Outcomes Arrangements

How the Outcomes Arrangements work

Outcomes, Programs and departmental activities form the basis of the Commonwealth's budgetary framework and documentation. Outcome statements define the purpose of appropriations in the Budget Bills, and Programs and departmental activities are detailed in Portfolio Budget Statements to explain these appropriations further.

The process of appropriating funds for the purpose of an Outcome, the delivery of Programs and departmental activities in support of this Outcome, and the subsequent reporting against this structure is presented in the figure below:

As the figure above illustrates, the framework works as follows:

• government (through its ministers and with the assistance of relevant agencies) specifies the Outcomes it is seeking to achieve in a given area
• these Outcomes are specified in terms of the impact government is aiming to have on some aspect of society (e.g., education), the economy (e.g., exports) or the national interest (e.g., defence)
• Parliament appropriates funds to allow the government to achieve these Outcomes through administered items and departmental activities
• items such as grants, transfers and benefit payments are administered on the Government's behalf by agencies, with a view to maximising their contribution to the specified Outcomes
• agencies specify and manage their activities to maximise their contribution to the achievement of the Government's desired Outcomes
• performance indicators are developed to allow scrutiny of effectiveness (i.e., the impact of Programs and departmental activities on Outcomes) and efficiency in contributing to the achievement of the Outcome. Indicators will also enable the system to be further developed to improve performance and accountability for results.

What are Outcomes?

Outcomes are the intended or proposed results, consequences or impacts of government actions on the Australian community. They identify the purpose for agency actions and provide the basis for assessing agency contributions to government policy goals and objectives.

Annual administered funds are appropriated to agencies on the basis of the Outcomes sought by the Government and Parliament.

Purpose of the Outcomes Arrangements

The Outcomes Arrangements help address three fundamental questions:

1. What does government want to achieve? (Outcomes)
2. How does it work towards achieving this? (Programs and activities)
3. How does it monitor its progress towards achieving this? (performance reporting)

The Government delivers benefits to the Australian community (Outcomes) primarily through administered items (Programs) delivered by agencies. Agencies apply inputs (e.g., finances, human resources, capital equipment) to the activities and processes that generate products and services. These inputs include the funds appropriated to them from the Budget or revenue from other sources, such as payments for services, sales, levies and industry contributions.

The Outcomes Arrangements aim to improve the understanding and knowledge of those outside the agency who have an interest in its performance, including ministers, parliament, external accountability bodies such as the Auditor-General, and the public. Managing through Outcomes aims to help improve decision making and performance by focussing attention on the fundamental questions outlined above.

It is important that Outcomes are structured in such a way as to maximise consistency in preparations between agencies. This enables comparisons and benchmarking within and across portfolios.

Who must have Outcomes?

Government policy requires all GGS agencies to use Outcomes as a basis for budgeting, measuring performance and reporting.

When do Outcomes need to be established?

There are two circumstances when Outcomes need to be established:

1. new Outcomes need to be approved for new functions that are not within existing Outcomes; and
2. revised Outcomes need to be approved for changes to existing Outcomes – including where there are refinements to policy objectives, strategy or desired results for agency activities, to clarify desired results or improve precision for measurement.

How are Outcome Statements developed?

Every agency must have at least one Outcome, with many agencies having more than one Outcome. They are to be written succinctly and precisely, and will mostly run no longer than one to two sentences in length.

The existing guide to Outcomes is provided below.

The Outcomes & Outputs Framework Guidance Document [ 304 KB]

The Department of Finance and Deregulation (Finance) is finalising additional guidance to supplement and update this advice. The additional guidance can be expected on this page during the course of July 2008.

Outcome Statements and the Portfolio Budget Statements (PB Statements)

PB Statements form part of the suite of information available to describe Budget appropriations and agency activity.

As Outcomes provide the basis for the appropriation of money from the Commonwealth, they also provide an important role in the reporting of information, such as how an agency plans to spend its appropriations in the pursuit of government goals.

The role of Outcome statements in PB Statement reporting is set out further in the: Portfolio Budget Statements Constructors Kit [ 1.3 MB].

What is the process for obtaining a new, or changing an existing, Outcome statement?

The Minister for Finance and Deregulation (Minister for Finance) is responsible for approving all changes to existing, and the establishment of all new, Outcomes.

Finance provides advice to the Minister for Finance on all Outcome change requests, and so plays an important role in ensuring Outcomes are developed inline with government policy.

Requests to change or add Outcomes should be made by way of letter from the relevant Portfolio Minister responsible for the agency to the Minister for Finance. Before this occurs, however, agencies should seek officer level agreement with Finance. A flow-chart outlining the process can be found below:

1. The minimum amount of information provided should include:

   • Background information on the driving force of the change
   • Proposed wording of new outcome statements
   • Materiality of old and proposed outcomes
   • Mapping of the proposed outcomes to programs and appropriations for incorporation in CBMS

Approval Process Flow Chart [ 30 KB]

The timing of these requests is very important, and runs to a tight timetable due to the work required by Finance in processing numerous requests.

All Outcome changes must be processed before the Federal Budget each year. An indicative timetable for the processing of Outcome change requests is presented below (note that the exact dates are issued by Finance each year through an Estimates Memorandum):

Process Step	Budget Period
1. Notification	Before Strategic Budget Committee (October / November)
2. Information and Consultation	November / December
3. Finance Officer Level Approval	Finance officer level approval in December. Portfolio Minister to write to the Finance Minister after Strategic Budget Committee (December / January).
4. Final Consultation and Formal Notification	Mid January to Mid February
5. Ministerial Authorisation	Late February
6. System Changes	During March (before Expenditure Review Committee)