GASB Proposes Guidelines for Performance Reporting
July 22, 2009
The Governmental Accounting Standards Board (GASB) has issued proposed suggested guidelines for voluntary reporting, "Service Efforts and Accomplishments (SEA) Performance Information." When finalized, the suggested guidelines will provide a common framework for the external communication of SEA performance information. The common framework will not be an external reporting requirement; rather, it will provide guidance for governments that might provide external performance reporting. Written comments are due to GASB by October 30, 2009.
External financial statements provide quantitative information about the use of resources. Such information reinforces governments' stewardship and accountability objectives. However, these statements are not designed to provide qualitative information about how successfully the government used its financial resources to fulfill both its mission and the expectations of stakeholders. For example, such information for a public institution might indicate the percentage of applicants accepted into degreed programs (an input), graduation rates (an output), how quickly graduates receive degrees (efficiency), and the number of graduates that become employed in an area related to their field of study or get accepted into a desired graduate program (an outcome).
The essential components that set forth the types of information an effective SEA report needs to contain in order to provide users with information that will assist them in assessing the efficiency and effectiveness of government services are as follows:
- Purpose and scope - describes why the government is publishing the report.
- Major goals and objectives - would address the most salient goals, objectives that the government is including in its report, both short and long term types of objectives, and achievement expectations.
- Key measures -those used to assess performance, and would describe, for example, how achievement of a specified goal or objective is determined.
- Discussion and analysis of results and challenges - includes things like challenges to achieving or measuring results.
SEA reports should contain qualitative attributes that help effectively communicate the essential components to stakeholders. The GASB's proposal presents the following six qualitative characteristics of SEA:
- Relevance - information that makes a difference in a user's assessment of performance.
- Understandability -presentation or styles of expression that help users comprehend the information in the report.
- Comparability - provides a basis and context for assessing performance. Comparability can include both internal and external references.
- Timeliness - adds value to the decision utility of the information presented.
- Consistency -measures reported or measured in the same way over time.
- Reliability - effective SEA reports contain information that is verifiable, objective, comprehensive in coverage, and faithfully representative.
Finally, in communicating SEA information, one should consider the type of audience, the appropriate level of detail for each type of stakeholder, and a format that makes sense for the type of user and the level of detail.
Again, GASB has determined that it is beyond its scope to establish the goals and objectives of government or public institutions' services, specific nonfinancial measures or indicators of service performance, or benchmarks for service performance. Extensive research has indicated that it is appropriate at this time for the GASB to set out conceptually based suggested guidelines for governments and public institutions that want to report SEA performance information. NACUBO will provide comments to GASB and encourages public institutions to let us know your thoughts on the proposal.
Director, Accounting Policy
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