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Public Governance: Government Management Framework: Public Sector Agencies’ Strategic Planning Processes: Audit Observations

 

Introduction

I commented in the first section of this Part of the Report that public governance is integral to the management and control of public resources. I also observed that it is important that the governance structure maintains clear and strong responsibility and accountability features. Strategic planning is well understood as a management tool that has the capacity to assist in setting the direction of organisations and thereby also assist in their control. It has recently been formally reaffirmed as an integral tool for public sector managers. The Government Management Framework (GMF) and the Financial Management Framework (FMF), two of a number of government initiatives of a policy, management and accountability nature, give prominence to strategic planning.

This section briefly draws together some audit observations in relation to strategic planning in public sector agencies. Related commentary also arises in other sections of this Part of the Report, particularly the section entitled ‘Government Management Framework and Budget Reform’, under the heading ‘Integrated Planning’ and the section ‘Public Governance: Financial Management Framework: A Reform Initiative for Improved Management and Accountability of Public Sector Resources and Risks: Audit Comments’. Specific comment on strategic planning is also made for some agencies in Part B of this Report in relation to the FMF requirements.

The GMF and Strategic Planning

The implementation of the GMF, which commenced during 1997-98, is seen by the Government as providing a means by which Cabinet can achieve its goals for the management of the public sector. The key objectives of the GMF include ensuring that the Government’s strategic priorities drive all key aspects of agency operations and improving the strategic management of government and agencies.

Cabinet’s October 1996 approval for the implementation of the GMF endorsed, among other matters, the principle that senior public service managers, with the lead and support of Ministers, are responsible for better management and improved performance within government agencies.

At the core of the GMF was a set of management improvement tools, one of which was corporate planning. This was to be used ‘to integrate planning and resourcing within and across agencies and be the basis for chief executive performance charters’. This notion was subsequently reinforced by the FMF which notes that planning and analysis is an important process in setting the direction, goals and values of an organisation and assisting in decision making. Related activities and techniques include strategic planning.

The GMF also sought to broaden the focus of then existing concepts of corporate planning so that agency planning would link to, and be an integral part of, the Government’s overall planning and budgeting cycle. This would entail strategic plans including the Government’s desired outcomes, the agency’s outputs and performance targets and articulation of the perceived contribution of its outputs to desired outcomes.

Audit Observations

As mentioned, elsewhere in this Report particular aspects of strategic planning are addressed more fully. Audit commentary on the GMF and budget reform considers the notion of planning driving budgeting. Observations on the FMF consider the compliance requirements for sound financial management and the links with management reporting.

Notwithstanding the different emphasis of these respective areas, the critical points are whether strategic plans exist and, where they do, whether they are of adequate quality to achieve their potential purpose that is, to assist management in making decisions to achieve an agency’s and the Government’s objectives.

Audit has observed in 1998-99 that strategic planning has not been finalised in some agencies or was finalised at the end of the financial year, that is, too late to be an effective component of an agency’s management framework. This partly reflects the current operating environment in which governance arrangements are developing and the relatively recent major restructuring of agencies. More details can be found in the previously mentioned sections of this Report.

Conclusion

It is reasonable to expect that soundly based and well structured strategic planning will be a fundamental aspect of the corporate governance activities of public sector agencies. Clearly, the recent promulgations by the Government on management issues, commencing with the GMF, are consistent with that expectation.

Notwithstanding the compliance issues addressed in the next section of this Report regarding the FMF, Audit expects that some agencies will need to further consider their strategic planning requirements in 1999-00 to meet the expectations of sound governance.

 

Public Governance: Government Management Framework: Public Sector Agencies’ Strategic Planning Processes: Audit Observations

Introduction

I commented in the first section of this Part of the Report that public governance is integral to the management and control of public resources. I also observed that it is important that the governance structure maintains clear and strong responsibility and accountability features. Strategic planning is well understood as a management tool that has the capacity to assist in setting the direction of organisations and thereby also assist in their control. It has recently been formally reaffirmed as an integral tool for public sector managers. The Government Management Framework (GMF) and the Financial Management Framework (FMF), two of a number of government initiatives of a policy, management and accountability nature, give prominence to strategic planning.

This section briefly draws together some audit observations in relation to strategic planning in public sector agencies. Related commentary also arises in other sections of this Part of the Report, particularly the section entitled ‘Government Management Framework and Budget Reform’, under the heading ‘Integrated Planning’ and the section ‘Public Governance: Financial Management Framework: A Reform Initiative for Improved Management and Accountability of Public Sector Resources and Risks: Audit Comments’. Specific comment on strategic planning is also made for some agencies in Part B of this Report in relation to the FMF requirements.

The GMF and Strategic Planning

The implementation of the GMF, which commenced during 1997-98, is seen by the Government as providing a means by which Cabinet can achieve its goals for the management of the public sector. The key objectives of the GMF include ensuring that the Government’s strategic priorities drive all key aspects of agency operations and improving the strategic management of government and agencies.

Cabinet’s October 1996 approval for the implementation of the GMF endorsed, among other matters, the principle that senior public service managers, with the lead and support of Ministers, are responsible for better management and improved performance within government agencies.

At the core of the GMF was a set of management improvement tools, one of which was corporate planning. This was to be used ‘to integrate planning and resourcing within and across agencies and be the basis for chief executive performance charters’. This notion was subsequently reinforced by the FMF which notes that planning and analysis is an important process in setting the direction, goals and values of an organisation and assisting in decision making. Related activities and techniques include strategic planning.

The GMF also sought to broaden the focus of then existing concepts of corporate planning so that agency planning would link to, and be an integral part of, the Government’s overall planning and budgeting cycle. This would entail strategic plans including the Government’s desired outcomes, the agency’s outputs and performance targets and articulation of the perceived contribution of its outputs to desired outcomes.

Audit Observations

As mentioned, elsewhere in this Report particular aspects of strategic planning are addressed more fully. Audit commentary on the GMF and budget reform considers the notion of planning driving budgeting. Observations on the FMF consider the compliance requirements for sound financial management and the links with management reporting.

Notwithstanding the different emphasis of these respective areas, the critical points are whether strategic plans exist and, where they do, whether they are of adequate quality to achieve their potential purpose that is, to assist management in making decisions to achieve an agency’s and the Government’s objectives.

Audit has observed in 1998-99 that strategic planning has not been finalised in some agencies or was finalised at the end of the financial year, that is, too late to be an effective component of an agency’s management framework. This partly reflects the current operating environment in which governance arrangements are developing and the relatively recent major restructuring of agencies. More details can be found in the previously mentioned sections of this Report.

Conclusion

It is reasonable to expect that soundly based and well structured strategic planning will be a fundamental aspect of the corporate governance activities of public sector agencies. Clearly, the recent promulgations by the Government on management issues, commencing with the GMF, are consistent with that expectation.

Notwithstanding the compliance issues addressed in the next section of this Report regarding the FMF, Audit expects that some agencies will need to further consider their strategic planning requirements in 1999-00 to meet the expectations of sound governance.