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About PRG – Performance measurement
Concepts
In April 1994 the GASB issued Concepts Statement No. 2, Service Efforts and Accomplishments Reporting. This Concepts Statement focused on one of the objectives from GASB Concepts Statement No. 1, Objectives of Financial Reporting. It was the product of eight years of research concerning performance measurement and reporting by state and local governments.
One objective of Concepts Statement No. 1 states that "financial reporting should assist in fulfilling government's duty to be publicly accountable and should enable users to assess that accountability by:
- Providing information to determine whether current-year revenues were sufficient to pay for current-year services,
- Demonstrating whether resources were obtained and used in accordance with the entity's legally adopted budget, and demonstrating compliance with other finance-related legal or contractual requirements,
- Providing information to assist users in assessing the service efforts, costs, and accomplishments of the governmental entity.”
The last of these three methods to achieving one objective of financial reporting is further developed in Concepts Statement No. 2. The Statement includes:
- a discussion of the governmental environment and the need for SEA reporting, including a discussion on the nature of governmental accountability,
- the elements of performance measurement reporting,
- the objectives and characteristics of performance information,
- the limitations of performance measurement information,
- how to enhance its usefulness, and
- the need for developing reporting standards for SEA information, which includes a call for experimentation with performance measurement and reporting.
Concepts Statement No. 2 asserts that information provided by governments should be intended (1) to assist in decision making and (2) to facilitate the process of decision making in the context of the public administration system and budgetary cycle. Therefore, ideally a governmental entity should:
- establish and communicate clear, relevant goals and objectives,
- set measurable targets for accomplishment, and
- develop and report indicators that measure its progress in achieving those goals and objectives (measures of performance).
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