The Strategic Management Cycle has been updated for the 12 months beginning October 1997 and is attached. As you will be aware, this publication is produced each year to assist managers with regard to central agency reporting requirements and strategic management practices. It is particularly relevant to Budget Sector agencies.

Please note NSW Treasury's new requirement for corporate services savings plans and for stronger links between budget allocations and agency outputs/outcomes. Accordingly, agencies are asked to include in their reply to the October forward estimates letter, comment on any planned reallocation of resources between programs or between corporate services and service delivery and the impact of such reallocation on outputs and outcomes.

Agency enhancements bids and capital bids will also need to be more strongly justified in terms of the impact on agencies' outputs and outcomes. In assessing both the existing level of agencies' resources and their enhancement bids, the Budget Committee will also take into account available information on agencies' operation efficiencies. This will include data on corporate services and other overhead costs and data on agency's service delivery costs relative to interstate or internal benchmarks.

It would be appreciated if you would provide a copy of the Cycle to all senior managers and other appropriate staff in your organisation.

C. Gellatly
Director- General

 

Introduction

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The Strategic Management Cycle is produced cooperatively by the Premier's Department, Treasury and The Cabinet Office.

This publication is designed to establish the environment in which NSW public sector agencies are required to operate in relation to central agency reporting requirements.

The Cycle has been developed as an aid for managers within the NSW Government framework and is particularly relevant for managers of agencies solely or predominantly financed by the Consolidated Fund (ie, Budget Sector Departments and Authorities).

The Cycle includes:

the legislative program


Performance Agreement reporting


mandatory central reporting requirements (eg, EEO).


the Budget Process


October 1997

Treasurer issues forward estimates allocations
Release of recurrent forward estimates allocations to Ministers and agencies and requests for enhancement proposals and capital program proposals. Treasury will specify the format for submission of this information by agencies, which will include the requirement for service delivery agencies to specify the output and outcome implications of their proposals. Corporate services savings plans will also be required.

Agencies provide Management Information and Technology Management project proposals to the Government Information Management Board
Agencies are required to provide funding proposals consisting of fully developed business cases and benefits management strategies for new Management Information and Technology Management projects to the Government and Information Management Board for the preparation of recommendations to the Budget Committee of Cabinet (refer Treasury Circular 97-11)

Agencies provide EEO reports to ODEOPE (Departments and Health Services)
Under part 9A of the Anti-Discrimination Act, 1977 Departments and Health Services are required to report by 1 October on the achievements of their Equal employment Opportunity (EEO) Program outcomes.

Agencies provide Ethnic Affairs Implementation Plans to Ethnic Affairs Commission.
All agencies are required to submit to the Ethnic Affairs Commission before 1 November 1997 their Ethnic Affairs Implementation Plans for 1997-98. These should contain ethnic affairs outcomes achieved, as well as proposed initiatives for the coming year(s).

November 1997
Agencies respond to forward estimates and put forward enhancement and capital program proposals
Enhancement and capital program proposals are provided by Agencies in response to the October allocation letters.

Agencies are required to provide an estimate of the dissection of total agency expenses across their programs, together with estimated output and outcome information for 1998-99 to 2001-2002. Comment is also required on any planned reallocation of resources between programs, between corporate services and service delivery and the impact of such reallocation on outputs and outcomes. Agency enhancement bids and capital bids will also need to be more strongly justified in terms of the impact on agencies' outputs and outcomes. Capital Investment Strategic Plans are also to be submitted to Treasury at this time and all major project proposals will need to be supported by economic appraisals and where appropriate, value management studies in accordance with the Total Asset Management Policy. Agencies are also to provide plans to achieve corporate services savings and to identify capital items intended to support corporate services efficiencies.

December 1997
Review of Budget Submissions
Treasury and other central agencies commence review of Minister's Budget Submissions (recurrent and capital) and prepare advice for the Budget Committee.

January 1998
Review of Budget Submissions
Continues

Agencies submit legislative program for Budget Session

Agencies provide membership of Government Boards and Committees

Agencies are required to submit through Ministers their legislative proposals so The Cabinet Office can draw up a legislative program for the Budget Session of Parliament.

Agencies provide membership details to the Premier's Department. The Premier's Department maintains a database of the membership of Government Boards and Committees to keep track of upcoming vacancies and monitor the representation of women and members of groups specified in the EEO legislation.

CEO's performance progress review with Ministers

Chief Executives are to discuss with their Minister progress with organisational and personal performance.

February 1998
Budget Committee develops Budget
The Budget Committee commences Budget preparation in the light of Minister's submissions and Central Agency advice.

Agencies finalise Cabinet Minutes for Budget Session
All Cabinet Minutes proposing legislation for Budget Session are to be submitted to The Cabinet Office.

SES officers discuss performance agreements with CEO/Managers
SES officers should discuss with CEO/Managers progress with personal performance well before the end of the financial year.

March 1998
Treasurer issues Budget recurrent and capital allocation letters.
The Treasurer writes to Ministers advising agencies' Budget allocations. agencies are requested to provide Treasury with program and expenditure category apportionment of their allocations and to provide material for the preparation of the State's Budget Papers. Service delivery agencies participating in the Statements of Financial Performance (SFP) exercise will also provide draft SFP.

Agencies plan for review of program performance
As stated in Memorandum 94-22, performance improvement is an integral part of good management practice. An appropriate mix of performance improvement tools such as program evaluation; audits and reviews; benchmarking; service standards; should be included as part of the corporate planning process.

Premiers' Conference and Loan Council meeting
The Prime Minister's Annual Premiers' Conference meets to determine the level of general revenue funds available to the States, while the Loan Council sets the borrowing allocation for the coming financial year.

April 1998
Ministers/Agencies adjust 1998-99 plans in line with resource allocation
Having received advice of their recurrent and capital allocation, agencies need to allocate resources to corporate strategies and initiatives in line with budget allocations.

Agencies respond to Treasurer's 1998-99 allocation letters and provide draft Statements of Financial Performance.
Agencies provide requested information for inclusion in the Budget Papers.

May 1998
Treasurer presents 1998-99 State Budget
The Treasurer brings down the Budget and tables the Budget Papers in Parliament.

Previous Budget Papers have comprised:

1. Budget Speech
2. Budget Information
3. Budget Estimates
4. State Capital Program
5. Appropriation Bills
6. Government Finance Statistics and Loan Council Reporting.

Global Budgeting provides significant flexibility for Ministers to move funds between programs and line items within their total budget constraint. The Government, however retains an interest in certain types of expenditure such as corporate services and may set targets for savings in that area. An explanation of the background to Global & Target Budgeting is provided in Treasury Technical Paper, Report on the Review of Budget Process, December 1988.

An overview of the State's financial management reform program can be found in the Treasury publication Excellence in Financial Management - Budget Sector Reform June 1993. For a detailed description of the Budget processes, refer to the Budget Procedures Manual May 1994. Budget papers are also now available on the Internet at http://www.treasury nsw.gov.au

CEOs annual Performance Review with Minister

Agencies submit Information Management and Technology Strategic Plan

Agencies submit Asset Strategy to Treasury

June 1998

Chief Executives are to discuss with their Ministers progress with organisational and personal performance.
Agencies are required to submit their Information Management and Technology Strategic Plan to the Government Information Management Board.
Agencies are required to submit their Asset Strategy to Treasury. The Asset Strategy incorporates strategic plans for capital investment, maintenance, disposal and accommodation.

July 1998
Agencies align corporate plans to government policy and complete final draft plans for the 1998-99 year
Agencies corporate plans must be aligned to Government policy direction and within budget to ensure appropriate, efficient and effective service delivery.

Agencies submit legislative programs for Spring Session
Agencies are required to submit through Ministers their legislative proposals in July so The Cabinet Office can draw up a legislative program for the Spring Session of Parliament.

Agencies provide EEO reports to ODEOPE (Authorities and Corporations)
Under Part 9A of the Anti- discrimination Act, 1997 Declared Authorities and State Owned Corporations are required to report by 1 July on the achievements of their Equal Employment Opportunity (EEO) Program outcomes.

Agencies provide the Premier's Department with information regarding use of consultants
Agencies are required to provide the Premier's Department with details of all consultancy engagements for the financial year just ended, by 31 July each year.

Premier requests input for statement for opening of Parliament
The Cabinet Office also requests input from agencies by August for the statement for the opening of the Spring Session of Parliament.

CEOs sign new Performance Agreements
CEOs meet with Ministers to establish their Performance Agreements for the new financial year. Completion by the end of July will allow other SES officers in the agency to renew their own Performance Agreements.

August 1998
1998-1999 Statements of Financial Performance agreed
Agencies will prepare draft Statements of Financial Performance (SPF) for the 1998-99 financial year based on a pro-forma provided by Treasury. These statements will reflect financial and non-financial information current at the time the 1998-99 Budget was tabled in May 1998. The main purpose of this exercise will be to ensure that agencies are comfortable with reporting under the SFP format and accordingly the documents will be endorsed at official rather than Ministerial level.

Agencies finalise annual reports
The Annual Reports (Departments) Act and the Annual Reports (Statutory Bodies) Act require those agencies with a 30 June year end, to submit their Annual Reports to Ministers and a copy to the Treasurer by 31 October.

Agencies that have been selected by the Ethnic Affairs Commission to enter into an Ethnic Affairs Agreement are reminded of the requirement to report the outcomes in their Annual Report (refer Building on our Cultural Diversity - Ethnic Affairs Action Plan 2000 - White Paper 1996)

Agencies send accounts to the Auditor General
The Public Finance and Audit Act requires Departments s45 (D) (1) and Statutory Bodies s41 (A) (1) to prepare and submit draft financial statements within 6 weeks of the end of the financial year (ie, by mid August) to the Minister and to the Auditor-General for audit. The form and content of the financial statements is described in the Public Finance and Audit Act and Regulations.

Agencies finalise Cabinet Minutes for the Spring Session
All Cabinet Minutes proposing legislation for the Spring Session to be submitted in August to The Cabinet Office.

Agencies provide input for the opening of Parliament
Agencies' input is required for the statement for the opening of Parliament.

SES annual performance review
SES officers should discuss with CEOs / Managers progress with personal performance well before the end of the financial year.

SES officers sign new Performance Agreements
SES officers meet with CEO/Manager to establish Performance Agreements for the new financial year. Performance Agreements should be completed by the end of September.

September 1998
SES Performance Agreements are completed.