Canadian Government Executive - Volume 24 - Issue 06

10 / Canadian Government Executive // December 2018/January 2019 CANADA So where does Canada stand? A survey undertaken by Raili Pollanen revealed that Canadian public institutions appear to be generally well-positioned. However, at least 50 per cent of the participants reported moderate or great extent of dif- ficulties in measuring performance or using performance information. Yet less than one third of public organizations surveyed provide training for setting program performance goals, developing performance measures, and linking the performance of programs/operations/ projects to strategic outcomes. Perfor- mance measurement is primarily done at lower/operational levels of management where strategic planning does not occur. Finally, the survey found that senior man- agement could benefit by greater engage- ment of middle/low level managers in strategic planning and priority setting. The survey did not address perfor- mance-based budgeting, but at the fed- eral level, the TB Policy on Results, the Management Accountability Framework (MAF) and, to a lesser extent, the Main Es- timates collectively support performance- informed budgeting. However, there is still a need for robust processes to develop and use the information for forward-look- ing budget planning and resource alloca- tion. This will require a culture shift and sustained leadership. Canada is not alone. Most countries in the OECD survey identified the attribu- tion of outcomes to specific programs and designing performance measures for spe- cific activities as the key challenges. Lead- ership and lack of knowledge and exper- tise were also cited as common challenges. KEY SUCCESS FACTORS Across all governments, a number of com- mon success factors emerged to support ef- fective performance-based budgeting: • Leadership: Strong and sustained lead- ership is required if performance in- formation is to play an effective role in how budgeting and service delivery is managed. Management must facilitate and encourage the change. Old mindsets associated with the siloed approach of internal controls and financial reporting and risk management can’t completely disappear, but new mindsets focused on collaboration, innovation, integration, and creativity are needed. At the begin- ning, a committed senior leader needs to send the signal that the change is impor- tant. But as reforms mature, ownership needs to broaden to a wider group. • Understand what business you are in: The type of program or service needs to be well understood as do the supporting business processes and resources, The performance-information needs will vary depending on the service models; for ex- ample, some require detailed informa- tion on the unit costs of specific services, whereas others require “whole of pro- gram” costing. Grants and Contributions programs may reasonably be expected to assess societal outcomes, whereas a service such as Passport Canada would necessarily focus more on efficiency (e.g., turnaround times). Clarity around the purpose of measuring performance helps garner wider support for and engage- ment with change. Shared analysis and reassessment of problems and challenges is also crucial. Finally, understanding the resource and operational constraints to achieving results is an important part of performance-informed or performance- based budgeting. • Learning, culture and mindset: Using per- formance information to inform budget decisions requires a fundamental trans- formation in organisational behaviour in a number of ways. First, a results-based approach means examining performance froma “customer” perspective. Second, the traditional “rear-viewmirror” approach to using information solely for reporting af- ter the fact is not enough. Focusing on re- sults means being able to use costing and performance in a forward-looking man- ner to allow for course corrections and to influence outcomes. Thirdly, the operat- ing culture needs to emphasize learning EXECUTIVE BRIEF At least 50 per cent of the participants reported moderate or great extent of difficulties in measuring performance or using performance information. been developed and streamlined in or- der to improve quality, availability, com- parability, and usefulness for decision making. In late 2015, a joint Treasury and Cabinet Office team was set up to review and rationalize management informa- tion across government. Activities have included short “data sprints,” looking at data around complex issues, and the join- ing up of systems to reduce duplication and support data-driven decision mak- ing. Formal and informal networks have improved cross-governmental collabora- tion, with departmental teams sharing ideas, themes, and best practices. The FMR is underpinned by a focus on peo- ple, developing capacity, and capability while addressing the recurring issue of staff retention. OECD In 2005, the OECD undertook a survey on performance information of its member countries, including Canada. The survey found that while there was an increas- ing interest in the use of performance information, questions remain about the real extent of change and whether perfor- mance information is truly used in bud- getary decision making. The majority of countries engage in per- formance-informed budgeting at the Min- istry of Finance level (that is, performance information is most often used along with other information to inform, but not to de- termine, budget allocations) and that the main reason for not using performance information is the lack of a method to inte- grate it into the budget process.