The StrategyNZ one-day workshop explored how New Zealand might better prepare and publish government department strategy documents on Thursday, 14 July 2016.

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The Role of Strategy in the NZ Public
Financial Management Framework
Ian Ball
Chairman, CIPFA International
Chairman, Audit Committee for the Financial Statements of the Government

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Why it is important…

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Fiscal and economic performance…

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…but at what cost?

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"Do you enjoy all this flummery,
Mr Pitt?"
"No, Mr Fox."
"Do you enjoy anything, Mr
Pitt?"
"A balance-sheet, Mr Fox. I
enjoy a good balance sheet"

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Hindsight: Key concepts in the financial
management framework…
• Performance
• Accountability
• Integrated management system

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Performance Defined
• “Owner” / “purchaser” distinction
• Inputs / outputs / outcomes
• “Crown” / department distinction

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“Ownership”
• Objectives and scope of business
• Strategy – especially products/outputs
• Financial performance
• Capital maintenance
• Risk management

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“Purchase” Framework
Input Output Outcome
Cost Revenue
Social
Benefit

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Direct costs
• Personnel
• Travel
• Stores
Indirect costs
• Overheads
Driver training
Road traffic research
Vehicle inspections
Reduction in
road deaths
Speed of
transport
Pollution
INPUTS OUTPUTS OUTCOMES

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OUTCOMES
INTERVENTIONS
Mix of actions to achieve
desired outcomes (Strategy?)
RegulationsOutputs Transfers Taxation Ownership

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Accountability Framework

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Integrated Management System
Strategic Planning
Budgeting
• Capital
• Operating
Operations / Budget
Implementation
Monitoring/
Reporting

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• Statement on Long-term Fiscal Position
• Fiscal Strategy Report
• Economic and Fiscal Update
• Budget Policy Statement
• Budget
• Forecast Financial Statements
• Estimates of Appropriation
• Investment Statement
Performance Specification Documents
- Government

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Budget reflects strategy…

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Reporting by the Government
• Financial statements
̶ Annual
̶ Monthly
• Snapshot of the Financial
Statements
• Better Public Services
results

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Performance Specification Documents
– Departments (as was…)
• Departmental Forecast Report
• Corporate/Strategic Plan
• CE Performance Agreement
• Purchase Agreement
After the Budget is agreed, output plans (or output agreements for Crown
entities) are signed by chief executives (or boards) and the relevant
Ministers. They are cross-referenced in chief executives’ job descriptions.

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But the Owner’s interest in
strategy remains central…

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Strategic Intentions

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Departmental Reporting
• Statement of Responsibility
• Statement of Accounting Policy
• Operating Statement
• Statement of Financial Position
• Statement of Cash Flows
• Statement of Contingent Liabilities
• Statement of Service Performance

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Reporting on Strategic Intentions

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But what is a strategy?

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Foresight: Integrated Reporting?

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Creating value…

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A new reporting framework for the
public sector?

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The Role of Strategy in the NZ Public
Financial Management Framework
Ian Ball
Chairman, CIPFA International
Chairman, Audit Committee for the Financial Statements of the Government