CCAF’s PPR website documents how public performance reporting began in each of the Canadian jurisdictions in the mid-1990s. This page looks at some of the ongoing challenges to effective performance reporting:

1. Performance reports do not meet the needs of users.

CCAF’s Users & Uses publication reported that “the primary intended audiences of PPRs — legislators, the media and the public — have generally made little use of them.”

• Taking legislators as an example, the report found that “public performance reports do not generally reflect the perspective of legislators as users or their very specific needs and concerns.” As Users & Uses found, legislators tend to be interested in:
• Issues that cut across many departments rather than department-specific issues
• Data arrayed by location (cities, regions) or by demographic group. This makes it easier for legislators to look at issues that affect their constituencies.
• The average citizen does not use performance reports — the reports tend to be highly technical and difficult to read.
• Non-governmental organizations find performance reports are inconsistent in quality.

2. For legislators, incentives for using performance reports are limited.

Legislators have few incentives for using performance reports in their everyday work. While performance reports can be used to make spending decisions during the estimates process (the consideration of the detailed budgetary estimates), legislators generally see very little reason to spend any significant time considering the estimates. In many jurisdictions, changing the estimates is a matter of confidence (i.e. the government will have to resign and call an election if it loses a vote on the estimates). Incentives to change the estimates are therefore highly limited.

In some Canadian jurisdictions, the review of the estimates is a highly political event. When ministers appear as witnesses before estimates committees (not all provinces have estimates committees), the committee hearings tend to be highly partisan. The committees spend very little time looking at performance information.

Generally, legislators are interested in “sexy” issues that grab the headlines and capture the imagination of the public. They are less interested in spending time reviewing the previous year’s performance reports.

3. Some aspects of performance reports are written to demonstrate success rather than objectively focus on results.

Users & Uses suggested that users such as legislators often do not use PPRs because they believe performance reports lack credibility. As Users & Uses noted, “there is sometimes a high level of political involvement in what goes into PPRs. However, glossing over weaknesses or failing to acknowledge them at all may not be in the best interests of the government.”

The Public Sector Accounting Board’s Statement of Recommended Practice for Public Performance Reporting suggests that:

The explanation of variances would include both positive and negative aspects of performance, as well as major challenges identified for programs and services, in order to provide a complete picture of performance… While there may be reluctance to report on objectives that have not been met, it is nonetheless a necessary element for a complete picture of performance and for a balanced performance report.

A House of Commons Subcommittee on the Business of Supply issued a report in 1997 that pointed out why performance reports are not always balanced. The report stated that “performance reports contain one potential drawback: they are self-assessments. As such, the temptation to report only the good news and to downplay difficulties and shortcomings is ever-present.”

The former Auditor General of British Columbia, George Morfitt, identified the principal reason why governments tend to downplay self-critical information. He wrote in a 1999/2000 report that “one concern among politicians and bureaucrats alike is that by being more specific and ‘up front’ about what it achieves compared to what it planned, government would be exposing itself to criticism from the Opposition, media and interest groups.”

Some legislative auditors have been critical of the lack of self-critical information in performance reports. In a 2005 report on the state of performance reporting at the federal level in Canada, the Auditor General of Canada found that “departments do not generally report credible and balanced results.” The report suggested that “it is important to report performance shortcomings as well as successes; this would reduce the risk that users, such as parliamentarians, might discount the positive results as biased, incomplete, and lacking in credibility.”

4. Users do not always provide feedback to governments.

In meetings between preparers of performance reports and CCAF in several Canadian jurisdictions, many public servants expressed the view that they are not afforded the opportunity to meet with users to receive feedback on performance reports. Similarly, public servants have suggested that users rarely provide feedback on how performance reports could be improved.

As Users & Uses reported, “legislators and PPR producers need to begin to better understand each other. That will help to build trust and communication.”  The 2003 report of the House of Commons Subcommittee on the Estimates Process recommended that a subcommittee of the Estimates Committee be struck to review performance reports and provide feedback to government. This has not yet happened.

5. Although some legislative auditors (the federal and provincial auditors general) are spending significant resources reviewing performance reports and providing feedback to government, performance reports show little improvement.

To quote the report of one legislative auditor, “much advice has been offered, yet little has changed overall.” [1]  Some legislative auditors are not finding a marked increase in the quality of performance reports over time, despite the fact that some expend considerable resources provided feedback to their legislatures on the state of government performance reporting. In one Canadian jurisdiction, the office of the provincial auditor reviews, on an annual basis, the performance reports of the government, and has found that improvement has been modest and the pace of progress slow.

Public Accounts Committees (PACs) are generally responsible for holding hearings on the reports of legislative auditors and for compelling governments to act on those reports. One plausible reason why legislative auditors are finding limited adoption of their recommendations by government concerning performance reports is that most PACs have spent little time discussing the state of performance reporting recently. Given other competing priorities, the state of performance reporting has not been an issue that has captivated PACs.

6. Good performance reporting depends on strong performance measurement systems.

The Public Sector Accounting Board’s Statement of Recommended Practice (SORP-2) states that “well managed entities operate in accordance with a plan — measuring, monitoring and assessing performance, learning and adjusting throughout the period and publicly reporting on what was accomplished.” 

Good performance reporting is tied to the rest of the continuous management cycle, which includes a system to measure, monitor and assess actual results; an annual or multi-year plan; and a strategic plan. A Conference Board report entitled Strategy, Accountability and the New Role of the CFO: Modernizing Financial Management in Government notes that, similar to the continuous management cycle, “strategic financial management” is contingent upon “improved reliability and analysis of financial information and strengthened performance measurement.”

7. It’s difficult for performance reports to be all things to all users.

As the SORP-2 explains, “the process of developing the PPR and the report itself play an important role for internal users as well. The act of developing the report creates a shared perspective about the most critical aspects of the entity and how it is performing. As a result, the report not only serves as an external communication tool, but it also helps illustrate the relationships between internal planning, operations and decision making.”

A common theme expressed by public servants in several jurisdictions, in discussion with CCAF, is that it is difficult for a single performance report to satisfy the needs of all users. Performance reports can be crucial planning documents for the bureaucracy. However, if such reports are prepared with internal purposes in mind, they may be written in a language that is not easy for other users, such as legislators and the public, to understand.

Additionally, governments often choose not to reveal self-critical information in their public reports. A performance report that distorts the picture might significantly reduce the value of the report to the bureaucracy, and be of little use to the public as well. As a recent Conference Board report suggests:

An excessive focus on external reporting and achieving strategically integrated information that has no value to the internal operations of the organization is a distortion of the organization’s priorities.