Annual budget and expenditure reports presented to the legislature contain information about performance targets and levels of achievement.
The supreme audit institution carries out performance audits, including tests of the accuracy and reliability of reported performance.
Parliament, supported by the SAI, scrutinises performance-based budgets and financial reports, holding ministers and senior public managers accountable in the event of poor performance or misrepresentation.
Accessible formats such as on-line performance portals and citizen budgets help citizens, civil society and the media to monitor performance.
OECD Good Practices for Performance Budgeting
Good Practice 5: Performance Budgeting facilitates systematic oversight by the legislature and civil society, reinforcing government performance orientation and accountability.
Annual performance reports
Regular reporting of performance is an essential part of the performance budgeting system, supporting accountability and decision-making. Performance information should be presented alongside financial information as part of the annual budget presented to parliament. The best practice is to integrate performance information into the main budget document that forms the basis of appropriations. Alternatively, performance information may be presented as supplementary information accompanying the budget.
At year-end, the final report on budget execution should include both financial outturn and a performance report. The consolidated annual report and accounts produced by the United Kingdom government departments represent a good practice, providing performance and financial statements as well as an accountability report and detailed information on departmental performance in meeting sustainability targets (see Box 11).
Box 11. Content of United Kingdom Consolidated Annual Report and Accounts (Dept. for Education 2017-18)
Source: United Kingdom, Department for Education (2018)
Performance audit
As the official reviewer of how public money has been used, acting on behalf of the legislature, the supreme audit institution has an important role to play in respect of the performance budgeting system. At a minimum level, external audit should review programme performance as reported in the public accounts and validate the reported results.
Many SAIs take a much more expansive view of performance auditing. In the view of the United States Government Accountability Office for example performance audit provides objective analysis that management and those charged with governance and oversight can use to improve programme performance and operations, reduce costs, facilitate decision making and contribute to public accountability. Increasingly, national audit offices are using performance audit to provide insights into complex problems and risks, such as modernising outdated financial regulatory systems and protecting public safety. Such issues cut across government programmes, levels of government and sectors.
Parliamentary oversight of performance
Parliaments in several OECD countries have played an important role in supporting performance budgeting. As mentioned in Good Practice 1, parliaments in several countries have also been advocates for performance budgeting, as a tool for promoting transparency regarding the purposes and results of spending.
Parliaments can play an equally important role in holding government to account for the results of spending by reviewing and discussing performance-based budget and financial reports. This is typically the work of specialised committees dealing with budgets and accounts, but should also be extended to committees dealing with the various sectors. The UK House of Commons Scrutiny Unit is a specialised unit that helps parliamentary committees carry out scrutiny of expenditure and performance, offer a good practice example of how parliaments can strengthen their role in holding the executive branch accountable (Box 12).
Box 12. United Kingdom - House of Commons Scrutiny Unit
The House of Commons’ Scrutiny Unit supports Select committees in examining the expenditure and performance of government, and the relationships between spending and delivery of outcomes. It does this by promoting the value of linking examination of spending with examination of outcomes, by helping committees analyse spending patterns alongside performance and by pressing the government to improve the information available and promoting Parliament’s interests of holding the executive to account. For instance, the Scrutiny Unit has:
produced a guide to committees on Better Financial Scrutiny which encourages examination of spending and outcomes throughout a programme’s lifespan, and sets out good practice;
contributed financial and performance material to committee inquiries, including briefings, questions, reports, and analysis of impact assessments;
analysed and briefed committees both on spending and trends in performance, using published indicators, when committees hold their hearings with Ministers on Government departments’ annual reports and accounts;
followed up a committee recommendation for government departments to produce annual mid-year reports, and
engaged with government in developing proposals to improve and simplify Government accounts for the benefit of Parliamentary users.
Source: OECD (2016)
Public access to performance budgets
On-line performance portals or central open government data portals can help citizens, civil society and the media to hold government accountable for performance. This requires access to machine readable and re-usable data, through formal Open Government Data policies. The publication of citizen budgets can also help to make these data accessible and understandable to these actors. Within government presentation of comparative data, for example performance league tables, can as also create competitive pressures to improve performance. Canada’s InfoBase System (Box 13) illustrates how expenditure and performance data can be related systematically to improve public access to performance information and data.
Box 13. Canada - TBS InfoBase
Interactive infographics and data are helping Canadians to understand the federal government. The TBS InfoBase (www.tbs-sct.gc.ca/ems-sgd/edb-bdd/index-eng.html#start) provides authoritative data to Parliamentarians and Canadians on how the government spends its funds, manages its people and plans to achieve its results. The InfoBase brings together data and information on resources and performance that were previously scattered across close to 100 annual reports (Departmental Plans) in a single data-driven tool. By including this data in the InfoBase, Canadians and parliamentarians now have the ability to understand what departments are seeking to achieve and how resources are used to achieve those results.
Moreover, the TBS InfoBase transforms the way financial and performance information is delivered to Canadians. By combining data and information sourced from various ‘siloed’ departmental reports, the InfoBase allows users to explore horizontally the information on various facets of government operations.
Source: Government of Canada (2018a), InfoBase website, http://www.tbs-sct.gc.ca/ems-sgd/edb-bdd/index-eng.html#about
Similarly Mexico’s Budget Transparency Portal (Box 14) is designed to allow public access to budget information including performance data and presentational and visualisation tools to make the information more easily understood and facilitate access to these data for the general population.
Box 14. Mexico - Budget Transparency Portal
Since 2011, the Federal Government has had a Budget Transparency Portal (Portal de Transparencia Presupuestaria -PTP-) that presents performance information in a way that can be interpreted by users without deep knowledge in budgetary processes or information, using infographics and the deployment of georeferenced information. It also provides several open datasets that can be used by analysts and researchers.
Mexico was the first country to formally adopt the international open fiscal data package’s specification promoted by the Global Initiative for Fiscal Transparency, Open Knowledge International, and the World Bank. Mexico’s Federal Government also formally implements the Open Contracting Data Standard and has formally released an open contracting portal as part of its membership of the Extractive Industries Transparency Initiative.
This strategy includes information and data accessible through the Internet site https://transparenciapresupuestaria.gob.mx, dissemination through social networks, training of public officials and other stakeholders in performance budgeting, as well as the use and interpretation of performance information, and exercises involving civil society organisations to promote the use of this information.