EG A10

Note - Things to keep in mind.

Planning prompts - Useful questions.

Further guidance - Other sections of the Guide that might be helpful.

Note

PBE FRS 48 stresses the importance of considering the information needed by users for accountability and decision making, the desired qualities of information (such as relevance and reliability) and the need to apply the concept of materiality. It uses the phrase ‘appropriate and meaningful’ as a reminder to think about all of these things when applying the Standard.

• Paragraph 15(a) ― (Contextual information)

• Paragraph 15 (b) ― Reporting on what the entity has done

Note

For entities subject to audit, one factor to consider in deciding the mix of service performance information to report is whether information can be verified by supporting evidence.

Other factors which require consideration when deciding what to report are discussed in the section Reporting on what the entity has done.

Requirement

Key paragraph(s) of Standard

Link to section of guidance

Service performance information must be presented in the same report as the financial statements

Paragraph 6

Presentation of service performance information

Some cross-referencing to other reports is permitted.

Paragraphs 33–

35

Presentation of service performance information

Comparative service performance information for the previous period is required (including the first year of adoption).3

Paragraph 37

Comparative information and consistency of reporting

If an entity changes what it reports or how it reports its service performance information, it is required to explain the nature and effect of those changes.⁴

Paragraph 40

Comparative information and consistency of reporting

An entity must disclose those judgements that have the most significant effect on the selection, measurement, aggregation and presentation of its service performance information that are relevant to an understanding of the entity’s service performance information.

Paragraph 44

Disclosure of judgements

Note

An entity has the flexibility to choose where and how it reports its service performance information within its annual report.

However, it is important that the complete set of service performance information presented in accordance with PBE FRS 48 can be easily identified. This becomes particularly important when the service performance information is subject to audit.

Refer to Presentation of service performance information

PBE FRS 48 Service Performance Reporting Requirements

Contextual information

Who are we?

Why do we exist?

What we did this year

What did we do?

How did we perform?

What PBE FRS 48 requires⁵

Consider

Paragraph 15(a)

An entity’s service performance information shall provide users with sufficient contextual information to understand why the entity exists, what it intends to achieve in broad terms over the medium to long term, and how it goes about this.

The Standard is asking an entity to explain what it does and why, the changes it wants to bring about, and how it plans to achieve its desired objectives.

The change that an entity wants to bring about can range from the achievable to the aspirational.

The contextual information should be consistent with these documents, but the best explanation of what the entity currently does might be obtained from other sources, such as the entity’s website, a recent grant application, governance report or newsletter.

Paragraph 17

Contextual information should be drawn from relevant documents (such as the constitution, trust deed, mission statement (vision, purpose) and recent plans and strategies).

Paragraph 17

If an entity uses a performance framework, theory of change or intervention logic at its highest level of management or in the governance of the entity, the contextual information should also draw upon that performance framework, theory of change or intervention logic.

Not all entities have a formal framework or intervention logic that sets out their understanding of how they and other entities help bring about the changes that they are seeking. Some do – others don’t.

The Standard requires that an entity that is managed or governed using such a performance framework etc reflect this in its service performance information. This is because it is likely to influence the service performance information that an entity collects and reports, both internally and externally.

Paragraph 18

The entity shall explain the main ways in which it carries out its service performance activities.

Does the entity:

• deliver goods and services directly to individuals, entities or groups (including members)?

• work together with other entities (refer to Appendix A: Reporting on shared performance)?

• deliver goods and services through other entities?

• make grants?

Example 1: Youth Charity

(Provides services for community and social benefit)

Who are we?

The entity is an independent charity with 12 volunteer staff operating mainly from our central office.

Why do we exist?

The mission of the entity is to reduce suicide rates among young people.

What we aim to do

The entity works to fulfil this mission through three strategies:

• Offering supportive counselling to young people to reduce the risk that they become suicidal.

• Providing crisis counselling to young people thinking of suicide.

• Educating those who interact with young people at risk of suicide on prevention, risk detection and response.

Example 2: Youth Charity (more detailed)

(Provides services for community and social benefit)

Who are we?

The entity is an independent charity with 55 staff operating from our central office and five regional outreach facilities.

Why do we exist, what do we hope to achieve, and how we plan to achieve this?

The entity’s mission is to improve the health and wellbeing of youth in the region, particularly those that face social, psychological or economic pressures. It does this by providing youth health care services in a safe, confidential and youth-focused environment and adopting a one-stop shop approach.

The aim of our work is to reduce rates of teenage suicide and measures of teenage risk- taking (including smoking, drug and alcohol use). The long-term consequences of such activities to young people are particularly significant in terms of health, earning capacity and social integration. These consequences are reflected in significant emotional costs to families and individuals and in major costs for many components of government including social welfare, justice, education, police and corrections.

The one stop shop approach makes it easier for young people to access all the services they need in one location and in a coordinated way.

Youth Charity provides a range of services to young people including counselling, crisis support and social and recreational activities. The types of issues that we assist with include mental health, low self-confidence, low self-esteem, low resilience, low aspirations, family problems, sexual health, sexual identity, eating disorders, education and employment, drug and alcohol use and self-harm. We provide some medical services on site and refer youth to other services as required.

We work alongside groups of young people that meet regularly, like Youth Advisory Groups and Youth Health Councils. We have established formal and informal links with many other organisations including primary health organisations, district health boards, Māori health providers, child and adolescent mental health services, sexual health clinics, family health centres, dental health services, various Ministries and groups.

The entity’s ultimate aims are to achieve a sustainable transformative change in the life of a young person through (for example) improved mental and physical health, improved self- confidence and self-esteem, and improved social and personal skills. However, some of the entity’s services aim to reduce the immediate risk of harm or occurrence of risk and problematic behaviour.

We are funded by central government agencies, the Lottery Grants Board and receive donations from other private NFPs. The nature and level of services provided is expected to remain stable over the next few years.

Example 3: Native Bird Trust

(Provides grants to other organisations to achieve its charitable objectives)

Who are we?

The Native Bird Trust (the Trust) is established for the sole purpose of providing grants to other organisations to achieve the charitable objectives of the Trust.

The Trust is funded by a large bequest that is invested solely for the purpose of the distribution of future grants.

Why do we exist?

The mission/objective of the Trust is to support the increase in populations of native birds in their natural habitat throughout New Zealand.

What we aim to do

The Trust provides funding through grant applications to entities that:

• care for and rehabilitate injured birds;

• breed endangered species;

• rid natural habitats of predators that are a danger to native birds; and

• educate people about the risk to native birds of dogs, cats and other predators kept as pets.

Example 4: Foodbank

(Delivery of goods for community and social benefit)

Who are we?

The Foodbank is a not-for-profit registered charity, that operates a self-sustaining shop that makes it easy for anyone to donate groceries to Kiwis in need and for those in need to easily get the food goods required for their family’s wellbeing.

Why do we exist?

Our mission is to provide nourishment and hope to those members in our community in need of support.

What we aim to do

We collect money and food from the local community, including local businesses, and distribute food to local families in need. We work with other agencies to ensure that the food hampers get to those who need them most. We donate surplus food to other community groups in the region who provide drop-in services and shelter services.

Example 5: Housing Trust (Provides low-cost social housing)

Housing Trust provides housing for senior citizens to give them secure housing and a sense of community, at below market rents.

The Trust has built a number of one and two-bedroomed houses close to the shops and public transport in the local region. The houses are grouped together to create small communities.

The Trust employs a property manager who inspects properties regularly and keeps them in good condition.

Studies show the value of communal space to residents’ lives and the importance of social interaction on the quality of life of residents (cite studies, if available and relevant).

Residents are encouraged to take pride in their community and, along with volunteers, help maintain the gardens. The Trust helps residents engage with the local community and each other by arranging monthly outings.

To evaluate whether the Trust is meeting its objectives, the Trust seeks written feedback from residents annually. If an issue arises between these evaluations, the matter is addressed immediately by one or more of the Trustees.

Note

Each entity needs to determine the level of detail that is the most appropriate and meaningful to explain what it does and why, having regard to the users of this information. Entities may choose to provide more detail when their external funding is strongly reliant on securing grant revenue.

There are various ways to present contextual information. Some entities present this information in an infographic style, while others include short videos in their reports.

Planning prompts

• Why does the entity exist – what’s its mission, key objectives? What outcomes or impact is the entity seeking to achieve?
• What goods or services is the entity planning to deliver (to achieve its key objectives) over the medium to long term?
• How does the entity intend to conduct its planned activities, and will this involve working collaboratively with other organisations?

What PBE FRS 48 requires⁷

Consider

Paragraph 15(b)

An entity’s service performance information shall provide users with information about what the entity has done during the reporting period in working towards its broader aims and objectives, as described in 15(a).

What are the key activities the entity plans to conduct in the period in order to achieve its planned objectives and desired impacts on the community?

Paragraph 19

The nature of this information provided to meet the requirements of 15(b) will depend on the circumstance of the entity. An entity is required to consider the following factors in deciding what to report.

1. What is it accountable/responsible for.

2. What it intended to achieve during the reporting period.

3. How it went about achieving its service performance objectives.

4. Other factors relevant to an understanding of an entity’s service performance during the period.

• What are the entity’s strategies for delivering against its key objectives?

• How does the entity monitor progress against its key strategies?

• What is best practice for reporting service performance for entities conducting similar activities?

• What information do funders and other key users regard as important?

• What information do service recipients regard as important?

These factors guide an entity’s decisions about what service performance information to include in its annual report. They build on the principles in paragraphs 6 to 10 of

PBE FRS 48.

• Refer to Table 1 below.

Paragraph 20

In reporting on what an entity has done during the reporting period an entity shall provide users with an appropriate and meaningful mix of performance measures and/or descriptions.

See also paragraphs 21–28 of PBE FRS 48 for further guidance on determining the type and extent of information to report.

• When deciding what service performance information to report, the entity should also consider what performance measures and/or descriptions will be used to communicate what has been done.

• Refer to the discussion below on Performance measures and/or descriptions.

Note

For entities subject to audit, documentation will be required on how both the service performance information and performance measures and/or descriptions were selected.

Deciding what to report

Performance measures and/or descriptions

Balancing the amount of service performance information reported

Table 1: Desired qualities of service performance information⁸

Overarching principles (see paragraphs 6 and 7 of PBE FRS 48)

Service performance information should be prepared with the users of that information in mind. Users include service recipients and funders.

• Is information useful for accountability and decision making?

• Is information appropriate and meaningful?

Qualitative characteristics (see paragraphs 8 and 9 of PBE FRS 48)

PBE FRS 48 uses the term ‘qualitative characteristics’ to refer to the desired qualities of service performance information. More formally, qualitative characteristics are defined as the attributes that make financial and non-financial information useful to users. The qualitative characteristics listed in PBE FRS 48 are:

• Relevance

• Faithful representation (reliability)9

• Understandability

• Timeliness

• Comparability

• Verifiability

Paragraph 9 of PBE FRS 48 explains how these characteristics relate to service performance information.

Relevance and faithful representation are particularly important. For service performance information to be faithfully representative it must be complete, neutral and free from material error.

Constraints on information (see paragraphs 8 and 10 of PBE FRS 48)

All of the qualitative characteristics must be considered when selecting and presenting service performance information.

In practice, some items or sets of service performance information may have more of one characteristic than another. It may be necessary to consider the overall balance of characteristics and make trade-offs between attributes.

The concept of materiality can help in making these and other judgments. An item is material if excluding it or misstating it would affect the decisions and assessments that users make concerning the service performance of an entity.

There are also costs and benefits associated with reporting information. The Basis for Conclusions that accompanies PBE FRS 48 acknowledges that the introduction of

PBE FRS 48 could lead to increased costs for NFPs and explains that high-level approach taken in developing the Standard was intended, in part, to avoid imposing unnecessary costs.

Refer to the discussion below on Balancing the amount of service performance information reported

Note

Remember to document decisions about the selection of performance measures and/or descriptions and what to report. This will assist discussions with the entity’s auditor and be a useful record for the next year.

Note

The service performance information reported externally is not expected to include detailed information on every aspect of every service performance activity undertaken by the entity. This could lead to readers being overwhelmed with too much information and struggling to find the information that is most important to them. It is important that material information is not obscured by immaterial information.

The entity is required to select the service performance information that is useful for accountability and decision-making purposes, by applying the qualitative characteristics of information and the pervasive constraints on information (refer to Table 1).

Example 1: Charity providing youth support services

The mission of the Charity is to reduce suicide rates among young people. The entity works to fulfil this mission through three strategies:

• Offering resources and supportive counselling to young people to reduce the risk that they become suicidal.

• Providing crisis counselling to young people thinking of suicide or self-harm.

• Educating those who interact with young people at risk of suicide about prevention, risk detection and response.

Performance measures and/or descriptions could include:

• Number of service users (this could be in total, for various types of services or by age bracket)

• Percentage of service users reporting satisfaction with services

• Percentage of service users reporting a change in behaviour (e.g. decrease in self- harm)

• Number of suicide awareness sessions delivered to the community

• Number of training sessions/seminars held for youth counsellors

Ways of collecting information:¹¹

• In-house records of number and type of services provided

• Questionnaires that give feedback on services or indicate changes in young people’s circumstances or lifestyle. These can include self-evaluations of progress between the start and completion of a course. Such tools may be developed by the entity itself, be used by a number of entities or be nationally validated measures of clients’ feelings in areas such as well-being, problems, functioning and risk12

• Data on what happens to young people immediately after they finish a programme, such as whether they re-enter education, find a job, or enrol in another programme

• Long-term tracking of a selected group of young people that have used the entity’s services

Example 2: Housing Trust (provides low-cost social housing)

Housing Trust provides housing for senior citizens to give them secure housing and a sense of community, at below market rents.

Performance measures and/or descriptions could include:

• Number of houses made available for low-cost rental, including number added or demolished and replaced in period

• Occupancy/vacancy rates

• Number of residents, including movements in period

• Number of complaints received and resolved in period

• Percentage of residents who report feeling part of a community

• Common concerns raised by residents and how addressed

Ways of collecting information include:

• Register of social housing portfolio

• Record of tenancy agreements

• Register of complaints and how they were resolved

• Tenancy evaluation forms completed each year

Example 3: Museum

The appropriateness of measures will depend on a number of factors including the nature of its collections and exhibitions, the museum’s objectives and what the museum wants to assess.

From the perspective of the museum itself, the objectives could include:

• Assessing visitor satisfaction and experience

• Contributing to make a specific art/science/culture form accessible

• Demonstrating the positive impact the institution is having across the community (social, educational, economic)

Quantitative performance measures for a museum (mainly focusing on visitor satisfaction) could include:

• Number of visits (overall visits, exhibitions, online visits, repeat visits, school visits etc)

• Number of workshops held

• Exhibitions (number held, invitations to hold exhibitions, requests to circulate exhibitions)

• Visitor satisfaction measures

However, if a museum wanted to report on how it was affecting visitors and volunteers (in terms of knowledge, attitudes or behaviours) it could use the following ways of collecting information:

• Interviews with participants and volunteers about the impact of the museum on their lives

• Structured observations of participants and their reactions

• Testimonials (including the use of apps for participants to upload videos)

• Wellbeing measures (for example, for volunteers to provide feedback about their experience)

Example 4: Family Support Service

Family Support Service assists families in need by providing free food and clothing. The food and clothing are collected in several ways including donations of unused goods and donations of used clothing. The donated food and clothing are difficult to value so the entity uses physical quantities and weights to record the volume of items collected and distributed.

Possible performance measures and/or descriptions could include:

• Number of boxes of food distributed (there could be different types of boxes, such as basic ingredients, fruit and vegetables). Larger entities might report quantities as shiploads, truckloads or carloads.

• Number of boxes of clothing distributed

• Weight (in kilos or tonnes) of food redistributed

• Number of people assisted (total, daily average)

• Unusable donations by volume (e.g. skip load, trailer load)

Because the items are difficult to count, photographs of items collected and distributed are used as a digital record.

Example 5: Native Bird Trust

The Native Bird Trust is an independent conservation organisation with a mission to increase the native bird population in New Zealand.

Performance measures and/or descriptions could include:

• Number of bait stations and traps managed

• Number of predators caught

• Number of trees and shrubs planted

• Number of seedlings distributed to other conservation groups

• Number of plant pots made

• Number of school visits (could be in relation to education or planting days)

• Volume of seeds collected and redistributed

• Area cleared of gorse and weeds (or time spent clearing areas)

• Area being managed

• Changes in bird populations (by region)

• Changes in predator populations (by region)

• Changes in habitat (by region)

• Development of land corridors – narrative explanation of work done to safeguard existing areas, connect areas or create new areas

• Submissions made on land development proposals (narrative explanation of action taken by entity and any response)

• What are the entity’s key objectives, what is it accountable/ responsible for?

• What did the entity intend to achieve during the reporting period?

• What activities or outcomes will best illustrate what the entity has done during the period in working towards its broader aims and objectives:

• • the goods or services delivered in period for community or social benefit,

  • the outcomes/impacts achieved as a result of the entity’s activities in the period; or

  • a mixture of both?

• What internal records are already retained on the achievement of the entity’s key objectives/goals for governance purposes (and/or grant purposes)?

• What performance measures and/or descriptions will be used to report on the delivery of service objectives for the period – where will the information come from?

• For new information, what additional systems and controls are required to capture the required information?

• How will we validate the information about what the entity has done in the period for external auditor purposes?

What PBE FRS 48 requires¹³

Consider

Paragraph 29

• Clearly identify the service performance information presented in accordance with the Standard.

• What to call the section of the report where service performance information is presented – statement of service performance is one option.

• Where to locate the service performance information in the annual report.

• Is the service performance information clearly identified? This is important for readers and audit purposes.

• What information should be reported as service performance information, what should be reported in the financial statements and what belongs in other sections of the annual report?

Paragraph 31

• There is no prescribed format.

• Entities develop a format that best meets the information needs of their users.

• Possible formats include graphs, tables, narrative, infographics and explanatory comments in ‘pop-up’ boxes.

• What is the most appropriate and meaningful way to present key service performance information and make the information visually appealing?

• Infographics and icons can be useful for snapshots of information and linking information. Find out what tools other entities use to create infographics.

• Case studies can be useful for personal insights or more in-depth information about an activity or service.

• Feedback from users about services often helps to heighten readers’ interest in the report.

  • Colour and charts can help break up large blocks of text and highlight key information.

  • Think about how the annual report will be accessed. If the report will be accessed mainly through the website then consider how information looks on the screen, and how it works with mobile devices.

  • Would an online interactive report (with features such as page turning, embedded videos, hyperlinks, etc.) be useful and feasible/appropriate?

Paragraph 28

• Service performance information needs to be linked to the financial statements to convey a coherent picture about the performance of an entity.

• Refer to the next section in the guidance — Linking the service performance information with the financial statements

Paragraph 32

• An entity may cross-reference the service information and the financial statements to help users obtain an overall impression of the entity’s performance.

• Consider where cross-referencing between the service performance information and the financial statements would help users better understand the entity’s performance.

Paragraphs 33–35

• Some cross-referencing to other information is permitted, but this is subject to a number of requirements.

• For example, the cross-referenced information must remain unchanged and available over time at the cross- referenced location (important when cross-referencing to information on a website).

• Would cross-referencing to other information enhance the understandability of the service information?

• Think about providing links in the service performance information to case studies or videos available on your website.

• Can you meet the cross-referencing requirements in paragraphs 33–35?

• Would the complete set of required service performance information still be clearly identified?

Note

• Reports that look good are easy to read are more likely to be read. Time spent considering how to best present service performance information is time well spent.

• Service performance information should be consistent with the financial statements, the notes to the financial statements, and other public reports See also Linking the service performance information

Example 1: Usefood

Service performance information about the entity, what it does, how it operates, and what it achieved in the period.

How USEFOOD works

Fighting hunger, reducing waste

5 suppliers

2 tonnes donated food

volunteers

20%

composted

80% reused

2,000

meals

500 people helped

Donate surplus food

We collect surplus food

Sort the food

We compost unusable food

We distribute usable food to 10 community groups

..who cook meals …

…for people in need

Example 2: Youth Counselling

Service performance information about key services delivered in the period.

Example 3: Youth Counselling (detailed)

What we do

Looking ahead

Our locations

Youth Counselling is one of region’s largest/most long-standing provider of counselling support for young people. Young people aged between 14 and 20 can access free, confidential counselling for a wide range of issues. They are offered 10 weekly sessions and can re-refer if they need further support.

We work closely with GPs, mental health service providers and other professionals.

Young people who use our services experience significant measured improvement in their emotional wellbeing and give positive feedback about how our support has helped them.

We will continue to deliver our mental health workshops in schools.

With the help of new staff and funding from other private NFPs we will also be running workshops to provide information and peer support to parents and offering a new drop-in centre.

Suburb 1

Suburb 2

Suburb 3

School 1

School 2

Highlights this year

We saw 105 referrals to the service – up from 98 last year.

Twenty counsellors offered counselling sessions in the year.

"Youth Counselling helped me find a way forward"

Male 16

Personal story to illustrate the impact of the services provided.

We helped the Northern Regional Authority meet its targets to ensure that young people have access to mental health services.

With the support of the Regional Council we have delivered mental health, wellbeing and early intervention sessions in schools and youth centres.

"My counsellor listens to me and that makes all the difference."

Female 17

We have had a successful first year of working with ABC Trust delivering counselling to young people in the Northern Region.

200 young people received free counselling

Example 4: Native Bird Trust

Service performance information about the impact on the environment as a result of the Trust’s predator control activities.

(a) Rodent tracking index trend lines - by location and time.

(b) Impact of predator control activities

• What presentation format will be of most use to the users of the service performance information?

• What current design and formatting expertise do we have within the organisation?

• How do other organisations with similar objectives present their service performance information?

What PBE FRS 48 requires¹⁵

Consider

Paragraph 9(b)

• One aspect of faithful representation is completeness. Completeness implies that the service performance information presents an overall impression of the entity’s service performance with appropriate links to the financial statements.

Paragraph 28

• Service performance information needs to be linked to the financial statements to convey a coherent picture about the performance of an entity.

• The link is generally made, where practicable and appropriate, by reporting on the cost of goods and services.

• Entities that report on the cost of goods and services in the service performance information need to reconcile the total cost of goods and services reported with the expenses in the financial statements.

Paragraph 32

• An entity may cross-reference the service performance information and the financial statements.

How can service performance information be linked with the financial statements?

• Pie charts can show how the entity’s expenditure relates to its main service performance activities.

• Graphics about revenue and expenses can be used along with narrative to explain how increases or decreases in categories of revenue and expenses have affected what the entity has done during the year.

• Narrative can be used to explain how volunteers’ contributions have contributed to an entity’s service performance.

• Some expenses might relate directly to volunteers – for example, volunteer training.

If an entity does not report on the cost of goods and services in the service performance information how else can it link service performance information with the financial statements?

• If an entity has significantly changed its services and has not yet developed costing systems it could describe the staff resource and assets required to support various services.

• If an entity has revenue-generating activities it could discuss how profits from those activities have supported service delivery.

Paragraph 28

• Acknowledge the use of donated goods and services (which have not already been recognised in the financial statements).

• Which, if any, donated goods and services have already been included in the financial statements? Which haven’t?

• Information about how volunteers have influenced service performance could be presented as narrative, narrative and numbers (for example, number of volunteers, number of volunteer hours), a personal story or infographics.

Note

Information about volunteer contributions help readers to understand the entity’s reliance on volunteers in relation to its service performance.

When reporting on costs of goods and services, where appropriate, acknowledge donated resources (including volunteers’ contributions).

Example 1: Cost of outputs

The cost of outputs is determined using the cost allocation system outlined below. Direct costs are those costs directly attributed to an output. Indirect costs are those costs that cannot be attributed to a specific output in an economically feasible manner. Direct costs are charged directly to outputs. Indirect costs are allocated to outputs based on cost drivers and related activity or usage information. Depreciation is allocated on the basis of asset utilisation. Personnel costs are allocated on the basis of actual time incurred. Property and other premises costs, such as maintenance, are allocated on the basis of floor area occupied for the production of each output. Other indirect costs are assigned to outputs based on the proportion of direct staff costs for each output. There have been no changes in cost accounting policies, since the date of the last audited financial statements.¹⁸

Current period

Prior period

Output 1

Output 2

Output 3

Total output expenses

Other expenses

Total expenses (as per statement of financial performance)

Volunteer hours

Example 2: Information about volunteers

The goods and services delivered in the period (as reported in the Service Performance Statement) could not have been achieved with the support of our volunteers.

Key performance activities

Volunteers help us by

Helping people

Driving clients to and from appointments/classes Advocating for clients

Education and networking events

Advertising events, Catering and running events

Connecting people

Setting up a database

Administration

Record keeping, Fundraising

The entity made a surplus $100,000 in the period which will be used to fund increased performance activities next year.

Example 4: Link the financial information with volunteer contributions

The entity’s main activity is to bring people together to share information and create networks. Volunteers organise the annual conference and other meetings – the costs shown in the financial statements do not include any payments to volunteers for their services.

The following example shows the financial and volunteer resources used in running the conference.

Conference financials

Current year

Last year

Total conference revenue

$250,000

$180,370

Total conference expenses

$240,800

$200,000

Surplus/ deficit

$9,200

($19,630)

Annual conference volunteers

Number of steering committee volunteers

Number of general volunteers

• How will we provide an appropriate and meaningful link between the service performance information presented and the financial statements?

• To what extent does the delivery of our planned service performance objectives rely on donated goods and services (including volunteer time)?

• Have we complied with the requirements to present comparative information?

What PBE FRS 48 requires¹⁹

Consider

Paragraph 44

An entity shall disclose those judgements that have the most significant effect on the:

• selection;

• measurement;

• aggregation; and

• presentation;

of service performance information reported that are relevant to an understanding of the entity’s service performance information.

Not all judgements have to be disclosed. There are two parts to this requirement.

• Identify the judgements that have the most significant effect on the service performance information reported.

• Decide which judgements are relevant to a user’s understanding.

Note

PBE FRS 48 does not require that all judgements be disclosed. An entity needs to decide which judgements have the most significant effect on the service performance information reported and are relevant to a user’s understanding.

Example 1: Youth Counselling

Judgements made in the reporting of service performance information

In preparing the service performance information for the period the entity has made a number of significant judgements about what information to present, based on an assessment of what information would be most appropriate and meaningful to users when assessing performance against the entity’s NFP objectives. This was a challenge due to the diverse nature of the entity’s activities and its multiple funding streams, which include grants from government agencies, and donations from individuals and other NFP organisations.

The decisions about what service performance information to present were made in consultation with the entity’s Board, key management personnel and service managers. The judgements that had the most significant effect on the non-financial information presented related to the selection of information about what the entity has done in the period – the “key activities” as reported (and the selection of performance measures for each key activity identified).

The selection of key activities to report was initially based on management’s assessment of where the entity expected to invest the most time and resources in the period (based on budget information). This was further refined through discussions with staff and the Board – as a result five key activities were identified that would best illustrate what the entity has done in pursuit of its NFP objectives.

The entity decided to base its service performance measures around the quantity of services delivered in the year, because this information is already retained for internal management purposes. The entity decided not to report against performance measures that assessed the outcome/impact of the entity’s activities because, at this time, performance measures of this nature are not easily available, reliable or independently

verifiable.

Example 2: Read Aid

Read Aid’s mission is to encourage reading as a means of improving self-confidence. We work mainly with young children and immigrants. Our volunteers take their dogs into schools, libraries and community centres. They read to people and people can also read stories to the dogs. At the request of schools or parents we also work on a one-to-one basis with children.

The governing body has decided to report on the following key activities because they best reflect our mission:

• Number of schools visited and number of children who attended

• Number of libraries visited and number of people who attended

• Number of community centres visited and number of people who attended

• Number of volunteers making visits to schools, libraries and community centres

• Feedback received from participants in the reading programmes Judgements

The service performance information does not report on Read Aid’s one-to-one work with children because that is not its primary focus.

Example 3: Nature Loving

Nature Loving Charitable Trust promotes, supports and undertakes programmes, actions and initiatives to beautify City A. Being involved in our projects gives people a sense of pride in their communities (see comments on our website). We report on the following key activities in our service performance information.

1. A free annual education event which has a different environmental focus each year. The focus of the event this year was the establishment and maintenance of native flora and fauna. This event is run over a period of three days, with the first two days being for schools and the third day being open to the public as a family-oriented event. We partner with the Council of City A, the local office of the Department of Conservation and volunteers in running this annual event. Attendees at the public event are asked to complete a brief satisfaction survey, which also seeks suggestions for future events.

2. Community work, such as painting murals, picking up rubbish from town centres and local waterways, and providing educational sessions on environmental issues in schools. The local community and schools are encouraged to participate in the painting of murals and picking up rubbish. This year, we organised the painting of murals in suburbs M and N, and the picking up of rubbish in suburbs W, X Y and Z and Freshwater Stream.

3. The removal of tagging on behalf of the Council of City A. Members of the public are encouraged to report tagging and we undertake to remove the tagging within 24 hours of it being reported to us.

For more information on our activities, including stories from participants, visit our webpage.

Judgement

The service performance information focuses on the annual education event, community work and removal of tagging. It does not report on other incidental activities.

Example 4: Healthy Foundation

Judgement

The service performance information does not report on our research and work to develop a new course about healthy living for people living with diabetes. We expect to start offering the course towards the end of next year.

The service performance information focuses on how our courses improve the lives of people living with diabetes, as that is our primary focus. Although some of the information we collect gives us feedback on how our participants’ lifestyle changes also benefit their families, this is not our primary focus and we do not collect such feedback in a systematic manner.

Example 5: Foodbank location

We have reported separately on each foodbank in City M because each foodbank operates independently and the food is supplied by local businesses in each suburb.

• What judgements had the most significant effect on the service performance information reported and which of these judgements are relevant to a reader’s understanding of the service performance information?

Consider:

• Selection

• Measurement

• Aggregation

• Presentation

• To what extent is the service performance information reported consistent with the entity’s overall purpose and objectives? If the link to the entity’s overall purpose and objectives is not immediately clear, users may need more information to understand why the information reported has been presented.

• How much discretion does the entity have over the service performance information reported? The more discretion the entity has over what it reports, the more likely users are to be interested in the entity’s judgements.

• To what extent were key users consulted about the entity’s selection of performance measures and/or descriptions and the focus of its service performance information?

• Have the key judgements been documented?

• Has the entity advised the external auditors which judgements it plans to disclose?

What PBE FRS 48 requires²¹

Note

Paragraphs 36 to 39

• In general, comparative information for the preceding period is required.

• Comparative information for all performance measures and/or descriptions for which an amount is reported in the current period is required.

• Comparative information for narrative and descriptive information reported in the current period is required when it is relevant to an understanding of the current period’s service performance information.

• The requirement for comparatives means two year’s information must be reported for any amount included in the service performance information.

• Judgement is required in deciding whether prior period narrative and descriptive information is required.

• Some entities are required to, or choose to, report against previously published prospective information.

• Public sector entities typically have requirements to report actual performance against planned performance.

• Other entities are not generally required to publicly report against budgets, plans or targets, although they may do so if they wish.

Paragraphs 40 to 41

• An entity shall report service performance information consistently (unless an entity chooses in the current period to change what it reports or how it reports, its service performance information).

• If an entity changes what it reports or how it reports, its service performance information (in contrast to the previous period) it shall explain the nature of those changes and their effect on the current period’s service performance information.

• Changes to comparative information are permitted, but not required.

• Careful selection of the information to be reported at the outset will help avoid unnecessary change.

• If an entity has made changes to the information reported, consider explaining why. For example, its primary objectives have changed, or a new performance measure is now used because it is more relevant or reliable than the previous measure?

Note

Comparatives are required in the first year of reporting in accordance with PBE FRS 48.

Therefore, decisions about what information to report, how service performance will be measured and presented, and if any new processes are required should be considered as early as possible.

Example 1: Prior year comparatives

Support Dogs (the entity) grants funding to NFP entities that train assistance dogs to support individuals with various disabilities and disaster rescue. The number of dogs trained is measured based on the number of dogs that meet international guidelines for the specialist service for which they are trained. As part of the grant conditions, recipient entities are required to provide evidence on the number of dogs successfully trained in the period.

Grants distributed

20X2

20X1

Type of assistance

No of entities

Total $

No of entities

Total $

Diabetes

1,500,000

1,300,000

Epilepsy

500,000

500,000

Help for physically disabled people

78,000

75,000

Disaster rescue dogs (e.g. earthquakes)

300,000

300,000

Other grants

2,500

-

-

Total grant expenditure for period

2,380,500

2,175,000

Example 2: Reporting against targets

Assistance Dogs (the entity) trains assistance dogs to support individuals with various physical disabilities.

Previously the entity published training targets for the current and preceding period. Number of dogs trained means the number of dogs that meet international guidelines for specialist assistance dogs.

Number of dogs trained

20X2

20X1

Target

Actual

Target

Actual

Number of dogs trained

This year we planned to train 30 dogs, but we had fewer staff than expected and a number of dogs were not suitable. We are in the process of recruiting more staff and are reassessing our method of identifying dogs suitable for this type of training.

Example 3: Discontinued measure

In the past we have used average waiting time for a request to be satisfied as a measure of the unmet demand for our services. A few years ago, the average waiting time was nine months. Now that the average waiting time is less than two months, we have decided not to report this measure.

Example 4: New measure

A new measure known as the Client Evaluation Tool has been developed to measure the effectiveness of our assistance dogs in improving quality of life for physically disabled people. The tool is administered before receipt of the dog and two months afterwards.

Example 5: New activity

Help for Hikers (the entity) helps people to enjoy their outdoors recreation safely. The entity receives funding from a variety of sources, including from other NFP entities. It also has an online shop which sells outdoor safety resources (with all profits used for the entity’s charitable purpose), a website, and social media page.

The entity works collaboratively with other entities with the aim of reducing injuries, the number of search and rescue call-outs and fatalities in the outdoors.

At the end of last year, the governing body agreed to train its own search and rescue dogs and developed a strategy for sourcing and training the dogs. This activity was also included in the budget.

Volunteers with appropriate qualifications (regarding dog psychology and training) assess dogs that are available for adoption for their suitability to undertake search and rescue activities. Dogs with the appropriate temperament and ability to learn are adopted by a volunteer and trained to search for people lost and/or injured in the outdoors.

Example 5: New activity

Activity

20X4

20X3

Training courses for volunteers

Number of courses presented

Number of attendees

240

178

Webpage – Be prepared in the outdoors

Hits 18,654

Hits 15,267

Social media page

Hits

Likes

Hits

Likes

34,789

30,546

10,436

4,198

Search and rescue operations conducted – no serious injuries

Search and rescue operations conducted – moderate to serious injuries

Search and rescue dogs trained – new activity

-

Has there been any changes in the nature of the entity’s activities from the prior period or from what was planned?

When considering the extent of changes to the service performance information in comparison to the previous period, it is useful to consider why the changes are being proposed. Do the changes ultimately result in the user receiving better information on the

performance of the entity?

Initial planning

• Check that you have an engagement letter. Amongst other things, it will cover:

• The services to be performed

• What you/your staff are responsible for

• The fees

• The start date and completion date.

• Talk to your auditors about what information you are planning to report, why you believe this will meet the requirements of the Standard and what evidence you will have to support that information. Identify the key decisions that you’ve made to date.

• Find out what the auditors will want to review, what they need from you and the key dates in the audit plan.

• Set dates for the internal review and sign-off of the service performance information and schedule the meetings.

Roles and responsibilities

• Identify the first point of contact for the auditors.

• Identify any new roles and responsibilities for collecting checking and reporting information.

Getting information ready

• Assemble as much information as possible in advance. Write a file note explaining how to find important documents and keep as many as possible together.

• Where you will be obtaining information from non-financial databases, consider if the relevant system’s reporting functionality is adequate for audit purposes (date sensitivity of report generation, ability for aggregated data to be tested).

• Identify what will need to be documented throughout the year.

• Establish controls to make sure that information is collected, complete and reviewed.

• Do periodic checks to make sure that information is collected, complete and reviewed.

Example 1: Youth Charity

Studies support the effectiveness of integrated services for young people [cite studies]. Young people who may not otherwise have sought help are accessing the services they need through one stop shops.

Young people report being highly satisfied with these services. Pre- and post-counselling intervention assessments show that young people report developing healthier coping strategies and increased self-belief. Evaluations have demonstrated an increased understanding of stress and management techniques. This approach seems to work well for many young people, although those with more serious health issues may benefit from more direct specialist care.

Example 2: Foodbank

Some recent research [cite study] looked at how food banks are embedded in a broader environment of community organisations, resources and networks. The study found that food banks are important to people because of the way people feel when they are there, as well as because of the help that is offered.

We have therefore created areas for people to socialise at two churches where we have distribution centres.

Example 3: Emergency assistance

As part of our ongoing process of seeking feedback we learned that some clients were having to queue for extended periods. This negatively affected their view of our services and is not the way we want to treat clients. We have therefore changed our process to greet all clients on arrival and assess whether we can help them immediately or need to set up an appointment. We have allocated more volunteers to service x/location x to help greet people and make these assessments.

Example 4: Independent evaluation

Breakfast Club sets up breakfast clubs in schools and helps run the clubs for the first year.

Last year we participated in an independent evaluation of breakfast clubs across the region. One of the objectives of the study was to explore schools’ perceptions of whether breakfast club provision has achieved the intended outcomes for children. The researchers carried out phone interviews, and face to face interviews with school staff (those involved in running the breakfast club, teachers, support staff, the head teacher or other members of the senior leadership team), partners (governors, school caterers or other partners), and pupils who attended the breakfast clubs. Parents were also invited to take part in a survey.

The study concluded that [add findings].

The study has given us better data to encourage schools to set up clubs, to recruit volunteers and to obtain funding.

Example 5: Trialling new method of delivering services

In the past we have operated offices in the main centres. Over the last year, we have also used a bus to offer education and support services in rural communities. The bus operates in public places such as shopping centres and libraries and we set up information stands in nearby public buildings. The team is made up of health professionals, counsellors, financial advisors and volunteers. The team is available to talk to people, offer advice and distribute information pamphlets.

We will decide whether to continue the mobile service at the end of this year. In the interim we are collecting data on how many people use the mobile service that would not otherwise access our services.

Example 1: Wildlife Trust

In the period the Wildlife Trust has worked together with the Nature Trust to achieve certain service performance objectives, namely in the form of providing training and support to planning staff in local authorities to demonstrate how wildlife sites and networks can be incorporated into planning policy.

Local Authority 1

Local Authority 2

Local Authority 3

Training

Wildlife Trust delivered 2 training sessions

Wildlife Trust delivered 2 training sessions

Wildlife Trust and Nature Trust jointly delivered 3 training sessions

Support

Wildlife Trust staff met monthly with local authority staff

Wildlife Trust staff met monthly with local authority staff

Nature Trust met monthly with local authority staff

Wildlife Trust participates in projects led by other entities which are aligned with our service performance objectives. This year we participated in the following projects.

BEE Trust has a project to improve the roadside habitat for bees. Briefly describe the project….

Wildlife Trust took the lead on improving the habitat on 10 road verges in the region.

Wildlife Trust has made a commitment to manage these 10 road verges for the next three years.

Bird sanctuary project is led by Department X and Incorporated Society Y. Briefly describe the project….

During the year volunteers planted 30,000 native trees and regularly checked predator traps. Wildlife Trust supported this project by informing its members about the activities and arranging transport. Wildlife Trust volunteers helped plant trees (100 people in March and 120 people in August) and made up 20% of the trap checking volunteers.

Wildlife Trust donated $5,000 towards the cost of traps and Wildlife Trust volunteers donated 2,000 plants.

Annual beach clean is led by Nature Trust. Briefly describe the project….

Wildlife Trust supported this project by informing its members about the event and arranging transport.

Wildlife Trust volunteers made up 150 of the 1,000 that attended. X amount of rubbish was collected at the event.

Nature Foundation has partnered with Entity X to support a project to eradicate predators (rats, weasels and stoats) in City X. The two organisations have jointly funded a project director for two years and start-up costs.

The Foundation encourages residents to trap pests in their backyards. It distributes traps to community groups who make them available to households and monitor their use. Individual households report back to the community groups about what they have caught. This year the Foundation has focused its efforts on Suburb S. In order to find out more about the number and location of predators in Suburb S, the Foundation and Entity X investigated the waste water system (zero rats found) and used camera traps.

The Foundation has distributed 1,000 traps to community groups. 500 households now have traps and have caught xx rats this year.

Entity X is focusing its efforts on parks and reserves and works with a range of community groups. Entity X has provided xxx traps to community groups. One of those groups, Group G has used 300 traps to catch xx rats at Reserve R. Group G has used chew cards to monitor population levels in the Reserve. The cards are used in accordance with the guidelines issued by XX. Rat numbers have reduced by 30% in Reserve R over the last two years.