An effective system of performance measurement and reporting is critical if government is to achieve its policy goals in a way that is transparent and accountable. The government expanded the framework to transform it from measuring only outputs to one that also measured the impact of those outputs on its intended outcomes for the community. It also introduced requirements for medium-term and long-term planning so it could anticipate and prepare for the performance challenges likely to affect Victoria.

In this audit I examined the application of this guidance by the departments of premier and cabinet, health and transport, planning and local infrastructure and its oversight by The Department of Treasury and Finance (DTF).

The three departments in this audit are not effectively applying the performance measurement and reporting system. While the budget papers and annual reports include output performance measures they fall well short of providing the information needed to understand departments’ effectiveness and efficiency in delivering outputs and intended outcomes for the community.

The progress towards developing corporate and long-term plans that fully address the government's requirements has been slow. The latest draft plans for the three departments examined fall well short of the government's minimum requirements and the rate of progress does not suggest that agencies are close to addressing this.

DTF's oversight of the performance measurement and reporting system has been partly effective. DTF applied the required processes and provided guidance and support to departments and reviewed their progress.

However, DTF needs to improve the quality and depth of its guidance material, the rigour of its reviews and clarity of its reporting. But above all it needs to identify and address the persistent barriers that are hampering progress, and to work with departments to overcome these. These barriers include constraints imposed by the current reporting structure and insufficient detailed guidance about how to apply government’s requirements.

My recommendations are designed to build on the momentum of the government's reforms and help departments break the impasse that has prevented significant improvement.

Being transparent and accountable are not optional extras under our system of government and are undermined if departments do not accurately and clearly communicate their performance. Parliament and Victorians deserve no less.

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