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© Commonwealth of Australia 2017
ISBN: 978-925205-15-2 (Online)
With the exception of the Commonwealth Coat of Arms and where otherwise noted, all
material presented in this document is provided under a Creative Commons Attribution 3.0
Australia (http://creativecommons.org/licenses/by/3.0/au) licence.
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Contact us
Please direct questions or comments about the guide to:
Public Governance, Performance and Accountability Governance and APS Transformation Department of Finance 1 Canberra Avenue Forrest ACT 2603
Email: [email protected]
Internet: www.finance.gov.au/resource-management/pmra/
The words ‘must’, ‘required’, ‘requires’ and ‘requiring’ denote mandatory compliance by
accountable authorities/officials. The use of the words ‘could’, ‘may’, ‘encouraged’ or
‘consider’ convey non-mandatory guidance. The guidance to which these words relate may
or may not be applied by accountable authorities/officials in their approach to resource
management, depending on the operating circumstances of the entity and its appetite for
risk.
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Contents Audience 4
Key points 4
Resources 4
Part 1 – Introduction 5
Portfolio Budget Statements 6
Commonwealth companies 6
Part 2 – The role of annual performance statements in the enhanced Commonwealth performance framework 7
Part 3 – Suggested format for annual performance statements 8
Part 4 – Minimum requirements of the annual performance statements 9
Statements (of preparation) 11
Results 13
Activity title or description 16
Performance measurement methodology 17
Targets, goals and measures 18
Results achieved 19
Analysis 21
Part 5 – Regulator Performance Framework 23
Part 6 – Tabling and publication requirements 25
Part 7 – Sensitive information 25
Intelligence, security or listed law enforcement entities 25
Part 8 – Entities with enabling legislation 26
Part 9 – Audit of annual performance statements 26
Part 10 – The role of audit committees 26
Appendix A – Performance maturity model 28
Appendix B – Quick Reference Guide 30
Appendix C – Suggested Format for Annual Performance Statements 31
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Audience
This guide is for the officials of Commonwealth entities who are responsible for assisting their
accountable authority to prepare annual performance statements. The guide also supports
officials who manage the activities of entities.
Key points
This guide:
provides guidance on the obligations of accountable authorities under section 39 of
the Public Governance Performance and Accountability Act 2013 (PGPA Act) to
prepare annual performance statements for their entities
outlines the minimum requirements, prescribed by the Public Governance,
Performance and Accountability Rule 2014 (PGPA Rule) in section 16F, for entities
producing annual performance statements.
This guide applies to annual performance statements that begin on or after 1 July 2015.
Resources
This guide is available on the Department of Finance website at www.finance.gov.au
together with related guidance on the enhanced Commonwealth performance framework:
Resource Management Guide No. 130 Developing good performance information
Resource Management Guide No. 131 Corporate plans for Commonwealth entities
Resource Management Guide No. 132 Corporate plans for Commonwealth
companies
Resource Management Guide No. 133 Annual performance statements for
Commonwealth entities
Resource Management Guide No. 135 Annual reports for non-corporate
Commonwealth entities
Resource Management Guide No. 136 Annual reports for corporate Commonwealth
entities
Resource Management Guide No. 137 Annual reports for Commonwealth
companies
2015-16 Annual performance statements lesson learned paper
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Part 1 – Introduction
1. An objective of the PGPA Act is to establish a performance framework across
Commonwealth entities that provides meaningful information to parliament and the
public.
2. Section 39 of the PGPA Act requires Commonwealth entities to prepare annual
performance statements and include those statements in their annual reports. This
requirement took effect on 1 July 2015.
3. Commonwealth entities will report, through the annual performance statements, to what
extent they have fulfilled their purpose(s) as articulated at the beginning of a reporting
year in their corporate plans. This includes reporting on non-financial performance
criteria in both their corporate plans and in any Portfolio Budget Statement, Portfolio
Additional Estimates Statement or other portfolio estimates statement.
4. The requirements for annual performance statements are designed to provide a
consistent approach to performance reporting. The statements consolidate relevant
performance. The aims are to improve the readability of this information and to provide a
clear line of sight between planned performance for the reporting period as outlined in
the corporate plan, Portfolio Budget Statements and Portfolio Additional Estimates
Statements of an entity over the reporting period.
5. Under previous arrangements, entities’ reporting of performance, through the publication
of annual reports, varied significantly in quality and structure. This has limited the ability
to clearly ascertain the scope, nature and success of an entity’s performance and to
what extent the entity has achieved its purposes.
6. It is fundamental to the objectives of the PGPA Act that the presentation of entities’
performance to the public and the parliament is meaningful and improves public
accountability. The annual performance statements replace the previous annual report
non-financial performance reporting requirements (for non-corporate Commonwealth
entities) creating a clear, concise and consistent approach to performance reporting
across all Commonwealth entities.
7. It is understood that the development of improved performance information and reporting
frameworks will evolve over the initial reporting cycles under the new arrangements. To
help entities assess their progress Finance has published a performance maturity model
(provided at Appendix A).
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Portfolio Budget Statements
8. The majority of Commonwealth non-corporate and corporate entities receive some level
of appropriation funding. As a result, key strategic information relevant to entities
appears in their responsible Minister’s Portfolio Budget Statements that accompany the
annual Appropriation Acts.
9. Portfolio Budget Statements are publications presented to parliament by the responsible
portfolio minister. They describe, at a strategic level, what is intended to be achieved
with money appropriated by parliament. The Portfolio Budget Statements explain the
estimates for the purposes of the Budget Appropriation Bills and informs Senators and
Members of Parliament of changes in the proposed allocation of resources to entities
within the portfolio.1
10. The Portfolio Budget Statements are formal ministerial documents. Together with the
Budget Papers, Portfolio Budget Statements they represent a package of documents
tabled in Parliament on Budget night, which explain the Government’s budget decisions.
11. A Finance Secretary direction under section 36(3) of PGPA Act sets out the
requirements for performance information to be included in Portfolio Budget Statements.
This includes a strategically focused set of high-level performance information for
existing programs and detailed information for new or materially changed programs. This
performance information must be reported against in annual performance statements at
the end of that year, along with the performance information from corporate plans.
12. Note that the annual performance statements report on the performance of the entity in
fulfilling its purpose(s) during the reporting period, by acquitting the performance
information published in both the entity’s corporate plan and the relevant Portfolio
Budget Statements for the reporting period.
13. To demonstrate the achievement of its purpose(s) entities will need to clearly map (or
attribute) the performance information from the Portfolio Budget Statements to the
entities’ purpose(s). This mapping will serve to establish a clear read between the
entity’s corporate plan, relevant Portfolio Budget Statements, annual performance
statements and the annual report, and ensure it is clear how (and how well) the entity is
fulfilling its purposes.
Commonwealth companies
14. Under the PGPA Act, Commonwealth companies are not required to produce annual
performance statements. This guidance therefore does not apply to Commonwealth
companies.
15. However, under section 27A of the PGPA Rule, companies are still required to report, in
their annual reports, on the actual performance results achieved against the
performance information outlined in their corporate plans.
1 A Portfolio Budget Statement is produced for every appropriation bill where a Commonwealth entity within a portfolio is appropriated an amount
by the parliament.
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Part 2 – The role of annual performance statements in the enhanced Commonwealth performance framework
16. The enhanced Commonwealth performance framework builds on three main concepts:
entity, purpose and activity. At its most basic, the framework is focused on each entity
covered by the PGPA Act. Each entity is required to identify its purposes, which include
its objectives, functions or role. Lastly, the framework focuses on the activities of the
entity, which are its core areas of effort and the actions that it undertakes to pursue and
fulfil its purposes. More information on how an entity can identify and define its purposes
and significant activities are in RMG 132 – Corporate plans for Commonwealth entities.
17. Key to the annual performance statements is the presentation of good performance
information that tells a cohesive performance story demonstrating the extent to which a
Commonwealth entity is meeting its purposes through the activities it undertakes.
Guidance on the development of good performance information is available in
RMG-131 – developing good performance information (summarised at Appendix B).
18. The corporate plan, Portfolio Budget Statements, and the annual performance
statements are the core elements of the enhanced Commonwealth performance
framework. The corporate plan is developed at the beginning of the reporting cycle and
sets out an entity’s strategies for achieving its purposes and how success will be
measured.
19. The Portfolio Budget Statements sets out the funding for the entity and how the impact
of that expenditure will be measured. Annual performance statements, which are
included as part of the entity’s annual report, are produced at the end of the reporting
cycle and provide an assessment of the extent to which an entity has succeeded in
achieving its purposes. Figure 1 shows the main components of the framework and the
annual cycle.
Figure 1: The enhanced Commonwealth performance framework
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20. Many of the minimum content requirements for entities’ annual performance statements
are linked to content requirements for their corporate plans (see PGPA Rule section 16E
and RMG – 132 Corporate plans for Commonwealth entities). This alignment recognises
the close relationship between the two elements of the framework. The annual
performance statements (which are to be included in each entity’s annual report)
complete the annual reporting cycle.
21. Commonwealth entities will report, through the annual performance statements, on the
results actually achieved against the measures set out in their corporate plan and
Portfolio Budget Statements, and on the basis of any review and evaluations they have
committed to undertaking to demonstrate their performance in achieving their purposes.
The statements will present the performance of the significant activities for which the
entity is responsible at the end of each reporting period, by reporting against the targets,
goals and measures that the entity established at the beginning of a reporting year.
22. The level of reporting detail will typically be commensurate with the size, nature and
complexity of the activity in question. The aim is to have good quality, comprehensive
and accurate information that provides a clear and complete picture of how an entity has
performed.
Part 3 – Suggested format for annual performance statements
23. One purpose of annual performance statements is to support consistent performance
reporting by all entities. If needed, an entity may expand on, or add additional
information, beyond the suggested structure if needed.
24. Further information on the suggested format of the annual performance statement is
provided at Appendix C.
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Part 4 – Minimum requirements of the annual performance statements
25. Subsection 39(1) of the PGPA Act requires the accountable authority of a
Commonwealth entity to include annual performance statements in its annual report
(unless otherwise prescribed in the entity’s enabling legislation). Annual performance
must comply with requirements for publication and content prescribed by the PGPA
Rule.
26. Section 16F of the PGPA Rule sets out the matters that entities must include in their
statements. There are three core minimum requirements for annual performance
statements:
Statements (of preparation)
Results
Analysis.
27. Annual performance statements are intended to be the key location for all public data on
the actual performance of an entity in a reporting period. They will directly reflect the
actual results achieved against the performance information as set out in their corporate
plans and Portfolio Budget Statements (see Figure 2).
Figure 2: Corporate plans to annual performance statements – flow and core elements
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Example 1
Mapping performance information across an entity’s corporate plan, Portfolio Budget Statements
and annual performance statements
The Australian Trade and Investment Commission (Austrade) 2015-16 annual performance
statements included a graphic to explain the relationship between its three key performance
documents – the corporate plan, Portfolio Budget Statements and annual performance statements.
The graphic enhances the annual performance statements’ clear read and illustrates the alignment
between purposes in the corporate plan and outcomes and programs in Portfolio Budget
Statements.
The following excerpt is taken from p. 20 of the Austrade 2015-16 annual report.
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28. Annual performance statements must be easy to locate within an entity’s annual report.
Better practice is to identify annual performance statements as a separate chapter or
section with the heading ‘Annual Performance Statements’. A reference to this chapter
or section in a table contents is also preferable.
Example 2
Readily identified annual performance statements in an entity’s annual report
The Department of Environment and Energy 2015-16 annual report clearly identifies the
entity’s annual performance statements at p.18 in the table of contents (see excerpt below)
Statements (of preparation)
29. Section 16F of the Rule requires annual performance statements to include a statement
to be endorsed by the accountable authority. The statement must specify that the annual
performance statements have been prepared for paragraph 39(1)(a) of the PGPA Act
and any other legislation applicable to the preparation of annual performance statements
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of the entity. The statement must specify the reporting period which the performance
statements cover and provide an assurance by the accountable authority that the annual
performance statements accurately reflects the entity’s performance in the reporting
period.
30. Entities are required to provide a statement that they have complied with subsection
39(2) of the PGPA Act. Subsection 39(2) requires the annual performance statements
provide information about the entity’s performance in achieving its purposes, and also
that it complies with any requirements of the PGPA Rule. Please see Example 3 for an
introductory statement for a Department of State, Parliamentary Department, or listed
entity.
31. This statement is to perform a similar purpose to the statements by accountable
authorities for their annual financial statements which is to provide assurance regarding
quality of the preparation and information included in the annual performance
statements.
Example 3
Introductory statement for a Department of State, Parliamentary Department or listed entity.
The excerpt following is taken from p. 27 of the Department of Defence 2015-16 annual report.
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Example 4
Introductory statement for a body corporate
The following excerpt is taken from p.126 of the Australian Broadcasting Commission (ABC)
2015-16 annual report.
Results
32. Subsections 16F(1) and 16F(2) of the PGPA Rule have the combined effect of requiring
the accountable authority of a Commonwealth entity to report results in the entity’s
annual performance statements. These results must demonstrate the entity’s
performance in achieving the entity’s purposes in the relevant reporting period, and in
accordance with the methods of measuring and assessing set out in the entity’s
corporate plan, Portfolio Budget Statements and Portfolio Additional Estimates
Statements (or other portfolio estimates statement) for that reporting period.
33. The core requirement of the annual performance statements is for entities to report on
the achievement of their purpose(s) during the reporting period. This can be achieved
through reporting on the actual performance results they achieved in the reporting period
against the performance information published at the beginning of the reporting period in
their corporate plans and Portfolio Budget Statements.
34. The information must be presented in a way that is easily linked to the information
presented in the entity’s corporate plan and Portfolio Budget Statements for the relevant
period, to allow for a clear read across the three documents. In practice this will require
entities to clearly map (or attribute) the performance criteria from the Portfolio Budget
Statements to the entity’s purpose(s), showing how each performance criterion
demonstrates, or goes to demonstrate, the entity’s fulfilment of its purpose(s). This
mapping will serve to establish a clear read between the entity’s corporate plan, relevant
Portfolio Budget Statements, annual performance statements and the annual report, and
ensure it is clear how (and how well) the entity is fulfilling its purpose(s).
All performance criteria published in corporate plans and Portfolio Budget Statements
must be attributed to a purpose(s) and reported against in the annual performance
statement.
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Example 5
Presentation of performance results in achieving an entity’s purpose
The Australian National Audit Office (ANAO) 2015-16 annual performance statements linked
analysis of results to the achievement of its purpose. This approach was used consistently
throughout the annual performance statements when presenting results. Supplementary
information about the data sources used was also consistently provided.
The following excerpt is taken from p. 45 of the 2015-16 ANAO annual report.
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Example 6
Mapping results to achievement of an entity’s purpose
The Department of Parliamentary Services (DPS) 2015-16 annual performance statements clearly
identified its purpose in the annual performance statements. It also a diagrammatic overview of how
its performance criteria related to demonstrating its effectiveness in achieving its purpose. A
consistent focus on the purpose continued in the results and analysis sections that followed.
The following excerpt is taken from p. 18 of the DPS 2015-16 annual report
35. When reporting actual performance, an entity may consider providing the following
information for each activity identified in its corporate plan – noting that it is for each
entity to structure and present results that best demonstrate performance in its specific
circumstances.
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Activity title or description
36. Entities can identify the significant activities or key activity areas that were identified for
measurement and assessment in their corporate plan at the beginning of the reporting
period. Each significant activity can be identified by the title or description used for the
activity in the entity’s corporate plan to ensure consistency between its planned
performance information and performance results.
Example 7
Reporting of results against high level strategic activities
The Civil Aviation Safety Authority (CASA) 2015-16 annual performance statement maps results to
three high level activity areas expressed as ‘portfolio deliverable/corporate plans’. These high-level
activities provide a framework that help demonstrate how performance measures (or criteria)
combine to demonstrate achievement of CASA’s purpose.
The following excerpt is taken from p. 27 from the CASA 2015-16 annual report.
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Performance measurement methodology
For each significant activity or key activities identified, entities can briefly describe the
performance measurement methodology that has been applied to assess the activity’s
performance. Entity’s will need to explain if the performance measurement methodology
used differs from the performance measurement methodology set out in the planned
performance information section of the entity’s corporate plan at the beginning of the
reporting period.
Example 8
Explanation of performance methodology associated with specific performance information
The Department of Parliamentary Services 2015-16 annual performance statements explained the
methodology used to assess results. This included explaining changes in the methodology used
between reporting periods.
The following excerpt is taken from p. 20 of the Department of Parliamentary Services 2015-16
annual report.
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Targets, goals and measures
37. For each significant activity or key activities areas identified, entities can provide any
targets, goals and measures that were to be pursued or measured against in the
reporting period. Entity’s will need to explain if the targets, goals and measures differ
from the targets, goals and measures set out in the corporate plan and Portfolio Budget
Statements at the beginning of the reporting period.
Example 9
Use of targets to demonstrate performance against benchmarks
The Australian Fisheries Management Authority (AFMA) 2015-16 annual performance statements
reported performance information against targets that provide standards against which to assess
the contribution of specific activities to achieving the AFMA’s purposes.
The following excerpt is taken from p. 26 of AFMA’s 2015-16 annual report.
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Example 10
Explanation of changes to targets
The Department of Human Services (DHS) 2015-16 annual performance statements provide clear
explanations of any changes to targets, specifying where the changes were documented and why
the changes were made.
The following excerpt is taken from p. 22 of the DHS 2015-16 annual report.
Results achieved
For each significant activity or key activities identified, entities can report the actual
performance results achieved in the period. These results are expected to be derived using
the prescribed performance measurement methodology and specifically address any targets,
goals and measures.
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Example 11
Acquitting performance results against discrete criteria identified in an entity’s corporate plan
and Portfolio Budget Statements
The Department of Defence (Defence) 2015-16 annual performance statements provides clear
coordinates to the source (document and page numbers) to the source of performance information
being reported on. This helps navigate the volume of information produced by an entity of the size
and complexity of Defence.
The following example is an expert from Defence’s annual performance statements included taken
from p. 33 of its 2015-16 annual report.
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Analysis
38. Section 16F of the PGPA Rule requires an entity’s annual performance statements to
include an analysis of the factors that contributed to its performance in achieving its
purposes. Such analysis is intended to provide context to the entity’s performance over
the reporting period. This requirement may be addressed through an entity-wide
overview of performance or, where relevant, an entity may discuss specific issues on a
case-by-case basis. For example, the analysis section may address how a change to
either its purposes, activities, organisational capability or operating environment had a
significant impact on its performance during the reporting period.
39. The analysis can include a relevant context to the performance results reported, and
provide an analysis of the factors that have contributed to, or restricted, the delivery of its
purposes within the reporting period.
40. For example, this guide recognises that there may have been events or external factors
that affected an entity’s ability to deliver on the intended results set out in its corporate
plan or Portfolio Budget Statements. The entity may wish to discuss how such events or
factors contributed to, or restricted, its performance in the reporting period.
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Example 12
Analysis that references the influence of external factors on performance
The 2015-16 annual performance statements published by the Department of Finance (Finance)
includes an analysis section following the presentation of detailed results. The analysis included a
high-level discussion that helps provides an understanding of how Finance’s operational context
influenced its performance in achieving its purposes.
The following excerpt is taken from p. 43 of the Finance 2015-16 annual report.
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Part 5 – Regulator Performance Framework
41. The Commonwealth Government’s Regulator Performance Framework (RPF)
establishes a uniform set of performance measures for assessing regulator
performance. The framework is administered by the Department of the Prime Minister
and Cabinet and requires all Commonwealth regulators to be assessed and report
against six key performance indicators: reducing regulatory burden, communications,
risk‐based and proportionate approaches, efficient and coordinated monitoring,
transparency, and continuous improvement.
42. Entities may use the reporting requirements of the enhanced Commonwealth
performance framework (the corporate plan, Portfolio Budget Statements and annual
performance statements) to address the reporting requirements of the RPF. If a
regulatory function forms a significant activity of an entity, the entity can consider
including the key performance indicators and evidence that addresses the requirements
of the RPF in its corporate plans, Portfolio Budget Statements and annual performance
statements. However, note that addressing the requirements of the RPF will not fulfil the
minimum requirements for corporate plans under the PGPA Rule.
43. The key performance indicators in the RPF address the administrative efficiency and
effectiveness of a regulatory function, which constitute one aspect of the purposes of an
entity. To fully address the minimum requirements of the PGPA Rule (i.e. presenting
results and analysis that demonstrate whether the entity has achieved its purposes), an
entity will need to provide a more comprehensive report on its performance in order to
tell a meaningful story through the annual performance statements.
44. For further information and guidance on entities’ responsibilities under the RPF, see
https://docs.jobs.gov.au/documents/regulator-performance-framework.
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Example 13
Drawing relevant links to the Regulator Performance Framework
The 2015-16 annual performance statements published by the National Offshore Petroleum Safety
and Environmental Management Authority (NOPSEMA) includes reporting on specific measures
that draw on its reporting under the Regulator Performance Framework (where relevant).
The following excerpt is taken from p. 26 of the NOPSEMA 2015-16 annual report.
Note:
CP – refers to NOPSEMA’s 2015-16 corporate plan
PBS – refers to the 2015-16 Industry and Science Portfolio Budget Statements
RPF – refers to NOPSEMA reporting under the Regulator Performance Framework
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Part 6 – Tabling and publication requirements
45. Section 46 of the PGPA Act requires the accountable authority of each Commonwealth
entity, after the end of each reporting period, to provide a copy of an annual report to the
entity’s responsible minister2. The annual performance statements are to replace the
non-financial performance section in the annual report.
46. Under section 46 of the PGPA Act, the annual report must be given to the responsible
minister by the 15th day of the fourth month after the end of the reporting period for the
entity, for subsequent tabling by the minister in parliament.3
47. As a matter of good practice, entities are also expected to publish their annual report on
their websites.
Part 7 – Sensitive information
48. Under subsection 16E(4) of the PGPA Rule, if the accountable authority considers that
the corporate plan contains commercially confidential, sensitive information or, sensitive
information on national security matters that if published could prejudice the national
security interest of the Commonwealth, a supplementary corporate plan may be
prepared for publication on the entity’s website that excludes such matters.
49. If an entity has produced a supplementary corporate plan to exclude matters under
subsection 16E(4) of the PGPA Rule, it will need to produce an annual performance
statement that is a direct acquittal of the performance measurement and reporting
intentions identified in its published corporate plan.
50. This process for dealing with sensitive information also applies to government business
enterprises that, under subsection 16E(4), have prepared and published a statement of
corporate intent in place of a full corporate plan. That is, the annual performance
statement will need to be acquitted against the published version of the corporate plan.
Intelligence, security or listed law enforcement entities
51. Intelligence, security or listed law enforcement entities covered by the PGPA Act may
seek exemption from the annual performance statements requirements. Under
section 105D(3)(a) of the PGPA Act the Minister for Finance is able to, by written
instrument, modify requirements of the PGPA Act for intelligence, security or listed law
enforcement agencies in relation to preparing and publishing annual performance
statements under section 39 of the PGPA Act. The responsible minister needs write to
the Minister for Finance seeking such a modification.
2 Sections 63(2) and 70(2) of the Public Service Act 1999 (PS Act) and other enabling legislation also require certain entities to
produce annual reports.
3 The timeframe for the tabling of an entity’s annual report may vary according to the legislation the entity is subject to.
For example, entities subject to the Public Service Act 1999 are currently required to present their annual report on or before
31 October in the year in which the report is given. Other entities may have annual report tabling requirements in their
enabling legislation.
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Part 8 – Entities with enabling legislation
52. The PGPA Act does not alter the operational independence of entities as set out in their
enabling legislation. A number of entities are subject to legislative requirements for the
preparation of their annual reports under their enabling legislation. This guidance
provides the minimum requirements for matters to be included in the annual
performance statements prepared under section 39 of the PGPA Act and recognises
that relevant entities will also include those matters prescribed by their enabling
legislation.
Part 9 – Audit of annual performance statements
53. Annual performance statements can be scrutinised through the following means:
Under section 40 of the PGPA Act, the responsible minister or the Minister for
Finance may request the Auditor-General to audit an entity’s annual performance
statements.
The Australian National Audit Office can audit annual performance statements at its
own discretion, in accordance with division 2 part 4 of the Auditor-General Act 1997.
Section 82 of the PGPA Act provides authority for the sharing of information with
other jurisdictions and section 83 allows for state and territory auditors-general to
conduct audits of entities where there has been a state or territory contribution.
Under paragraph 17(2)(b) of the PGPA Rule, the functions of the audit committee of
a Commonwealth entity must include reviewing the appropriateness of the
accountable authority’s performance reporting.
Part 10 – The role of audit committees
54. The role of an audit committee is to provide independent advice and assurance to the
entity’s accountable authority. It is a requirement of subsection 17(2) of the PGPA Rule
that the functions of an audit committee must include reviewing the appropriateness of
the accountable authority’s financial reporting, performance reporting, system of risk
oversight and management, and system of internal control, for the entity. The PGPA
Rule requires that the accountable authority must, by written charter, determine the
functions of the audit committee (subsection 17(1) of the PGPA Rule). This charter must
include the requirements of subsection 17(2) of the PGPA Rule, including the
requirement in subsection 17(2)(b) that functions of the audit committee must include
reviewing the appropriateness of the accountable authority’s performance reporting. This
is summarised by Appendix B.
55. “Appropriateness” has its ordinary meaning of ‘suitable or fit for purpose’. This would
involve an audit committee reviewing the systems and framework that underpin the
performance reporting of an entity to give a level of assurance to the accountable
authority that is comparable to the level of assurance that the audit committee gives in
relation to financial reporting, risk and internal controls.
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56. Where there are formal standards in relation to a matter listed in subsection 17(2) of the
PGPA Rule, an audit committee “appropriateness” would be reached with reference to
the requirements of these standards of rules. Where no mandated standards are
provided, please refer to guidance material issued by the Department of Finance
supporting the performance framework, and the periodic reports on compliance made by
the Australian National Audit Office.
57. In the Quick Reference Guide - RMG 131 – Developing Good Performance Information
(at Attachment A) issued by Finance in September 2016, good performance information
(the bedrock of the performance reporting framework), is characterised as being
relevant, reliable and complete.
Relevant performance information should clearly state who benefits and how they
benefit from an entity’s activities.
Reliable performance information should use information sources and
methodologies that are fit-for-purpose and verifiable.
Complete performance information, when read as a whole, should articulate
whether the purposes of an entity are being achieved.
58. This Quick Reference Guide can be used to assist in determining the appropriateness of
performance reporting. The Australian National Audit Office Implementation of the
Annual Performance Statements Requirements 2015–16) may also provide a useful
reference point for audit committees reviewing the appropriateness of an entity’s
performance reporting.
59. Those responsible for compiling annual performance statements should include audit
committee clearance in their timeframes, and provide the audit committee with any
required supporting documentation.
60. Further information on the role of audit committees and the enhanced commonwealth
performance framework can be found in the paper entitled Function of audit committees:
Reviewing the appropriateness of performance reporting, including the 2016-17 annual
performance statements.
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Appendix A – Performance maturity model
Dimension Sub-dimension Maturity level
Beginning Developing Mature
STRATEGY
Purpose
Strategic purposes are
ambiguous and not
linked to expected
measurable results (i.e.
unclear purposes
impedes overall
assessment of an entity’s
performance)
There is some reference to
strategic purposes and links
to expected measurable
results
Entities’ long term strategic
purposes are expressed
clearly and link directly to
expected measurable results
Capability
Resource management
planning is not clearly
linked to an entity’s
ability to achieve its
purposes
There are some links
between resource
management planning and
an entity’s ability to achieve
its purposes
Resource management
planning is clearly linked to
an entity’s ability to achieve
its purposes
Environment Impacts of factors in the
operating environment,
on an entity’s ability to
achieve its purposes are
unclear
Impacts of factors in the
operating environment on
an entity’s ability to achieve
its purposes are identified
but not clearly linked to
impacts on achieving
purposes
Impacts of factors in the
operating environment on an
entity’s ability to achieve its
purposes are clear
CULTURE
Leadership
Producing strategic
performance
information is generally
viewed as a compliance
exercise. There is limited
engagement by senior
leadership in its
development and use
The benefits of developing
and using strategic
performance information,
are highlighted by senior
leadership
Senior leaders value, and are
engaged in, driving the
development and use of high
quality strategic
performance information
Capacity
The skills of, and
relationships between,
corporate and program
areas to establish and
maintain robust entity
performance
frameworks and
meaningful performance
measures, are limited,
despite pockets of
expertise
The skills of, and
relationships between,
corporate and program
areas to establish and
maintain robust entity
performance frameworks
and meaningful
performance measures, are
beginning to be widespread
The skills of, and
relationships between,
corporate and program areas
to establish and maintain
robust entity performance
frameworks and meaningful
performance measures, are
widespread. The entity is
recognised for its
performance frameworks
and performance measures
Risk
Entities provide limited
insight into how risk
management underpins
their approach to
achieving their purposes.
There is generally a risk
averse culture
Entities provide a broad
insight into how risk
management underpins
their approach to achieving
their purposes.
There is a culture where the
occasional failure is
accepted, expected and
valued
Entities clearly outline how
risk management underpins
their approach to achieving
their purposes. All
performance information is
highly valued
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RMG-134: Annual performance statements for entities
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Dimension Sub-dimension Maturity level
Beginning Developing Mature
PERFORMANCE
INFORMATION
Meaningful
performance
information
Measures are output
focused. Understanding
of meaningful
performance measures
is low. Annual,
quantitative KPIs are the
main tool used
Developing meaningful
performance measures is an
integral component of policy
and program development
and a wider mix of
appropriate measures are
beginning to be used
There is an appropriate mix
of short and longer-term
quantitative and qualitative
performance measures,
which support an
assessment of an entity
achieving its purposes and
an evidence based
performance story
Tiered structure No formal system and
planning process that
links the different levels
of performance
information within an
entity
A system and planning
process is being developed
that links different levels of
performance information
within an entity
There is a system and
planning process that links
the different levels of
performance information
clear within an entity
Use Performance
information is not used
widely to drive better
performance and assess
achievement of
purposes
Performance information is
used sporadically to drive
better performance and
assess achievement of
purposes.
Performance information is
used widely to drive better
performance and assess
achievement of purposes
* The performance maturity model is a self-assessment tool for entities – it will not be used by the Department of
Finance to assess entities’ performance maturity.
Also available: http://finance.gov.au/resource-management/pmra/performance.
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RMG-134: Annual performance statements for entities
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Appendix B – Quick Reference Guide
RMG 131 DEVELOPING GOOD PERFORMANCE INFORMATION
(Also available at: www.finance.gov.au/resource-management/pmra/performance)
CHARACTERISTICS OF GOOD
PERFORMANCE INFORMATION
DEVELOPING GOOD PERFORMANCE INFORMATION
RELEVANT
Performance information
should clearly state who
benefits and how they benefit
from the entity’s activities.
RMG 131 – Developing Good Performance Information
outlines the issues to consider when developing good
performance information.
A concise and measurable statement of the purposes of an
entity underpins a robust performance reporting framework.
Good performance information should enable stakeholders to
assess how an entity’s activities support the achievement of its
purposes, and if there has been a proper use of public
resources in undertaking these activities.
The questions below, drawn from RMG 131 (page references
noted), will help entities develop good performance
information.
Does the performance information:
1. Draw on qualitative and quantitative information to
demonstrate the extent to which the purpose is being
achieved through the activities being undertaken?
(Pages 2-10,15-18,23,24,29,41)
2. Demonstrate who is benefiting, and how they benefit from
the activities being undertaken, including how the activities
contribute to achieving a purpose?
(Pages 15,16,19,20,25,26)
3. Enable an assessment of public resources being used
effectively, efficiently, economically and ethically in striving
to achieve the purpose? (Pages 4,11,20,27,28,41)
4. Report against appropriate baseline information and short,
medium and long term qualitative and quantitative
measures? (Pages 14,21,29,31,42)
5. Use appropriate qualitative and quantitative methodologies
that are accurate and verifiable to support a rich
performance story? (Pages 24,31,32)
6. Use all relevant data sources? (Pages 22,23,32)
7. Get published at an appropriate time and frequency to
inform decision making and report short, medium and long
term results of an activity? (Pages 4,11,31,41)
8. Reflect the joined-up nature of an activity? (Pages 24,25)
9. Enable comparisons across relevant entities and
jurisdictions? (Pages 14,28,36)
10. Drive continuous performance improvement throughout the
implementation of an activity? (Page 11)
RELIABLE
Performance information
should use information
sources and methodologies
that are fit-for-purpose and
verifiable
COMPLETE
Performance information
should help stakeholders
judge whether the purposes of
an entity are being achieved.
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Appendix C – Suggested Format for Annual Performance Statements
The annual performance statement is the key non-financial reporting mechanism for all
public data on the actual performance of a corporate Commonwealth entity in a reporting
period.
It reports on the non-financial performance of the entity in fulfilling its purpose(s) during the
reporting period. This can be achieved by an entity acquitting the performance criteria as
published in both their corporate plan and the relevant Portfolio Budget Statements for the
reporting period. To demonstrate the fulfilment of their purpose(s), entities can map (or
attribute) each performance criterion to their purpose(s).
The diagram below provides the suggested presentation structure for the annual
performance statements. The use of this format is encouraged to enable presentation in a
consistent form by entities.
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RMG-134: Annual performance statements for entities
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It is suggested that annual performance statements produced by entities contain:
1. an introduction statement (as required by section 16F(2), item 1 of the PGPA Rule)
2. a clear statement detailing the entity’s purpose(s), including reference to outcome
numbers from the relevant Portfolio Budget Statements
3. results that demonstrate the entity’s performance against its purpose(s) as measured
by relevant performance criteria. The results should include the following elements:
a. the name and description of the performance criterion being reported on,
as published in the entity’s corporate plan and/or relevant Portfolio Budget Statements. All performance criteria published in the entity’s corporate
plan and/or relevant Portfolio Budget Statements for the reporting period
are expected to be attributed to a purpose or purposes
b. source – details of where the performance criterion, attributed to the purpose,
was originally published or sourced from. This is limited to the corporate plan
prepared for the reporting period or the relevant Portfolio Budget Statements
for the reporting period. If a performance criterion is sourced from both the
corporate plan and Portfolio Budget Statements, it is appropriate to state both
as the source
c. results against the performance criterion – the actual results achieved by
the entity in the reporting period against the performance criterion that are
attributed to the purpose. This could also include contextual analysis of the
result.
4. an analysis of the factors that contributed to the entity’s performance in achieving its
purposes (e.g. changes to purposes, changes to organisational capability and
variations in the entity’s operating environment).
Entities with more than a single purpose can consider repeating this structure (excluding the
introduction statement) for each and every purpose. Additionally, all performance criteria
published in the entity’s corporate plan and/or relevant Portfolio Budget Statements
for the reporting period are expected be attributed to a purpose or purposes.