Review of Commonwealth Government Business Enterprises ...

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Proposed Change:
2.6 3.8 The SCI is a brief (no more than fve pages), high level, plain English document that is
to be no more than fve pages expressed in terms of outputs programs or outcomes. It
is an integral part of the corporate plan, but does not include commercial-in-confdence
commercially sensitive information. An SCI would normally contain a business
description and mission statement, corporate vision, objectives, code of ethics, values
of the GBE, statement of accountability (including reporting obligations) and broad
expectations on fnancial and non-fnancial performance selected key indicators of
fnancial and non-fnancial performance as outlined in paragraph 3.3(c) above.
2.7 3.9 The SCI is GBEs are to arrange for the SCI to be tabled in the Parliament within ffteen
sitting days of the Parliament, following the start of the new fnancial year and then be
published as soon as practicable on the GBE’s website.
3.4 Progress Reports
3.4.1 Periodic progress reports are an important mechanism in ensuring that GBEs are
accountable for their performance to the government. The reports play an important role
in enhancing the Shareholder Minister(s)’ understanding of the operations and fnancial
performance of GBEs, the risks of their operations and factors infuencing their operating
environment. Performance reports also assist offcials in providing high quality advice and
assurance to the Shareholder Minister(s) on the performance and risks of the GBE.
3.4.2 The current GBE Guidelines provide for the preparation of six-monthly progress reports by
GBEs, or by agreement with the Shareholder Minister(s), quarterly reports. 33 In practice,
quarterly reporting has been adopted for all GBEs and the framework is working well for
all entities.
3.4.3 Finance considers that quarterly performance reports should be formally adopted by all
GBEs as the default reporting arrangement, with alternative arrangements agreed by
the Shareholder Minister(s) on an exceptions basis. In general, there is a reasonable
expectation that quarterly reporting would not be a signifcant imposition on GBEs given
that the management of each GBE will already be preparing some form of regular reporting
for its board in order to assist it in executing its fduciary duties.
3.4.4 GBE progress reports are evolving documents that have been tailored to meet the
government’s requirements over time. In each case, they provide analysis of performance
against the corporate plan, including a mix of fnancial information, trends, major
milestones and operational information. The reports serve both to update the Shareholder
Minister(s) on the GBE’s achievements and emerging risk factors and to facilitate analysis
by departments advising Minister(s).
3.4.5 Finance considers that there is merit in the GBE Guidelines outlining those aspects of
quarterly progress reports that are central to adequately understanding GBE performance
and fulflling the oversight function. There is currently little guidance on this in the GBE
Guidelines and some general principles could assist GBEs in preparing these reports.
3.4.6 In particular, we suggest that the GBE Guidelines require a reporting format that compares
quarterly and year-to-date performance information against the forecasts outlined in the
corporate plan for that fnancial year. This would include detailed analysis of revenue and
expense performance for the period and explanations of deviations from budgeted and
corporate plan forecasts. 34
Exposure Draft
33 GBE Governance Arrangements, paragraph 2.8.
34 Refer to New Zealand Crown Company Monitoring Advisory Unit Owner’s Expectations Manual for State Owned Enterprises, October 2007 (page 17);
http://www.comu.govt.nz/resources/pdfs/oem-soe-07.pdf