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About PRG – Performance measurement
Characteristics
The following text is adapted from GASB Concepts Statement No. 2, Service Efforts and Accomplishments Reporting.
Characteristics Performance Information Should Possess
- Performance information should meet the characteristics of relevance, understandability, comparability, timeliness, consistency, and reliability. The application of these characteristics to performance information is discussed below.
Relevance
- Performance information should include data that are essential to provide a basis for understanding the accomplishment of goals and objectives of the entity that have potentially significant decision-making or accountability implications. As with any other information provided in GPEFR, performance information should be management's representations of the performance of the entity and its agencies, departments, programs, and services. Because the purpose of governmental entities is to establish and enforce laws, regulate activities, and provide services economically, effectively, and efficiently—not to earn profits—no single measure of performance is readily available to assist users in assessing accountability and in making economic, political, and social decisions. A broad variety of performance measures may therefore be required to meet the diverse needs of the different users; report on the many goals and objectives of different types of agencies, departments, programs, and services; and address the issues being considered for different decisions and levels of accountability.
Understandability
- Performance information should be communicated in a readily understandable manner. It should communicate the performance of the agency, department, program, or service to any reasonably informed interested party. To enhance user understanding, different forms of reporting such as tables, charts, and graphs may be needed by different state and local governmental entities and for different agencies, departments, programs, and services.
- Performance information should be concise yet comprehensive with regard to which (and how many) measures of performance are reported. Both conciseness and comprehensiveness in reporting performance measures are important because of the number, diversity, and complexity of state and local governmental agencies, departments, programs, and services. Performance information should be provided at the most appropriate level of aggregation or disaggregation. A balance should be achieved among the number of services reported, the performance measures reported, and the capability of users to understand and act on the information.
- Performance information should include explanations about important underlying factors and existing conditions that may have affected performance. Explanatory information (including narrative explanations) should be reported with the measures of performance both for important factors that are substantially outside the control of the entity and for factors over which the entity has some control, which could affect performance. Narrative explanations about performance measures and any important factors that are known to have affected the reported results should be presented.
- Performance information may be accompanied by a description of the way in which the performance measures should be used. This could include comments on the need to consider performance measures in conjunction with explanatory information, the need to consider the multiple aspects of performance when assessing results, instances where surrogate measures (see paragraph 67e) are being reported because of an inability to measure an outcome of a service, and the difficulty of using performance information to assess policy accountability. The descriptions could also contain additional information about performance measures that could assist users in understanding the reasons for the reported level of performance and actions planned or being taken to change results.
Comparability
- Performance information should provide a clear frame of reference for assessing the performance of the entity and its agencies, departments, programs, and services. Performance measures, when presented alone, do not provide a basis for assessing or understanding the level of performance of an agency, department, program, or service. Therefore, performance information should include comparative information. This information may take various forms; for example, depending on the type of agency, department, program, or service being reported on, reported measures of performance could include comparisons with (a) several earlier fiscal years, (b) targets established by the entity such as targets established as part of the budgetary process, (c) externally established norms or standards of performance, (d) other parts or subunits of the same entity, or (e) other, comparable entities.
Timeliness
- Performance information should be reported in a timely manner so that it will be available to users before it loses its capacity to be of value in assessing accountability and making decisions.
Consistency
- Performance information should be reported consistently from period to period to allow users to have a basis for comparing performance over time and to gain an understanding of the measures being used and their meaning. However, performance measures also need to be reviewed regularly and modified or replaced as needed to reflect changing circumstances.
Reliability
- For performance information to be of value to users, it is essential that it be reliable. To be reliable, the information should be verifiable and free from bias and should faithfully represent what it purports to represent. Therefore, performance information should be derived from systems that produce controlled and verifiable data. The value of a strong internal control structure has long been recognized when dealing with financial information. If performance information is to be considered for inclusion as part of the information required for GPEFR, it is important that the systems and methods used to gather and verify the information be subjected to analysis similar to that used for financial information systems.
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