enhanced-commonwealth-performance-framework-discussion-paper

Report 439—recommended that Finance ‘prioritise the review and update of the performance
measurement and reporting framework’. 4
The current quality of external non-financial performance reporting in the Commonwealth
public sector has significant scope for improvement.
How can key performance indicators be improved
As a general observation, KPIs are better suited to measuring process than they are at
measuring impact, although this varies according to the type of activity being measured. In the
right context, if KPIs are well designed, aligned and relevant, they can help to determine
whether a programme is achieving its objectives and, in turn, whether high-level outcomes are
being achieved over time. 5 While they are not suited to all circumstances, and often need to be
supplemented by other performance information of a more qualitative nature, KPIs are likely to
remain a keystone of any performance framework.
In its audit reports, the ANAO has consistently encouraged Commonwealth entities to:
• improve the specification of outcomes and programme objectives, noting their
importance to measuring an entity’s outcome
• clearly articulate the purpose, objectives, strategies and associated priorities, and
performance indicators of an entity through clearer linkages between strategic plans,
programme documentation and Portfolio Budget Statements
• ensure that performance information relates to the objectives of the programme and
enables an assessment of the extent to which the objectives are being achieved
• develop and implement more representative sets of KPIs to measure qualitative and
quantitative aspects of a programme. These improved KPIs should measure the relative
effectiveness of the strategies used and the extent to which objectives are being met.
In October 2010, Finance issued a guidance paper titled Performance Information and Indicators,
and annually issues guidance for the preparation of Portfolio Budget Statements, to help entities
develop their KPIs. The quality and scope of this guidance has been criticised. A key output in
the first stage of developing a new performance framework will be to provide clearer guidance
on how to manage the various methodological challenges associated with the development of
KPIs.
There are some interesting timing issues with improving the quality of published KPIs. In our
discussions to date, we have found that a lot of activity-level data is collected and used
internally to inform day-to-day management decision-making, but only some of this is
developed to be reported in higher level KPIs that support tactical and strategic decisionmaking.
Leveraging these datasets for better information could underpin some early
improvements in the quality of published performance data. On the other hand, where no data
exists to support better quality KPIs, it will take time to grow and mature relevant new datasets
to a level where they can be published. In some cases this may take years, and involve the
development of new systems and analytical tools. Commonwealth entities may need space to
4 Joint Committee of Public Accounts and Audit, Commonwealth of Australia 2014, Report 441—Inquiry
into Public Governance, Performance and Accountability Act 2013 Rules Development, page 116.
5 There is a view that the current outcomes and programmes framework for Commonwealth
appropriations is misaligned, that outcomes are too abstract, and to that extent, do not lend themselves to
easy measurement. The responses to this discussion paper may point to how big an issue this is, and what
improvements could be made to structuring of outcomes and programmes.
Enhanced Commonwealth Performance Framework—Discussion Paper | 12