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.
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.