Planning and reporting

Key board responsibilities are strategic planning, monitoring and reporting publicly on the expected and actual performance of the entity: this enables Parliament and the public to hold entities accountable.

The CEA sets out planning and reporting obligations of Crown entities, including the requirements for key accountability documents - the Statement of Intent, Statement of Performance Expectations and Annual Report. The expectation that boards are fully engaged in these areas is reflected by the requirement that these accountability documents are signed by members of the board.

The set of key accountability documents that Crown entities produce regularly should operate as a system, where each publication has relationships and connections to one another. It should be straightforward for users to see or find the ‘lines of sight’ between key sets of information in agency documents. Boards should encourage their leaders and staff to think about and plan for connections between the key accountability documents the Board signs off.

Additional planning and reporting requirements may be specified in the entity’s own legislation, and the impact of some of the provisions in this section on will depend on the category of the entity.

Communications between Ministers and entities that inform boards of the responsible Minister’s expectations for the future direction of the entity are also an important part of the planning process.

The range of planning instruments and vehicles make it advisable for each entity to consider setting up a process to record the actions and time frames for key planning and reporting decisions.

Enduring letter of expectations

An enduring letter of expectations to Crown entities is issued periodically, with the most recent in 2019: see Enduring-Letter-of-Expectations-to-Statutory-Crown-Entities.pdf (publicservice.govt.nz) It sets out the ongoing expectations that the Minister of Finance and the Minister for the Public Service have of all statutory Crown entities. These expectations include regularly and transparently reporting to the Minister, supporting future-focussed Māori Crown relations and contributing to improving wellbeing. An enduring letter remains ‘in force’ until it is replaced.  

Ministerial involvement in setting strategy and annual performance expectations

Ministers “participate in the process of setting the entity’s strategic direction and performance expectations and monitoring the entity’s performance...”  (s27(1)(f), CEA). Ministers’ expectations for entities’ strategic direction and their specific priorities for the planning period may be provided through meetings with the chair or board, and/ or in an annual letter of expectation from the Minister to the entity. Ideally, the letter will be sent to the chair, before the board starts their strategic review and planning in October.

Statements of Intent

The purpose of a Statement of Intent (SOI) is to promote the public accountability of a Crown entity (s138, CEA) by:

• enabling the Crown to participate in the process of setting the Crown entity's strategic intentions and medium-term undertakings
• setting out for the House of Representatives those intentions and undertakings
• providing a base against which the Crown entity's actual performance can later be assessed.

Section 141 of the CEA specifies what a SOI must contain. An SOI must set out the strategic objectives that the Crown entity intends to achieve or contribute to (strategic intentions) and explain how the entity proposes to assess its performance.

Ministers may participate in determining the content of the SOI (s145) which includes: agreeing with the Crown entity on any additional information to be incorporated; specifying the form in which any information must be presented; making comment on a draft SOI; and directing amendment in relation to some content of the SOI.

Advice on preparing a meaningful SOI can be found at Reporting: Performance (treasury.govt.nz) including specific advice on preparing an SOI at Crown Entities Act: Statement of Intent Guidance (treasury.govt.nz).

Statement of Performance Expectations (SPE)

The purpose of an SPE is to:

• enable the responsible Minister to participate in setting the annual performance expectations of the Crown entity
• enable Parliament to be informed of those expectations
• provide a base against which actual performance can be assessed.

Section 149E of the CEA specifies the contents of an SPE. An SPE must include a concise explanation of what each reportable class of outputs is intended to achieve and explain how the performance of each reportable class of outputs will be assessed.

Ministers may participate in determining the content of the SPE (s149H) which includes: agreeing with the Crown entity on any additional information to be incorporated; specifying the form in which any information must be presented; making comment on a draft SPE; and directing amendment in relation to some content of the SPE.

Advice on preparing a meaningful SPE can be found at Reporting: Performance (treasury.govt.nz):

Specific advice on SPEs can be found at: CEA: Statement of Performance Expectations (SPE),

Guidance for Creating a Statement of Performance Expectations (SPE) under the Crown Entities Act (CEA) (treasury.govt.nz)

Māori Crown Relations

The 2019 Enduring Letter of Expectations from the Ministers of Finance and for the Public Service includes an expectation that Crown entity boards will support future focused Māori Crown relations. How the board meets that expectation should be clearly contained in accountability and planning documents, performance expectations on the entity chief executives and entity sector engagement plans.

Te Arawhiti is the government agency responsible for ensuring that public sector engagement with Māori is meaningful. More information can be found at Te Arawhiti - Te Kāhui Hīkina (Māori Crown Relations).

Annual Report

The entity reports on its performance to Parliament in its annual report (ss150 – 157, CEA). The annual report must include information to enable an informed assessment to be made of the entity's progress against its strategic intentions and statement of performance expectations. Other information that must be included in an annual report is the annual financial statements for the entity, any direction given to the entity by a Minister in writing, the total value of the remuneration paid to each member during the financial year (ss151 and 152, CEA).

The board is informing stakeholders on how it is leading the performance of the entity, and how it is using public resources. The board will lead development of the annual report, including engagement as necessary with the Minister. The Annual Report must be in writing, be dated, and be signed on behalf of the board by two members.

The Auditor-General is the entity’s auditor, but will generally appoint another auditor to act on their behalf. The auditor is required to audit the annual financial statements, statement of service performance, the annual report, and any other required or agreed information.

A Crown entity must provide its annual report to the responsible Minister within 15 working days of receipt of the audit report: it is recommended that entities provide a near final draft to their monitoring department to enable the Minister to be briefed on key issues

Advice on preparing a meaningful annual report can be found at Reporting: Performance (treasury.govt.nz):

Specific guidance on preparing an annual report can be found at: Preparing the Annual Report: Guidance and Requirements for Crown Entities,

Preparing the Annual Report and other End-of-Year Performance Reporting: Guidance for Crown Entities (treasury.govt.nz)

Summary: Planning and reporting

At a minimum a good governance manual should cover:

• each of the key planning and reporting requirements in the CEA and the board’s role, including:
  
  • the Statement of Intent
  • the Statement of Performance Expectations
  • the Annual Report
• any planning and reporting requirements in the entity’s own legislation, the board’s role and engagement with the responsible Minister
• any relevant non-legislative planning and reporting processes and the board’s role, including:
  
  • enduring letters of expectation
  • annual letters of expectation, or
  • any other agreements.