Annual performance statements for Commonwealth entities (RMG 134)

Audience

This guide is for officials of Commonwealth entities who are responsible for assisting their accountable authority to prepare annual performance statements.

Key points

This guide:

  • provides guidance to assist accountable authorities to prepare and publish annual performance statements for their entities as required by section 39 of the Public Governance Performance and Accountability Act 2013 (PGPA Act);
  • 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.

Part 1 – Introduction

  1. At the end of each reporting period, Commonwealth entities must prepare an annual report for presentation to the Parliament by the entity's responsible Minister.
  2. The annual report must include, among other matters, the annual performance statements for the entity which must comply with any requirements of the PGPA Rule (including section 16F).
  3. The annual performance statements address the non-financial performance of an entity and must provide information about the entity's performance in achieving its purposes.
  4. The annual performance statements are intended to complete the cycle of performance reporting that commenced at the start of the reporting period with the Portfolio Budget Statements (PBS) and corporate plan. An entity's annual performance statements should report the actual results achieved against the performance measures and targets set for the entity in its corporate plan and PBS.
  5. The measurement and assessment of performance relates only to that particular reporting period, even though the corporate plan sets out how the entity's performance will be measured and assessed over the minimum of four reporting periods covered by the plan.
  6. While entities have discretion in determining the content of these statements, entities are encouraged to present their annual performance statements in a concise way and to use cross-references to other information included in the annual report where an entity wishes to expand on aspects of its performance.   
  7. For further information on annual reports, refer to section 46 of the PGPA Act and Resource Management Guide No. 135 – Annual report for non-corporate Commonwealth entities and Resource Management Guide 136 – Annual report for Commonwealth entities.

Commonwealth companies

  1. Under the PGPA Act, Commonwealth companies are not required to produce annual performance statements. This guidance therefore does not apply to Commonwealth companies.
  2. However, companies are required to report, in their annual reports, on the actual performance results achieved against the performance information outlined in their corporate plans.

Part 2 – Entities with enabling legislation

  1. A number of entities are subject to legislative requirements for the preparation of their annual reports under their enabling legislation. The PGPA Act does not alter the operational independence of entities as set out in their enabling legislation. This guidance discusses the 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 any matters prescribed by their enabling legislation.

Part 3 – Structure of annual performance statements

  1. Entities have the flexibility to structure their annual performance statement in a way that provides the best approach to communicating the entity's performance. Appendix A to this guide provides a suggested presentation structure for the presentation of performance against individual performance measures.
  2. Entities are encouraged to expand or add information beyond this structure to suit individual circumstances in order to clearly convey the entity's performance against each performance measure.
  3. Generally speaking, an entity's annual performance statements should be clear, concise, and balanced, including through clear design and the use of headings. The presentation of an entity's performance should be done in a consistent manner and in such a way so the reader is able to obtain a clear understanding of:
    • an entity's performance against each individual performance measure;
    • the overall achievement of an entity's purposes; and
    • the factors that have contributed to the level of the entity's performance.
  4. The following sections provide some good practice examples of aspects of annual performance statements.

Alignment with the corporate plan and Portfolio Budget Statements

  1. Annual performance statements should include information that demonstrates the connection between the corporate plan, PBS and annual performance statements to enable a ‘clear read' across the three documents.
  2. To achieve this, entities may wish to include a diagram demonstrating how the performance information fits together across the documents, or page number references to the corresponding information in corporate plans and the PBS.
  3. It is good practice for entities to set out the discussion of the achievement of performance in their annual performance statements in the same order as the corporate plan, reinforcing the connection between the documents. Each performance measure should also be expressed in a consistent way to aid the clear read between its planned performance information and performance results.
  4. Where an entity changes performance measures from those presented in its PBS and/or its corporate plan, entities should include an explanation of the changes in their annual performance statements.

Example 1
Mapping performance information across an entity's Portfolio Budget Statements, corporate plan and annual performance statements

The Australian Trade and Investment Commission (Austrade) 2018-19 annual performance statements includes a graphic to explain the relationship between its three key performance documents – Portfolio Budget Statements, the corporate plan and annual performance statements. The graphic in the extract below illustrates the alignment between purposes in the corporate plan and outcomes and programs in Portfolio Budget Statements, and aids readability across the documents (p 18).

Example 2
Mapping performance information across an entity's Portfolio Budget Statements and corporate plan

The Department of the Environment and Energy 2018-19 annual performance statements map performance information across the corporate plan and Portfolio Budget Statements to show the alignment between purposes, outcomes, activities and programs. This is shown in the extract below (p 15).

Example 3
Mapping performance information across an entity's corporate plan, Portfolio Budget Statements and annual performance statements

The National Gallery of Australia 2018-19 annual performance statements include references (document and page numbers) to the source of the performance information being reported on. The performance measures are also described consistently in the corporate plan and the annual performance statements. This construct assists the reader to navigate the performance information across the three documents. The following extract is taken from page 25.

Location within the annual report

  1. Annual performance statements should be easy to locate within an entity's annual report. It is good practice 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 the table of contents is also preferable. Further, the list of requirements contained within the annual report must indicate the location of the annual performance statements within the annual report.

Example 4
Readily identified annual performance statements in an entity's annual report

The Department of Employment, Skills, Small and Family Business 2018-19 annual report clearly identifies the entity's annual performance statements in the table of contents (see excerpt from page iii below).

Part 4 – Matters to be included in annual performance statements

  1. 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; and
    • Analysis.

Statements of preparation

  1. Annual performance statements must include the following statements:
    • that the annual performance statements are prepared for paragraph 39(1)(a) of the PGPA Act and any other legislation applicable to the preparation of annual performance statements of the entity;
    • the reporting period for which the performance statements are prepared; and
    • that the annual performance statements, in the opinion of the accountable authority:
      • accurately present the entity's performance in the reporting period; and
      • comply with subsection 39(2) of the PGPA Act.
  2. Example 5 is an example of an introductory statement for a Commonwealth entity that has an individual as the accountable authority. Example 6 is an example of an introductory statement for a Commonwealth entity that has a group of individuals (such as a board) as the accountable authority.
  3. 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 the preparation and information included in the annual performance statements.

Example 5
Introductory statement for an entity with an individual as the accountable authority.

The following excerpt is taken from the Department of Parliamentary Services 2018-19 annual performance statements (p 48)

Example 6
Introductory statement for an entity with a group of individuals as the accountable authority

The following excerpt is taken from the Civil Aviation Safety Authority 2018-19 annual performance statements (p 28)

Results achieved

  1. The annual performance statements must include the results of the measurement and assessment of the entity's performance in the reporting period.
  2. In practice, this will require entities to report against the performance information published at the beginning of the reporting period in their corporate plans and PBS.
  3. These performance results are expected to be derived using the data sources or methodology determined at the time each performance measure was developed. It is good practice for this information to be included as part of the performance information outlined in the corporate plan. Entities may wish to use cross-references to its corporate plan to assist a reader to understand how performance is measured. 
  4. It is for each entity to structure and present results in a manner that best demonstrates performance in its specific circumstances. Good practice annual performance statements present the results in a way that is clear, concise and easily linked to the information presented in the entity's corporate plan and PBS for the relevant period.
  5. When reporting actual performance, an entity should consider providing the following information for each performance measure:
    • the relevant target for that performance measure;
    • the performance methodology or data source from which performance has been measured;
    • prior year(s) results to show trends over time.
  6. Entities often use, to good effect, a standard legend or graphic to illustrate the extent of achievement of individual performance measures. Where this approach is followed, it should be used in a consistent way throughout the annual performance statement. The inconsistent presentation of performance can result in a lack of clarity about the extent of achievement of individual performance measures, which in turn can make it difficult for a reader to understand the extent of achievement of an entity's purposes.
  7. Entities also often include case studies and photographs to assist in demonstrating achievements during the reporting period. In deciding how best to report on the entity's measurement and assessment of its performance, entities should ensure that contextual material is not used as a substitute for a clear and concise presentation of the entity's performance. A discussion about the use of case studies to measure and assess performance is included in RMG 131A.
  8. As a matter of good practice, annual performance statements should also include a clearly presented summary of results to enable readers to readily assess the degree of achievement against its purposes.
  9. If performance information, such as performance measures, targets, data sources and methodologies, differs from those set out in the corporate plan at the beginning of the reporting period, entities should explain these changes in their annual performance statements.

Example 7
Presentation of a high-level summary of performance results in achieving an entity's purpose

The Australian Federal Police (AFP) 2018-19 annual performance statements includes a results summary (p 24).
Table 3.1 provides an overview of results that clearly shows, at a glance, the entity's performance against its performance criteria for Outcome 1. These results are discussed in further detail in the annual performance statements.

Example 8
Summary presentation of performance results

The Services Australia (SA) 2018-19 annual performance statements provide a high-level results summary that outlines, at a glance, the entity's performance against its performance criteria for Program 1.1 (p 178).

Example 9
Summary presentation of performance results

The Old Parliament House 2018-19 annual performance statements provide a summary table that clearly shows, at a glance, the entity's performance against its performance criteria, indicators and targets (p 15).

Example 10
Presentation of detailed performance results in achieving an entity's purpose

Following the presentation of a high-level summary of results, the Australian Federal Police (AFP) 2018-19 annual performance statements present a detailed discussion of the entity's performance against each performance criterion. In the excerpt below (p 25), the annual performance statements present the target, the actual result for the current and previous year, and a clear statement of whether or not the target was met. The AFP also provides an analysis of the result, providing context for the actual performance result and a discussion of reasons for the results achieved.
It is good practice to reference the source of each criterion (document and page number) to facilitate a clear read. The inclusion of prior year results can also be valuable to identify trends in performance over time.

Example 11
Presentation of detailed performance results in achieving an entity's purpose

The Services Australia annual performance statements 2018-19 includes tables to set out the results against each performance criterion in a consistent manner. The table in the excerpt below (from p 183) includes a description of the methodology and data sources for each performance criterion, the performance target, the results (for the current reporting period and two prior reporting periods), and an informative analysis. This enables the reader to better understand and make a judgment about the performance results.

In line with good practice, the annual performance statements also include the source of each criterion (document and page number) to facilitate a clear read across performance information.

Example 12
Presentation of detailed performance results in achieving an entity's purpose

In the National Gallery of Australia (NGA) 2018-19 annual performance statements, the NGA clearly identifies actual performance results against performance targets (p 25). The table in the excerpt below includes the performance target, the result for the current reporting period, and an informative analysis. This enables the reader to better understand and make a judgment about the performance results. However, the table may benefit from including a description of the methodology and data sources for each performance criterion. In line with good practice, it also references the source of each criterion (document and page number) to facilitate a clear read.

Analysis of performance

  1. An entity's annual performance statements must include an analysis of the factors that contributed to its performance in achieving its purposes. Entities should provide an informative analysis beyond simply listing specific achievements.
  2. It is good practice for the analysis of the factors that contributed to performance to be included for individual performance measures as well as at an entity-wide level.
  3. The intent of the PGPA Rule requirement is for the annual performance statements to include factors that have contributed in both a positive and negative way to an entity's performance.
  4. There may be events or external factors flagged in an entity's corporate plan that were expected to affect an entity's ability to deliver on the intended results. The entity should discuss in its annual performance statements how such events or factors contributed to, or restricted, its performance in the reporting period. These factors may include the extent that an entity's cooperation with other organisations or bodies has impacted the entity's performance. This cooperation may be in relation to any linked programs reported in the entity's PBS, the organisations and bodies discussed in the entity's corporate plan that are expected to make a significant contribution towards the entity's purposes, or more broadly.

Example 13
Analysis that references the influence of external factors on performance

In the following excerpt, the Department of Agriculture and Water Resources 2018-19 annual performance statements provide an informative analysis of the results achieved
(p 16). The analysis identifies factors such as dry conditions and a decline in export values as external factors that influenced performance.

Example 14
Analysis that references the influence of internal factors on performance

  • In the following excerpt, the Services Australia 2018-19 annual performance statements provide an informative analysis of the results achieved (p 180). As well as identifying specific achievements, the analysis discusses factors that contributed to the results observed, identifying factors such as technological improvements to improve service delivery.

Example 15
Analysis that references the influence of external factors on performance

In the Old Parliament House (OPH) 2018-19 annual performance statements, OPH provides an informative analysis of its performance results (p 16). The analysis identifies factors such as increased onsite tours, the development of new exhibitions, and capturing more visitor data as factors that influenced performance. In this way, the analysis goes beyond a list of achievements.

Example 16
Overall analysis of performance

  • In the Department of the Environment and Energy 2018-19 annual performance statements, the Department provides an informative overall analysis of its performance results. This section presents a summary of the overall results (62% of performance measures were achieved and 35% were partly achieved), and discusses reasons for the results achieved. For example, it clarifies that some targets extend beyond the current reporting period and therefore are reported as being ‘partly achieved'. In relation to the two-yearly measures not achieved, the Department identifies delays and significant workloads as factors that influenced performance. This gives the reader an understanding of the overall extent to which the entity has achieved its purposes, and provides some context and explanation for the results.
  • The following excerpt is taken from page 23 of the annual performance statements.

Example 17
Overall analysis of performance

In the Department of Education and Training (DET) 2018-19 annual performance statements, DET provides an informative overall analysis of its performance results (pp 14-18). In the extract below, DET identifies several factors that contributed to the achievement of its results. For example, DET identifies significant planning and communication efforts to assist in transitioning to reforms, and compliance and fraud activities to improve payment accuracy of fee assistance. This overview gives the reader a sense of some of the factors that contributed to DET's achievement of its purposes, and goes beyond a mere recitation of achievements.

Example 18
Analysis of factors influencing individual and overall performance

In the Director of National Parks (DNP) 2018-19 annual performance statements, DNP provides an informative overall analysis of its performance results. DNP provides an analysis of the factors that contributed to performance to be included for individual performance measures (pp 31-37) as well as at an entity-wide level (p 38). This gives the reader a sense of some of the factors that contributed to DNP's achievement of its purposes, and goes beyond a mere recitation of achievements.

Part 5 – Sensitive information

  1. If the accountable authority considers that the corporate plan contains confidential or commercially 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.
  2. 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.
  3. 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

  1. Intelligence, security or listed law enforcement entities covered by the PGPA Act may seek exemption from the annual performance statements requirements. 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 must write to the Minister for Finance seeking such a modification.

Part 6 – Audit of annual performance statements

  1. Annual performance statements can be scrutinised through the following means:
    • the responsible Minister or the Minister for Finance may request the Auditor-General to audit an entity's annual performance statements; If the Auditor-General audits (examines and reports) an entity's annual performance statements, the audit report must be given to the requesting Minister who must table the report as soon as practicable after receipt;
    • the Australian National Audit Office can audit annual performance statements at its own discretion;
    • 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;
    • the functions of the audit committee of a Commonwealth entity must include reviewing the appropriateness of the accountable authority's performance reporting.

Part 7 – Record keeping

  1. In line with an accountable authority's responsibility to properly record and explain the entity's performance in achieving its purposes, it is good practice for entities to maintain records that accurately record and explain the entity's performance against its performance measures. This could be expected to include:
    • the raw data collected;
    • details of the data sources, collection methods, and clear trails of data calculations;
    • the results and analysis of the entity's performance, and any notes on proposed amendments to performance information for future reporting periods.
  2. A discussion of an entity's record keeping responsibilities relating to performance is also included in RMG 132: Corporate plans for Commonwealth entities.

Appendix A – Reporting template

This reporting template provides a suggested presentation structure for the presentation of performance against individual performance measures. Entities may choose to develop their own approach, or use all or part of this template.

TEMPLATE FOR REPORTING AGAINST INDIVIDUAL PERORMANCE MEASURES


Performance measure

Outline the performance measure as reported in the entity's corporate plan and/or Portfolio Budget Statements
[Example: A five per cent increase in customer satisfaction levels]

Target

Specify the target set as reported in the corporate plan and/or PBS.
[Example: 2019-20: 90%. The 2018–19 performance was 84% against a target of 85%]

Source

Refer to the page number where the performance measure is included in the corporate plan and/or PBS.
[Example: 2019–20 corporate plan page 11; 2019-20 PBS page 95.]

Performance achieved

Outline achievement of the performance measure against the target set.
[Example: Achieved
Stakeholder satisfaction of 92% (Target 90%)]

Analysis

Include a discussion of the factors that contributed to the performance achieved and any other matters that assist the reader to understand the achievement against the performance measure. This may include the presentation of trends in performance over time using graphs or other presentation methods.
Factors contributing to the entity's performance must be reported, irrespective of the level of performance achieved.
[Example: A number of activities were delivered in 2019–20 that were directed at improving our dealings with customers. These included improving the department's call centre technology and better managing customer on-line queries. This resulted in an eight percent increase in customer satisfaction levels compared with the level achieved in
2018–19.

Further details of the activities undertaken in 2019–20 are on pages 101 to 103 of the annual report.

Appendix B – Annual performance statements checklist

This template checklist is aimed at assisting entities in demonstrating adherence with the requirements of the PGPA Rule. Entities may choose to develop their own approach or use all or part of this template.

CHECKLIST FOR PREPARING AND PUBLISHING THE ANNUAL PERFORMANCE STATEMENTS


Requirement and related considerations

PGPA Act  or Rule reference

RMG 134
reference

Met?
Yes/No

Do the annual performance statements include:

  • a statement that the plan is prepared for paragraph 39(1)(a) of the PGPA Act?
  • a statement specifying the reporting period for which the performance statements is prepared?
  • a statement that, in the opinion of the accountable authority, the performance statements:
    • accurately present the entity's performance in the reporting period; and
    • comply with subsection 39(2) of the PGPA Act

Table Item 1 subsection 16F(2) of PGPA Rule

Paras. 21 to 23

 

Do the annual performance statements clearly set out the results of the measurement and assessment of the entity's performance in achieving its purposes?
Consider:

  • is the entity's performance against its performance measures and targets presented in a clear and consistent manner throughout the statements?
  • do the statements report against each of the performance measures included in the corporate plan and PBS? If not, do the statements explain why?
  • do the statements convey to a reader the entity's overall achievement in meeting its purposes?
  • are the statements easily identifiable within the annual report?

Table Item 2 subsection 16F(2) of PGPA Rule

Paras. 24 to 32

 

Do the annual performance statements provide an informative analysis of the factors that have contributed to the entity's performance?
Consider:

  • whether this analysis is best presented for each performance measure or whether the factors can be presented at a summary or entity-wide level?
  • whether the annual performance statements should report on any factors referred to in the corporate plan as likely to impact performance in the reporting period?
  • that the reporting of specific achievements only is unlikely to be sufficient to meet the requirements of the PGPA Rule.

Table Item 3 subsection 16F(2) of PGPA Rule

Paras. 33 to 36

 

If the entity publishes a supplementary corporate plan so that sensitive information is not published, has an annual performance statement been published that reports on the performance measures outlined in that supplementary corporate plan?

 

Paras. 37 to 40

 

Has the entity kept records that properly record and explain the entity's performance in achieving its purposes?

Section 37 of PGPA Act

Paras. 42 to 43

 


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