NSW Audit Office - Better Practice - 1995 - Joint Operations in the Education Sector

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best practice is simply the best way to perform a process, including the desire to learn and adapt others leading-edge ideas to deliver world class standards of performance	The development and issue of this Guide to Best Practice flows from the requirement that agencies in the public sector have to strive for best practice. This Guide to Best Practice is designed to provide direction to senior public sector management in the education sector to meet best practice with regard to joint operations. Best practices have been derived from observations at various joint operations in the NSW educational arena. Practices are primarily suited to fully integrated sites, but are also applicable to co-location joint operation models. This publication is equally beneficial to agencies contemplating joint operations outside the education sector. Many of the practices stated may currently be undertaken at existing joint operations, however benefit was seen in providing a summary of all relevant consideration points. Best practices with respect to joint operations are provided within the following broad areas: Establishment, Management, and Effectiveness. Maintenance of best practice requires continuous improvements in cost, quality and timeliness through the adoption of leading edge management techniques and technologies. Key result areas of best practice are shown below.



the success of any operation is heavily dependent upon good planning	The establishment phase sets the foundation upon which the success of any joint operation will be built. Establishment spans the formation of a project steering committee, the drafting of an agreement between partners, capital construction of site and facilities (including refurbishment or modification of existing site and related facilities) through to marketing the joint operation prior to opening.


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an effective steering committee facilitates a smooth transition from planning to policy implementation phase	Steering Committees comprise a number of suitably qualified, representative individuals who are chosen to brief the Minister on the best mechanism to introduce and operate a joint operation. The researched conclusions and action oriented directions provided by a Steering Committee facilitate a smooth transition from planning to policy implementation phase. The following practices should exist: The Steering Committee is to be established by the Minister(s) responsible, having regard to members pre-defined background and experience requirements. Clearly articulated Terms of Reference and appropriate time frames, including frequency of meetings and documentation standards for meeting minutes, should be developed.
	The Steering Committee members should include appropriate representation from all partners and be independently chaired. Community consultation and/or liaison should be an integral factor in the conduct of Steering Committee business. The Steering Committee should define a corporate strategy for the joint operation consistent with government policy. The Minister should instruct the Steering Committee to conduct an economic feasibility study and then report findings. The economic feasibility study report should canvas the following issues: demographics, financial appraisal, demand and supply analysis of education and possible savings from options (singular provision, co-location, integrated facilities or do not proceed). The feasibility study should include an asessment of potential sites. The Steering Committee should investigate the legal status of any proposed joint operation and recommend options. For example: fully integrated Body Corporate status established by an Act of Parliament and accountable via the tabling of an annual report, or co-location status with no legal contracts and accountable via individual organisations ministerial reporting regimes. The Steering Committee should finalise work with a comprehensive Memorandum of Understanding that defines the intentions, powers and limitations of parties to any agreement.


a joint statement of commitment to the achievement of a successful outcome	A document called a Memorandum of Understanding (MOU) has been adopted as the norm when organising joint operations between government based providers. A MOU should detail the set-up and operational issues relevant to ensure control and accountability structures are in place. In the absence of a formal contract, there should be a Memorandum of Understanding. The MOU should: Be evidenced in writing, dated and duly executed by all parties to the agreement.
	Detail the aims and objectives of the joint operation so that they are consistent through to corporate planning stage. Identify the composition and charter of any management structure (ie a board or committee) established to carry out the objectives of the operation. Contain information concerning the Board's authority, specific roles and responsibilities, particularly those relative to: operational and financial controls; compliance with laws and regulations; and financial reporting. Set the frequency and general timing of Board meetings. Define the Board's reporting requirements. Set guidelines for the Board's relationships with management and stake holders, and with internal and external auditors. Detail internal and external auditing arrangements for the joint operation. Detail listing of resources initially provided by each party (both in dollar terms and ratios). Contain documentation on the basis of contribution ie. equal share or some other basis, eg per student capita. Provide identification of any liabilities and asset: contribution; ownership; protection; and recording in schedules. Document mechanisms to compensate a party in the event of an inequitable contribution. Detail funding arrangements, financial management and reporting requirements. Contain dispute resolution procedures and termination arrangements in the event of a break-up. Provide for sub-agreements that may be drawn up to contain information pertinent to corporate management issues. Consider industrial matters, determine the employing authority in terms of personnel salary payments, superannuation, leave loading, etc.


building infrastructure on time and within budget	Capital works planning is integral to bring about the transition of a new site or refurbishment of an existing site into an aesthetically pleasing, quality learning environment. Integral stages include project planning and tracking and control. *Project planning* involves the identification of:
	The likely capital scenario out of a number of options What needs to be accomplished - ie. an objective. The steps required to do this - ie. tasks or activities. An estimate of the likely duration of each of these tasks. The sequence in which these should be done - ie. dependency links or predecessors. The resources required. The costs to be incurred. The likely completion date - ie. scheduled finish date? The likely budget - ie. scheduled costs? Effective project planner's: Clearly document the project scope. Maintain task and resource information to form a 'planned' project outline, ensuring adequacy, cost and availability of resources for the joint operation. Set clear time frames and ensure specification of correct task relationships (eg. a finish to start relationship means one task must finish to allow the next task to start, etc) to ensure optimum delivery. *Tracking and Control* involves asking the questions: Which tasks have started and when - ie. Actual Start? Which tasks have finished and when - ie. Actual Finish? How advanced are tasks that have commenced - ie. % complete? How many resource hours were expended? What costs have been incurred? It also involves: Ensuring budget controls and mechanisms for monitoring expenditure are in place. Implementing procedures for introducing some project variations. Implementing a system to monitor and report progress to a Steering Committee via a Project Manager. Project management structures accommodating a team approach with clearly defined responsibilities are conducive to best practice.


telling others about the service on offer detailing place, promotion and price advantages	Marketing is about informing potential students, and the general public about the planned or actual service provided. It is important to publicise joint operations prior to opening to ensure the community is fully informed of the services available to them. Ongoing marketing is also important to reflect changes in services being provided or to attract students from unexplored avenues. Marketing includes the following requirements: Establish an integrated marketing strategy covering 'product' (high quality education), 'place' (market area consisting of a geographic region), 'promotion' (advertising of quality of education, flexible methods of delivery, etc) and 'price' (cost recovery versus public equity) strategies for the joint operation
	Establish a unique identity and market niche for the services provided by the joint operation. Define the market area for the joint operation. Usually this is geographically based. Ensure marketing campaign targets local papers, surrounding high schools, parent and teacher associations and networks in an attempt to publicise the joint operation. Ensure ongoing marketing is supported by market research and customer observations to project a favourable image of the joint operation. This may involve communicating the joint operation's subjects, values, strategies and plans, policies and operations, and results and achievements, both externally and internally. Supplement advertising to inform the community and potential students by holding open days, exhibitions, presentations, etc to publicise activities/policies of the joint operation. Develop an external communications policy or code of practice that determines who is responsible/accountable for communications, and inform all staff of procedure for official public comment. Ensure telephone/reception facilities are maintained to present a positive image, as should all publications and written communications. Train staff in effective communication techniques and provide media relations courses for those personnel who liaise with the media. Follow government guidelines when applying student fees.
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effectiveness in deciding what has to be done, doing it, and doing it in an effective manner	Good management can be defined in terms of the level of effectiveness in handling, discharging and directing an individual or institution in line with a conferred responsibility. Good management arrangements are needed to provide services efficiently and effectively in an increasingly demanding environment, and to manage priorities with limited resources. This section on Management covers the issues of Strategic Planning, Organisational Structure, Business Unit Management and Resource Management. Resource Management is broken up into its resource components of: Human, Financial, Information, Natural and Physical.


	Vital to the good management of each joint operation is the extent to which the objectives of each joint operation are: Clear; understood, well integrated Reflected in management plans and the organisation structure Reflected in delegations of authority and decision making.
	The hierarchy of objectives to assist the management of joint operations is shown below.

	The 1990s have seen senior management set clear organisational Missions/Visions/objectives. Middle managers and general staff are more likely to be in unison with corporate objectives if they understand, control and monitor the sub-process which neatly fit into a larger process hierarchy. Organising and viewing joint operation's from a 'process' management perspective rather than a 'functional' perspective ensures that managers have both functional (business unit) and process (task) responsibilities. This allows the setting and monitoring of performance indicators on process efficiency and organisational effectiveness. Performance indicators allow the measurement of key performance 'drivers' and key performance 'outcomes'. Key performance drivers are aligned with what happens inside business processes while key performance outcomes are linked with what the business wants to achieve from business processes. Management of key performance drivers allows early detection and changes in processes rather than relying on what happens with the results from those processes (key performance outcomes).


organisational strategies to implement corporate objectives	All joint operations should develop a strategic plan consistent with legislative mandate, mission statement and corporate objectives which includes the following: Organisational objectives Business unit objectives Business unit plans Personnel plans
	Performance measures and targets should be developed to complement these strategic objectives and plans. Periodic strategic planning reviews looking at the achievement of short, medium and long terms goals should be conducted having regard to changing community requirements, laws and regulations and corporate resources. Lessons from previous plans being successful or unsuccessful should also be incorporated.



the organisation should be structured in such a way to co-ordinate the desired outcome rather than concentrating on the achievement of individual outputs	The organisational structure should mirror the core product of the joint operation, ensuring functional areas meet the organisations goals and objectives. The regularly reviewed structure should: *General* Be clear and understood. Be process integrated with appropriate role defined/ differentiated business units, areas of (de)centralisation and specialisation. Clearly define responsibilities and provide delegations of authority commensurate with responsibility. Have a 'flat' minimum layered structure consistent with proper control. Encourage a team approach supported by: process management; devolution of responsibility; employee empowerment. Have appropriate reporting lines for effective, efficient communication that allows staff the opportunity to 'own' the process they work on, instead of viewing it as a 'chore'. Provide for accurate, consistent, timely and relevant management reporting for decision making purposes. Provide properly documented systems and procedures which are communicated to staff and which underpin and support the core joint operation activities and promote continuous improvements.
	*Specific* Define the background and experience requirements of Board Members, with chairperson to be rotated at appropriate intervals. Clearly define the Terms of Reference (Charter) and a Code of Conduct for the Board, specifying roles and responsibilities. Ensure Board Members include appropriate representation from joint operation partners. The Minister may wish to appoint (to the Board) a prominent community representative from, for example, the business sector. This will ensure a balance is provided between consideration of policy and performance, community feedback and operational management issues. Establish formal delegation of operational responsibility to the Director, supported by decisions being noted in Board's minutes. Allow the Board to endorse the strategic plan, business unit plans, organisation structure, delegations, decision making processes and lines of reporting and communication channels. Promote the advance appointment of a joint operation Director independent of partners prior to opening. Provide clear working arrangements between the Board and the joint operation Director, and internal/external auditors.


efficient business unit management is important in terms of bringing about operational efficiencies and contributing to corporate effectiveness	Joint operation Business Unit planning (efficiency-orientated) must be complemented by, and be consistent with, a strategic plan (effectiveness-orientated) to be of any benefit. Each Business unit should: Establish specific objectives, to be supported by a business plan. Ensure objectives are periodically revisited Ensure relevance of objectives and maintain ongoing interaction with key employees. Be supported by a Business Plan which must: Be a formal/living document Describe the unit's future destination and how they plan to get there Be action orientated and achievable Meet the needs of the user. Conduct thorough operations planning to ensure the right balance to enable: customer service to be maximised; minimum investments in resources to be obtained; and business unit operating efficiency to be maximised.
	Recognise the potential for the corporate provision of a service by one partner for all partners. Ensure key result areas cover: the quality of internal processes and competencies; and the ability of the unit to innovate and improve by utilising technology etc. Ensure that areas such as maintenance, ground and building cleaning, infrastructure and canteen facilities should be integrated to ensure costs savings amongst joint operation partners.


the achievement of corporate objectives is threatened without adequate resource management	Resource management entails planning, organising, leading and controlling organisational resources to achieve specific organisational goals. Resources span the following: Human Financial Information Natural and Physical 'Quality' should be an integral component in the choice, planning, control and accounting for resources, as well as in the activities and processes undertaken utilising the mix of resources.
	Probity and prudence should also be exercised in the acquisition and use of resources. Regular assessments should be made of the affects on resource needs of changes in program direction and priorities, workload, and quality of service.




it is people who provide the skill, innovation, leadership and motivation that encourages effective utilisation of other resources	In managing human resources the following factors are important: The joint operation is to develop practices for monitoring, controlling and recognising performance and contribution. Individual performance plans and targets (supplemented by accurate job descriptions and related salary gradings/pay scales) should be established for all employees. Detailed 'process' / 'task' related personal plans, compatible with organisational objectives, designed to encourage goal congruent behaviour need to be developed. Staff management and appraisal procedures should be established containing appropriate performance measures, targets, development action plans. This appraisal system should provide for regular, specific, focused, relevant and timely feedback which is measured against defined outputs and provide comparisons between current and past performance. Appropriate rewards/sanctions to reinforce/discourage high quality/poor performance should also be included. Non-productive activities should be monitored and controlled. There should be a positive culture developed within the organisation which allows each joint operation's performance to be discussed culminating in productive, remedial action.
	Annually report and review human resource policy targets. Each joint operation should deploy its resources to meet changing priorities and should plan to avoid skill limitations or other constraints, having regard to staff 'establishment numbers'. Appoint staff as per government recruitment and selection policy and ensure management/staff are covered by minimum conditions in a legislated Industrial Award or Industrial Commission Enterprise Agreement stating: employment guidelines/standards; Codes of Conduct; remuneration levels; employment conditions; equal employment standards; redundancy/redeployment provisions. Implement a structured training program to cater for individuals. Ensure grievance procedures are available to all staff to allow for quick resolution of problems to minimise work disruption. Engage counselling services where appropriate. Implement Workcover guidelines for a safe workplace. Record and monitor staff absentee / turnover levels, industrial conflicts, work related accidents / workers compensation claims. Establish Occupational Health & Safety Committee to oversight joint operations and have regular reports submitted to the Board for review and appropriate action.


asset recording, cash-flow monitors, budget and actual cost comparis-ons and proper control of finances are at the core of sound financial practice	For joint operation financial management, best practice requires the following: Outline the capital and recurrent costs attributed to partners to the agreement. Estimate the relative contribution of each party, and where disparities exist, explain actions of any arrangement to compensate the party. Determine, at the outset, how assets and liabilities are to be accounted for in the financial statements of each of the partners. If separate financial statements are prepared they should go to the Board and then be referred to the Minister for presentation to Parliament. This may involve external auditing of accounts. Guarantee an effective management control system ensuring the financial control system complements business unit controls. Establish a control system that clearly allocates responsibility for budget preparation, funds administration and expenditure commitments and ensure accounts close annually by the due date. Establish a well defined budgetary management system compatible with accrual accounting and document responsibilities accordingly. Ensure budgets reflect, and support, corporate and strategic goals Link business unit budgets to managers and their performance targets to provide responsibility/accountability covering all units.
	Assess the extent to which the approved budget has been met, reasons for, and implications of, over and under expenditure and undertake necessary corrective action. Outline a financial management reporting system program that fits into an overall Management Information System framework and ensure it is simple to understand, speedy in response, easy to manage, not expensive to run and supports management control. Ensure financial management system keeps abreast of developments in accounting and reporting standards. Monitor financial risk, business issues and financial performance. Communicate directly and regularly with internal/external audit personnel and review their fees, scope, materiality assessments and results in detecting risks and regulation non-compliance. Establish a balance between financial and operational auditing. Ensure cash handling and banking arrangements are completed with physical security and daily reconciled cash banking, weekly reconciled petty cash as a minimum requirement. Ensure individual expenses claims are proper, related to objectives and approved.


cost effective controls over the activities of: 'Senior', 'User', and 'Information Systems' Management	Management should be supported by adequate information systems which provide information to support the achievement/measurement of organisational and business unit objectives. Information provided to managers should be timely, relevant and easily understood. Appropriate probity and data integrity controls over information systems should be in place, whilst effectively utilising technology to gain competitive advantage and provide efficient operations. Principal roles identified in information management are: Senior Management The Chief Executive Officer (CEO) of an organisation is responsible for all activities. With respect to information systems, the CEO may set up a steering committee to develop and oversee executive information management policy formation and monitoring.
	User Management Users play an important role in contributing to the design, and making the best use of, the application of computers. Information Systems Management, comprising: Information Systems Development Helping to develop, implement and review the organisations information systems brief. Information Systems Processing Ensuring application processing efficiency and effectiveness of information tools. Information Systems Support Examining the adequacy of database administration and physical and data security.

	Premier's Department Statements of Best Practice should be consulted in relation to information technology (IT) acquisition and development. They are directed at senior management, with some relevance to Information Systems Management. Information systems should be supportive of corporate core business service delivery and be designed to enhance the efficiency of an organisation's communications network.
	Apart from being involved in information technology direction, senior management are also responsible for ensuring management and performance standards/measures are applied to monitor the effectiveness of IT in their organisation. This promotes a healthy 'dividend' from IT investment and ensures the organisation will take full advantage of IT to support corporate/customer and strategic/operational purposes. Senior managers are also concerned to integrate systems to provide maximum user efficiency and ease of use. Treasury Directives for Financial and Related Operations shall be implemented as per Government requirements. They primarily relate to Information Systems Management, but also include factors prevalent to User Management. Although these Treasury Directives relate primarily to financial systems, their relevance to all business unit operations is paramount, as over time IT has penetrated all aspects of service delivery.



'physical' resources should be protected while 'natural' resources should be sustained	Natural and physical resource management requires: Internal and external audit facilities that spans both financial controls and control over all physical resources. Assets that are critical to the success of the joint operation to be safeguarded by physical protection and insurance. Assets being human, financial, information, natural and physical resources. Plant and Equipment Registers to be maintained to link actual item with a trail from Invoice through to Physical Location. Utilise an appropriate engraving or bar coding technique. An audited stocktake of equipment to be completed in one day.
	Insurance to cover likely risk areas. Fraud, irregularities, and corruption prevention/detection all of which requires a combination of: preventative, detective, separation and directive management controls, and an effective 'whistleblower' procedure. Controls that are cost effective and impose minimum administrative burdens. Security services to be contracted where physical or personal safety of personnel or students cannot be guaranteed. Key register and security. Contingency plans for possible asset loss or destruction. Fire evacuation procedures to be known and practiced. Natural resources to be maintained to ensure that they remain a renewable resource. The conduct of a risk analysis at appropriate intervals to provide management with reasonable assurance that inherent risks are appropriately managed.

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the measurement of any endeavour against a target is fundamental to the accountability framework	The ability of a joint operation to measure its performance, requires that: Objectives be clearly defined. Responsibility for achieving those objectives be set in accordance with the organisational structure of each joint operation. Appropriate performance indicators be set by each joint operation in terms which will enable comparison or benchmarking with both internal and external acceptable norms of achievement. This section details: Management Information Systems as an effectiveness tool for measurement, reporting and management action.
	Performance Indicators which measure effectiveness. Reporting which allows effectiveness levels to be communicated




effective management information system to report performance on critical business unit processes and strategic objectives	The key components of performance measurement by joint operations are performance indicators and the norms with which they are compared. In addition to establishing the traditional financial reporting mechanisms, it is essential joint operations develop management information systems (MIS) that provide managers with information concerning results of progress in achieving objectives in relation to planned outcomes. This involves developing systems which provide two types of control; that is: Resource control (inputs) Achievement control (output-outcomes). Management Information System's should: Be in place to enable managers and users to compare performance with norms. The information so produced must be relevant, appropriate, timely and in a form that the recipient can use effectively. Allow managers to review performance indicators to determine, and regularly monitor, key performance drivers. Business unit processes or sub-processes should be amended where required.
	Hold key performance indicators that detail both 'efficiency' and 'effectiveness' issues.





both 'efficiency' and 'effectiveness' performance indicators are required	Joint operation Management Information System's are to provide key performance indicators which: Relate to the primary objectives, activities and purpose of the joint operation, as identified within the mission, vision and corporate planning statements. Overview operations and business sub-processes. Closely represent the extent to which objectives have been achieved. Examples of performance indicators are detailed below. *Efficiency*
	Economic and Productivity measures measuring the relationship between outputs as a ratio of inputs. Student/Teacher Ratios Cost per student measured on a course or joint operation basis. Cost of teacher per student. Cost of support function per student, eg. administration, student records, library services, etc. Number of teachers/support function staff (total) per student. Utilisation of Facilities Current value of land and buildings on a per student basis (measured in terms of maximum capacity and yearly enrolments). Current enrolments as a percentage of maximum enrolment capacity. Maintenance costs per student. *Effectiveness* Extent to which objectives of the service have been achieved (outcomes). Student outcomes in terms of: Student movement to further study Students placed in employment Students unemployed Students enrolled versus students completing course. Unexplained absences that may reflect satisfaction levels. Level of student satisfaction with teacher/course measured by student survey. Employer satisfaction level with skill level and competencies of students employed. Comparisons of the above performance indicators should be made to similar institutions for benchmarking purposes.


reporting for assessment, information and accountability	Key indicators of performance to be reported annually. Performance indicators: Are used to enable users to assess performance relative to: Targets and goals Previous performance Benchmark performance of other schools, colleges and universities
	Enhance accountability to the: Public Relevant parties Parliament
	Should explain: Any variation from previous indicators Why the indicators are considered to be key indicators, indicating the nature of the indicator, ie. 'driver' or 'outcome' How the indicators have been derived How the indicators can assist user Any impact of unusual circumstances on performance Should be: Relevant Quantifiable Verifiable Free from bias Appropriate Studied to verify whether there is a need to dis-aggregate information to manage individual aberrations. Individual aberrations in statistics may point to a need for case-management techniques.