Conclusions from the discussion in OECD, spring 2005

1
Conclusions from the discussion in OECD, spring
2005

• In principle, all OECD countries use performance
  information in different ways as support in
  controlling and budgeting government activities
• The criticism that is levelled against this form
  of control has its origin in performance
  information being used to a limited extent
• Its advocates claim that performance management
  has contributed to transform the budget process
  from input-based control to control focused on
  results
• These views are in line with our experience in
  Sweden

2
Economic control

• The concept of economic control consists of two
  sub-concepts
• Performance management refers to a control system
  that involves setting goals, collecting
  performance information and analysing and
  assessing the results against stipulated goals
• Financial control is used to set the economic
  frameworks for organisations resource
  consumption (appropriations, investment and
  borrowing frameworks)
• Follow-up and evaluation results are assessed
  along the lines of both goal attainment and
  resource consumption

3
How do we work with performance management?

• Parliament appropriates funds for various
  purposes
• Parliament establishes goals for different policy
  areas
• Every year, in the Budget Bill, the Government
  submits a statement of operations for each policy
  area to Parliament
• In turn this is intended to form the foundation
  for the Governments budget proposal for the
  coming years

4
How do we work with performance management?

• The Government appropriates funds to its
  authorities on the basis of what Parliaments
  decides with regard to the Budget Bill
• It does this in a special steering document the
  letter of appropriation (goals, performance
  information)
• Annual reports what the authority accomplished
  during the year
• Objective and results dialogue once a year
  between the authoritys management and the
  responsible ministry

5
Experience of two decades of performance
information

• What is Parliaments view?
• Operational goals set should be formulated in
  such a way as to enable them to be followed up
• Performance information - relevant to the goals
  set
• Performance and development - reported in
  quantitative terms to a greater extent than
  hitherto
• The Governments report must focus on performance
  to a greater extent than hitherto (incl. focus on
  activities)
• The linkages between goal attainment and budget
  proposals must be improved

6
Experience of two decades of performance
information

• What is the authorities view?
• The performance information compiled is used to a
  fairly large extent within the authorities
• The dialogue between the authorities and the
  Government Offices appears to be developing in
  gradual stages
• Feedback requirements have greatly increased
• Not clear how performance information is used by
  the Government Offices (shortcomings as regards
  continuity and competence)
• A risk that the amount of information will lead
  to a lack of clarity in the Governments
  priorities.

7
What questions are we considering at present?

• Is it realistic to expect that performance
  information can be used to enforce accountability
  and allocate resources in the future?
• Is it possible to base the reporting of results
  to Parliament on the performance information that
  the authorities provide?
• Is it possible to evaluate the authorities
  activities on the basis of the performance
  information that they compile themselves?

8
possible answers

• We have gone too far with performance
  managements application and its associated
  requirements
• We attach too much importance to performance
  management (lack of political interest)
• We would gain a lot if we could at least
  accomplish a follow-up of substance
• The Government can to a certain degree use the
  authoritiesperformance information in their
  reporting to Parliament
• The Governments need for performance information
  varies

9
Where do we go from here?

• A working group has been set up consisting of
  representatives from the Ministry of Finance and
  the Parliamentary Committee on Finance
• The question we are discussing is what kind of
  performance information Parliament needs to be
  able to come to a decision on the Governments
  budget proposals
• what performance information should be submitted
  annually?
• what performance information should be submitted
  at specified intervals?

10
Where do we go from here?

• The Government has chosen to appoint an
  investigator with a broad and unconditional
  mandate to evaluate how performance management
  is used in the relationship between the
  Government and its authorities
• Proposals as to how performance management can be
  reformed and developed in order to improve
  management of authorities (prerequisites/limitatio
  ns)
• interaction between performance management and
  financial control
• possibilities and limitations for adapting
  performance management to specific activities and
  situations