Why should we care about performance reporting?

As Director of Performance Reporting at the Office of the Auditor-General, I feel very fortunate to work on a topic that I deeply care about – public sector performance reporting.

Although this might seem like an odd topic to be passionate about, effective performance reporting, for me, is critical to maintaining trust and confidence in government and an effective democracy.

By “public sector performance reporting”, I simply mean how the public sector reports on how well it uses public money and resources to deliver high-quality services and better outcomes for New Zealanders.

From our research, we know that this is very important to New Zealanders. Each year, the public sector spends large amounts of public money, and, as taxpayers and rate payers, New Zealanders have a right to know whether it is being spent wisely.

Without effective performance reporting, there is a risk that trust and confidence in government could be lost. With the rise of social media, and information (of varying quality) coming from all places, the importance of reliable and trustworthy reporting about how the public sector is performing has never been more apparent.

The quality of performance reporting in the public sector

Our Office plays a crucial role in supporting Parliament and New Zealanders to hold the public sector to account for its performance. Our auditors check that the information public organisations report can be trusted. This work gives us a unique view of performance reporting across the whole public sector.

Parliament and New Zealanders should be able to determine whether the public sector is performing well based on the reporting information available. However, I often feel that they can’t make that judgement because the reporting sometimes isn’t as good as it should be. That worries me.

What are some of the issues?

There are many ways public organisations can report on their performance; an important way is through their annual reports.

Annual reports should allow Parliament, on behalf of New Zealanders, to scrutinise public organisations’ performance. At its heart, an effective annual report should provide a clear and balanced account of how well a public organisation has performed. It should explain, in an honest, meaningful, and relevant way, how well the organisation has spent public money to provide services and better outcomes for New Zealanders.

Many annual reports don’t do this. Instead, we see lengthy reports that act more like a “public relations” document. They focus only on what has gone well. They describe an organisation’s activities without explaining how these activities have improved people’s lives. The focus is often on what’s important to the organisation instead of what matters to New Zealanders.

In short, there’s an enormous amount of reporting produced every year that often doesn’t provide what New Zealanders and Parliament want to know, nor does it always give a fair and balanced account of how an organisation has performed.

We’ve published some guidance on performance reporting

However, I am optimistic that this reporting can improve.

Recently, we collaborated with the Treasury and Audit New Zealand to identify good practice in performance reporting.

We want public organisations to read this guidance and use it to improve their performance reporting. Drawing on our analysis of about 40 central government organisations’ annual reports, the guidance provides good practice examples across three important areas:

• Reporting what is important.
• Providing a coherent account of performance.
• Reporting on impacts and the contribution to outcomes.

You’ll find examples in there of how some organisations have been honest when things haven’t gone well, reported on the issues that matter to New Zealanders, and explained how they are making a difference.

Putting together this guidance made it clear to me that performance reporting can be done well, and is being done well by some public organisations. Although there is considerable room for improvement across the public sector, I was encouraged by the number of good examples we found. This gives me hope that public sector performance reporting can improve and give New Zealanders more trust and confidence in government.

And that is something worth caring deeply about.