Performance Reporting by New Zealand Central Government Agencies
This study attempts to assess longitudinally the increase in the quality of performance information resulting from the Managing for Outcome (MfO) initiative, embarked on by the New Zealand Government in December 2001, and to identify the internal and external factors influencing the increase in quality. To measure the quality of performance information, a disclosure index was developed. The index assesses the comprehensiveness of information in compliance with available guidance, and reflects the approaches used by Marston and Shrives (1991), and Guthrie et. al. (2004). The disclosure analysis was applied to publicly available planning documents - the Statement of Intent and Annual Report of 27 New Zealand Government departments over the period 2003-2007. Agency theory, focusing on the role of information in the accountability relationship between principals and their agents, and public choice theory, focusing on the mechanisms to mitigate public choice problems, are used to explain the improvement in the quality of performance information and the external and internal factors influencing the improvement in quality. The roles performed and the activities initiated and implemented by ministers and other government agencies in the MfO initiative are identified and analysed. The data for the study was obtained from the reports of selected New Zealand central government departments and from semi-structured interviews. The findings support the Auditor General's assertion of disappointing quality in performance information. Weak incentives for reporting outcomes, the lack of authoritative reporting standards, and constraints on measuring performance have been the key factors in explaining the lack of meaningful progress in New Zealand performance reporting practice implemented under the MfO initiative. The initiatives do not include proper accountability arrangements, where the ministers responsible for outcomes also report; instead the current arrangement is that chief executives report but are not themselves accountable.