audit committees’ perspective on performance management and insights into their oversight role
DESCRIPTION
Page 3 PERFORMANCE INFORMATION - CONTEXT “Performance information indicates how well an institution is meeting its aims and objectives, and which policies and processes are working. Making the best use of available data and knowledge is crucial for improving the execution of government mandate. Performance information is key to effective management, planning, budgeting, implementation, monitoring and reporting.” National Treasury: Framework for Managing Programme Performance Information 5 th Annual Audit Committee ConferenceTRANSCRIPT
AUDIT COMMITTEES’ PERSPECTIVE ON PERFORMANCE MANAGEMENT AND INSIGHTS INTO THEIR OVERSIGHT ROLE
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AGENDA
1. WHY PERFORMANCE MANAGEMENT2. PLANNING, BUDGETING & REPORTING3. KEY PERFORMANCE MANAGEMENT CONCEPTS4. REPORTING5. AGSA REQUIREMENTS6. WHAT IS EXPECTED OF THE AUDIT COMMITTEES7. CONCLUSION
5th Annual Audit Committee Conference
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PERFORMANCE INFORMATION - CONTEXT
“Performance information indicates how well an institution is meeting its aims and objectives, and which policies and processes are working. Making the best use of available data and knowledge is crucial for improving the execution of government mandate. Performance information is key to effective management, planning, budgeting, implementation, monitoring and reporting.”
National Treasury: Framework for Managing Programme Performance Information
5th Annual Audit Committee Conference
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WHY PERFORMANCE MANAGEMENT
► Government policy – being accountable to the people► Pure financial results not always appropriate measure or
inadequate ► Yardstick to measure performance of public institutions► Measure value for money – efficient allocation of
resources► Hold public institutions accountable► Drive results-based management approaches
5th Annual Audit Committee Conference
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RELATIONSHIP BETWEEN KEY INFORMATION CONCEPTS
IMPACTS
OUTCOMES
OUTPUTS
ACTIVITIES
INPUTS
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Delivery
Goals to be achieved
Actions taken
Improvement expected to be made
Resources
► Planning, Budgeting &► Implementation
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PLANNING, BUDGETING & REPORTING CYCLE
5th Annual Audit Committee Conference
OVERSIGHT
POLICY DEVELOPMENT
STRATEGIC PLANNING
INSTITUTION“SOE” PLANNING & BUDGETINGYEAR-END REPORTING
IMPLEMENTATION & CURRENT YEAR REPORTING
► Specify performance indicators
► Set targets &► Allocate resources
► Monitor and take► corrective action
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SELECT PERFORMANCE TARGETS “SMART”LY
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S
• Specific and clear description and identification of the performance area • Level of performance clearly spelt out
M• Required performance must be measurable
A
• Target must be realistic and achievable give the existing capacity • Is the target achievable within the constraints of resources available
R• Relevant. The required performance is linked to the achievement of a goal
T• Time-bound. The time period or deadline for delivery is specified
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STEPS IN DEVELOPING PERFORMANCE INDICATORS
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• What needs to be achieved• Eg. Eradicate bucket system
Step 1Specify what needs to be achieved
• What needs to be done to achieve desired outcomes and impacts
• Activities required to produce these outputs
Step 2Specify outputs, activities and
inputs
•Indicators must be simple, easy to understand•Data for chosen indicators should be readily available
• Number of indicators should be manageable
Step 3Select key indicators
• Balance between realistic, achievable and challenging
Step 4Set realistic performance targets
•Performance information to be consolidated and reported back into planning, budgeting and implementation processes
Step 5Determine process and format for
reporting performance
• Regular monitoring and reporting against expenditure plans and targets
Step 6Establish processes and mechanisms to
facilitate corrective action
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REPORTING
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Accountability Cycle Document Information
Strategic planning Strategic Plans Outputs Performance Indicators
Planning & Budgeting Operational Plans Budgets Performance Agreements
Set Performance Targets Allocate Resources Allocate Responsibilities
Implementation and reporting during the year
Monthly Budget vs Actual Reports Quarterly Performance Reports
Report Progress with Implementation of Plans & Budgets
Year end Reporting Annual Report Report on Performance vs Plans and Budgets
Audit Audit report Management letter
Audit findings
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WHAT THE AGSA IS LOOKING FOR
► Usefulness and reliability of reported performance information as presented in the annual performance report
► Is performance information presented in accordance with National Treasury reporting principles – compliance with regulatory requirements
► Is the reported performance information consistent with planned performance► Are performance indicators and targets well defined, verifiable, specific, measurable,
time-bound and relevant, as required by the National Treasury Framework for Managing Programme Performance Information
► Is the reported performance information valid, accurate and complete
► Portfolio of evidence
5th Annual Audit Committee Conference
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WHAT IS EXPECTED OF THE AUDIT COMMITTEE
► Thorough understanding of Performance Management processes and how they work
► Ownership of copy of approved Performance Management Plan/ Pre-determined Objectives
► Quarterly interrogation of performance management report► Monitoring of management plan of action for progress re Performance
Management► Hold management accountable for the follow up on prior year AG
findings
5th Annual Audit Committee Conference
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IN SUMMARY
► Performance management now topical due to pressure to deliver services to the public
► AGSA now focussing on Performance Management► Trend expected to continue for some time► Responsibility of Audit Committees to play oversight role
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