The User's Perspective

December 2008

Considering Guidelines for Voluntary Performance Reporting

            This article spotlights a critical element of the GASB’s Service Efforts and Accomplishments (SEA) Reporting project, the Request for Response (RFR), Suggested Guidelines for Voluntary Reporting of SEA Performance Information. While other elements of the project were described in a previous issue of The User's Perspective, the goal of the RFR, which was issued in late July, was to elicit public input at an early stage in the project, before the GASB members decide how to proceed.

            The RFR lays out a proposed framework of suggested guidelines for voluntary SEA reporting that is meant to help state and local governments communicate their SEA performance information more effectively. By voluntary, we mean that the GASB is not proposing that any government be required to follow the guidelines or even to report SEA performance information at all. The GASB is developing these guidelines solely for those governments that wish to report this type of information externally. The GASB has worked for more than two decades to encourage experimentation with and conduct research on SEA reporting. The results of the GASB’s research and monitoring indicate that it is appropriate for the GASB to suggest conceptually based guidelines for voluntary reporting.

Why Report SEA Performance Information?

            External reporting of SEA performance information is a means for governments to communicate about how well goals and objectives are being achieved, how efficiently and effectively services are provided, and the degree to which the government is helping to maintain or improve the well-being of its citizens by providing services.

            The primary purpose of a government is to help maintain or improve the well-being of its citizens by providing services. Traditional financial statements provide financial performance information about a government’s fiscal and operational accountability, but do not provide all of the information needed to determine how successful a government was in achieving the government’s primary purpose. To understand how well a government performed, information is needed about what the government achieved and how efficiently it provided services with the resources used.

The Proposed Suggested Guidelines

            The proposed suggested guidelines comprise two parts—essential components of an effective SEA report, and the qualitative characteristics of SEA performance information. There may be many forms of SEA reporting. Selected measures of SEA performance information may be included in a variety of government reports. SEA performance information may be condensed, extracted, or narrowly focused within a popular report or other financial document, for example. The suggested guidelines chiefly are meant to be used in preparing external SEA reports, but could be applied to other forms of reporting. However, one or more of the essential components or qualitative characteristics may not apply to other forms of SEA reporting because of the differing objectives and formats of other types of reports.

Proposed Essential Components

            As a result of the SEA-related research conducted by the GASB and other organizations, as well as years of observing best practices by governments, four essential components of SEA reports have been proposed. They are: purpose and scope, major goals and objectives, key measures of SEA performance, and discussion and analysis of results and challenges. These are the critical features that the GASB believes an effective SEA report contains.

Purpose and Scope

            It is essential for the reader to understand the report’s purpose and scope—why the information is being reported and what part of the government is being reported on.

            What is this report all about? What does it cover? Who is it for? An effective SEA report answers these questions. A statement of purpose describes why a government is publishing the report, the intended audience of the report, what the reported information is intended to communicate, and how the reported information can assist readers in assessing SEA performance and making decisions. It also may describe how the reported SEA performance information can be employed by citizens and other readers to evaluate whether the government has operated in an efficient and effective manner, and how that information may be used for judging the consistency of the government’s resource allocation decisions with its stated goals and objectives.

Major Goals and Objectives

            Stating the government’s major goals and objectives is essential for giving readers a basis for determining whether the reported SEA performance measures are relevant to what the organization intended to accomplish.

            What was the government trying to do? Absent an answer to this question, it is difficult for the reader of an SEA report to tell whether the government has done a good job or not. The goals and objectives of a government are the building blocks of performance management. Goals generally are statements of what a program is striving to achieve in the long term, and objectives are statements of what a program expects to achieve within a defined, shorter period of time. Quantifiable and measurable objectives allow for comparisons of what a government intended to achieve with what it actually achieved. The comparisons are important because the achievement of objectives provides an indication of the long-term realization of goals.

Key Measures of SEA Performance

            Focusing on key measures of SEA performance provides readers with information that is important, on the one hand, but does not overload them with too much information, on the other.

            What measures speak most directly to how well a government has achieved its goals and objectives? Focusing on these select measures helps the reader to see the forest for what it is, rather than getting lost in all the trees. An effective SEA report contains a limited number of measures in order to focus on information that is essential for assessing the level of achievement of a government’s programs and services in comparison to what it had planned to achieve. The use of key measures within an SEA report provides readers with enough information to develop their own conclusions about important aspects of a government’s performance without overwhelming them. The number and type of key measures reported may vary depending on the level of reporting, with additional measures included at more detailed levels of reporting.

Discussion and Analysis of Results and Challenges

            A narrative discussion and analysis of results and challenges enhances the reader’s ability to understand what has been achieved and what factors have affected the level of achievement. It provides a context for assessing the reported performance results.

            So, what did all of those measures mean? How do you explain these results? The SEA report reader should not be left to answer these questions without some help. An effective SEA report discusses and analyzes the results reported by the government. The narrative discussion of results and challenges provides an objective explanation of the results being reported. This discussion highlights the major and critical results being reported, together with management’s understanding of the reasons why the actual results differ from the expected or intended results. The discussion also may address currently known facts and circumstances that could affect results in the future.

Qualitative Characteristics

            The essential components of an effective SEA report—or any financial report, for that matter—are only as good as the information they contain. The qualitative characteristics of SEA performance information represent the attributes of the information contained in SEA reports that effectively communicate performance to readers.


            Relevance: The ability to assess the level of accomplishment of a government’s goals and objectives with potentially significant accountability or decision-making implications.

            What good is the information if the reader cannot use it to make decisions or assess whether the government has been accountable for its actions? In order for information presented in an SEA report to be relevant, it has to have a close logical relationship to the purpose for which it is intended to be used. Information is relevant if it is capable of making a difference in a reader’s assessment of a problem, condition, or event. The relevance of SEA performance information depends on the various needs of the report readers for assessing performance and making decisions. Relevance also influences or may be influenced by many of the other qualitative characteristics. For example, if the information provided in an SEA report is not timely or consistent, then it may not be as relevant to readers.


            Understandability: SEA performance information should be readily comprehendible.

            Information presented in an SEA report needs to be expressed simply and clearly. Readers of SEA reports have different purposes for using information, as well as different interests, needs, levels of understanding, education, and involvement. It is important to communicate SEA performance information in different forms and at different levels of detail, so that the information can be understood by those who may not have a detailed knowledge of a government’s programs and services. No one is served if the reader cannot understand the SEA performance information and therefore does have clear information on which to base important decisions.


            Comparability: A clear frame of reference for assessing the SEA performance of a government and its agencies, departments, or programs and services.

            SEA performance measures, when presented alone, do not provide a basis or context for assessing SEA performance. Comparable SEA performance information provides a frame of reference for readers to assess performance. To see whether the reported SEA performance is improving, deteriorating, or remaining the same, readers need comparative information such as targets established by the government, industry standards, or measures from similar governments. The types of comparative information reported may depend on issues such as the availability of reliable and relevant information, the purpose of the report, and the needs of the readers.


            Timeliness: SEA performance information needs to be issued while it is still of value in assessing accountability and making decisions.

            The information presented in an SEA report is timely if it is received soon enough after the reported events to affect the readers’ decisions or assessments of accountability. While timeliness alone does not make information useful, the passage of time can undermine its usefulness. Sometimes, a timely estimate can be more useful than a more precise measure that takes a long time to produce. An effective SEA report includes information regarding the period covered by the report and for each program, service, or SEA performance measure presented.


            Consistency: A basis for comparing similar SEA performance information over time.

            Consistency in reporting SEA performance information means measuring and reporting the same measures in the same way from period to period. Consistency allows SEA reports to be used to compare performance and monitor trends over several years. Readers can then expect to find SEA performance measures that they are familiar with and already understand when they review a report. Consistency should extend to the various layers of a government’s reporting—from the highly aggregated summary information to the underlying detail. Consistency in the manner of presentation avoids confusing readers and helps them to assess changes in SEA performance over time.


            Reliability: SEA performance information needs to be verifiable, free from bias, and a faithful representation of what it purports to represent.

            SEA performance measures that are independently verifiable provide a significant degree of assurance that the reader can rely on the information in an SEA report. Reliability means that the measures would be duplicated by independent evaluators using the same measurement methods. Reliable SEA performance information is derived from systems that produce controlled and verifiable data.

Looking Ahead

            The Board received a substantial amount of valuable input during the comment period on the Request for Response, which ended October 31. The GASB did carefully consider and evaluate this input, along with comments made in early November at a user forum and public hearing, to determine how to move forward with the project. As a result, the Board has decided to proceed with a project to further the development of suggested guidelines for voluntary reporting of SEA performance information, taking into consideration the thoughtful comments received in response to the RFR. The structure of the GASB’s next due process document will be discussed at its January 2009 meeting.

Further Reading