GUIDELINES FOR PUBLIC SECTOR REVIEWS AND EVALUATIONS

Transcription

1 Department of the Premier and Cabinet Government of Western Australia GUIDELINES FOR PUBLIC SECTOR REVIEWS AND EVALUATIONS PUBLIC SECTOR MANAGEMENT DIVISION 19 December 2007

2 CONTENTS EXECUTIVE SUMMARY 1 INTRODUCTION Purpose and Context Background Relevant Legislation Relevant Government Policies 2 2 NATURE AND SCOPE OF REVIEWS 3 3 REVIEW ACTIVITIES Criteria for Selection of Areas to be Reviewed Planning for the Review Conducting the Review Reporting on and Utilising the Results Implementing Review Findings Roles of Key Stakeholders Application of the Guidelines to Statutory Authorities 12 4 EVALUATION ACTIVITIES Introduction Planning for and Conducting Evaluations Ongoing Performance Monitoring 15 Need Assistance? 16 Attachment 1: SUMMARY OF RELEVANT LEGISLATION Attachment 2: SUMMARY OF RELEVANT GOVERNMENT POLICIES

3 EXECUTIVE SUMMARY INTRODUCTION Purpose and Context The purpose of these Review Guidelines is to assist: Central agencies to: Plan for and facilitate reviews into the efficiency and effectiveness of public sector services, policies, structures and legislation in a systematic, consistent and transparent manner Provide input to and support for reviews in a more effective and coordinated way Line agencies to: Better understand the reasons for and methodologies used in review activities Take greater ownership of the outcomes of reviews Be more proactive in carrying out meaningful reviews themselves in a timely fashion, so as to reduce the need for centrally initiated and conducted reviews. Relevant Legislation and Government Policies The Public Sector Management Act 1994, Financial Management Act 2006, associated Treasurer s Instructions, and the Government Financial Responsibility Act 2000 require both expressly and implicitly meaningful reviews to be carried out at appropriate times. A number of government policies relate to review activities within and across the public sector. These Review Guidelines have been endorsed by the Expenditure Review Committee and Cabinet. NATURE AND SCOPE OF REVIEWS Six review categories are listed in Section 2. Whole-of-government reviews and those involving portfolios or whole agencies are referred to simply as reviews. Those involving agency-level activities are referred to as evaluations.

4 ii REVIEW ACTIVITIES Criteria for Selection of Areas to be Reviewed Ideally, all areas 1 should be reviewed systematically. Reviews consume considerable resources, so it is important to target reviews in areas that will be of most benefit. Clearly, an area should be reviewed where there is a statutory requirement to do so. In other cases, the selection of an area for review is most likely to provide greatest value for money, and generate useful decision-making information, when one or more of the criteria stated in Section 3.1 apply. Planning for the Review In planning for the review, it should be borne in mind that Section 10 of the Public Sector Management Act provides for the Minister for Public Sector Management to undertake public sector review activities. A key planning step is that the Approving Authority for the review should be specified. The Approving Authority would normally be Cabinet or the relevant Minister/s in collaboration with the Premier / Minister for Public Sector Management, depending on the review category. A Review Committee should be established to provide overall leadership and direction. The Review Committee should comprise the responsible CEO/CEOs, or their delegate/s, and other members who should as far as possible be independent of the agency/ies concerned. Where the review is of strategic importance to the Government, the Review Committee should be chaired by the relevant Minister/s or their representative. The Review Committee should prepare a draft Review Plan. The Review Committee should obtain comment from the Department of the Premier and Cabinet on the proposed Review Plan. The final Review Plan should then be submitted to the Approving Authority. Endorsement of the Review Plan by the Approving Authority should be obtained before commencement of the review. Conducting the Review In conducting the review, the Review Committee should ensure that all aspects of the Review Plan are properly addressed and/or carried out. The Review Committee should ensure that an Implementation Strategy is prepared. The Implementation Strategy, which is an important component of the conduct of the review, should clearly indicate who is responsible for what. 1 The terms area or areas are used generically to mean activities, agencies, portfolios or the public sector generally, as applicable.

5 iii Where Cabinet is the Approving Authority, Cabinet Submissions should be jointly sponsored by the relevant portfolio Minister/s and the Minister for Public Sector Management. Reporting on and Utilising the Results On completion of the review, a comprehensive draft Review Report should be prepared and submitted to the Department of the Premier and Cabinet for comment. When any issues raised by the Department have been resolved, the final Review Report should be submitted to the Approving Authority. Implementing Review Findings The Department of the Premier and Cabinet will advise the Minister for Public Sector Management on matters relating to the implementation of review findings, and proposed courses of action, where applicable. Updates on progress will also be provided to the Minister for Public Sector Management. Roles of Key Stakeholders The review program and review activities will be directed by Cabinet and the Minister for Public Sector Management, with advice and support from the Expenditure Review Committee, Strategic Management Council, Department of the Premier and Cabinet and Department of Treasury and Finance. Application of the Guidelines to Statutory Authorities Based on feedback from Directors General and others, all agencies including statutory authorities should be selected for review, and reviews carried out, according to the criteria and principles outlined in these Review Guidelines. Hence, the approach in relation to statutory authorities involves the phased and progressive selection of agencies for review, as well as effective planning, conducting and reporting on reviews, and implementation of review findings. EVALUATION ACTIVITIES The guidelines relating to reviews are also broadly applicable to evaluations. The following additional guidelines relate more specifically to evaluations. Evaluation involves the systematic collection of information about the characteristics and outcomes of activities, services, projects or programs. This information is used to inform decisions, clarify options, reduce uncertainties and meet accountability requirements.

6 iv Planning for and Conducting Evaluations Premier s Circular 2007/05, titled Agency Strategic Management, refers to Guidelines for Agency Strategic Management. The guidelines, issued in February 2007, provide information regarding the planning and conduct of, and reporting on, evaluations. An Approving Authority should be specified for each evaluation. The Approving Authority would normally be the relevant CEO/s and/or Minister/s. A primary aim is to ensure that meaningful evaluations are carried out and that agencies benefit from the lessons learnt from evaluations. The underlying principles concerning evaluation are provided in Section 4.2. Ongoing Performance Monitoring Ongoing performance monitoring is closely linked to evaluation. Ongoing performance monitoring is regarded as regular monitoring of performance using performance indicators, performance measurement, customer feedback (including complaints) and other performance information. Further information is provided in the Guidelines for Agency Strategic Management.

7 1 INTRODUCTION 1.1 Purpose and Context There is a need among central agencies to be able to plan for and facilitate reviews in a systematic, consistent and transparent manner. There is also a need for an explicit set of criteria for the selection of areas to be reviewed. Feedback has been received from a number of line agencies that they would welcome having access to a clearly articulated set of guidelines and criteria for review activities. The purpose of these Review Guidelines is therefore to assist: Central agencies to: Plan for and facilitate reviews into the efficiency and effectiveness of public sector services, policies, structures and legislation in a systematic, consistent and transparent manner Provide input to and support for reviews in a more effective and coordinated way Line agencies to: Better understand the reasons for and methodologies used in review activities Take greater ownership of the outcomes of reviews Be more proactive in carrying out meaningful reviews themselves in a timely fashion, so as to reduce the need for centrally initiated and conducted reviews. The document is not intended to be a comprehensive how to manual. It is a summary of the main principles and issues relating to the Government s various review policies and legislation. 1.2 Background In keeping with other jurisdictions around the world, the Government of Western Australia endeavours to deliver holistic, coordinated and cost effective services which are accessible to those who need them, and of a type and quality expected by the community. From time-to-time it is important that answers are sought to the following questions: To what extent are these objectives or desired outcomes being achieved? Which aspects need to be improved?

8 2 What needs to be done to attain the desired improvements? In order to seek answers to these questions, rigorous reviews need to be conducted. Depending on the circumstances and issues concerned, the nature and scope of reviews can range from whole-of-government to agency-specific activities. A strong review culture and effective review activities are essential components of good governance at all levels across the public sector. This paper presents guidelines to assist in ensuring that reviews of the public sector, agencies, services and legislation are properly planned, established, conducted and reported on, and the results utilised to best effect. It is expected that these guidelines will be of particular relevance to Ministers, Directors General, Chief Executive Officers and other agency staff directly involved in review activities. The roles of key stakeholders, including Cabinet, the Expenditure Review Committee and Strategic Management Council are also described in the paper. 1.3 Relevant Legislation The Public Sector Management Act 1994, Financial Management Act 2006,, associated Treasurer s Instructions, and the Government Financial Responsibility Act 2000 require both expressly and implicitly meaningful reviews to be carried out at appropriate times. A summary of the requirements of this legislation in relation to review activities is provided in Attachment 1. Review requirements are also stated in individual agency-related legislation. Many reviews are conducted as a result of such legislative requirements. In these cases, reviews should be carried out in accordance with Sections 3.2 to Relevant Government Policies A number of government policies relate to review activities within and across the public sector. The following form part of and/or contribute to the government s policy framework on reviews. Further details of these aspects are provided in Attachment 2. Resource management requirements Machinery of Government Review (2001) Functional Review (2002) Better Planning: Better Futures (The Strategic Management Framework )

9 3 Premier s Circulars These Review Guidelines have been endorsed by the Expenditure Review Committee and Cabinet.

10 4 2 NATURE AND SCOPE OF REVIEWS Depending on the nature, scope and purpose of reviews, they may be categorised as follows: Category 1: Category 2: Category 3: Category 4: Category 5: Category 6: Whole-of-government reviews Reviews involving a number of portfolios Reviews at the portfolio level Reviews of whole agencies Reviews of activities carried out by a group of agencies Reviews of activities carried out within a single agency. There is considerable commonality in the planning, principles and methodologies relating to reviews in any of the above categories. In the interests of simplicity, the remainder of this paper focuses on two broad review groups, namely: (i) (ii) Whole-of-agency/portfolio/government reviews (sometimes referred to as machinery of government reviews ) [Categories 1-4 above] Reviews of agency activities [Categories 5 and 6 above]. For ease of reference, the first group will be referred to simply as reviews, and the second as evaluations 2. Policies and principles regarding review activities are outlined in Section 3, and those relating to evaluation activities are summarised in Section 4. In addition to the above six categories, other more specialised kinds of reviews exist. For example, reviews of the particular Outcome Based Management (OBM) structure under which agencies report. Many of the principles outlined in these Guidelines relate also to legislative reviews. Guidelines for instructing officers, particularly in relation to machinery of government issues, are available at: The diagram on the following page presents a simple portrayal of review and evaluation activities in the context of public sector and agency strategic management. The inner cycle represents agency activities, and is a modified version of Figure 1 of the Guidelines on Agency Strategic Management (at The outer cycle of activities represents statewide or public sector wide activities. 2 The evaluation section of this paper, together with planned subsequent detailed guidelines on evaluation, are intended to ultimately replace the various existing Department of the Premier and Cabinet documents on evaluation.

11 5 Review and Evaluation Activities in the Context of Public Sector and Agency Strategic Management State Strategic Planning Agency Strategic Planning Statewide Reporting Agency Reporting Agency Budgeting State Budgeting Review Activities Evaluation Activities Service Delivery Strategic Outcomes Agency Performance Monitoring Public Sector Performance Monitoring

12 6 3 REVIEW ACTIVITIES (Categories 1 to 4, as indicated on p4) 3.1 Criteria for Selection of Areas to be Reviewed Ideally, all areas 3 should be reviewed systematically. Reviews consume considerable resources, so it is important to target reviews in areas that will be of most benefit. Reviews should not be a substitute for taking tough decisions. Clearly, an area should be reviewed where there is a statutory requirement to do so. In other cases, the selection of an area for review is most likely to provide greatest value for money, and generate useful decision-making information, when one or more of the following criteria 4 apply. The area concerned: Has a significant impact on the community or community groups Has considerable policy significance Is significant in achieving government goals Is associated with an issue which is identified as a significant government priority Has an important relationship to other key areas or objectives Has high public visibility Is to be affected by a proposed major change Absorbs substantial resources Has not been reviewed for a substantial period of time Has displayed weaknesses in financial or people management and / or planning processes Has been the subject of a significant number of complaints, or significant public dissatisfaction or concern Appears to display discontinuities or inconsistencies between inputs, processes, services and outcomes Has performance information which suggests the existence of problems. 3 4 The terms area or areas are used generically to mean activities, agencies, portfolios or the public sector generally, as applicable. The criteria are not intended to be in order of importance, and there is a degree of overlap between them.

13 7 It should be noted that Cabinet or the Expenditure Review Committee might select an area to be reviewed which is not necessarily a significant government priority. The purpose of such a review may be to determine whether the area is delivering value for money. 3.2 Planning for the Review In planning for the review, it should be borne in mind that Section 10 of the Public Sector Management Act states that one of the functions of the Minister for Public Sector Management is to arrange for reviews to be conducted in respect of the functions, management or operations of one or more public sector bodies. Initial Actions and Considerations The steps to be undertaken, and the way they are carried out, will depend on who or which body has initiated or proposed the review 5, and the nature of the review itself. However, in general terms, the following would normally apply. The review initiator should ensure that: The proposed area for review is carefully considered, and that the relevant criteria (from Section 3.1 above) are identified, together with any other specific catalysts for the review and any key issues relating to the review. The views of the responsible Minister and Chief Executive Officer of the department/agency principally assisting the Minister are obtained prior to developing firm proposals about the nature, scope and timing of the review. Consideration is given to appropriate strategies to ensure there is external or independent scrutiny. This may be by the use of expertise in other public sector agencies rather than necessarily relying on consultants outside the public sector. The peer review option should be considered as it may provide a costeffective means of achieving greater independence and objectivity. In some circumstances, peer review can also result in useful additional expertise, information and perspectives being contributed to the process. The Project Scope 6 is identified and clearly stated, including: Purpose, nature and scope of the review, including the issues to be addressed and desired outcomes Information required Time schedules. 5 6 The proposal to carry out a review could emanate from a number of sources including Cabinet, the Expenditure Review Committee, individual Ministers, the Department of the Premier and Cabinet or the Department of Treasury and Finance. Sometimes referred to as Terms of Reference.

14 8 The Approving Authority for the review is specified. The Approving Authority would normally be as indicated in the following table. Type of Review Whole-of-government reviews (Category 1) Reviews involving a number of portfolios (Category 2) Reviews at the portfolio level (Category 3) Reviews of whole agencies (Category 4) Approving Authority Cabinet Cabinet Cabinet* / Relevant Minister/s, in collaboration with the Premier / Minister for Public Sector Management (* Given that changes to one portfolio may affect other portfolios) Relevant Minister/s, in collaboration with the Premier / Minister for Public Sector Management A Review Committee is established to provide overall leadership and direction for the review project. The Review Committee should comprise the responsible CEO/CEOs, or their delegate/s, and other members who should as far as possible be independent of the agency/ies concerned. Where the review is considered by Cabinet or the Expenditure Review Committee to be of strategic importance, the Review Committee should be chaired by the relevant Minister/s or their representative. Such reviews should not involve self-assessment by the area/s concerned. Where practicable, senior and experienced reviewers from the Department of the Premier and Cabinet, Department of Treasury and Finance and other central agencies will conduct or provide significant input to the review. In some cases the review may be undertaken by private, public or academic sector consultants identified as being appropriate by Cabinet or the Expenditure Review Committee. It is important that the role of the portfolio Minister/s and the relevant CEO/s in undertaking the review be clearly enunciated. If the review is conducted centrally, then CEOs will need to have some ownership and responsibility for decisions which they will be required to implement.

15 9 The Review Plan The Review Committee should prepare and document the Review Plan, which should include: A description of the area to be reviewed and its key stakeholders Project Scope (as outlined above) Description of the likely benefits of the review Composition of the Review Committee and identification of the Approving Authority Arrangements for managing and undertaking the review Proposed review methodology, including data collection and analysis Required resources and skills, and from where they might be drawn Ethical and legal considerations Cost estimates Reporting requirements. While the Review Plan may be framed to suit particular circumstances and known issues, it should generally include requirements for the Review Committee to: Identify the stakeholders who will need to be consulted. Obtain feedback from the Government concerning its priorities and needs as a stakeholder and as a representative of the community. Identify any relevant obligations and responsibilities of the department principally assisting the portfolio Minister. Prepare an appropriate consultation and communication strategy. This should include communication with those affected by the review as well as representative organisations. Time spent in the early stages to ensure that everyone involved shares a common understanding of the aims of the review will pay dividends later. Establish appropriate public involvement objectives for the review. Information on consultation strategies is available at:

16 10 Consider social, economic and environmental factors. This includes recognition of the operating context for the agency in adding value to the economy of the State, in managing environmental matters and in delivering social outcomes for the community. The balancing of these often conflicting aspects may be central to the review. Ensure that the functions and activities concerned are consistent with relevant government policies and priorities. Identify the most efficient and effective arrangement for delivery of services and opportunities for cost savings. Consider opportunities for, and barriers to, improved portfolio integration, priority setting and service delivery. Identify specific issues that need to be addressed from the perspective of agencies represented on the Review Committee. Adopt the specified lines of accountability, deadlines and reporting requirements. Ensure that the information needs are met, focusing on the purpose of the review and the issues to be addressed. Identify or confirm specific source/s of funding for the review. Make recommendations about the most appropriate roles, responsibilities, organisational structures and funding models to ensure effective delivery of services and outcomes. Arrange to maximise the use of existing information before considering the collection of additional information. The Review Committee should obtain comment from the Department of the Premier and Cabinet on the proposed Review Plan. When any issues raised by the Department have been resolved, the final Review Plan should be submitted to the Approving Authority. Endorsement of the Review Plan by the Approving Authority should be obtained before commencement of the review. 3.3 Conducting the Review In conducting the review, the Review Committee should ensure that all aspects of the Review Plan are properly addressed and/or carried out. The Review Committee should keep the Approving Authority informed of significant developments in the review project. Where Cabinet is the Approving Authority, Cabinet Submissions should be jointly sponsored by the relevant portfolio Minister/s and the Minister for Public Sector Management.

17 11 The Review Committee should ensure that an implementation strategy is prepared. The implementation strategy, which is an important component of the conduct of the review, should clearly indicate who is responsible for what. 3.4 Reporting on and Utilising the Results On completion of the review, a comprehensive draft Review Report should be prepared and submitted to the Department of the Premier and Cabinet for comment. When any issues raised by the Department have been resolved, the final Review Report should be submitted to the Approving Authority. The report should address all issues raised in the Review Plan, and should include details of the implementation strategy. The report s information and recommendations should be sufficiently clear to enable it to be readily understood by the Approving Authority and others who may not have detailed knowledge of the area. The report should also be as useful as possible in relation to other subsequent reviews. Great care should be taken in drafting the review recommendations. Those responsible for implementation will endeavour to carry out the recommendations to the letter (as far as possible). The recommendations will also tend to be quoted and referred to long after the project has been completed. 3.5 Implementing Review Findings It is important that review findings be properly implemented. This final and often lengthy stage of the review process will be guided by the implementation strategy. The Department of the Premier and Cabinet will advise the Minister for Public Sector Management on matters relating to the implementation of review findings, and on proposed courses of action, where applicable. Updates on progress will also be provided to the Minister for Public Sector Management. 3.6 Roles of Key Stakeholders Arising from Sections 3.1 to 3.5, the roles of key stakeholders may be summarised as follows: Cabinet Agree from time to time to a program of reviews on the advice of the Minister for Public Sector Management Carry out the role of the Approving Authority for reviews where applicable.

18 12 Expenditure Review Committee Request the Department of Treasury and Finance to develop proposals concerning which area/s should be reviewed from an efficiency/financial perspective as well as effectiveness in achieving government outcomes Contribute to the terms of reference for such aspects of reviews Request the Department of Treasury and Finance to assist on Review Committees, as appropriate. Strategic Management Council Discuss, and advise the Minister for Public Sector Management on, reviewrelated matters from time to time Recommend project officers for secondment to review teams as appropriate Discuss, and advise the Minister for Public Sector Management on matters relating to implementation strategies from time to time. Department of the Premier and Cabinet Develop a proposed program of reviews based on the criteria for selection of areas to be reviewed, and consultation with Ministers and chief executive officers. Facilitate review projects, including: Ensuring that the Premier, Treasurer and portfolio Minister/s are briefed on the detailed review proposal, and that any views are taken into account by the Review Committee Ensuring a project budget and indicative timeframe are formulated Advancing, where appropriate, arrangements for use of external consultants either by way of a Request for Proposals or via the Ministerial Contracts for Service Engagement Process Providing advice to the Review Committee Negotiating release arrangements for review team members Identifying suitable accommodation and office equipment, and providing administrative support, where appropriate Provide representation on Review Committees as appropriate Conduct reviews when appropriate

19 13 Provide advice on the draft Review Plan to the Review Committee and Minister for Public Sector Management as appropriate Provide advice on the draft Review Report to the Review Committee and Minister for Public Sector Management as appropriate Advise the Minister for Public Sector Management on matters relating to the implementation of review findings, as well as any proposed courses of action Maintain a database on planned and conducted reviews, and implementation of completed reviews Department of Treasury and Finance Provide representation on Review Committees as appropriate, particularly for reviews which are likely to touch on financial and/or economic issues Provide advice to Review Committees on: The requirements of the Financial Management Act and Government Financial Responsibility Act Technical financial management issues Resource allocation issues, including efficiency and effectiveness in achieving government desired outcomes The use of key performance indicators and other performance information. The Review Committee Prior to commencing the review, provide a copy of the draft Review Plan to the Department of the Premier and Cabinet for comment After resolving any issues raised by the Department of the Premier and Cabinet, submit the final Review Plan to the Approving Authority. Ensure that the Minister for Public Sector Management is represented on key decision-making forums, in view of the review provisions of the Public Sector Management Act Ensure the Minister for Public Sector Management is briefed on progress of the review Ensure the relevant agency CEO/s and portfolio Minister/s are kept informed of plans for and progress of the review and of the outcomes After completing the review, provide a copy of the draft Review Report to the Department of the Premier and Cabinet for comment

20 14 After resolving any issues raised by the Department of the Premier and Cabinet, submit the final Review Report to the Approving Authority. 3.7 Application of the Guidelines to Statutory Authorities Based on feedback from Directors General and others, all agencies including statutory authorities should be selected for review, and reviews carried out, according to the criteria and principles outlined in these Review Guidelines. Hence, the approach in relation to statutory authorities involves the phased and progressive selection of agencies for review, as well as effective planning, conducting and reporting on reviews, and implementation of review findings. This generates a number of important benefits, including: Reviews being more targeted, selective and focussed than an across-theboard approach. The targeted approach is more efficient and effective in terms of the resources required to plan and carry out the reviews. The problems associated with review fatigue are minimised. It is noted that statutory authorities were reviewed relatively recently as a consequence of the recommendations of the Machinery of Government Taskforce.

21 15 4 EVALUATION ACTIVITIES (Categories 5 and 6, as indicated on p4) 4.1 Introduction The guidelines relating to reviews are also broadly applicable to evaluations. The following additional guidelines relate more specifically to evaluations. Evaluation involves the systematic collection of information about the characteristics and outcomes of activities, services, projects or programs. This information is used to inform decisions, clarify options, reduce uncertainties and meet accountability requirements. Any organisation that is responsible for spending public money is obliged to demonstrate that it is getting value for money for its stakeholders. Evaluations provide information necessary for sound decision-making to determine: The efficiency, effectiveness, impact, sustainability, relevance and appropriateness of an activity, service, project, program or organisational objective in light of current circumstances Whether stated objectives are being achieved Better ways of achieving objectives or desired outcomes Whether new services are needed Whether existing activities or services need to be extended or reduced Appropriate resource levels. 4.2 Planning for and Conducting Evaluations Premier s Circular 2007/05, titled Agency Strategic Management (at refers to Guidelines for Agency Strategic Management. The guidelines, issued in February 2007, state in relation to evaluation: agencies should plan for and actively manage their evaluation activities, ensuring that evaluations are targeted and meaningful. Agencies should be clear about which programs or functions are to be evaluated and when, and how the agency s evaluation activities are to be carried out. Agencies are encouraged to develop a systemic evaluation culture. (p. 15) An Approving Authority should be specified for each evaluation. The Approving Authority would normally be as indicated in the following table.

22 16 Type of Evaluation Evaluations of activities carried out by a group of agencies (Category 5) Evaluations of activities carried out within a single agency (Category 6) Approving Authority Relevant CEO/s and/or Minister/s Relevant CEO and/or Minister/s A primary aim is to ensure that meaningful evaluations are carried out extensively, and that agencies benefit from the lessons learnt from evaluations. The underlying principles concerning evaluation may be summarised as follows: All agencies should have an evaluation plan, which may be part of the strategic, corporate or business plan. Evaluation planning should be an integral part of the agency s planning processes. The evaluation plan should be formulated in consultation with other relevant organisations, i.e. those organisations with which the agency works collaboratively to deliver joined-up services. The areas to be evaluated in any one year should be selected on the basis of greatest need or greatest likely benefit. Evaluations concerning services provided collaboratively by a number of agencies or organisations should be conducted and reported on jointly. 4.3 Ongoing Performance Monitoring Ongoing performance monitoring is closely linked to evaluation. In relation to ongoing performance monitoring, the Guidelines for Agency Strategic Management state: For the purposes of these guidelines, ongoing performance monitoring is regarded as regular monitoring of performance using performance indicators, performance measurement, customer feedback (including complaints) and other performance information. The process should form part of the agency s ongoing performance management activities. Agencies should plan for and actively manage the mechanisms by which performance information will be collected, collated and analysed in order for corrective and/or improvement action to be taken.

23 17 To the extent possible, agencies should monitor and manage their performance against the key performance indicators (KPIs) as published in the relevant Budget Papers. It should be noted that Treasurer s Instruction 904 mandates the reporting of KPIs, which is consistent with the annual advice to agencies by the Department of Treasury and Finance regarding the content of Budget Papers. Guidance on the development and use of KPIs is provided in the Department of Treasury and Finance s publication Outcome Based Management: Guidelines for use in the Western Australian Public Sector, November (pp ). Performance monitoring can also provide useful information on trends and benchmarks. Need Assistance? Should you have any queries concerning this document (other than the matters referred to below), please contact: Alistair Conwell Public Sector Management Division Department of the Premier and Cabinet Telephone: Alistair.Conwell@dpc.wa.gov.au For assistance on review matters relating to the Financial Management Act 2006 or Treasurer s Instructions, please contact: Phil Forward Department of Treasury and Finance Telephone: phil.forward@dtf.wa.gov.au For assistance on review matters relating to Outcome Based Management, please contact: Peter McMullen Department of Treasury and Finance Telephone: peter.mcmullen@dtf.wa.gov.au

24 1 Attachment 1 SUMMARY OF RELEVANT LEGISLATION The legislation referred to below requires both expressly and implicitly meaningful reviews to be carried out at appropriate times. Review requirements are also stated in individual agency-related legislation. The Public Sector Management Act Section 7 of the Public Sector Management Act 1994 requires a number of general principles of public administration and management to be observed. These principles essentially relate to: Improving service to the community Ensuring an appropriate structure and organisation of the public sector Achieving and maintaining operational responsiveness and flexibility Ensuring continuous improvement Deploying resources efficiently and effectively Maintaining proper standards of management and accountability. Section 10 of the Act requires the Minister for Public Sector Management to: Promote the overall effectiveness and efficiency of the Public Sector, having regard to the principles set out in Section 7 Advise other Ministers of the Crown on: Structural changes Programs for management improvement Policies, practices and procedures relating to any aspect of management which should be implemented in order to improve the effectiveness and efficiency of the whole or any part of the Public Sector. Cause to be carried out planning for the future management and operation of the whole or any part of the Public Sector.

25 2 Arrange for reviews to be conducted, on the initiative of the Minister or at the request of another Minister of the Crown, in respect of the functions, management or operations of one or more public sector bodies. A review may be conducted in respect of: (a) (b) (c) the functions, management or operations of one public sector body; a part only of the functions, management or operations of one public sector body; or the functions, management or operations of more than one public sector body in related matters. Section 29 requires Chief Executive Officers to, amongst other things: Provide leadership, strategic direction and a focus on results Plan for and undertake financial, information and other management and monitor administrative and financial performance. The Financial Management Act The Financial Management Act 2006 and its subordinate legislation require annual reporting by agencies and the appointment of officers with tasks related to monitoring and reporting. Sections 52 and 54 require agencies to have accountable officers/authorities who, under sections 53, are responsible for: Ensuring that the agency operates in an efficient and economical manner in achieving its objectives Ensuring the agency complies with all relevant legislation and the Treasurer s Instructions Having custody and control over the property, managed by the agency. Developing and maintaining an effective internal audit function for the agency. Section 57 requires the appointment of a chief finance officer who is responsible to the accountable officer/authority for, amongst other things, the development of strategies for future financial management of the agency. Part 5 of the Act requires agencies to prepare annual reports containing financial statements, performance information and a report on operations. Details of the information required are also found in the Treasurer s Instructions, as published in the Government Gazette.

26 3 The requirement for annual reports means that annual reviews are already undertaken at the agency level. The scope of other reviews could include an assessment of the comprehensiveness and accuracy of the content of relevant annual reports. The Government Financial Responsibility Act The Government Financial Responsibility Act 2000 sets out the following financial management principles: Funding for current services is to be provided by the current generation Spending and taxing policies are to be formulated and applied so as to give rise to a reasonable degree of stability and predictability Financial risks are to be managed prudently Spending and taxing policies are to be formulated and applied with consideration to the effect of these policies on employment and the economic prosperity of the State. Although the Government s financial planning is meant to be consistent with these principles, the third principle also has particular relevance at agency and sub agency levels, and should be included in reviews.

27 1 Attachment 2 SUMMARY OF RELEVANT GOVERNMENT POLICIES A number of government policies relate to review activities within and across the public sector. The following form part of and/or contribute to the government s policy framework on reviews. Resource Management Requirements In terms of the Outcome Based Management framework, agencies are required to comply with a number of strategic management approaches, including: The conduct of agency strategic planning in the context of Government policy objectives Identification and specification of, and reporting on, those agency services required to achieve desired outcomes Evaluation of the effect of the outcomes on the community. Machinery of Government Review In 2001, Cabinet endorsed the Machinery of Government Report 7 which made a number of statements in relation to public sector and agency strategic management, including the following: Agencies must be seen as part of a larger entity rather than as isolated, independent, self-contained units. Moreover, if they are to remain effective over time they must be adaptable and responsive to changing circumstances. (p. 19). This requires whole-of-government and portfolio level reviews. Functional Review In 2002/03, Cabinet endorsed most of the recommendations of the Functional Review Taskforce Report. The report recommended a number of priorities for reviews in future years. Although not explicit in its recommendations, the Functional Review Taskforce also advocated that an ongoing process of reviews should be instituted. 7 Government Structures for Better Results, The Report of the Taskforce Established to Review the Machinery of Western Australia s Government, June 2001.

28 2 Better Planning: Better Futures Better Planning: Better Futures 8 was endorsed by Cabinet in September It states that the public sector is to Continuous improvement in the effectiveness and efficiency of the public sector will be a hallmark of administration and management. (p. 7). Premier s Circulars Premier s Circulars relating to review matters include: Number 2007/05, titled Agency Strategic Management, which states that agencies should: Ensure that their strategic management outcomes and activities align with Better Planning: Better Futures - A Framework for the Strategic Management of the Western Australian Public Sector. Use the Strategic Planning Framework as an overall guide in relation to their strategic management activities, including: strategic planning, budgeting, service delivery, ongoing performance monitoring, evaluation and reporting. Ensure that value for money is achieved and maintained. 8 Better Planning: Better Futures A Framework for the Strategic Management of the Western Australian Public Sector, September 2006.