Lessons learned from Commonwealth's first corporate plans

By Stephen Easton

February 25, 2016

The Department of Finance and University of Sydney Business School have analysed, poked and prodded the federal government’s first crop of corporate plans.

As the lead agency for the federal government’s rolling public administration reform agenda, Finance is dutifully adjusting the new rules around goal-setting and performance reporting for federal entities in line with the relevant parliamentary committee’s recommendations, as it heads into a second inquiry today.

The Joint Committee of Public Accounts and Audit came up with six recommendations last year. In the department’s submission to the new inquiry — which includes its responses to the last one — it provides the “lessons learned” from analysis of the Commonwealth’s first crop of corporate plans.

The department’s three main conclusions — drawn from putting 71 corporate plans under the microscope and discussions with 198 people who worked on them in 105 entities — are not altogether surprising:

  • Senior level engagement and support is important in developing and implementing reporting frameworks;
  • A good corporate plan can be an effective driver of cultural change in an entity; and
  • There is the potential for entities to use a broader range of quantitative and qualitative performance information.

The Finance submission also includes preliminary findings from a University of Sydney Business School research project with more or less the same focus. Both analyses note that a corporate plan must be based around “clear, concise and unambiguous” statements of the organisation’s overall purpose.

It sounds obvious, but there’s a little more to it than that. The department favours mission statements that focus on “what an entity seeks to achieve in terms of impacts on society and the community” rather than the narrower kind that just explains the job it does.

A more basic understanding of mission “can result in entity planning being inwardly driven and focussed on maintaining the status quo, as opposed to being problem or needs driven and focussed on how best to achieve desired outcomes”, according to the research.

The university’s analysis, led by Professor Suresh Cuganesan, also looked at how future corporate plans might better describe the need for collaboration with other organisations to achieve certain aims. Some of the plans mentioned collaboration but “the rationale for collaboration was often operationally based, rather than being expressed in strategic terms”. Also:

“This made it difficult to understand how collaboration helped to access capability, manage risk, coordinate programs and contribute to purpose. Performance measures of collaboration were limited.”

The department also seeks the committee’s approval of new requirements for the content of annual reports, as the old rules about what must go in them under the previous legislation have now expired:

“Without their replacement, corporate Commonwealth entities and Commonwealth companies would have no legal obligation to meet content requirements, although the legal requirement to produce annual reports would continue to exist under the PGPA Act.”

A consultation paper on new requirements that is doing the rounds of federal entities explains the department doesn’t want to “substantially” change the existing system. Finance told the committee:

“We are, however, interested in evolutionary change and in reducing the complexity of current requirements.”

Secretary Jane Halton explained how annual reports are changing through the ongoing implementation of the Public Governance, Performance and Accountability Act at last year’s ACT and Australian Public Service Annual Report Awards.

This year’s annual reports will include annual performance statements for the first time, and the department has provided the committee with a mock-up of its own 2015-16 effort.

The JCPAA’s refinements to the new frameworks underpinning the Commonwealth public sector will continue throughout 2016.

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