- Title page
- 1: Relationships, roles and responsibilities
- 2 : Appointing and maintaining an effective board
- 3: Participating in setting the expectations and direction for entities
- 4: How can your monitoring department assist you?
- Appendix 1: How Crown entities fit into the public sector
- Appendix 2: Information for Crown entity companies
Statement of Performance Expectations (SPE)
Key message: Purpose of the SPE
The SPE is a key instrument of public accountability and enables the Crown to participate in setting annual expectations for outputs directly funded by appropriations, levies or by compulsory fees or charges set under legislation. It also serves to set out those intentions for the House of Representatives, provides a base against which the entity's actual performance can be assessed, and includes the entity's financial forecasts for the next year. The SPE results from the entity's annual business review and planning processes.
When you participate in the annual strategic planning process you can also set annual performance expectations which are to be reflected in the SPE. Your monitoring department 38 should advise you on whether an entity's SPE adequately covers matters such as:
- its fit with the agreed strategy
- how well is the entity delivering on its core functions
- its consistency with government policy and any directions (to the extent applicable to the entity concerned)
- whether the level of funding (from appropriations, levies etc) should be adjusted
- what is intended to be achieved with the expenditure
- how performance will be assessed
- whether the SPE would be useful as a standalone document or presented with other accountability documents, and
- whether the performance information tells a meaningful performance story.
You have the right to review and provide comment on the draft SPE and, if the final SPE is not adequate, you may direct the Crown entity to make changes.39 Although an SPE must be tabled each year, there may be no need to completely rewrite it. Minimal changes may be made, with your agreement, if there is no substantial shift in the entity's activities from the previous year.
In some circumstances, while not provided for in legislation, you may request the entity prepare a memorandum of understanding, relationship agreement, or similar document to assist you, the monitor and the entity to clarify, align, and manage expectations and responsibilities.
38: The Treasury has a suite of guidance to help departments and entities with planning and reporting. This guidance can be accessed at www.treasury.govt.nz/publications/guidance/strategy, and www.treasury.govt.nz/publications/guidance/planning/cea-spe
39: Direction may be given on issues of scope (of an SOI), statements of forecast service performance, performance measures and other issues. However the CEA prevents from Ministers giving directions on the forecast financial statements or that affect statutorily independent functions. Ministers should seek legal advice before a direction is issued.