Public Sector Governance and Accountability Series: Budgeting and ...

Budget Methods and Practices 127
BOX 4.2 Selected Performance Budgeting Practices of
Organisation for Economic Co-operation and Development Members
Australia
In Australia, ministers approve outcomes and outputs that are developed by
agencies in conjunction with the relevant minister and then endorsed by the
finance ministry. The outcomes are identified in the appropriation bills and
annual portfolio budget statements, binding spending agencies to use the
appropriated resources for the identified outcomes. Annual reports provide
ex post accountability. They state the extent to which planned performance
has been achieved using indicators of efficiency and effectiveness.
Canada
Departments submit annual reports on plans and priorities, containing key
results commitments for a three-year period, to the legislature. After the spending
year, departmental performance reports are tabled in the legislature.
New Zealand
The system focuses on controllable outputs rather than uncontrollable
outcomes. Outcome targets are set out in key government goals. These goals
are treated as a political responsibility of ministers. The outcome targets are
translated into departmental output-focused key priorities for which chief
executives (or spending agency heads) are held accountable. Chief executives
are contracted to deliver on the targets. Ministers (as the purchaser) review
agency performance.
United Kingdom
Departments enter into public service agreements with the treasury. These
agreements cover the aims, aspirations, and outcome targets of the department.
Departments publish service delivery agreements, which include
output and process targets that are based on outcomes set out in the public
service agreements. The treasury takes a key role in oversight of the system
and of target setting. The treasury monitors outcomes quarterly with scrutiny
by the relevant cabinet committee. Progress is also monitored by the Office of
the Prime Minister.
Source: Based on Rose 2003: 3–4.
Using a Medium-Term Approach
A parallel development in budget practice has been the widespread shift from
annual planning for one year ahead to budgeting for a longer period. 1 A first
application of a coherent system of forward budgeting occurred in Australia,
where a medium-term expenditure framework (MTEF) was introduced in