland Government agencies use performance information to advise the Government, and to drive improved service delivery and outcomes for Queenslanders in the short, medium and longer terms

improve the quality and consistency across agencies of performance information and monitoring practices

create better alignment of performance information across the various planning and reporting documents (i.e. strategic plans, Budget documentation and annual reports).

Toward Q2: Tomorrows Queensland , the Governments 2020 vision for Queensland, is framed around five ambitions that address current and future challenges. Within each of these areas, the Government has identified measurable targets for2020.

The Toward Q2 ambitions and targets represent objectives for the Queensland Government. Other Government objectives include those set internally, for example through policy decisions (such as initiatives highlighted in Blueprint for the Bush), and those imposed by external entities, such as the Australian Government through Intergovernmental Agreements and National Partnership Agreements. These other objectives are discussed later.

Under the Framework, the Governments objectives for the community are translated into specific agency objectives and performance indicators, and services and service standards. These will be reported through documents such as strategic plans, Budget documents and annual reports.

The Premiers expectations of Ministers and agencies are outlined in Ministerial Charter letters and Chief Executive Officer (CEO) performance agreements and cascade into Senior Executive Service (SES) performance agreements.

Refer to the Performance Reporting section of this guide for more information on the various planning and reporting documents within the Framework.

Suggested reference

Strategic Management Planner- reflects the performance management framework and financial management framework and highlights key strategic management and governance activitieshttp://premiers.govnet.qld.gov.au/performance/resources.html#two

Figure 1: Queensland Government Performance Management Framework

Appendix3 Performance Management Framework Explanatory View provides more detailed information and a working example of each of the levels of information in the PMF.

Roles and accountabilities

This section sets out the main roles and accountabilities of those involved in performance management in the Queensland public sector.

Agencies and Chief Executive Officers

Chief Executive Officers have statutory responsibilities for managing performance within their agencies under the Financial Administration and Audit Act 1977 and the Financial Management Standard 1997. Chief Executive Officers are responsible for:

managing the department efficiently, effectively and economically [FAA S36(1)(aa)]

as far as is possible having regard to the limits of the accountable officers powers and control, ensuring reasonable value is obtained for moneys expended for delivering departmental services and purchasing, developing and augmenting assets of the department [FAA S36(1)(c)(iii)]

obtaining information about the agencys operations and deciding if the operations are achieving the objectives and delivering the services identified in its plans and meeting the performance targets identified in its plans [FMS S58(2)(a)]

reporting to Ministers about achieving objectives, delivering services, and meeting targeted performance; and whether the objectives, services and performance information remain appropriate [FMS S58(2)(b)].

The requirements of the PMF help agencies to comply with these requirements by:

collecting performance information about the efficiency and effectiveness of the agencys service delivery

ensuring that the agency has clearly defined objectives, and collects performance information to assess the extent to which those objectives are being met

describing the agencys services, and the standards to which those services will be delivered

improving visibility of the agencys performance.

Chief Executive Officer accountabilities are specified in Chief Executive Officer Performance Agreements with the Premier. Guidelines for CEO Performance Agreements are published by the Public Service Commission.

Cabinet (including various committees of Cabinet such as CBRC)

Cabinet is the Queensland Government's central decision-making body. Its role includes initiating or refining new government policy, making senior appointments and approving government spending.www.cabinet.qld.gov.au

Within this role, with regards to the Performance Management Framework, Cabinet:

exercises decision-making authority for Government direction, policy and associated resourcing. In doing so, Cabinet will seek technical advice and/or advice about stakeholder concerns from various external experts and stakeholder groups. Such groups include formalised groups such as the Smart State Council, the Premiers Climate Change Council and various Ministerial councils.

instigates reviews in response to risks and opportunities:

the Premier may refer a subject to the Public Service Commission (PSC) for review under section37 of the Public Service Act 2008

the Expenditure Review Committee of Cabinet (ERCC) undertakes reviews to identify efficiency improvements.

authorises the Treasurer to fund agencies services to achieve the Governments objectives for the community (CBRC)

ensures that it has optimum investment in each agency and that each agencys financial and service delivery performance meets the Governments expectations (CBRC)

promotes government-wide accountability for both service delivery and resource management, and

directs the implementation of government policy and carries out the tasks of government administration through individual Ministers portfolios.

Queensland Audit Office (QAO)

The QAO is an independent office assisting the Auditor-General to conduct annual audits of more than 800 diverse public sector entities across Queensland. Its primary clients are the Queensland Parliament and Public Accounts Committee. Through its audit and reporting activities it promotes public sector accountability to the Queensland Parliament. Through its recommendations it helps audit clients improve their operations to more efficiently and economically meet their objectives.www.qao.qld.gov.au

The QAO supports the Performance Management Framework through:

providing independent audit services and reports to Parliament to enhance public sector accountability

undertaking performance management systems audits in order to assess if agencies have systems in place that enable them to assess how effectively, efficiently and economically agencies objectives are being met. The scope of these audits was expanded in January 2007 to consider the relevance and appropriateness of performance measures and whether measures fairly represent the agencys performance.

Department of the Premier and Cabinet (DPC)

The Department of the Premier and Cabinet supports and advises the Premier and Cabinet, provides leadership across government and advances government policy priorities. The department supports the Premier in administering his or her legislative duties as well as managing policy and executive governance in Queensland. The Premier requires legislative support for his or her role as parliamentary leader of the Government, Chair of Cabinet, Chief Adviser to the Governor and a Member of the Council of Australian Governments.

The department collaborates with all Queensland public service agencies to ensure the government receives considered, balanced and timely advice on all issues important to the good governance of Queensland. Professional advice and services are also provided to the Premier and Cabinet on constitutional, legislative and intergovernmental matters.www.premiers.qld.gov.au

The Policy Division within DPC is structured to provide policy advice and coordination services based on the Ministerial portfolios of the Queensland Government through Portfolio Contact Officers who:

assist Queensland Government agencies to develop policy at agency, cross-agency and whole-of-government levels

coordinate the development of whole-of-government policy by bringing together key players on important issues that require action from several agencies and, at times, act as mediators in resolving issues at the cross-agency level to achieve targeted, coordinated and responsive policies for Queensland

embed performance management in the State Budget process through briefs jointly developed with Treasury to Cabinet and CBRC.

The role of the Policy Development and Performance Management Office (PDPMO) within Policy Division is:

to identify emerging issues and policy challenges

to provide strategy and policy advice to the Premier and Cabinet and to support government departments in developing effective strategies and policies

to support government and departments improve their performance.

With regard to the Performance Management Framework, PDPMO:

in conjunction with other DPC business units and Queensland Treasury (Treasury), supports Cabinet processes

provides centralised capability to identify risks and opportunities for government and explores holistic policy responses

supports and advises the Premier and Cabinet, provides leadership across government and advances government policy priorities

advises the Government on the development of the Government objectives for the community

monitors and reports on performance against Government targets and recommends appropriate interventions to the Premier, Cabinet and CEOs where appropriate

publishes policies and standards relating to the detailed elements of the Performance Management Framework including the content of agency plans (such as strategic plans) and non-financial reporting documentation (such as annual reports), and works with Treasury to ensure that these policies and standards complement and are consistent with guidance materials for the State Budget documentation and financial reporting requirements

administers the provisions of the financial legislation (Financial Administration and Audit Act 1997 and its subordinate legislation, the Financial Management Standard 1997) relating to planning, performance and the non-financial aspects of annual reporting

ensures that strategies are in place across the Queensland public service to achieve the Governments objectives for the community.

Queensland Treasury (Treasury)

Treasury provides core economic and financial policy advice to the Queensland Government, as well as services to the community, to enhance the State's financial position and economic performance, supporting sustainable long-term economic growth. Treasury assists the Government to manage the State's finances, including the preparing and oversight of the Budget to meet community needs. It has a lead role to support the Queensland Government to be accountable and transparent in delivering services to the community. This is achieved through sound financial management policies, standards, systems, procedures and related reforms.www.treasury.qld.gov.au

With regard to the Performance Management Framework, Treasury:

in conjunction with DPC, supports Cabinet processes, and provides centralised capability to identify risks and opportunities for the Government and explores holistic policy responses

is the lead agency for financial management services and economic advice to the Government and manages the States fiscal position

publishes policies and standards relating to agency financial reporting documentation (such as annual financial statements), and works with the DPC to ensure that these policies and standards complement and are consistent with guidance materials for the content of agency planning and non-financial reporting

works collaboratively with stakeholders to help the Government meet its fiscal objectives and progress its key priorities

Treasury business branches, through Treasury Analysts, work in partnership with other government agencies and stakeholders to:

provide advice (briefings) to Cabinet on strategic and operational budget submissions including:

impact of submissions on the Budget position

relevance to the Governments strategic policy objectives and its ambitions and targets

advice relating to value for money

monitor the delivery of approved Budget initiatives:

discuss with agencies any significant issues and risks in delivering services

discuss with agencies the type of information that the agency will provide to Treasury for monitoring purposes, when the agency will provide the information, and the mechanism through which it will be provided

embed performance management in the State Budget process through briefs jointly developed with DPC to Cabinet and CBRC.

Public Service Commission (PSC)

The Public Service Commission supports and advises the Premier on workforce and organisational management across the public service. It provides a critical leadership, support and capability building role to the public service workforce and organisations, to ensure that the public service has the human resource and organisational capacity to deliver on the Government objectives for the community. By working collaboratively with all agencies, the Public Service Commissions task is to ensure that the governments most valuable resource its people support government priorities.www.psc.qld.gov.au

The Public Service Commission:

works in partnership with agencies to develop better mechanisms to target performance objectives, to improve organisational performance and to measure improvements

builds capability in and seeks to improve performance management practices across the sector, including through the issuance of better practice material to agencies

conducts reviews to improve the overall effectiveness and efficiency of government entities (section 3 of the Public Service Act 2008).

Queensland Government Chief Information Office (QGCIO)

The Queensland Government Chief Information Office (QGCIO) works with Queensland Government agencies, industry and the tertiary sector to develop and implement information and communication technology (ICT) strategies for the state.

ICT is central to government and constitutes a significant investment - the Queensland Government invests $1 billion annually in people, products and services related to ICT. The QGCIO aims to get maximum value out of this investment.

http://www.qgcio.qld.gov.au/

The Queensland Government Chief Information Office has developed standard approaches for managing projects, programs and portfolios in the Queensland Government. These methodologies have been approved by the Strategic Information and ICT CEO Committee for sector-wide adoption, with a mandate for ICT-enabled initiatives.

Projects, programs and portfolios will be established from time to time in Queensland Government agencies as part of efforts to improve performance. The section on Taking Steps to Improve Performance in an Agency from page 31 of this guide provides more detail on the linkages between project, program and portfolio management and the Performance Management Framework.

Performance Leadership Group (PLG)

Chaired by the Director-General of the DPC and composed of the Under Treasurer and the Commission Chief Executive of the PSC, with secretariat services provided by the Policy Development and Performance Management Office, DPC

The PLG provides governance for performance management activities across Government by:

reviewing agency strategic plans and annual reports

reviewing CEO performance agreements

determining, and where necessary, recommending to Government, appropriate actions to improve performance including (but not limited to):

developing new policy responses

initiating a review, and/or

revising expectations in light of unforseen external influences.

Expenditure Review Committee of Cabinet (ERCC)

Chaired by the Premier and composed of the Deputy Premier and Treasurer, and an independent appointee with extensive business expertise, with secretariat support provided by Queensland Treasury

The ERCC monitors and prioritises spending across Government, and conducts reviews of efficiency as directed by the Premier and/or the CBRC.

Government objectives for the community

The Premier is required to prepare and table a statement of the Governments broad objectives for the community including details of arrangements for regular reporting to the community about the outcomes the government has achieved against its objectives for the community.

Toward Q2: Tomorrows Queensland currently addresses this requirement. The Governments 2020 vision for Queensland is framed around five ambitions and within each of these areas, the Government has identified measurable targets for 2020.

Suggested reading

Toward Q2: Tomorrows QueenslandDepartment of the Premier and Cabinet, September 2008http://www.towardq2.qld.gov.au/

Ambitions

Ambitions represent the desired effects on, or consequences of, Government services on the community. Ambitions are more specific goals for change and should be strategic, high-level and measurable.

Toward Q2: Tomorrows Queensland is the Governments blueprint for the State to the year 2020. Toward Q2 articulates the Governments vision for Queensland in relation to five ambitions that address current and future challenges. Ambitions are long-term objectives describing why Government services are to be delivered.

These ambitions are for our whole state for communities in every Queensland region.

Strong

Creating a diverse economy powered by bright ideas

Green

Protecting our lifestyle and environment

Smart

Delivering world-class education and training

Healthy

Making Queenslanders Australias healthiest people

Fair

Supporting safe and caring communities

All Government services contribute to the achievement of one or more ambitions over time. Agencies develop strategic plans to align service delivery to the Government's ambitions and help to articulate the agency's direction to staff and external stakeholders.

Key points about ambitions

Ambitions are broad and are defined at a very high level.

Ambitions are expressed in a short, logical, concise statement.

Ambitions are long-term goals to be progressively achieved over an extended timeframe (they may take several years to achieve).

Ambitions are intended to cover the broad dimensions of community well-being. They express the current needs and future aspirations of communities.

Government targets

Government targets set specific, observable and measurable goals for improvement in key policy areas. Achievement of government targets is likely to require collaboration between multiple government agencies.

Government targets provide Government direction for agencies by establishing clear, measurable goals for agencies to collectively pursue.

They also give the community a benchmark against which to judge the Governments performance as well as their own. They will tell us where we are doing well and where we need to lift our game.

Meeting some of the Government targets, particularly those relating to our health and environment, will require a real shift in personal attitudes and behaviour for many Queenslanders. These targets can not be achieved by the Queensland Government alone. They will require a strong alliance between the Queensland Government, other levels of government, industry, communities, families and individuals.

Some of the Government targets will also require the Queensland Government to review its own operations and how it funds and delivers services to ensure resources are going to the programs that work best.

As well as the targets set by the Queensland Government through Toward Q2: Tomorrows Queensland, other targets have been set for Queensland through agreements with the Australian Government. Achieving these targets is particularly important as there are often funding implications if they are not met.

Government targets focus on key policy and service delivery areas, and will not cover the full range of government services or community needs. Other Government services, while not directly assisting delivery of targets, remain important to the achievement of Government ambitions. Agency performance in these areas still needs to be managed and monitored, and is therefore incorporated within the Performance Management Framework.

Collaborative agreements

Collaborative agreements outline the specific contributions that individual agencies will make to the achievement of Government targets.

A collaborative agreement is a mechanism for coordinating and maintaining cross-agency actions and services to achieve a Government target. It will contain both cross-agency and individual agency initiatives. The collaborative agreement is a central part of the Performance Management Framework to ensure that agencies activities are complementary.

Development of collaborative agreements has so far focussed on agreements relating to the Toward Q2 targets. There is potential, however, for the collaborative agreement process to be extended to other government objectives and targets, or to any initiatives that will need agencies to work together to achieve a common goal.

To ensure that each agencys contribution to, and accountability for, the achievement of a Government target is clear, a collaborative agreement will be prepared between the agencies concerned for each target. A nominated lead agency for each Government target will coordinate the process with relevant co-signatory and consulting agencies.

Agencies responsible for contributing to the achievement of Government targets will jointly develop agreements identifying the objectives they must meet as their contribution to the 2020 target and what they will do to meet them.

Strategic Cabinet will approve these agreements and agencies will need to demonstrate they are taking action to meet the targets.

Suggested reading

Guidelines for the Collaborative Agreement ProcessDepartment of the Premier and Cabinet, 2009http://premiers.govnet.qld.gov.au/performance/index.html

Other Government priorities

In addition to the Governments objectives for the community stated in Toward Q2 Tomorrows Queensland, from time to time the Government will release whole-of-Government plans or announce a specific initiative to address a particular issue for Queensland. These additional priorities and/or targets are also able to be captured within collaborative agreements. Recent examples include:

a Health Action Plan to address the challenge of providing better health services for Queenslanders

working with all levels of government, industry, the community and an international congestion expert to implement a balanced approach to deal with urban congestion

investing to tackle climate change through the Queensland Climate Change Fund

achieving priorities and performance targets set as part of the Council of Australian Governments (COAGs) reform agenda.

Agency objectives

Objectives

Agency objectives are the effects or impacts that an agency seeks to have on its clients, stakeholders, or the broader community.

Each agency needs to be clear about what it is trying to achieve. Establishing agency objectives and strategies helps to ensure that the agency is focussed on achievable goals and attains the best possible results from available resources.

Agency objectives are long-term goals which are progressively achieved over a number of years. A focus on the ends (rather than the means) provides agencies with the flexibility to explore alternative service delivery strategies.

Raising the focus of performance analysis at the whole-of-Government level to agency objectives allows that analysis to be based on whether or not services are effective in achieving objectives (rather than simply whether services were delivered to agreed standards).

Agency objectives:

standardise each agencys consideration of:

the effects that their services will have on clients and the broader community

how those effects relate to Government ambitions

improve alignment between strategic plans, Budget documentation and annual reports by introducing a common concept that will be applied to all of these documents.

Achievement of agency objectives is embedded in CEO and SES performance agreements to provide a clear mechanism through which senior executives will be held accountable. Agency objectives will also be incorporated into Ministerial Charters of Goals to ensure that Ministers have a consistent view of their portfolio agencies accountabilities.

Refer to the Performance Reporting section of this guide for more information on the various planning and reporting documents within the Framework.

Objectives should . . .

express what the agency wants to achieve

be focussed on the end result or impact the agency is contributing to, not on the means of achieving it. Objectives should not be discrete services or products.

be consistent with the Governments objectives for the community - all agency objectives must link to one or more of the ambitions, and where relevant, agency objectives should also link to Government targets. Objectives should be at a level relevant to agencies and should link to (not replicate) the Governments objectives for the community (i.e. the ambitions and targets)

have a strategic focus, without being pitched at too high a level

be well aligned with the agencys vision and purpose

be measurable, or at least able to be verified, in order for the Government to be able to judge whether the objective was achieved

be within an agencys influence, or at least include only those aspects of performance that the agency has reasonable influence over and is therefore able to meet

be informative to a wide range of users, in particular, Ministers, Parliament, agency management and the general community (i.e. sufficient to inform and support decision-making by the user of the information).

Performance indicators

Performance indicators measure the extent to which agencies are achieving their objectives.

Performance indicators will be defined for agency objectives to provide agreed criteria for assessing whether or not objectives are being met. Each agency objective may require one or a range of performance indicators in order to demonstrate performance. Some indicators may also be relevant for more than one agency objective.

An agencys performance indicators should be able to demonstrate that the objective has been achieved. Reporting actual results against the indicators should demonstrate the extent to which the objective is being achieved.

Knowing how well the agency is currently doing is essential in developing strategy and policies to meet the agencys objectives.

It is not mandatory for agencies to set targets for performance indicators at this stage of implementation of the PMF. However, agencies are encouraged to develop and set performance targets for performance indicators where possible.

ChecklistPerformance indicators

The following checklist of better practice characteristics may be useful when developing performance indicators.

A performance indicator should:

describe a change that is measurable and verifiable over the period of an agencys strategic plan

be relevant should reflect what the agency is trying to achieve not simply what is measurable

be attributable the objective measured must be capable of being influenced by actions which can be attributable to the agency, and it should be clear where accountability lies

be challenging (stretching), but achievable agencies should understand the relationship between resources committed and objectives

inform decision-making - to make informed decisions, why an agency objective has been achieved or not must be clear

provide an overview of the performance achieved by reporting ends (performance with respect to objectives), not means (performance with respect to services or activity).

Agency servicesServices

Services are the deliverables that will help an agency achieve its objectives. Services describe the areas in which an agency delivers services to its clients at a level appropriate to the agency.

Services include all services and/or products delivered by an agency to achieve agency objectives and the Governments objectives for the community (ambitions and targets).

Services should be at a reasonably high level, as too much detail creates the risk of constraining how agencies respond to changing demand, cost drivers, priorities and service delivery models. Services are generally specified at a point where their impact can be readily assessed or measured.

Because every agency is different, there is no one set of rules to prescribe how to develop an appropriate service structure. You need to use judgement to formulate an accurate, meaningful and informative specification of services of your agency.

Services should . . .

be controllable by the agency, or at least include only those aspects of performance that the agency has reasonable influence over and is therefore able to meet

be comprehensive, in that they must cover all material services and/or products provided by the agency for its clients, stakeholders or for the broader community

be measurable, or at least able to be verified, in order for the government to be able to judge whether the services were actually delivered to the set standard

be informative, to a wide range of users, in particular, Ministers, Parliament and agency management and the general community (i.e. sufficient to inform and support decision-making by the user of the information).

The most appropriate level of service delivery reporting is a matter of judgement for the individual agency and their Minister.

Agencies must develop the following key elements for each service:

a service delivery objective (explaining how the service contributes to the achievement of agency objectives)

a balanced set of service standards and targets

supporting contextual information for the service such as:

related services (including services of other agencies)

stakeholders and their information needs.

Adequate collaboration and information sharing between and within agencies is an essential component in a system seeking to provide for cross agency coordination, performance management and assessment of accountabilities.

Increasingly, the Governments objectives for the community (i.e. ambitions and targets) will only be achieved through coordinated service delivery across multiple agencies. An environment where agencies are required to manage their services to achieve relevant Government objectives, will need to be supported by a culture, the systems and processes that allow for improved alignment of resources and integrated service delivery.

Refer to the Performance Reporting Whole-of-Government Service Delivery section of this guide for more information.

Service standards

Service standards describe the standards of efficiency and effectiveness to which the agency will deliver services within its available resources. Standards are set with the aim of defining a level of performance that is appropriate for the service and is expected to be achieved.

Service standards will provide a benchmark for the efficiency and effectiveness of agencies delivery of services. This will enable Government and the public to make an assessment of whether or not agencies are delivering services to acceptable levels of efficiency and effectiveness.

Agencies are expected to have a balanced set of service standards, including a combination of quantitative and qualitative measures, which incorporate better practice characteristics.

It is crucial that the service performance data collected is accurate and can be relied upon as a valid assessment of an agencys performance.

Suggested reading

Better Practice Guide: Output Performance Measurement and ReportingQueensland Audit Officewww.qao.qld.gov.au

Standards of efficiency

Standards of efficiency reflect how resources (inputs) are used to produce services and objectives, expressed as a ratio of resources (inputs) to services - technical efficiency, or resources (inputs) to objectives - cost efficiency.

Standards of efficiency assess how well an agency uses its available resources to deliver services and products. Efficiency in the delivery of services and products arises when:

there is an increase in the level of services delivered or products produced for a reduced level of resources used (such as a reduced level of staffing) total value is up, total cost is down, unit cost is down

the same services are delivered or products are produced for a reduced level of resources used - total value is constant, total cost is down, unit cost is down

there is an increase in the level of services delivered or products produced for the same amount of resources - total value is up, total cost is constant, unit cost is down

there is increased level of services delivered or products delivered for a proportionately smaller increase in the level of resources used - total value is up, total cost is up, unit cost is down.

Standards of efficiency are important to managers for evaluation of service delivery and are often used to justify equipment acquisitions or changes to systems and processes. Standards of efficiency measures assist to answer questions such as:

How much does it cost to deliver this service or product?

Is this service or product efficient in the way it uses public money for policy purposes?

Standards of efficiency include:

cost-efficiency the cost of the service in relation to the quantity being provided (cost efficiency would be enhanced when unit cost falls this means increase in coverage with no increase in cost, or a decrease in cost for the same coverage)

each case costs no more than $ to manage

service response efficiency (i.e. timeliness)

% of ambulance patients receiving hospital care within # minutes of arrival at hospital

benchmarked comparisons of similar services or products in other jurisdictions or through other service providers

achieve national benchmarks for timely access to hospital emergency departments.

Standards of effectiveness

Standards of effectiveness reflect how well a service achieves its stated objectives through meeting service delivery standards - operational effectiveness, or achieving desired objectives - policy effectiveness.

Standards of effectiveness describe the quantifiable extent of the effect on recipients of the service, as a result of the level and quality of the service or good provided. Standards of effectiveness assist to answer questions such as:

How well does this service or product achieve its stated objective/s?

Does this service or product actually contribute to the achievement of the objectives of the agency? (i.e. Why are we doing it? To meet our objectives!)

Standards of effectiveness include:

cost effectiveness the relationship between the cost of producing the service and the outcome or results achieved (improved results should be evident with an increase in service funding)

cost per successfully managed client

cost of job training program to place an unemployed person in employment

service delivery effectiveness

in 2009, not more than # in-patients in hospitals will be readmitted post-discharge for further treatment of the same diagnosed illness as at the time of the initial admission

initiative effectiveness

reduction in workplace accident levels resulting from safety campaign compared with target

increase in new tourists resulting from advertising promotion compared with target

Setting standards of performance

Setting targets can challenge an organisation to improve performance.

Targets are generally established and agreed as part of the annual Budget process. They are estimates, based on analysis of historical performance and trends, current government policy contexts and priorities, agency capability and consumer demand.

Targets should present clear and quantified measures against which agencies can assess performance. Targets are expressed as absolute numbers, a range (such as 75% to 85%, rather than just a single figure of 80%), percentages, or ratios.

Targets should be challenging but achievable. For example, targets for customer satisfaction should not be set at 100%. It is not reasonable to believe that all customers will be satisfied with an agencys services.

If achievement of a target becomes impractical or not feasible, the agency is to explain why that is the case and what legislative, regulatory, or other actions are needed to accomplish the target, or whether the target should be modified or discontinued. Refer to the Performance Reporting section of this guide for more information.

As agency stakeholders are affected by an agencys business and the services it provides, they should be included in planning performance targets where appropriate. Consultation with agency stakeholders helps to establish targets that are meaningful and useful for decision makers.

The aim of targets is to set a level of performance acceptable to Government on behalf of the community. Setting target levels is a complex task as the establishment of a target raises as many questions as it answers.

Commonly used approaches in setting performance targets are:

adoption of current performance

current performance plus a percentage improvement increase

averaged performance (national, state, or industry)

best practice (benchmarking)

technical targets (external targets established by professional associations)

management decisions (calculated decisions given resource and staffing limitations).

Agencies may choose to use any combination of these methods.

A number of challenges have been identified in international literature with setting targets, including:

Setting performance targets and basing decisions on performance results may cause organisations to do the wrong things well if they become too committed to a particular understanding of policy problems. (Thomas 2006)

The setting of unrealistic benchmarks with a view to raising performance levels may backfire as it can lead to unrealistic expectations that exacerbate frustration on the part of public managers and growing cynicism on the part of the public. (Thomas 2006).

Some suggested solutions to these issues are to ensure that targets are set through negotiation with service delivery areas, that new targets are trialled as to their effectiveness and that targets are presented as part of an overall context of the service or product being delivered and not displayed in an isolated manner.

Refer to the Performance Reporting section of this guide for more information.

ChecklistService standards

The following checklist of better practice characteristics may be useful when developing service standards (and targets).

A service standard should be:

specific so it is clear what the service is aiming to achieve. Clearly specify the standard of service to be achieved in terms of effectiveness and efficiency

measurable there should be a clear and transparent standard of success

achievable the service standard should be stretching, and reflect the Governments ambitions for improved standards of public services. However it must be achievable within the agencys available resources

relevant the service standard should reflect what the agency is trying to achieve not simply what is easy to measure

time-framed it should be clear by when the service should be delivered by

able to avoid perverse incentives not encourage unwanted or wasteful behaviour

attributable the relevant service must be capable of being influenced by actions which can be attributable to the agency, and it should be clear where accountability lies

comparable with either past periods or similar services in other jurisdictions

well-defined with a clear, unambiguous definition so that data will be collected and the service standard is easy to understand and use with minimal explanation. Clear documentation of measurement processes should be maintained

timely performance data should be produced regularly enough to track progress and, quickly enough for the data to still be of value for decision-making

reliable and verifiable able to produce accurate data for its intended use, able to be measured consistently and be responsive to change

cost-effective in terms of gathering and processing the data

credible a service standard that has the support of stakeholders and where appropriate, is supported by research and/or established industry standards.

- Adapted from: Choosing the Right Fabric A Framework for Performance Information, A joint publication by HM Treasury, Cabinet Office, National Audit Office, Audit Commission and Office of National Statistics, United Kingdom, 2001

Taking steps to improve performance in an agency

Agencies should continually seek to improve their performance, both in terms of service delivery and the effectiveness of their services in achieving objectives. Initiatives that are designed to improve performance will often take the form of projects and programs, managed as part of portfolios.

The Queensland Government Chief Information Office has developed standard approaches for managing projects, programs and portfolios in the Queensland Government. The methodologies offer a consistent approach to help projects come to life - on time and within budget - and drive programs to deliver the outcomes and benefits they are intended to achieve.

Standard methodologies across the Queensland Government will mean all agencies will share the same expectations and use the same language, thus providing project and program managers and decision-makers with better information for reporting and planning. Adoption of the methodologies will also lead to:

reduced meetings and bureaucracy

improved confidence and capability of project and program managers

better use of resources and investment.

The Queensland Government Project Management Methodology offers a standard way to manage projects. By offering logical steps, advice and guidelines, it is designed to lead project managers and other stakeholders through the project's life-cycle, ensuring it is completed successfully.

The Queensland Government Program Management Methodology is used to plan and manage multiple interdependent projects and activities to achieve specific organisational outcomes and benefits. By focusing on the bigger picture, it helps agencies to effectively plan and implement significant business change.

The Queensland Government Portfolio Management Methodology (under development) focuses on strategic goals, at a departmental or agency level. It will help agencies better manage their portfolios of initiatives (including projects and programs).

All three management methodologies work towards making the most of the Queensland Governments investments, but each perform a specific role.

Any change requires investments in time, money and resources to provide enhanced services. The Queensland Government Benefits Management Framework helps agencies focus the business change on value for money and business benefits. Agencies can use the Queensland Government Benefits Management Framework at a strategic level when undertaking changes and improvements to Government services.

The framework:

offers a structured process of identifying and tracking the expected benefits from business change to ensure they are achieved

is easily scaled and therefore suitable to be applied to individual projects or entire programs.

It should be used in association with the Queensland Government Project and Program Management Methodologies.

The Queensland Government Business Process Improvement (BPI) Methodology has been developed to guide and align process improvements to agency outcomes and business strategies. Business process improvement involves capturing, mapping and analysing a process at a high level with the intention of improving that process. The methodology provides guidelines on:

how to analyse the processes, issues and opportunities

designing the improved processes, and

planning for their implementation.

The methodology provides agencies with the justification for specific improvements, and greater confidence that those improvements will be the most beneficial to the agency. The Queensland Government BPI Methodology is intended to complement business process management methods where they exist or to be used as a stand-alone methodology in the absence of other approaches. The methodology integrates with complementary Queensland Government methodologies such as the Program, Project and Benefits Management methodologies.

The Queensland Government ICT Planning Methodology has been developed to enable Queensland Government agencies to optimise and align their ICT activities and initiatives with agency and whole-of-Government business direction. Clearly defined processes complement existing strategic, business and ICT planning activities of agencies. The methodology is scalable and can be applied to planning units ranging from whole of agency to a single business area. The techniques used are based on best practices, reviewed, summarised and integrated into an efficient set of processes.

Suggested reading

Queensland Government MethodologiesQueensland Government Chief Information Office, Department of Public Workshttp://methodologies.govnet.qld.gov.au

How do these methodologies relate to the Performance Management Framework?

Projects, programs and portfolios will often be initiated by an agency or a group of agencies in an effort to improve service delivery. For example, these might be included in a collaborative agreement as a specific government initiative aimed at achieving a Government target. An agency might also undertake projects or programs in an effort to improve its efficiency or effectiveness in service delivery.

The results of these initiatives (i.e. projects, programs or portfolios) will affect the agency or agencies' performance - either at the service standard or performance indicator level, depending on the project/program and its goals.

The effect on performance, however, will only be achieved if the benefits of the project or program are realised. If the project or program does not result in any benefits, it will have no impact on the agency's performance. Benefits realisation, therefore, is an important part of the process to ensure that the agency's investment in a project or program results in real improvements in the agency's service delivery, or the achievement of its objectives.

Where technology plays a part in enabling a project, program, or ongoing service delivery, you will need to make sure that your business requirements are incorporated into your agency's ICTplanning.

Policy development

Policy is the means governments use to pursue their objectives (Bridgman and Davis, 1998).

Agency objectives clarify the contributions agencies are expected to make towards achieving the Government objectives, and policies and must be linked to the Governments objectives for the community.

Incorporating Government targets in policy development processes

Make sure that your policy development process includes analysis and evaluation of:

how the policy impacts on the Governments objectives for the community (i.e. ambitions and targets)

the impact of the policy on other agencies particularly those that have been identified as co-signatory or consulting agencies for relevant Government targets.

Incorporating Government targets in Cabinet and CBRC submissions

The Premier has made a public commitment that Government targets will be factored into consideration of all Cabinet submissions. The following guidance for agencies is provided to ensure that policy development and consequent Cabinet and CBRC submissions reflect the Governments objectives for the community.

Cabinet and CBRC submission templates will not include a separate section for Toward Q2 as a Government priority. Rather, agencies will need to build this information into the body of submissions.

The following information should be included in all Cabinet and CBRC submissions. DPC Portfolio Contact Officers (PCOs) and Treasury Analysts will use this information when briefing the Premier, Treasurer and Cabinet:

An indication of whether or not the submission is relevant or not relevant to a Government target. Relevant means that there is a direct relationship between the submission and a target. Avoid making tenuous links, or attempting to extend the scope of a target to adapt it to the submission. For example, a submission relating to clean coal technology does not relate to the target for reducing the household carbon footprint because the measures for the target specifically relate to household emissions generated from electricity, waste and fuel.

If you identify that the submission is relevant to a Government target, include an analysis of:

the level of positive or negative impact on relevant targets

how the submission assists in achieving the Governments objectives for the community by quantifying the impact where possible avoid just including a generic statement that this initiative contributes to TowardQ2.

Agencies should consult with the lead, cosignatory and/or consulting agencies for the relevant Government target. Contacts for each of the targets are available from the Policy Development and Performance Management Office of DPC.

If it is identified that the submission is not relevant to a Government target, there is no need to mention the targets in the submission.

Where the submission potentially impedes the achievement of a Government target, reflect this in the submission and justify why the submission should still proceed.

Toward Q2 co-branding

Agency programs and initiatives that are consistent with the Toward Q2 ambitions and targets may be considered for co-branding, that is, an arrangement to associate a single product or service with the Queensland Government logo and the Toward Q2 logo (for use on marketing material/publications produced in print, electronic, and/or online).

For further information please contact Communication Services in the Department of the Premier and Cabinet at:

Email:communication.services@premiers.qld.gov.au

Telephone:07 340 55220

Performance management and monitoringMonitoring and evaluation of performance

Agencies are required to monitor their progress in meeting performance indicators and service standards throughout the year.

Regular monitoring against service standards (such as monthly or quarterly) allows for early intervention where achievement of a service standard is at risk and will assist agency managers in managing and meeting the agreed overall service standards for the year.

Performance reports provide a link between planning and budgeting. Government reporting and compliance costs can be minimised by aligning performance information for internal reporting and external monitoring.

Analysis and evaluation

QAOs Better Practice Guidelines recommend processes for the ongoing analysis and evaluation of performance information and measures, including variance analysis of results and progress to date against targets and/or standards.

Evaluation is a complementary tool for accountability. Evaluation is the systematic, objective assessment of appropriateness, effectiveness and/or efficiency of a program or part of a program. Evaluation is often requested by Government (Cabinet and CBRC) in the budget process to assist strategic decision making for the future.

Suggested reading

Using evaluation to drive continuous improvementService Delivery and Performance Commission, 2009http://www.sdpc.qld.gov.au/sdpc/reviews/review_performmgmt.shtm

Trend and variance analysis

Trend analysis is as important, in some cases more important, than specific monthly or quarterly comparisons between actual and planned/estimated financial and non-financial performance. Trend analysis presents data by showing how performance changes over a period of time.

Whilst trend analysis depicts data over a period of time, variance analysis compares performance measures against each other from one period to another, from one agency to another, or from target to actual. By identifying large variances, management can conduct a root-cause analysis and uncover what drives the variances. By doing so, management can pursue appropriate remedial action, which is one of the primary benefits of an effective performance reporting process.

Independent review

The Auditor-General has an important role in auditing performance management systems of public service entities. In carrying out this role, the Auditor-General will test the accuracy of reported non-financial performance information and the relevance and appropriateness of measures used.

Suggested reading

Performance Managements Systems Audits: An Overview Queensland Audit Office, December 2006http://www.qao.qld.gov.au/pages/publications/pub_misc.html

Benchmarking

Benchmarking involves the collection of performance information to undertake comparisons of performance. Benchmarking information is commonly used in the annual State Budget process to reach decisions, by the Performance Leadership Group to compare agency performance, and in agency reporting such as annual reports.

The three main forms of benchmarking (Report on Government Services, 2008) are:

results benchmarking comparing performance within and between agencies using performance indicators of effectiveness and efficiency

process benchmarking analysing systems, activities and tasks that turn resources (inputs) and services (outputs) into results/outcomes

setting better practice standards establishing goals and standards to which agencies can aspire.

Agencies proposing to conduct benchmarking should initially consider the legislative and/or policy differences in service delivery of each jurisdiction. Significant and fundamental differences in concepts and definitions used, and differences in client characteristics or the availability of resources may substantially impact comparability of performance information.

Benchmarking resources

There are numerous benchmarking resources available for agencies to use:

Office of Economical and Statistical Research, Queensland TreasuryProvides statistic, economic, demographic and social information relating to Queensland.http://www.oesr.qld.gov.au/

Data Hub, Queensland GovernmentThe Data Hub is a whole-of-government focal point for government employees to discover and access data and to gain training in data related activities. http://datahub.govnet.qld.gov.au/

Workforce Analysis and Comparison Application (WACA), Queensland Government

Workforce information helps us understand workforce profiles and measure workforce planning, management, policy and practices. It includes data on age, gender, occupation, employment equity target groups, employment status, appointment type, employee separation, leave, location, salary, etc. http://www.opsc.qld.gov.au/work/statistics/waca.shtml

Australian Bureau of StatisticsProvides statistics on a wide range of economic, industry, environment and energy, people and regional matters, covering government, business and the community in general.http://www.abs.gov.au/

Report on Government Services (ROGS)ROGS is a major annual report from the Productivity Commission that examines the performance of governments in Australia in the important service areas of education, health, justice, emergency management, community services and housing. http://www.pc.gov.au/gsp/reports/rogs

The Statistics Portal, OECDThe OECD Statistics Portal provides free access to some OECD databases as well as extracts from all other databases, classified by topic. The OECD collects statistics needed for the analysis of economic and social developments.http://www.oecd.org/statistics/

Benchmarking initiatives and publications from specialist agencies such as:

- Australian Institute of Health and Welfarehttp://www.aihw.gov.au

- HealthInsitehttp://www.healthinsite.gov.au/topics/Benchmarking_and_Best_Practice

- Business Regulation Benchmarking Stage 2 (Productivity Commission)http://www.pc.gov.au/study/regulationbenchmarking/stage2

- Governance Matters 2008: Worldwide Governance Indicators 1996 2007http://info.worldbank.org/governance/wgi/sc_country.asp

Annual reports of similar agencies in other jurisdictions.http://www.gov.au

Periodic review of objectives and services

In recent Performance Management Systems Audits (PMSAs) performed by QAO, the Auditor-General noted that it was expected that agencies would have processes for the continuing analysis and formal evaluation of an (outputs) activities, its measures and continued relevance to whole-of-government outcomes and priorities to enable continuous improvement in service delivery.

Agencies should incorporate a periodic review of their objectives and services and performance information in their existing strategic, operational and/or budget planning processes.

This should occur with an aim of ensuring that an agencys:

services describe the key deliverables produced by an agency

services contribute to the achievement of agency objectives

service standards enable the measurement of the efficiency and effectiveness of delivering these services

objectives contribute to the achievement of Government ambitions

performance indicators enable the measurement of the efficiency and effectiveness of the agency.

Agencies should consult with key stakeholders, including DPC and Treasury, when considering a change to agency performance information. Where agencies decide to change their performance information, they should ensure clear links in external reports to previous performance information.

Agencies to note . . .

Objectives, performance indicators, services and service standards should be relevant, appropriate and fairly represent the agencys performance achievements.

However, performance management is a continuous improvement process and improvements may need to be made over an appropriate period of time.

The effort and level of commitment required for an agency to review its performance information should not be underestimated.

Performance reporting

Better practice reporting principles

focus on the few critical aspects of performance

look forward as well as back

explain key risk considerations

explain key capacity considerations

explain other factors critical to performance

integrate financial and non-financial performance information

provide comparative information

present credible information, fairly interpreted

disclose the basis of reporting.

Source: Performance Measurement Reporting Obstacles and Accountability Recent Trends and Future Directions, ANZOG, 2006

Integration and alignment of performance information

Integrating performance information into agency planning processes and performance documentation will assist in strengthening accountability for delivery of the results for which the agency is responsible.

The value of performance information depends on how well performance indicators, measures or standards are integrated.

To the extent appropriate, responsibility for all objectives and services and associated performance information should be clearly assigned to relevant business areas or position holders of agencies. This is to ensure there is a common understanding about respective contributions to the delivery of services and the achievement of objectives by the relevant business areas of an agency.

Figure 2 : Relationship between key documentation within the Performance Management Framework

An agencys:

strategic plan will describe the agencys overall objectives (including its contribution to Government targets) and how it will know if it has achieved those objectives (i.e. performance indicators)

operational plans will translate those objectives into the services that it will provide to its clients, and the standards of those services

Service Delivery Statements (part of the Budget papers) will discuss the resources that the agency will apply to delivering those objectives and services, including estimated actual performance (against performance indicators and service standards) for the year preceding the Budget

annual report will include reports on actual performance (against the same indicators and service standards) for the year.

In addition, Ministerial Charter of Goals (referred to as Ministerial Charter letters) reflect Ministers roles with regard to the achievement of Government targets and agency objectives. CEO and SES Performance Agreements reflect agencies contributions to the achievement of those targets, as negotiated within the collaborative agreement process, and agency objectives and services.

The use of consistent performance information through all documentation improves agencies accountability for performance by ensuring that the agency is reporting consistently and that actual performance against agreed set of indicators, measures and standards are published annually.

Fair and balanced reporting

It is important to remember that not all performance information reported by agencies can be good news. Credible performance reporting requires a balanced account of performance.

The Auditor-General notes that performance information should be balanced, addressing the agencys key activities and should report both the good and not so good achievements (QAO2007).

Better practice performance reporting involves being open about the extent of, and reasons for, the results achieved whether the results are above or below the expected level of performance. It also includes explaining what the agency plans to do in response, to the extent that the situation is within their control (ANAO 2004).

Telling the performance story

Performance data alone does not generally tell the performance story.

Recently there has been debate about the abundance of performance measures and the need to reduce them to a more meaningful state. Thomas (2006) recommends that, In the future, less emphasis should be placed on reporting data and more should be placed on allowing program managers to tell the performance story.

It is important to include contextual and explanatory information in reports, such as an analysis of performance information, to communicate the meaning of the level of performance achieved and how it is to be interpreted.

Contextual and explanatory information may refer to:

the rationale for the selection of performance information reported

the significance of each indicator, measure or standard

the environment in which the agency is operating (i.e. economic, social and environmental)

external factors that may have impacted on performance

whether performance is within acceptable tolerances:

if results exceed expectations, are there any adjustments that need to be made

if results are below expectations, are there compensating improvements in other areas, and/or higher priorities

if results are not effective or performing poorly, does this need to trigger critical reflection and/or a change of approach

Whole-of-government service delivery

There is an increasing emphasis on the whole-of-government delivery of services.

Agencies must work together to develop planning, budgeting and performance management, monitoring and reporting arrangements that meet both the accountability obligations of individual agencies and also contribute to the collective achievement of, and accountability for, whole-of-Government objectives.

Suggested reading

Connected Government : Good Practice Guide- outlines considerations for budgeting and accountability arrangements in cross-agency initiativeswww.apsc.gov.au/mac/connectingguide.htm

Appendices

Appendix1 History

Appendix2 Terminology

Appendix3 Performance Management Framework Explanatory ViewAppendix4 References

Brief history of performance management in the Queensland Government

In 1999, the Queensland Government adopted a range of management improvements and introduced accrual output budgeting across the public sector. These reforms were collectively labelled Managing for Outcomes. Managing for Outcomesaimed to better integrate management processes, focussing on strategic planning, resource allocation (budget) and performance management.

It was recognised at the time of implementation that while Managing for Outcomes established a framework for better information on managing government services, experience elsewhere indicated that it would be several years before it provided the quality of information it was capable of.

Prior to Managing for Outcomes, the Queensland Budget was managed on a cash basis. Under Managing for Outcomes, the emphasis of the Budget changed from inputs (the resources used to produce something) to outputs (the services and products provided) and outcomes (the impact of those services on the community). Agencies were required to report financial details in accrual terms as well as report non-financial information on outputs.

The key elements of accrual output budgeting were identified as:

strategic planning - identifying the outcomes government wanted to deliver to meet community needs

a budget allocation process allocating funds to agencies for delivery of outputs (services and products) to achieve the identified outcomes

a performance management framework in which agencies were accountable for the delivery of the services and products at an agreed cost

a differentiation between controlled and administered items - to focus agency accountability on those items that they had discretionary decision making authority (control) over.

The performance management framework introduced under Managing for Outcomes was an organisational and accountability framework for public sector service delivery. It represented the whole delivery process - inputs, outputs and outcomes, to focus effort across the public sector in delivering services to achieve the endorsed community outcomes, and identified the strategic points at which performance was measured and reported to the Government and the community.

By relating agency outputs to whole-of-government outcomes, and inputs to agency outputs, decision makers were able to test the alignment of government services and resources with desired outcomes and priorities.

Figure 3 : Performance Management Framework under Managing for Outcomes

Through measuring success in achieving outcomes, determinations could in theory be made regarding the appropriate mix of outputs in delivering the desired results. Through monitoring output performance, the efficiency and effectiveness of service delivery, including the extent, quality and benefit of services in relation to cost, could be determined.

The principles of Managing for Outcomes have shaped Queenslands financial and performance management framework as it stands today. Managing for Outcomes was introduced to ensure the services the Government provided were clearly articulated, accurately costed and consistent with its social priorities.

The Performance Management Framework retains some of the basic concepts underpinning Managing for Outcomes, such as ensuring that planning, resource management and performance management are integrated. The Performance Management Framework also addresses some of the shortcomings of Managing for Outcomes through:

including agency objectives to bridge the gap between agencies activities and the Governments objectives and priorities

being less prescriptive about defining agencies services to allow agencies to adapt the framework to suit their own needs, within guiding principles

ensuring that agencies are using consistent information in strategic plans, Budget documentation and annual reports

establishing formalised processes for agencies to work together to achieve common objectives (i.e. the collaborative agreement process).

accountable officer

The chief executive of a department of government declared under the Public Service Act 2008, section 14(1), is the accountable officer of the department. (Financial Administration and Audit Act 1977, S34(1)).

activity

Any work performed on a project or as part of a program. It may be a task or a set of tasks to be completed. An activity has a finite duration and will result in one or more deliverables. An activity will generally have cost and resource requirements. Some activities are operational in nature and are often ongoing.

agency objective

The effects or impacts that an agency seeks to have on its clients, stakeholders, or the broader community.

ambitions

Represent the desired effects on, or consequences of, Government services on the community. Ambitions are more specific goals for change and should be strategic, high-level and measurable.

annual report

A written report on the operations of the department during the financial year, as prescribed by the Financial Administration and Audit Act 1977, S 39.

annual report on progress against whole-of-Government targets

The Department of the Premier and Cabinet will prepare an annual progress report on the targets contained in Toward Q2: Tomorrows Queensland along with a plan that maps out what needs to be done over the coming 12 months to bring us closer towards each target.

Budget

An outline of Governments priorities and plans for the coming year, expressed in terms of financial and non-financial performance information.

Budget submission

Each agency prepares a submission to the Cabinet Budget Review Committee each year highlighting how it plans to apply its Budget, and, where necessary, seeking CBRCs consideration of changes to its Budget allocation to address new or emerging demands.

Cabinet Budget Review Committee (CBRC)

The CBRC has a primary role of considering matters with financial or budgetary implications for the Government. Initiatives or proposals with a material impact on government services or resourcing must be directed to CBRC in the first instance for consideration. At the direction of the Premier or Cabinet, CBRC may also consider other issues that require dedicated or longer-term scrutiny or otherwise might best be considered in the committee environment.

CBRC has a membership of four Ministers, with the Premier and Treasurer as standing members along with two rotational senior Ministers occupying the positions for generally one year.

CEO performance agreement

Departmental chief executive officers (CEOs) are required to enter into a performance agreement with the Premier at their substantive appointment and annually thereafter.

The performance agreement is drafted by the CEO using a proforma provided by the Public Service Commission.

collaborative agreements

Outline the specific contributions that individual agencies will make to the achievement of Government targets.

collaborative agreement process

The process through which whole-of-Government targets are disaggregated into the specific contributions that each agency will deliver in order to achieve the target.

consulting agencies

The Department of the Premier and Cabinet will nominate consulting agencies for each collaborative agreement those agencies with whom the lead agency must consult in the preparation of a collaborative agreement. An agency may be nominated as a consulting agency because of tangential impacts of the agreement on their business, or to ensure that tensions between the achievement of different targets are considered.

cosignatory agencies

The Department of the Premier and Cabinet will nominate cosignatory agencies for each collaborative agreement those agencies whose services make a significant or material contribution to the achievement of whole-of-Government targets.

escalation process

The process used to reach a decision where agencies are unable to agree during the collaborative agreement process.

Expenditure Review Committee of Cabinet (ERCC)

The Expenditure Review Committee was established in March 2008 to monitor and prioritise spending across departments and agencies and deliver the productivity dividend.

fiscal objectives

Detail the Governments commitment to maintaining a strong fiscal position for the State, and that the States asset base supports the current and future service delivery needs.

Government objectives for the community

The Government is required to prepare and table a statement of the Governments broad objectives for the community including details of arrangements for regular reporting to the community about the outcomes the Government has achieved against its objectives for the community.

Toward Q2: Tomorrows Queensland currently addresses this requirement. The Governments vision for Queensland is framed around five ambitions and within each of these areas, the Government has identified measurable targets for 2020.

Government targets

Set specific, observable and measurable goals for improvement in key policy areas. Achievement of Government targets is likely to require collaboration between multiple government agencies.

Toward Q2: Tomorrows Queensland is the Government's blueprint for the state to the year 2020. Toward Q2 includes 10 specific wholeofGovernment targets.

initiative

Initiatives could occur at any level within the performance management framework as ways that an agency intends to enhance, expand, or change its objectives or the way that it achieves them. An initiative could relate to a small process improvement within the agency, or a major policy shift.

lead agency

Cabinet has appointed a lead agency for each Government target. The lead agency is the agency with the most significant contribution to a target. The lead agency will lead the development of collaborative agreements, including coordinating the process and drafting the resulting collaborative agreement.

Machinery of Government (MOG) change

From time to time, the Premier will re-align responsibilities across government agencies. These re-alignments are known as Machinery of Government (or MoG) changes.

operational plan

An agencys operational plan provides for the services the agency intends to deliver during the plans timeframe. It also includes details about performance information that allows the accountable officer to assess the agencys performance in delivering services. (Financial Management Standard 1997, S21)

performance improvement strategy

A strategy established where risks or opportunities relating to the achievement of whole-of-Government targets are identified.

performance indicator

Measure the extent to which agencies are achieving their objectives.

performance information

A generic term used to describe information about the performance of an agency or Government at any level of the performance management framework.

performance management

Considered to be the system, which integrates organisational strategic management, performance information, evaluation, performance measurement, monitoring, assessment and reporting.

Performance Leadership Group (PLG)

The group, consisting of the DirectorGeneral of the Department of the Premier and Cabinet, the Under Treasurer, and the CEO of the Public Service Commission, that provides governance and oversight over performance across Government.

portfolio

A group of departments for which a Minister is responsible.

Portfolio Contact Officer (PCO)

Officer of the Department of the Premier and Cabinet with responsibility for briefing the Premier on Cabinet and CBRC submissions to ensure that they are consistent with policy.

program

A temporary structure created to coordinate, direct and oversee the implementation of a set of related projects and activities in order to deliver outcomes and benefits related to an organisation's strategic objectives. A program produces an end-state and is finite (albeit often years in duration).

Service Delivery Statement (SDS)

Budget papers prepared on a portfolio basis by agencies reporting to each Minister and the Speaker. The SDS set out the priorities, plans and financial statements of agencies.

service standard

Describes the standards of efficiency and effectiveness to which the agency will deliver services within its fiscal limit. Standards are set with the aim of defining a level of performance that is appropriate for the service and is expected to be achieved.

Standards of efficiency - reflect how resources (inputs) are used to produce services and objectives, expressed as a ratio of resources (inputs) to services - technical efficiency, or resources (inputs) to objectives - cost efficiency.

Standards of effectiveness - reflect how well a service achieves its stated objectives through meeting service delivery standards - operational effectiveness, or achieving desired objectives - policy effectiveness.

services

Services are the deliverables that will help the agency to achieve its objectives. They describe the areas in which an agency delivers services to its clients at a level appropriate to the agency.

SES performance agreement

Departmental Senior Executive Service (SES) are required to enter into a performance agreement with departmental chief executive officers (CEOs) at their substantive appointment and annually thereafter.

The SES process mirrors the CEO performance agreement process. The SES performance agreement will reflect aspects of their CEOs performance agreement.

Strategic Cabinet

Twice a year, usually in September/October and March/April, Cabinet meet to focus on the future strategies for the State as a whole.

strategic plan

Each accountable officer and statutory body must develop a strategic plan for the agency to cover a period of at least four years.

strategy

The way in which an agency intends to pursue its objectives and deliver its services, and assist in achieving the Governments objectives for the community.

Strategies can occur at various levels within an agency.

Strategies included in an agencys strategic plan would generally be longer term strategic strategies that are pursued over a number of years

Strategies included in an agencys operational plan would generally be shorter term operational strategies that are pursued over a year or less timeframe.

Treasury Analyst (TA)

Officer within Queensland Treasury with responsibility for briefing the Treasurer on agencies Cabinet and CBRC submissions to ensure th