Effectiveness and efficiency: stories from the public sector
Efficiency thinking
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Corporate and back-office improvements
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South Taranaki District Council
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External Reporting Board Setting a clear purpose, defining the organisational culture, and emphasising cost-effectiveness were key foundation stones for this new agency. https://www.oag.govt.nz/2012/efficiency-stories/efficiency-thinking/external-reporting-board https://www.oag.govt.nz/@@site-logo/logo.png
Setting a clear purpose, defining the organisational culture, and emphasising cost-effectiveness were key foundation stones for this new agency.
Start as you mean to go on
Making every dollar count is "in the bones" of the External Reporting Board (XRB), according to Chief Executive, Tony Dale. As a new organisation, the XRB had the opportunity to establish the culture it wanted from the outset.
The mandate for the new incarnation of the Accounting Standards Review Board was given in February 2011, and the XRB's doors opened on 1 July 2011. Driving the pace is the need to develop new accounting and auditing standards – including separate standards for for-profit entities and public-benefit entities – the first of which was put in place on 1 December 2012.
After Mr Dale was appointed in April 2011, one of the first things he and the Board did was outline the culture that they wanted. "The Chairman and I had both worked at the Office of the Auditor-General and the Treasury, and had an inherent ethos of value for money," he says. "Spending government money effectively is a mindset that stays."
Effectiveness is balancing the output/input equation. Efficiency is delivering the maximum amount of output for minimum amount of cost.
Defining the culture was an explicit and deliberate process that he recommends any new organisation start with. "We had a clear idea of what sort of organisation we wanted to be and that was to be cost-effective. We also knew we wanted to have a culture of belonging and collaboration, and all our decisions flowed from that."
This made selecting everything – from premises to staff – easier. "We wanted premises that were professional but not flash and encouraged team work," he says. All job descriptions and performance agreements were developed in-house and reflect the focus on efficiency. The selection process was about finding people with "not just the right technical skills" but also with the "values and ethos of the public sector". These were tested through interview questions and reference checks.
"It's a way of thinking," he says. "It's not mapped out and it's not formalised in policies." This has been made easier by the fact that XRB's 15 staff are all "cut from the same cloth". They are all professionals, and most of them are accountants with similar values and expectations.
As the head of a small organisation, most of the invoices cross Mr Dale's desk, so he sees "what it's costing to fly people around, do the cleaning, cater for meetings". He says it's the little things that add up. "If we were to have an all-day meeting, we determine the starting time by balancing the cost of flying people into Wellington on a later and cheaper flight with asking them to stay longer and pay for their accommodation.
"We are using taxpayers' money and every dollar counts. We are comfortable that we have created a culture and structure that encourages and rewards, and all this is done in a cost-effective way."
Based on an interview with Tony Dale, Chief Executive, on 22 June 2012.
Disclaimer: This case study is the entity's story – we have not audited the facts but have confirmed with the entity that its story is fairly represented.
Organisation's purpose:
The XRB prepares and issues accounting, auditing, and assurance standards and liaises with comparable organisations in order to contribute to creating dynamic and trusted markets and economic growth that delivers greater prosperity, security, and opportunities to all New Zealanders.
Type of organisation: Crown entity
Number of full-time equivalent staff: 15
Number of customers/clients:
Most New Zealanders:
1. Users of financial reports – for example, investors, analysts, ratepayers, taxpayers;
2. Preparers of financial reports – for example, accountants and advisors; and
3. Auditors.
2011/12 Expenditure – $3,396,000
2011/12 Total assets – $2,457,000
Website: www.xrb.govt.nz