Guideline on Performance Measurement Strategy under the Policy on Transfer Payments

The purpose of this guideline is to assist deputy heads and departmental managers in meeting their responsibilities under the Policy on Transfer Payments and the Directive on Transfer Payments as they relate to performance measurement strategies (see the Appendix for relevant excerpts from both the Policy on Transfer Payments and the Directive on Transfer Payments).

A performance measurement strategy (PM strategy) in the context of a transfer payment program is the selection, development and ongoing use of performance measures for decision-making in the context of program management. A PM strategy will assist in ensuring that there is adequate and relevant information to support deputy heads and departmental managers in:

• the continuous monitoring and assessment of the results of the transfer payment program including its relevance and effectiveness as well as the efficiency of the management of the program;
• making informed decisions and taking appropriate timely action with respect to the transfer payment program, including the amendment or termination of terms and conditions and/or funding agreements, where appropriate;
• supporting statutory requirements under section 42.1 of the Financial Administration Act^[1] and ensuring that the information gathered will support an evaluation or review of relevance and effectiveness of the transfer payment program and inform decisions on the continuation, amendment or termination of the terms and conditions; and
• providing effective departmental reporting on the relevance and effectiveness of the transfer payment program.

The Policy on Transfer Payments requires a deputy head to establish a PM strategy for a transfer payment program at the time of program design, and ensure that it is maintained and updated throughout the life cycle of the program. This requirement is consistent with the Policy on Management Resources and Results Structures which sets out the expectation that departments collect and use sound financial and non-financial program performance information as articulated in the department's Program Alignment Architecture.

This guideline, which focuses specifically on performance measurement strategies for transfer payment programs, is a companion document to Supporting Effective Evaluations – A Guide to Developing Performance Measurement Strategies which provides a step-by-step process for identifying and planning for the collection of performance information to effectively support program evaluation.^[2] In preparing a PM strategy for a transfer payment program, consultation with the departmental evaluation function and/or departmental performance measurement advisors in its development is strongly encouraged. These units have subject matter expertise in the selection of performance measures or indicators and in data collection. They can also offer assurance that the PM strategy will effectively support an evaluation of the transfer payment program. Consultation with other departmental functions, such as the corporate planning function, is encouraged as well.

A PM strategy for transfer payment programs should include, as a minimum, the elements identified in the following figure.

Figure 1: Elements of a PM Strategy for Transfer Payment Programs

The Policy on Transfer Payments requires that a deputy head ensure that the PM strategy for a transfer payment program is maintained and updated throughout the life cycle of the program. The PM strategy is to be an evergreen document that is changed as required to ensure that it remains relevant and effective in meeting its purposes. Consultation with the departmental evaluation function is encouraged, especially as program managers are responsible for implementing and updating the PM strategy to ensure that it is relevant to the program and that credible and reliable performance data are being collected to effectively support evaluation.^[3] Consultation with other stakeholders is also encouraged.

Updating of the strategy may be required for reasons such as:

• The measures or indicators chosen are proving not to be valid, reliable and credible;
• Better data sources have become available;
• Data collection is proving to be difficult or expensive;
• Program design and terms and conditions are modified.

The PM strategy is a departmental document for internal use. Although this document does not need to be approved by or sent to the Treasury Board Secretariat, it may be shared for developing common understanding and knowledge of the transfer payments programs.