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Part 7: Linking impacts and outcomes to outputs — Office of the Auditor-General New Zealand
/2009/statements-of-intent/part7
Part 7: Linking impacts and outcomes to outputs Statements of intent: Examples of reporting practice. https://oag.parliament.nz/2009/statements-of-intent/part7 https://oag.parliament.nz/@@site-logo/logo.png
There should be a credible relationship between outputs and impacts/outcomes, and it should be explained clearly in the SOI. Such an explanation helps the user to understand how the entity believes that the goods and services it is accountable for will result in improved outcomes. It also helps users to see the alignment between the entity’s medium-term goals and its annual performance plan.
Information on the specific links is vital to evaluating the effectiveness of the entity’s outputs and service performance. However, there is more than one way to show links, and entities should experiment with different formats while keeping in mind the need for a precise and logical presentation.
Ideally, the entity’s explanation of the medium-term impacts and outcomes in its SOI should link to a summary of the entity’s outputs (or output classes) and illustrate the contributing outputs for each outcome. The outputs or (output classes), depicted outside the forecast SSP as linking to the outcomes/impacts, should correspond to those reported within the forecast SSP.
Entities are also encouraged to present the output information in SSPs (and forecast SSPs) within the context of the outcomes they seek to influence through delivering their outputs.1 However, this is more difficult for government departments than for Crown entities, now that the forecast SSP is no longer reported in the SOI. Instead this information is reported in the Information Supporting the Estimates of Appropriation, which therefore constitutes the forecast SSP. It is critical that government departments depict the output-to-outcome links and explain the intervention logic within their SOIs, because the specified format of the Information Supporting the Estimates of Appropriation constrains this part of the performance story (also see paragraph 7.12).
Entities should customise their diagrams to best depict the links among the performance elements. Therefore, entities should not necessarily limit their model by using a standard format if that format limits their ability to communicate the performance story.
Specific links can be shown by grouping the outputs under related outcomes (if they are discrete enough) or by using lines or arrows. MED uses a table to depict the output-to-outcome links in its SOI (Example 15). This example contains a useful innovation in that it identifies its strategic priorities (SP) for particular output/outcome relationships. This points the user to areas the entity considers to be particularly important.
The MED could now align its SOI with its forecast SSP in the Information Supporting the Estimates of Appropriation. By using consistent descriptions of outcomes and output classes, strategic priorities in the SOI could be identified and flow through into the forecast SSP.
Because the Information Supporting the Estimates of Appropriation now constitutes the forecast SSP for government departments, it is important for users that the outcome-to-output links are clear in this document. The links should be succinctly presented in tables and description in each department's Part 1.2 (High-Level Objectives of the Vote) and Part 2.1 (Departmental Output Expenses) of the Information Supporting the Estimates of Appropriation, as illustrated in Vote Transport (Examples 16 and 17).
The output-to-outcome links are apparent in each example. Example 16 links the output classes (appropriations) to “Government Outcomes” (although these are not always phrased in outcomes language). Example 17 links the output classes to the lower level outcomes and impacts.
The format does not show the links between the “Government Outcomes” (Part 1.2) and the lower-level outcomes and impacts (Part 2.1) for Vote Transport. The Ministry of Transport has sensibly used its SOI to draw these links together (Example 18). The “Government Outcomes” are referred to as “Objectives” in its SOI and, for each of the five “Objectives”, it lists the relevant outcomes (as in Part 2.1 of the Information Supporting the Estimates of Appropriation). Example 18 shows the Ministry of Transport’s approach for its “Objective 1: Assisting Economic Development”.
Although MAF’s “Strategic Direction” diagram in its SOI (see Example 7) does not draw explicit links between output classes and outcomes, there are good links with intermediate outcomes in the Information Supporting the Estimates of Appropriation – for example, in Vote Biosecurity (Example 19).
Because of the specified two-column format in the Information Supporting the Estimates of Appropriation, any depiction of intervention logic in these documents will necessarily be two-dimensional only. This format provides one approach to showing how outputs link to outcomes, but it will not always be the most effective approach. SOIs provide an opportunity for entities to use different formats.
In summary, it is important that government departments and Crown entities depict and explain the important intervention logic links within their SOIs. The SOI allows more freedom and flexibility for entities to best present the model of their intervention logic, including using diagrams, for drawing the important links between outputs, impacts, and outcomes.
1: Technical Practice Aid No. 9: Service Performance Reporting, Institute of Chartered Accountants of New Zealand.