Experiences of Using Performance
Information in Budget Process
27th Annual Meeting of Senior Budget Officials
Sydney, June 5th 2006
Teresa Curristine
Budgeting and Public Expenditures Division OECD
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Overview of Presentation
Part 1: Introduction
 Part 2 : Key Challenges and Lessons
Learned: Individual Countries’
Experiences
 Part 3 : General Insights and On-going
Issues
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PART 1: Introduction
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Performance Information (PI) in the
Budget Process
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Widespread trend : 75% of OECD countries include
non-finance performance data in budget documentation
Long-term trend: 40% of countries working on outputs
for over 10 years
Constantly evolving: 35% of countries introduced a new
initiative in past year
The road from incremental towards results-based
budgeting: long and difficult
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PART 2: Key Challenges and Lessons
Learned: Individual Countries’
Experiences
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AUSTRALIA
Challenges and Lessons Learned
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Two recurring challenges faced in
establishing good PI
– The quality of PI in relation to agency
contributions to outcomes and outputs
– The limited use of PI for decision making in the
budget context
Need to ensure links between programmes, outputs,
and outcomes are clear and measured effectively
Need a more systematic and better targeted
approach to programme review framework
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Canada
Lessons Learned
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There is no end point on results based management –
persistence over many years is required and you never get it
“right”
You need central leadership to build capacity
A detailed understanding of the programme base is essential it is very easy to lose and not easy to get back
Everybody knows about cultural barriers but don’t
underestimate the challenges with systems
You need a common whole-of-government planning and
reporting framework if you want to do real strategic planning
and reporting
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Canada (continued)
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There is no substitute for evaluation -but you need
to give it some backbone and support
Demands from Parliamentarians and the external
auditor for better public PI is needed and good.
There is no managing for results without sound
management practices – you need clear
expectations and annual assessment
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Denmark
Challenges: performance contracts
●Improving measurement of targets
●Avoiding goal distortion
●Making cross-cutting targets work
●Dealing with fragmented performance information
●Resistance against a very centralized and systematic
approach
●Transparency can create pressure for more resources
●No direct integration between PI and the budgets
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Denmark (continued)
Lessons Learned: Performance contracts
● Focus on outputs and outcomes (external targets and
objectives)
● Merge performance contracts with director contract
● Limit number of output targets (5-10) but many
measures
● Analysis of the “hierarchy of tasks and activities” as
a condition
● Focus on distribution of costs (ABC)
● Review targets and objectives in yearly reports
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Lesson Learned: direct performance
budgeting
● Be aware of perverse effects
● Need to fine-tune the grants and simplify the
model
● Pay attention to expenditure control
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The Netherlands: Lesson Learned
● Limit and focus performance information
● Use appropriate information for level of
discussion (main issues)
● Integrate policy analysis better in budget
cycle
● Improve quality and independence
● “Fruitless search for certainty”
● Efficiency must be promoted with other
instruments
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United Kingdom
Challenges and Lessons Learned
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Taking a top-down approach
– Need for consultation
– To focus on outcomes
– Too limit the number of targets
Delivery
– If you cannot measure how you are doing you cannot improve
delivery
– Importance of rigorous delivery planning and reporting
Measurement
– Consider measurement issues when linking PI with budgeting
– Systematically assess data risks and perverse incentives
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United Kingdom (continued)
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Performance management should reflect local
priorities
Key agents: Consultation and ownership
Assess what will the effect be on the frontline
Decisions should be informed by evidence and
analysis at the outset (performance evaluations)
Cross organisational co-operation
Performance information should permit
decentralised decisions (measure outcomes)
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Korea
Lessons Learned
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Importance of sequencing
Need for Leadership
Reorganization of government can be
useful
– Separation of service delivery and
policy formulation
Balance between centralization and
decentralization
Patience
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PART 3: General Insights and On-going
Issues
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General insights from experts meeting
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Contextual variables – No one “best” model.
Importance of leadership
Importance of consultation
PI used to inform budget decision along with other
information
PI does not generally appear to significantly change
resource allocations
Within government more communication based on
language of results
Many efforts to bring PI to attention of politicians and the
public
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On-going issues and challenges
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Continuing to struggle with integrating PI into the
budget process in a systematic manner.
Improving quality of PI and data gap
Balancing centralised and decentralised
implementation approach
Providing appropriate information for different users
and at different stages of budget process
Developing and using PI between different levels of
government
Convincing politicians to use PI in decision making
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Conclusion
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Today cannot imagine budget system without
performance information
PI has proven useful but not met expectations –
problems remain
Have we gone too far or not far enough?
Countries evolving their performance approach
rather than discarding
There is a need for more realistic expectations and
greater efforts to get all stakeholders on board
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