Building a Healthy Performance Culture: Part 1

By now, you should be aiming for your organisation’s performance to be hitting a high level of maturity. Effective enterprise performance should be more than a ‘tick-the-box’ compliance exercise. Applying the principles of enterprise performance means you deliver better outcomes for government, clearly articulate the unique value of your agency and drive the right behaviours in your organisation. This will ultimately contribute to improved transparency and trust.

Public sector agencies have had more than five years to implement the Commonwealth Performance Framework (the Framework) and to strategically align outcomes, measures and activities.

With the Australian National Audit Office’s (ANAO) increase in funding and powers, it will be applying greater scrutiny than ever before – so will you be ready?
 

Scrutinising enterprise performance

Over the last few years, the ANAO has been increasing audit activity around performance, yet there has been some latitude while it encouraged agencies to mature. All that is changing… Recent ANAO findings, published by the Joint Committee of Public Accounts and Audit (JCPAA), indicate that the ANAO is getting serious. It is now funded to cover more agencies, more thoroughly, and on an ongoing basis.

The ANAO has established a new Performance Services Group to expand the performance statement audit work. Initial plans have been released which show the ANAO plans to audit 14 entities by 2024 and up to 24 by 2026.

You must prepare now if you want to avoid adverse findings!
 

You’re on notice!

We know many agencies are meeting the Framework requirements, yet the strategic linkages and organisational integration between planning, measuring and reporting is still lacking. Many accountable authorities need to improve their approach to enterprise performance.

For instance, the published independent assurance reports on the 2019–20 annual performance statements of the Attorney-General’s Department and the Department of Veterans’ Affairs highlighted issues with how these agencies were applying the Framework. These findings are significant: the ANAO issued qualified conclusions for both agencies. This kind of publicity is not ideal. Clearly, these findings are putting accountable authorities and audit committees on notice.

The ANAO is taking a stronger stance on what is expected under the Framework. It is focusing initial reviews and findings on the reliability and accuracy of underlying performance information. The ANAO expects agencies to apply a similar level of rigor usually seen in the preparation of Financial Statements to the preparation of the Annual Performance Statement – think audit trails and evidence to support all statements made.

We believe the people of Australia expect this level of transparency too.
 

Beyond compliance

We’ve seen many Commonwealth agencies transform the way they measure performance since the introduction of the PGPA Act and Rule. It is now time to transcend compliance to also consider the quality of performance measures and how they tell a comprehensive performance story.

Your organisation should be considering how well its performance measures demonstrate longer-term impact. With many executive leadership teams only able to focus on forward estimates or relatively short-term corporate plans, some agencies are missing the measures that would demonstrate long-term strategic impact – which truly establish progress towards purpose and objectives.

Our experience has shown that robust enterprise performance practices are the cornerstone to delivering outcomes for the Commonwealth. To effectively implement enterprise performance practices, agencies need a comprehensive approach detailing the who, what, when, why and how of the enterprise performance cycle.
 

Integrated enterprise performance

Implementing this approach cannot be done by a single team within your organisation. It requires a coordinated approach with many areas working together. Envision it like this:
 

• Senior Executive shapes the strategic direction

• Senior Executives must work with business areas and individuals to set performance measures which drive performance

• Management, internal audit and the audit committee provide a combined assurance approach

• Data and systems enable collection of relevant and reliable data for the measures through a systemic approach

• Regular tracking of performance to focus decision making

• Well-designed reporting, communications and design aid agencies to evaluate performance and present a compelling performance story.

When we support agencies to implement the Framework, we consider numerous factors across the enterprise performance cycle – it’s about integrating strategy, planning, performance measures, delivery, governance, data, analysis and reporting to build a healthy performance culture.

Enhance your capability

Taking your enterprise performance to a state of maturity requires knowledge of the elements of the cycle and knowing how to apply it within your organisation. We know what the ANAO is looking for and how to prepare you for the impending scrutiny.

We’ll be releasing more articles to help shape your performance maturity. If you would like to sign up to our evergreen webinar and receive practical advice to achieve a healthy performance culture register below.