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About PRG – Performance measurement
Elements
Because users recognize that information about SEA (in terms of outputs, outcomes, and efficiency) is an essential part of the measurement of performance, financial reporting needs to be expanded to include those measures. Having considered the information users need for assessing accountability and making decisions, and the role of financial reporting in providing information to assess performance, the GASB believes that SEA performance information is an integral part of GPEFR.
The following diagram identifies the integral elements of reporting SEA performance information.
The three elements of SEA performance measures displayed here are the basic building blocks of many performance measurement systems. These measures report what services the entity has provided, whether those services have achieved the objectives established, and what effects they have had upon the recipients and others (service accomplishments). This information, when compared to service efforts (inputs), also provides a basis for assessing the efficiency of the entity's operations.
The following text is adapted from GASB Concepts Statement No. 2, Service Efforts and Accomplishments Reporting.
The Elements of SEA Reporting and Related Factors
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Elements of SEA Performance Measures |
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Measures of service efforts |
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Inputs—These are measures of the amount of financial and nonfinancial resources a government uses to provide a service, such as cost of road maintenance or the cost incurred per lane-mile on road maintenance, the number of employees used in providing a service, or the amount of equipment used. |
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Measures of service accomplishments |
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Outputs—Measures that quantify the amount of a service provided. For example, the lane-miles of road repaired, school graduation rates, number of patients treated in the emergency room, tons of garbage collected, or number of fires extinguished. |
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Outcomes—Measures that gauge the accomplishment or results that occur at least partially) because of the services provided. They provide a basis for assessing how well a service's goals and objectives are accomplished. Outcome measures indicate the quality or effectiveness of a service. For example, the condition of roads in a community, or the residents' rating of the smoothness of the roads. Other examples include, the cleanliness ratings based on routine inspections of its streets or parks. As other measures that can be used to gauge success, a fire department might track the number of fire-related deaths and injuries, or the dollar value of property lost to fire. A hospital might utilize mortality rates and the results of random patient surveys. A school district might collect information on the percentage of graduating students gainfully employed or continuing education two years after graduation. |
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Measures that relate service efforts to service accomplishments |
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Efficiency—Indicators that measure the amount of resources used per unit of output or per unit of outcome. These measures inform judgments about how well resources were used to achieve intended aims—the question of "bang for the buck"—by comparing input indicators with output and outcome indicators. |
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Input-output comparisons include annual cost per inmate in jail, cost per lane-mile of road repaired, and ratio of nurses to patients discharged. |
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Input-outcome measures include cost per inmate successfully rehabilitated, cost per lane-mile of road maintained in good or excellent condition, and cost per patient cured without remission. |
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External factors that influence results |
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External factors--These include economic, social environmental, and demographic characteristics that have an influence on the results of a service. For example, external factors that might affect highway maintenance cost and condition may include weather conditions in the area where the highway is located and the volume and type of traffic on the highway. |
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Other external factors include actions or services provided by other governmental entities, not-for-profit organizations, and business enterprises. |
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Additional factors related to SEA reporting |
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To be useful, SEA performance measures need to be presented with comparisons to allow users to assess results. Comparisons such as those with results from previous periods, entity-established targets, goals or objectives, generally accepted norms and standards, other parts of the entity, or other comparable jurisdictions can be particularly helpful. |
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In using SEA performance measures, secondary effects of a service need to be considered. These include significant indirect consequences—intended or unintended, positive or negative—that occur, at least partially, as a result of the service. For example, secondary effects may include a decrease in traffic accidents because of an improvement in the condition of roads. Secondary effects are often difficult to identify and relate to the actual service being provided. |
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Narrative information provided with SEA performance measures can provide explanations for what the level of performance reported by the measure means, the possible effects that the factors that influence results might have on performance and actions that have been (or are being) taken to change reported performance. |
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The level of service being provided may be more or less than is necessary to satisfy the need addressed or the results desired. In certain instances, the need or demand for a service may help users to understand the performance achieved and whether the level of services provided meets the perceived need for a particular level of service. |
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