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1997 April and October Report of the Auditor General of Canada

April and October 1997 Report—Chapter 5

Appendix B—Expectations for Good Performance Information

We believe that departments should report information on their performance that allows the reader to judge how well their programs are doing. To that end, we identified five characteristics of good performance reporting, which together allow a department to provide a credible account of performance:

Clear context and strategies. The report should clearly describe the mission and mandate of the organization, the objectives of its programs and services, the major strategies being used to achieve these objectives and the related external context.

There is a need to provide an overview of what the program is trying to accomplish under what operating environment and its relationship with broader organizational goals to allow for interpreting the performance reported. The major strategies being used, such as business lines, should be clearly described along with their sub-objectives. This should include information on all the major instruments such as loan guarantees and tax expenditures being used to achieve objectives, as well as both statutory and non-statutory voted expenditures. The related external context outlines the major factors, other government activities, risks and other influences outside the program that may affect the extent of progress toward the objectives pursued.

Meaningful performance expectations. The performance information should contain clear and concrete key performance expectations with a focus on outcome-results.

Clear performance expectations allow a reader to understand what result is intended. Concrete performance expectations can be qualitatively or quantitatively measured and hence be credibly reported as to whether or not they have been accomplished. Key expectations reflect the major intended results (usually outcome-oriented) expected from the program in relation to the interests and concerns of the users of the performance report. Key expectations also reflect the major or significant programs and elements thereof.

Performance accomplishments against expectations. The performance information should report key accomplishments in relation to expectations and be attributable to the activities undertaken.

Key accomplishments are those that the reader would expect to see reported in order to be able to judge the extent to which expectations have been met. This includes reporting of performance where expectations have not been met. Reporting of performance accomplishments needs to be selective to be useable.

Key performance accomplishments should be reported in relation to previously stated expectations, be linked to related mission statements and objectives and include the important aspects of the results achieved (outputs, intermediate outcomes, ultimate outcomes) and their costs, and related financial performance.

The performance information should be attributable . There should be a discussion and explanation of the extent to which the accomplishments achieved can be attributed to the activities of the program - how the program in question has made a difference.

Capacity to learn and adapt demonstrated. The performance information should provide a measure of the ability of the program to learn from past performance and to adapt to external changes.

A capacity to learn refers to the ability of the program to modify its strategies in light of past performance. In particular, where performance has been less than expected, the adjustments that will be made to reflect what has been learned should be reported. A capacity to adapt refers to the ability of the program to modify its strategies in light of the external context and in anticipation of future changes and challenges.

Fair and reliable performance information reported. Performance information should be fair, valid, reliable and understandable.

Fair information presents a balanced and timely picture of how well performance has been in relation to expectations, including cases where key expectations have not been met.

Reliable information can be validated. The reliability that can be placed on the performance information should be indicated in the report, by presenting such information as the method of data collection and verification, or whether the data are estimates or actuals.

Valid information is an accurate representation of what it purports to measure. It is essential that adequate explanatory and interpretive material is included in the report so that the reader can understand the relevance and importance of the measures provided and the context in which performance has been accomplished or not.

Understandable performance information allows the intended reader to see readily and clearly what results were expected and the extent to which they have been achieved.