Good morning. I’m pleased to be here this morning to explore the issue of performance reporting with you and the members of this panel. And I’d like to thank IPAC for putting this workshop together.
I think you’ll find that my remarks this morning will build on and reinforce many of the comments made by Peter Gregory a few moments ago – to talk about reporting in the context of results-based management and explore the link between the two.
I wanted to cover these areas this morning:
So what is current reporting practice? For a start:
§ That annual reporting, in fact, does take place – about 20 ministries and 30 Crown agencies report each year, as does the government as a whole.
§ There’s consensus among government, legislators and the Auditor General on general principles for public performance reporting. Why is this significant? It means that all three parties – those who prepare, use and assess the performance reports – agree on what constitutes good performance reporting.
§ Central agencies provide more detailed guidance on the content and structure of the service plans and reports.
§ And, finally, an all party committee of the Legislative Assembly, the Crown Corporations Committee, publicly reviews the annual reports of selected agencies, even going so far as to hear directly from the most senior managers of these Crown corporations. This is the only committee of the Assembly to do so, however.
That said, many of the key elements for good performance reporting are in place. The next question to consider, though, is “Is it supported by results-based management systems?”
Performance reporting in BC should be seen in this context. That’s what underlies the Budget ad Transparency and Accountability Act. It presupposes that organizations are managing for results. And, if they are not, public reporting is meant to give impetus to this. I also want to add that many of the significant changes the government introduced with its initiative to “Redefine Management in the BC Public Sector” was also meant to introduce results-based management. The were meant to give managers greater flexibility and scope for managing for results.
Seen in this context, then, performance reporting in BC holds some surprises. For example, we’ve seen that planning and reporting in its external form – the public reporting of performance – is, often enough, disconnected from the rest of an organization’s business. For many, it’s a once-a-year exercise done for public consumption.
That’s disconcerting. Performance reports are – or should be – a reflection of how well an organization is managed. As the Auditor General has often said, “Performance reporting is a by-product – not the end product – of an organization’s performance management system”.
In other words, a good performance report is built on the internal management functions of an organization. And if it isn’t, you begin to wonder how that organization is managing. How are its performance measures in its Service Plan, for example, linked to the programs an organization delivers? How does the organization monitor the ongoing success of its programs? How does it know when it should adjust its strategies? How is it managing for results?
All this to say that I believe the key to good performance reporting – which would be supported by results-based management – is to use information to manage for results. That may sound odd. Surely it’s happening? After all, using information to manage seems easy enough:
1. First you define your information needs – some organizations use logic models to help define results and performance measures they need, and to help discern where they have control versus influence.
2. Then you collect the information you need. This could be done via big electronic database systems, but it doesn’t have to be. Periodic program evaluation can provide a snapshot of how you’re doing and may be better able to focus on client outcomes.
3. And then, of course, you monitor the success of your program and adjust your strategies as appropriate.
It sounds simple enough – but, of course, it’s not. Results-based management asks that people think, behave and operate in ways that are quite different from before.
They have to monitor with more of an eye to the longer-term results of their programs – focusing on outcomes, for example. But results-based management also puts much more onus on managers to be involved and make decisions in areas that were, more often than not, the purview of others: financial management and control, HR recruiting, staffing, and counselling, and risk management.
Not that these functions weren’t part of the job of the manager before, but it’s a much bigger part of the job now. Managers are much more intimately involved in those functions. And they have to exercise their judgement about these matters on the basis of principles rather than rules and regulations – there isn’t the same kind of roadmap anymore; there are only guideposts. There isn’t the same comfort as there was when one simply followed rules.
So part of the challenge of shifting to results-based management and performance reporting is in changing the culture of an organization.
There’s lots of advice on changing culture: you can focus on the people, quite directly, for example, or focus on process. I’ll focus on process today.
By using information to monitor, adjust and report, organizations will be sending a strong message to people that results-based management is here to stay. One thing is certain, if performance matters to the Executive of an organization, it will matter to everyone. In a survey we conducted in the summer of 2004, we asked ADMs, “How often does Executive monitor ministry progress against measures in the Service Plan?”. While over 55% said the measures were monitored every 1 – 3 months, 40% said it happens only once or twice a year; the remainder, not at all.
In one ministry we studied (one in the 55% group), each Executive member was given responsibility for achieving high level indicators. Each Executive worked with the program area to ensure performance data was collected and monitored, and that adjustment strategies were put in place. I mention this because this action sent a clear communication to people within the ministry – performance does matter – and helped shift the culture of the organization to one that also values a focus on results.
I’ve been talking about the internal use of performance information but external users – legislators and the public they represent – can also have a positive impact. Public scrutiny can be a powerful incentive for driving program improvements because a good performance story, which is what every organization wants to tell, depends on good management.
So it’s important that those who demand this information also use it. But how much is that happening? Jim McDavid will help us answer this question, I know. But I would suggest that performance reports are not used by legislators as much as you might have expected. And one reason, I would suggest, is the perception – supported by research – that performance reports lack credibility.
Given this perception, how do we encourage external users to accept these performance reports and add their value to the process? Providing assurance on reports is one way – in other words, having independent third parties attest to the quality of the reports.
And this is starting to happen. The Public Guardian and Trustee Act, for example, calls on the Auditor General to comment on his performance report – something we’ve done for five years now.
WorkSafe BC (previously the Workers Compensation Board) is another example. It asked us to provide an audit opinion on the quality of its performance report – so going beyond an audit of its financial statements to include its operational performance. This report, which we consider one of the leading edge reports you’ll see, includes an opinion from the Auditor General that the report fairly presents performance.
More recently, we’ve provided similar assurance on the performance report of the BC Assessment Authority.
We believe this third party assurance adds value – it tells the external user that the report is fair and reliable; and it exerts discipline on the organization. As the Public Guardian has said, “If we can’t prove it, we can’t say it.” That philosophy has a direct impact on the organization and on the way it manages – from the performance measures and targets it selects to the information it gathers and the way it monitors performance.
So focusing on the use of information, internally and externally, I believe, can help organizations manage and report on results. Using information, however imperfect it may be, brings performance management to life – and by extension – drives performance improvements throughout an organization. It sends a strong message to people within the organization that results matter and, in the process, begins the culture change that is necessary. And, lastly, when organizations are able to manage for results, they’re able to report on results in a meaningful way.
Thank you.