In terms of section 27(4) of the PFMA, departments are required to report on measurable service delivery objectives. In line with the PFMA, the revised budget format requires departments to develop an indicator of service delivery for each output that is defined.

Service delivery indicators are important as they measure:

Service delivery indicators therefore provide important accountability checks on Government. They also shift the focus of departments and their managers from inputs and resources used to the quality and impact of the services that they deliver. Concepts of ‘efficiency and effectiveness’ and ‘value for money’ – getting the greatest impact from rands spent – are fast becoming part of public service management practices.

The 2001 Budget takes the first step towards developing service delivery indicators. It is recognised that output or quantity measures are easily understood and therefore the first step towards developing more complex service delivery indicators. Output or quantity measures describe outputs in terms of how much, or how many. This calls for departments to develop a unit of measure that best describes the particular outputs.

It is important to distinguish between workload statistics and output or quantity measures. Workload statistics tell us about the inputs or activities of a progaramme. Output or quantity measures describe how well the programme is performing. This may refer to how much or how many of the output. It often includes criteria or benchmarks that may be used in measuring progress. Output or quantity indicators therefore are often expressed in terms of percentages, ratios and rates in certain cases, absolute numbers, and in may instances refer to a measurable time period.

Example

Increased output does not always signal value for money. Other measures such as quality, efficiency, timeliness and sustainability are important. Treasury and departments will work towards developing these kinds of indicators at a later stage as progress is made in budget reform.

Treasury recognises that some departments are experienced at developing and using service delivery indicators. For most departments, however, this is a new activity which requires learning and practicing in ’getting it right’. It is therefore important that departments select the appropriate output or quantity measures based on the activity measured, the intended audience – most often reporting to the public – and their particular information requirements.

A guide to selecting indicators is that they should be:

Departments should ensure that the output or quantity measures that they select are consistent with those contained in year 1 of the departmental strategic plan. A focus on target groups, including the poor, women, children, people with disabilities and people living in rural areas is also important with specifying outputs and selecting output or quantity indicators. Departments may wish to consider selecting measures that enable the collection and analysis of disaggregrated data to monitor delivery to these target groups.

Example

Developing service delivery indicators is not an end in itself. Setting targets and measuring progress towards those targets are the next steps in improving service delivery information in the budget.

Service delivery indicators help departments to set delivery levels and assess performance against the targets.

Tracking indicators in terms of service delivery targets informs departmental managers, policy and decision-makers and the public about what progress departments are making towards their objectives. This helps departments plan, budget and manage programmes better. It improves accountability and control and informs policy and decision making. It also provides information to the public about what goods and services Government ‘buys’.