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Section II: Analysis of Program Activities by Strategic Outcome

Analysis by Program Activity

Strategic Outcome

Rigorous stewardship of public resources to achieve results for Canadians.^[4]

Financial Resources by Program Activity

($ thousands)	Planned Spending	Authorities	Actual Spending
Management and Expenditure Performance	134,649	142,470	138,797
Comptrollership	41,711	43,898	32,580
Centrally Managed Funds	2,427,986	2,281,742	1,537,987
Revitalization of the Toronto Waterfront1	0	115,937	35,049
Total	2,604,346	2,584,047	1,744,413
1. In accordance with the February 6, 2006, changes in ministers' responsibilities, this authority was transferred from Citizenship and Immigration Canada to the Treasury Board of Canada Secretariat through the 2006–07 Supplementary Estimates. Subsequently, in accordance with the January 4, 2007, changes in ministers' responsibilities, this authority will be transferred from the Treasury Board of Canada Secretariat to Environment Canada through the 2007–08 Supplementary Estimates.

 Human Resources by Program Activity

Full-time Equivalents	Planned	Actual	Difference
Management and Expenditure Performance	1,087	978	109
Comptrollership	265	196	69
Centrally Managed Funds	0	0	0
Revitalization of the Toronto Waterfront	0	6	–6
Total	1,351	1,179	172

Introduction

This section provides information on the progress made by the Secretariat in delivering on each of its priorities, plans, and expected results as outlined in the 2006–07 Report on Plans and Priorities, organized around its Program Activity Architecture (PAA). The Secretariat's program activities for 2006–07 were organized into three key areas of activity. They were:

• Management and Expenditure Performance;
• Comptrollership; and
• Centrally Managed Funds.

During fiscal year 2006–07, the strategic outcome of the Secretariat was to "ensure the rigorous stewardship of public resources to achieve results for Canadians." This strategic outcome was viewed as too narrowly focussed on the resource allocation activities undertaken by the Secretariat and did not adequately reflect the full spectrum of the support provided by the Secretariat to the Treasury Board in its functions as the management board (i.e. promotion of effective, efficient, transparent, and accountable management) or the budget office (i.e. resource allocation is optimized to achieve value for Canadians) of the federal public service.

For these reasons, the Secretariat amended its PAA in 2006–07, and introduced a new strategic outcome: Government is well managed and accountable, and resources are allocated to achieve results. The Secretariat's revised program activities are as follows:

1.  Management Policy Development and Oversight, where the Secretariat's priorities for 2006–07 centred on enhancing governance, accountability, and management practices that support its management board functions;

2.  Expenditure Management and Financial Oversight, where priorities focussed on strengthening results-oriented expenditure management, which is intended to advance the Secretariat's efforts as the budget office; and

3.  Corporate Strategy and Services, where the Secretariat's priorities involved enhancing its own internal management in accordance with its MAF assessment, and providing better support to the Treasury Board.

It is important to note that, as the Secretariat develops a performance measurement framework based on its PAA, it will be in a better position to report on core functions related to each of its main program activities and the priorities that support them.

Program Activity Architecture Crosswalk

New Program Activity
Old Program Activity	($ thousands)	Management Policy Development and Oversight	Expenditure Management and Financial Oversight	Revitalization of the Toronto Waterfront	Total
	Management and Expenditure Performance	94,402	44,396	N/A	138,797
	Comptrollership	25,063	7,516	N/A	32,580
	Revitalization of the Toronto Waterfront[5]	N/A	N/A	35,049	35,049
	Subtotal—Operations	119,465	51,912	35,049	206,425
	Centrally Managed Funds	N/A	1,537,987	N/A	1,537,987
	Total	119,465	1,589,899	35,049	1,744,413

Program Activity: Management Policy Development and Oversight

Through the Management Policy Development and Oversight program activity, the Secretariat provides support to the Treasury Board in its role as the management board. This role includes responsibilities for promoting improved management performance, and developing policies and priorities to support the prudent and effective management of the government's assets and human, financial, information, and technology resources. To achieve its objectives under this program activity, the Secretariat also works closely with its portfolio partners, the Canada Public Service Agency and the Canada School of Public Service.

Key activities under the Management Policy Development and Oversight program activity include:

• setting management performance expectations through the MAF;
• articulating specific management requirements, standards, and reporting requirements through the Treasury Board policy suite;
• defining the professional competencies required of key functional communities, including financial, information management, information technology, audit, procurement, materiel management, real property, and human resources specialists (i.e. labour relations, occupational health and safety, and compensation specialists);
• assessing departmental, agency, and Crown corporation performance against management standards and taking action to ensure weaknesses are addressed; and
• negotiating collective agreements, setting terms and conditions of employment, and promoting good labour-management practices.

In addition to advancing the RPP priorities listed below, highlights of the Secretariat's ongoing management policy development and oversight operations include:

• conducting MAF assessments for 54 departments and agencies;
• managing recruitment and professional development programs for the Financial Management and Internal Audit communities, including the Financial Officer Recruitment and Development and the Internal Auditor Recruitment and Development programs;
• developing and applying professional competencies, delivering workshops, and leading or participating in interdepartmental working groups in support of the real property and materiel management communities; and
• concluding nine collective agreements without labour disruption, including settlements with the Correctional Services and the Computer Systems groups.

The following table summarizes 2006–07 priorities in support of the Management Policy Development and Oversight program activity and its expected results for the reporting period:

Program Activity: Management Policy Development and Oversight

Supporting Priority: Strengthening governance, accountability, and management practices

RPP Commitments	Expected Results[6]	Summary of Achievements
Trust and confidence in government is enhanced through the implementation of the Federal Accountability Act and supporting measures and through improved reporting to Parliament.	Tabling parliamentary review and Royal Assent of the Federal Accountability Act is successfully coordinated under the leadership of the Secretariat.	The Federal Accountability Act was tabled in the House of Commons on April 11, 2006, and it received Royal Assent on December 12, 2006.
	Leadership is provided by the Secretariat in developing and implementing Secretariat elements of the Act.	After Royal Assent, the Secretariat was tasked with leading and coordinating the implementation of the Federal Accountability Act and Action Plan. An implementation plan and tracker was developed with target dates set for bringing the remaining provisions of the Act into force.
	Reporting to Parliament is improved.	The new website for parliamentarians is live and provides access to planning and performance information, and Web tools. The display of information in the Main Estimates, reports on plans and priorities, departmental performance reports, and the Public Accounts was standardized for 2005–06.
Responsibilities of deputy heads are clarified—streamlining rules while strengthening accountability and efficiency—through the renewal of the Treasury Board policy suite.	The three key reviews of policy areas required to support implementation of the Federal Accountability Action Plan are conducted and completed: transfer payments, procurement, and financial management.	The report of the Blue Ribbon Panel assessed and recommended changes to the Policy on Transfer Payments, which is planned to be renewed by the end of 2007. An independent review of government procurement was launched and completed, leading to the revised Policy on Managing Procurement that's still under consideration as part of the overall Treasury Board policy suite. The results of the review undertaken by the Senior Committee on the Review of the Financial Management Framework are under consideration as part of the review of the overall Treasury Board policy suite.
	The Treasury Board policy suite is streamlined—consistent with key Secretariat management initiatives such as the MAF—and associated policies are renewed and approved by the Treasury Board.	Work on the policy suite renewal continues to progress. To date, 31 policy instruments have been implemented, including 4 frameworks, 9 policies, and 18 directives or standards.
Management oversight is improved through the use of better tools, processes, and information.	Oversight and departmental management practices of deputy heads are enhanced through better understanding, ownership, and use of the MAF.	Departments received guidance to provide information in support of the assessments, which enhanced understanding of the MAF, fostered a dialogue on management practices within departments, and increased the use of MAF findings.
	The Secretariat's oversight role is strengthened through better indicators of management performance, processes for assessing performance, and capacity to interpret and apply findings.	Credible and useful information on the state of management across government was derived from MAF assessment findings through a more disciplined process, and a better suite of indicators and measures tailored to meet Treasury Board Portfolio oversight needs.
	The Secretariat's contribution to departmental and government-wide management performance is enhanced through the application of MAF findings to decision making by the Secretariat, the Privy Council Office, the Treasury Board, Cabinet, and departments.	MAF results were incorporated more systematically into advice to ministers in relation to expenditure decisions and were a key input to the Privy Council Office for the performance assessments of deputy ministers.
Financial management and auditing capacity across the Government of Canada are enhanced.	Financial management operations, practices, and reporting across government are improved.	Draft policies and supporting directives related to financial management, including the chief financial officer model, are progressing and expected to be completed by year-end. The results of the review undertaken by the Senior Committee on the Review of the Financial Management Framework are under consideration as part of the review of the overall Treasury Board policy suite. Work on the Financial Management Capability Model was deferred pending the finalization of the revised financial management policy suite.
	Internal audit plans, operations, and practices across government are enhanced.	Incremental funding allocations were made to departments in support of the implementation of the Policy on Internal Audit Extensive guidance and enablers to advance the Policy were developed, including an internal audit maturity model to guide the assessment of departmental internal audit capacity and capabilities.
	Capacity building and community development for financial management and internal audit are strengthened across government.	The Audit Committee Recruitment and Development Secretariat has been established and delivered strategy, outreach, and tools to engage departments in the establishment of their audit committees.
Management performance is strengthened through the development of strategies and tools to support service transformation.	An accountability regime to monitor and report on the achievement of service transformation outcomes is established.	An environmental scan was completed that identified issues and potential solutions related to the service transformation agenda. Interdepartmental committees were created to enhance horizontal collaboration on service transformation. A progress-reporting instrument was developed to monitor the status of issues related to service transformation initiatives.
	Plans to support improved management through corporate administrative shared services are refined and brought forward for Treasury Board consideration.	Considerable progress was made on the development of a business case for corporate administrative shared services with extensive collaboration from departments and agencies.
	Key Secretariat enabling and alignment initiatives are implemented in the fields of information management and information technology.	Guidelines have been developed that provide practical advice, best practices, and explanations for investment planning for the information management (IM) and information technology (IT) domains. A government-wide profile of IT services was developed.

Commitment

Trust and confidence in government is enhanced through the implementation of the Federal Accountability Act and supporting measures and through improved reporting to Parliament.

Results achieved

Implementation of the Federal Accountability Act

The primary goal of this initiative was to ensure that the government's commitment to implement the Federal Accountability Act is successfully coordinated under the leadership of the Secretariat. Work on the Act did not stop with the tabling of the Bill: numerous supporting measures, including those mentioned in the Federal Accountability Action Plan, were to be developed and implemented across government over the past year.

The implementation of the Federal Accountability Act is proceeding well. By the end of 2006–07, the majority of the provisions of the Act had come into force or the dates on which they would come into force had been fixed by order in council. In 2007–08, the government will bring into force the remaining provisions of the Act, specifically those related to the new rules on lobbying and the establishment of the position of Procurement Ombudsman.

In the lead-up to Royal Assent of the Act, the Secretariat led an interdepartmental team comprised of officials from the Privy Council Office, Public Service Human Resources Management Agency of Canada (now the Canada Public Service Agency), the Department of Justice Canada, and Public Works and Government Services Canada. This involved monitoring testimony from over 230 witnesses, anticipating potential amendments, and responding to over 350 proposed amendments.

Officials supported the government by providing strategic policy advice on the implications of the proposed amendments and appearing before House of Commons and Senate committees to explain how the Bill would work if adopted, as well as the legal underpinnings supporting the policy decisions taken and to provide technical expertise on the implications of amendments and suggestions on how to structure amendments in order to minimize unintended consequences. This work was commended by members of the House committee.

Improved reporting to Parliament

The new website for parliamentarians is now live and provides access to planning and performance information, and Web tools, including the following:

• a brief explanation of the reporting cycle and associated documents, providing links to the Estimates, the Public Accounts, and Canada's Performance;
• the horizontal results database;
• the Audit and Evaluation database; and
• other information of interest to parliamentarians.

In addition, the RPP overview for parliamentarians website helps users navigate through departmental RPPs and provides a whole-of-government view of planned spending over a three-year time horizon. The Secretariat organized a special session on Parliament Hill to inform parliamentary staff of the new website.

Finally, the display of information in the Main Estimates, reports on plans and priorities, departmental performance reports, and Public Accounts was standardized for 2005–06. Each of these documents now provides information on strategic outcomes and program activities. This standardized display facilitates understanding of the purpose of planned and actual spending throughout the reporting cycle.

Lessons learned

Following Royal Assent to the Federal Accountability Act, an implementation plan was developed for the Lobbying Act. A priority was to move forward with the development of the regulations necessary to bring the Lobbying Act into force. In accordance with the Government of Canada Regulatory Policy, consultations were held with lobbyists and the public through an online survey conducted from March 1, 2007, to March 23, 2007. Implementing the Lobbying Act requires more time than initially expected, given the complexity of the regulations.

A deputy-level committee to oversee discipline and compliance was established in 2006–07; however, committee meetings are being held in 2007–08 as preparatory work on the compliance framework needs to be completed first.

The Secretariat has also responded to requests to examine the feasibility of rationalizing the number of departmental reports required by Parliament and communicated the results to departments and agencies through the Guide to the Preparation of Part III of the Estimates.^[7]

Commitment

Responsibilities of deputy heads are clarified—streamlining rules while strengthening accountability and efficiency—through the renewal of the Treasury Board policy suite

Results achieved

Reviews of the Independent Blue Ribbon Panel

As promised in the Federal Accountability Action Plan, the President of the Treasury Board commissioned the independent Blue Ribbon Panel to recommend measures to make the delivery of grant and contribution programs more efficient while ensuring greater accountability.

The Panel's report was released on February 14, 2007. The overarching thrust of the report points to a need for widespread cultural change and sustained leadership within the federal government to create meaningful change in grants and contributions programming. It also concluded that it is possible to simplify the administration while strengthening accountability.

Responding to the report, the Secretariat established the Blue Ribbon Panel Coordination Office; created an interdepartmental committee of deputies to steer the development of a government-wide action plan; selected seven departments to develop specific action plans aimed at improving their administration of grants and contributions; launched a business review exercise to identify best practices; conducted early analysis for a centre of expertise; and took initial steps to engage recipient groups in the process of change.

The Secretariat also supported two other policy reviews as part of the Federal Accountability Action Plan: one for the government's procurement systems and processes, and one for financial management. The draft Policy on Managing Procurement was reviewed by an independent reviewer with a final report submitted to the President of the Treasury Board in November 2006 and publicly released in February 2007. The draft policy incorporates many of the independent review recommendations.

The Senior Committee on the Review of the Financial Management Framework of the Government of Canada finalized its report and the results are under consideration as part of the review of the overall Treasury Board policy suite.

Renewal of the Treasury Board policy suite

The objective of the Secretariat's policy suite renewal initiative is to reduce the number of Treasury Board policies by at least 50 per cent, and significant progress has been made to date. In 2006–07, the Secretariat continued to coordinate policy renewal efforts across the Treasury Board Portfolio and to ensure that renewed policy instruments are streamlined and coherent while being presented in a consistent fashion across all policy areas. Importantly, the Secretariat has, in renewing each policy, considered the implications of the Federal Accountability Act, specifically the accounting officer model, and identified the linkages with the Management Accountability Framework.

As of March 31, 2007, Treasury Board ministers had renewed 31 policy instruments (4 frameworks, 9 policies, and 18 directives and standards). Work on the remaining policies continues, with further renewals anticipated in 2007–08. It is expected that work on the resulting directives and standards will continue in 2008–09. Close monitoring of implementation continues to be essential for successful roll-out of policies.

With each renewed policy, the Secretariat is developing detailed implementation and specific communication strategies. The training needs of both policy centres and functional communities across government are being identified to support the Secretariat's outreach and training activities.

Lessons learned

Given the size and complexity of the federal government and its management policy suite, clarifying accountabilities and developing reliable and useful performance information on a whole-of-government basis are major undertakings that take time and dedicated effort. Key lessons from the past year include the following:

• There is a need for policy centres within the Secretariat to monitor policy implementation within departments on an ongoing basis, to be ready to react and propose amendments when necessary. In particular, taking stock in early phases of implementation and identifying what works well and what does not is essential to achieve policy objectives.
• Effective consultation with government and non-government stakeholders is a pre-requisite for successful policy implementation and it requires openness, thoughtful negotiations, and usually considerably more time than estimated.
• Implementation issues must be identified and resolved during policy development to ensure that the intended policy direction adequately addresses identified risks and is well understood by those implementing the policy.
• Policy reviews need to take into account the specific circumstances of small departments and agencies, and there is no uniform model for policy implementation.
• If policy implementation requires new funding, sources of funds should be identified first.
• Change management, including the development of guidance tools, should be well planned and continually addressed during policy development and implementation.

Commitment

Management oversight is improved through the use of better tools, processes, and information.

Results achieved

Continued implementation of and improvements to the Management Accountability Framework

The Management Accountability Framework (MAF) establishes expectations for sound management practices across government. The Secretariat uses the MAF to assess the management performance of departments and agencies against these expectations on an annual basis in an effort to improve overall government management and to provide a picture of the state of management over time.

In building a longitudinal database of management performance, the Secretariat is able to better identify best practices and areas that require systemic improvement. Specific MAF assessments are used each year to improve departmental management practices and to help frame the expectations for deputy ministers' performance agreements.

Over the last year, the Secretariat improved its capacity for management oversight by streamlining the set of MAF indicators and by enhancing the analytical capabilities of its program and policy analysts. These improvements will help the Secretariat produce a higher quality of management assessment and departmental performance information.

The number of indicators was reduced from 41 to 20, and the number of associated measures from 134 to 90 between 2005 and 2006 assessments. Streamlining the indicators and measures has helped to increase acceptance of MAF as a valuable tool for departmental management and has enhanced the analytical capability of the TB Portfolio to identify enterprise-wide management trends. In addition, MAF results were incorporated more systematically into advice to ministers in relation to expenditure decisions and were a key input to the Privy Council Office for the performance assessments of deputy ministers.

MAF-based assessments were completed for all 54 departments and agencies targeted in Round IV (2006). Analysts in the program and policy sectors of the Secretariat, the Office of the Comptroller General, and the Canada Public Service Agency combined their expertise to produce quality assessments in a timely manner.

Through the use of the MAF and the findings of the MAF assessments, deputy ministers' oversight and departmental management practices were significantly enhanced in 2006–07:

• Deputies were provided with assessments on the state of departmental management. These assessments are being used to improve management practices within their organizations.
• To enhance understanding, ownership, and use of the MAF by departments and agencies, the Treasury Board Portfolio improved its departmental communications and shared its assessment methodologies with departments and agencies. Additionally, following the assessment round, bilateral meetings between deputies, the Secretary to the Treasury Board, and the President of the Public Service Human Resources Management Agency of Canada (now the Canada Public Service Agency) were held to discuss management challenges and set individual priorities for the coming year.
• Departments received guidance to provide information in support of the assessments, which enhanced better understanding of the MAF, fostered a dialogue on management practices within departments, and increased the use of MAF findings. The Treasury Board Portfolio made progress in becoming more strategic and more collaborative in identifying and addressing the learning needs of departments and agencies concerning the MAF.

Lessons learned

Through continued refinement of the MAF assessment instrument, departmental assessments against the Framework are becoming increasingly relevant and useful management tools for deputy heads, as well as for central agencies. Key lessons learned in the past year include:

• the need for seeking out and incorporating departmental input to refinement of the assessment instrument;
• the positive impact of improved training and communications on the quality of departmental assessments;
• the importance of effective engagement and dialogue between Treasury Board Portfolio senior executives and departments before, during, and after the assessment process;
• the need to fully tap the potential of the MAF to increase understanding of government-wide management strengths and weaknesses; and
• the importance of broadening the use of MAF findings in departments and central agencies alike, including in the provision of advice to Cabinet committees and parliamentarians.

Commitment

Financial management and auditing capacity across the Government of Canada are enhanced

The Office of the Comptroller General (OCG) within the Secretariat is responsible for developing and implementing policies and practices to strengthen financial management, controls, and internal audit. This role is supportive of the management policy development and oversight, as well as the expenditure management and financial oversight functions of the Treasury Board.

To this end, the main priorities of the OCG include ensuring public confidence in the government's financial management practices, improving the quality and credibility of financial information, and strengthening the role of internal audit across government.

Results achieved

Financial management operations, practices, and reporting across government

The results of the review of the Financial Management Framework undertaken by the Senior Committee on the Review of the Financial Management Framework of the Government of Canada are under consideration as part of the review of the overall Treasury Board policy suite.

Work to develop a financial management capability model was deferred pending the completion of the financial management policy suite. Financial management policies and most directives were drafted.

Internal audit plans, operations, and practices across government

The Policy on Internal Audit came into force in April 2006 with a phased implementation period extending through April 2009. Funds have been allocated to departments and agencies relative to the new requirements of the Policy. In addition, under the leadership of the OCG, an extensive range of guidance and tools have been drafted, including:

• an internal auditing standards manual;
• a professional practice inspection manual;
• framework of core management controls; and;
• a guidebook and a generic charter for departmental audit committee.

Additionally, an evergreen internal audit maturity model has been developed to help guide expectations for the phased implementation of the new Policy on Internal Audit. At the same time, an integrated business and technology strategy for internal audit has been articulated and, as a first priority, a project is underway to procure a common audit management system for use across the government internal audit community.

Capacity building and community development for financial management and internal audit across government

The Audit Committee Recruitment and Development Secretariat was established to support the implementation of independent audit committees for departments and agencies in line with the 2006 Policy on Internal Audit and new legislation created with the passing of the Federal Accountability Act. The foundation was laid for solid selection and appointment processes and instruments. A development strategy was articulated and a first generation of induction materials and events delivered.

A comprehensive demographic survey of the internal audit community was completed that contributed to the development of a human resources strategy for this community. This was in line with the comprehensive Human Resources Framework prepared for this community. In addition, the financial management community completed a demographic profile and released a comprehensive human resources framework. The data gathering phase of the Financial Management Human Resources Strategy was initiated and is currently nearing completion.

Lessons learned

With respect to the development of a revised financial management framework and policy suite, great care needs to be taken to ensure policy directions are clear and effective. Policy measures in the area of financial management must strike the right balance not only in and of themselves but also in relation to the entire suite of Treasury Board policies. They must ensure financial management can be strengthened without adding more red tape and burden on departments and line managers. As such, it is a question of putting in place the right risk-based controls, and not more controls, to ensure appropriate oversight and accountability.

In a similar vein, internal audit plans are risk-based and must be designed to promote purposeful, cost-effective controls. It has become apparent that, during the early stages of policy implementation and transition to steady state, the OCG will play a greater than expected hands-on role in the delivery of horizontal audits across government. Opportunities have also been recognized to better assist and leverage the total productivity of the internal audit function. This centres particularly on the development of an audit intelligence capacity to harvest, analyze, and share results of completed internal audit reports, methodologies, and other information generated by individual departments. This latter initiative will have significant multiplier effects in advancing the contribution of internal audit and will require organizational design changes within the Internal Audit Sector of the OCG.

In the above context, increasing the capacity of the Internal Audit Sector within OCG has been complicated by a shortage of experienced internal audit professionals and the requirement to actively generate products while designing a new organization.

Going forward, it is also clear that the OCG must take greater advantage of the knowledge leaders within the Chief Audit Executive community and have them act as centres of expertise for particular audit methodologies for the benefit of internal audit across government.

The hiring and retaining of appropriately trained internal auditors and accounting professionals is a challenge for the government, given the current economic and demographic climate. These challenges reinforce the necessity of developing and implementing sustainable human resources strategies for both the internal audit and financial management communities.

Commitment

Management performance is strengthened through the development of strategies and tools to support service transformation

Results achieved

Strategies and tools to support Service Transformation

The Secretariat completed an environment scan, including interdepartmental consultations, that was captured in a document titled Service Transformation Alignment Roadmap. This document provides an overview of challenges and barriers to service transformation across government while presenting strategies for future improvements that, if implemented, could foster leadership and culture change; build capability; and strengthen oversight for future service transformation initiatives.

A horizontal governance structure, engaging senior executives within the Secretariat and across government was created to help monitor and guide the progress of the service transfer initiatives. Governance committees within this structure will provide oversight, identify risks and emerging issues, recommend risk mitigation strategies to facilitate the government's service transformation objectives, and monitor the status of initiatives on an ongoing basis.

Improved management through corporate administrative shared services (CASS)

Considerable progress was made in the development of a business case for CASS, with extensive collaboration from departments and agencies involved.

Implementation of key Secretariat information management- and information technology- enabling initiatives

A key focus was to provide departments and agencies with the policies, guidelines, frameworks, and other tools needed to more effectively manage the federal government's investment in information management (IM) and information technology (IT), as well as to augment its service delivery capacity.

Significant progress was made to ready key policy instruments for July 1, 2007, implementation. In particular, the Policy on Information Management and the Policy on Management of Information Technology establish the government-wide direction and accountability for the sound stewardship and responsible management of information and technology assets.

In addition, the Government of Canada Information Technology Services Profile was published. This catalogue provides a whole-of-government approach for consistently describing information technology services and lays the foundation for planning, budgeting, measuring, and reporting of IM and IT investments more consistently across departmental program activity architectures.

Finally, the Policy on Management of Information Technology is ready for implementation. This policy sets the conditions for expanded use of shared services within government.

Other achievements include the following:

• New Common Look and Feel standards for Internet sites were released to promote well-coordinated, well-managed, responsive communications across the Government of Canada.
• The secure channel mandatory services amendment was made to the Common Services Policy to promote the use of the shared technology infrastructure and ensure single access to government services.

Work will continue in 2007–08 to develop the policy directives, standards, guidelines, and tools to use information and technology as strategic tools in a more consistent manner across government and to enhance service and improve the delivery of services to the public.

Lessons learned

Service transformation initiatives are large and complex, and a great deal of effort and goodwill have been invested to launch and sustain them by their sponsoring organizations. They need a significant number of policy changes to make their business and solution models work as planned, alongside large, complex procurements for services and/or products. They also face unique financial risks related to the realization of savings targets in the context of escalating IM/IT costs and the significant effort required to link systems, streamline processes, and make organizational and cultural changes to implement their solutions.

The establishment of enterprise governance committees noted above has allowed the Secretariat to work jointly with other policy authorities and service transformation initiatives to promote a shared understanding of the government's service transformation environment and associated challenges and opportunities.

Finally, efforts to take stock and reflect on the future of service transformation in the Government of Canada has provided the Secretariat with the basis for assisting senior leadership in considering three key questions from the perspective of the government as a whole:

• whether the service transformation initiatives that are planned or underway are the right things to be doing in the right sequence;
• whether the direction, scope, and pace of these initiatives are appropriate at this time; and
• what approaches in moving forward could ensure coherent and consistent enterprise governance of service transformation initiatives so that they achieve their full potential.

Program Activity: Expenditure Management and Financial Oversight

The Treasury Board is often referred to as "the budget office" because of the important role it plays, along with the minister of Finance and the prime minister, in managing and overseeing government expenditures. Supported by the Secretariat, the Treasury Board's role is to ensure efficiency and effectiveness in federal expenditure management. The Expenditure Management and Financial Oversight program activity captures the Secretariat's activities in support of this budget office role, specifically through:

• providing advice to ministers with respect to resource allocation and reallocation, and the provision of expenditure authorities;
• undertaking government-wide expenditure and performance analysis, and oversight of estimates and government supply; and
• ensuring that accurate and timely financial and performance information from departments and agencies is available and reported, to support Public Accounts and budget office functions.

This program activity also includes the management and administration of central funds. Managing access to the central reserves under Treasury Board control is the core business of this program activity. These centrally managed funds were administered in accordance with the applicable legislation and/or Treasury Board policies and standards, and they include funds related to:

• Government Contingencies (Secretariat Vote 5);
• Government-wide Initiatives (Secretariat Vote 10);
• Public Service Compensation (Secretariat Vote 20); and
• Public Service Insurance (Secretariat Vote 20).^[8]

In addition to the priorities outlined below, other ongoing performance highlights with respect to this Program Activity include:

• the preparation and maintenance of the Public Accounts, the government's financial statements, and the ongoing development and maintenance of the government-wide Chart of Accounts;
• coordination of the Budget 2006 commitment to identify savings of $1 billion in 2006–07 and 2007–08 from direct program spending;
• successful management and preparation of the government's Main Estimates and Supplementary Estimates, including coordinating the tabling of 88 departmental performance reports for fiscal year 2005–06, and 54 reports on plans and priorities for both the 2006–07 and 2007–08 fiscal years; and
• successful coordination, implementation, and reporting of Governor General's special warrants to ensure essential government operations for the balance of 2005–06 and the first 45 days of 2006–07, in response to the November 2005 dissolution of Parliament.

The following table summarizes the priorities and expected results in support of the Expenditure Management and Financial Oversight program activity for the 2006–07 reporting period:

Program Activity: Expenditure Management and Financial Oversight

Supporting Priority: Strengthening Results-oriented Expenditure Management

RPP Commitments	Expected Results[9]	Summary of Achievements
Leadership is provided in reviewing the government's expenditure management system and strengthening the role of the Treasury Board.	Expenditure Management review is completed and the Treasury Board's contribution to Cabinet priority setting and the annual budget process are strengthened.	Continued progress in the development of a proposal to review the government's Expenditure Management System. Options for implementation of accrual accounting and appropriations is being developed.
Results-based management and information on programs and spending is improved.	The quality of financial, management and program performance information across government is improved through the implementation of the MRRS Policy.	An implementation process in support of the MRRS Policy was launched to strengthen results-based management and performance information in departments. An evaluation framework for implementation of the MRRS Policy was developed. Progress was made in identifying information systems requirements to support the budget office systems renewal.
	The Secretariat's capacity to assess and advise on program spending, management, and results is strengthened.	A prototype for monthly expenditure reports is under development. The renewed Evaluation Policy was developed and is expected to be implemented in 2007–08.
	The tools, information, networks, and frameworks required to support horizontal program management are improved.	Programs related to climate change and Aboriginal issues were reviewed. The Horizontal Management Accountability and Reporting Framework for Clean Air was developed for implementation. The Performance Management Desktop Web tool was developed.

Commitment

Leadership is provided in reviewing the government's expenditure management system and strengthening the role of the Treasury Board.

Results achieved

Review of the Expenditure Management System

The Expenditure Management System (EMS) is the framework for supporting responsible and effective spending by the government through the identification and implementation of the government's spending plans and priorities within the monetary limits established by the budget. The EMS governs how money is spent, how much, on what, and for what purpose.

A key focus of the government's renewal of the EMS is to improve the quality, timeliness, coverage, and use of performance information to support managing, decision making, and reporting on results. Specifically, the renewed approach aims to better support Cabinet ministers in making integrated spending decisions that take into account the performance, relevance, and value for money of government spending.

As such, and in accordance with Budget 2006, the Secretariat, in collaboration with the Privy Council Office and the Department of Finance Canada, undertook a fundamental reassessment of the government's expenditure planning, budgeting, and decision-making processes.

From this assessment, an integrated package of measures was developed to renew the EMS. It is expected that a renewed EMS will strengthen the management of overall spending by establishing clear responsibilities for departments to better define the expected outcomes of government programs and ensure that they are managed efficiently and effectively and that they align with other programs.

As the different elements of the renewed EMS are implemented, the government will have more complete information with which to review spending to ensure efficiency, effectiveness, and ongoing value for money and to subsequently improve the quality of departmental and government-wide financial and non-financial reporting to Parliament.

Building upon its response to the House of Commons Standing Committee on Government Operations and Estimates, the Secretariat is currently developing a complete accrual-based budgeting and appropriations system. As indicated by the government's response to the 12th Report of the Standing Committee on Public Accounts, the Secretariat will present implementation options and considerations for discussion and debate by Parliament in 2007–08.

Lessons learned

To further improve expenditure management, the government must take a whole-of-government perspective on both financial and non-financial information, including the value for money and results achieved by government programs and services.

Effective financial management requires clear accountabilities and professional leadership within the Secretariat and in departments and agencies, as well as good governance, sound policies and processes, and timely and accurate information. The key elements of the new approach will require three to five years to reach full maturity and will require dedicated effort both within the Secretariat and across government.

Commitment

Results-based management and information on programs and spending is improved.

Results achieved

Implementation of the MRRS Policy

As a result of the MRRS implementation, in November 2006, the President of the Treasury Board tabled for the first time 88 Program Activity Architecture-based departmental performance reports (DPRs) on behalf of the government, thus completing the first full Estimates cycle based on MRRS. These 2005–06 DPRs more closely reflected what organizations do and how they manage their resources. They also provided more in-depth and systematic information on departmental expenditures and performance that is consistent with each department's MRRS. It is clear that the new structure provided parliamentarians and Canadians with enhanced tools to support their scrutiny of government expenditures.

Further to the initial implementation of the MRRS, it became evident that a government-wide process for making amendments to departmental program activity architectures (PAAs) would be necessary to increase the standardization and accuracy of PAAs. After two years of the amendment process, the 2007–08 Estimates cycle provides a much more stable PAA structure and a more consistent framework for examining spending across government.

Encouragingly, many departments have made substantial progress in developing and using the MRRS as their management and reporting tool, with an increased focus on identifying key departmental outcomes. A well-functioning PAA is a critically important departmental management tool and, as a result, has been incorporated as a clear expectation in the Management Accountability Framework.

The Secretariat has successfully managed the first step of the MRRS implementation, wherein departments were to develop fully articulated PAAs by identifying, situating, and describing all of their programs down to a common level of detail across the government, as well as to refine their strategic outcomes and Program Activity elements. As a result of this process, 96 departments and agencies came forward with changes to their departmental strategic outcomes and/or PAAs.

Furthermore, the second step of this process, during which departments and agencies are to define their Performance Measurement Framework and Governance Structure for their entire PAA, is still ongoing. The Secretariat is committed to assisting individual departments with the development of their performance measurement frameworks.

Full implementation of the MRRS Policy is an essential element of the renewed Expenditure Management System, and the government intends to complete implementation of the Policy over the course of the next two planning cycles.

Once mature, fully implemented, and supported by the information systems needed to meet budget office information requirements, the MRRS will provide a coherent inventory of all government programs aligned to strategic outcomes and the related financial and non-financial program performance information necessary to support allocation and reallocation decisions by departments and by Cabinet and to support better reporting to Parliament.

Strengthening the evaluation function

The evaluation function's objective is to provide timely, reliable, neutral results and value-for-money information to inform decision making on and accountability for policy, expenditure management, and program improvements. It complements and builds on the performance frameworks and performance information in MRRS by assessing the continued relevance and performance of programs and, as part of that process, looks behind the performance information to determine what it means and how performance and expenditure management can be improved to increase results for Canadians.

Extensive work has been undertaken by the Secretariat to renew the evaluation function across the government. A proposed new evaluation policy, directive, and standards, along with supporting guidelines, are currently being developed. As a first step, the Secretariat has developed a rapid value-for-money assessment tool that is currently being piloted by four departments to test its viability. Once lessons learned from the pilots are incorporated, the tool will be made available to the general evaluation community.

The renewed evaluation function will, once fully implemented, provide departments with comprehensive value-for-money assessments of their programs over a five-year cycle. Its increased focus on quality and rigour will also improve the credibility and objectivity of evaluations. It will ensure that departments have a suite of evaluation tools to align the intensity and scope of evaluations with the risk, scale, and impact of the spending program.

Tools and frameworks required to support horizontal program management

The Secretariat, in keeping with its commitment to review horizontal and cross-cutting programs, made progress on several fronts related to horizontal program management, including:

• the development of the Horizontal Management Accountability and Reporting Framework (HMARF) for Clean Air;
• the completion of the Performance Management Desktop (PMD) Web tool, which is a corporate resource for TBS; and
• continued development of guidance for central agencies and departments on horizontal expenditure management.

Lessons learned

Departmental MRRS are slowly improving, however continued refinements are needed, as some departments still remain challenged by the requirements of MRRS implementation. Clearly, moving to a more structured performance measurement framework for departmental programming is a major cultural change and thus will take some years to complete successfully. The Secretariat will continue to work closely with departments over the next fiscal year to assist with the continuing implementation of the MRRS.

In addition, horizontal reviews are an important tool to support Cabinet in assessing programs and their contributions to the achievement of government-wide priorities. These reviews can serve to assess performance in the growing number of government-wide policy areas and whether there are opportunities for improved alignment and coordination across government. It is expected that the ongoing horizontal review process will identify areas where effectiveness and efficiencies can be improved, including through the elimination of overlap and duplication.

Finally, the renewal of the Evaluation Policy was a challenging task, particularly given the range of issues that the Policy needed to address. Various lessons learned can be drawn from this experience. First, engaging departments, as well as other key stakeholders, throughout the policy development process was critical in order to ensure buy-in and to anticipate any policy implementation challenges and risks. Second, a strong leadership and oversight role of the Secretariat in evaluation (particularly capacity building and training) is key to the successful implementation of the Policy. Finally, the evaluation function needs backbone and support in order to be effective.

Program Activity: Corporate Strategy and Services

The Corporate Strategy and Services program activity is comprised of internal management functions that aim to ensure that the Secretariat is well managed and accountable, and that resources are allocated to achieve Secretariat results. This includes key corporate functions such as:

• ensuring effective and efficient corporate services;
• ensuring effective corporate governance and accountability;
• providing integrated support to the Treasury Board; and
• advising on communication of policies, programs, and services and providing effective internal and external communications.

The following table summarizes the Secretariat's priorities in support of the Corporate Strategy and Services program activity, and its expected results, for the 2006–07 reporting period:

Program Activity: Corporate Strategy and Services

Supporting Priority: Strengthening Results-oriented Expenditure Management

RPP Commitments	Expected Results[10]	Summary of Achievements
Secretariat support to the Treasury Board is strengthened through the adoption of a renewed approach to Treasury Board operations.	A shared understanding of and commitment to a renewed approach to supporting the Treasury Board is developed.	Plans to develop a Secretariat charter were expanded into a more comprehensive change management exercise to reposition the Secretariat to better carry out its management board and budget office roles in support of the Treasury Board. Numerous learning and knowledge management events were held to support core Secretariat functions.
	A new intranet site is developed and implemented.	A new Secretariat intranet site was developed and launched.
	New approaches to strengthen Treasury Board operations are put into practice in cooperation with departments.	An assessment of the Secretariat's change readiness was carried out and a transformation framework was developed that identifies critical success factors for enabling change and strengthening support to the Treasury Board.
Internal management practices are improved in response to the Secretariat's MAF assessment and the survey on workplace well-being.	Human resources management is improved with progress on an open and transparent process for staffing, strengthened linkages to the Secretariat's business planning, and development of a multi-year human resources framework.	Ninety-six per cent of the executives identified at the Secretariat have registered, taken the required authority delegation training, and/or validated their knowledge. An ES program was implemented to recruit, develop, and retain highly skilled, well-rounded ES employees.
	Internal stewardship is improved, with emphasis on improving the quality and timeliness of Treasury Board submissions and financial reporting.	The new PAA developed and approved. Business planning was completed based on the revised PAA. An end-to-end review of the contracting process was completed. A tool kit, including a managers' guide to contracting, was completed. A risk-based internal audit plan for the Secretariat was developed. The Secretariat's Sustainable Development Strategy was tabled in Parliament and its implementation is underway.
	Governance and strategic direction is strengthened, including renewal of the Secretariat's PAA and MRRS; continued integration of strategic, human resources, and business planning; and development and implementation of a corporate risk profile.	Significant progress was made to strengthen the Secretariat's integrated planning and reporting function, relying extensively on the new Secretariat PAA as the core framework. Initial steps were taken to integrate human resources planning into the Secretariat's business planning. Significant progress was also made in building a first iteration of a corporate risk profile for the Secretariat, which is nearing completion.

Commitment

Secretariat support to the Treasury Board is strengthened through the adoption of a renewed approach to Treasury Board operations.

Results achieved

A renewed approach to supporting the Treasury Board

Plans to develop a Secretariat charter were expanded into a more fundamental review of how to reposition the Secretariat to better carry out its management board and budget office roles in the context of a change management exercise. This exercise is currently underway and aims to align key processes to reflect a more strategic and risk-based approach to the Secretariat's work, build relationships and processes with governmental stakeholders, and enhance the Secretariat's internal capability to better support and enable change across government.

Numerous learning and knowledge management events were held to support a shared and common understanding of Secretariat roles and responsibilities as they relate to management board and budget office functions:

• over 300 participants attended the Secretariat orientation and awareness sessions; and
• over 60 information and training events were held related to management board and budget office functions, including training related to the MAF, MRRS, policy suite renewal, and the Management Reserve.

Lessons learned

Given the depth and breadth of change facing the Secretariat, a fundamental review of how it carries out its management board and budget office roles was required. Early recognition of the requirement to expand initial efforts to strengthen support to the Treasury Board into a broader change management exercise was an important lesson learned.

The scope and complexity of the change management agenda has highlighted the importance of building consensus across the Secretariat and ensuring the alignment of the change agenda with other Secretariat priorities and activities, as well as broader government initiatives such as public service renewal.

Commitment

Internal-to-Secretariat management practices and oversight are improved in response to the Secretariat's MAF assessment and survey on workplace well-being.

Results achieved

Governance and strategic direction

Significant progress was made in efforts to strengthen the Secretariat's integrated financial, planning, and reporting functions, including further integration of risk management and human resources within the annual cycle, as well as alignment of the Secretariat's governance structure with its new PAA.

Internal Stewardship

The Secretariat has made significant progress in its internal management practices, particularly with respect to integrated financial and operational planning. Key results include:

• the completion of a full corporate business planning cycle based on the new PAA;
• simplified and automated business planning tools introduced to facilitate corporate planning across the Secretariat;
• the completion of three internal financial reviews to assure alignment of corporate resources with priorities;
• an end-to-end review of the contracting process, the development of a contracting tool kit, and the review of contracting delegations contracting authorities within the Secretariat;
• an internal risk-based audit plan that is now in place;
• the establishment of more robust procedures to ensure increased timeliness and quality of Secretariat-sponsored Treasury Board submissions; and
• the tabling in Parliament on December 13, 2006, of the Secretariat's Sustainable Development Strategy , which is expected to provide improved management of sustainable development within the Government of Canada, while improving environmental stewardship of the Secretariat's own internal operations.

Progress on an open and transparent process for staffing, strengthened linkages to the Secretariat's business planning, and development of a multi-year human resources framework

The Secretariat made substantial progress on implementing an open and transparent process for staffing, as well as on strengthening the links between human resources requirements and corporate business planning. Achievements in this area include the following:

• Ninety-six per cent of executives identified at the Secretariat have registered, taken the required authority delegation training, and/or validated their knowledge.
• An analyst development program was successfully implemented to recruit, develop, and retain highly skilled, well-rounded employees who understand the Secretariat's mandate and are able to contribute to all sectors across the Secretariat.

Lessons learned

In order to support decision making and accountability, the Secretariat will need to ensure that a robust internal evaluation function is established and maintained within the organization. This work will require development of a sound performance measurement framework to better assess expected results in each of its program activities.

In the context of its dynamic change management agenda, the Secretariat will also need to build upon the progress already made in developing a corporate risk profile and ensure that integrated risk management practices are central to the ongoing management of the organization.

Progress on the Secretariat's Management Accountability Framework Assessment

The 2005–06 MAF assessment of Secretariat management indicated that the Secretariat had made significant progress in a number of areas, including:

• leadership in horizontal initiatives and active engagement of departments and agencies;
• effective stewardship in complying with financial and administrative policies; and
• more effective integration of human resources and business planning.

In its 2006–07 RPP, the Secretariat committed to improve on its 2005 MAF assessment and has made significant progress in this regard. The Secretariat will continue to take action in six key areas:

1. Governance structure: The Secretariat is developing performance measures to better assess its strategic outcomes and improve results-based management practices.

2. Treasury Board submissions and compliance with Treasury Board conditions: The Secretariat is improving the timeliness of its own Treasury Board submissions through clarification of its governance structure.

3. Evaluation function: The Secretariat has refocussed internal resources to strengthen its audit and evaluation capacity.

4. Project management: The Secretariat is enhancing its project management capacity on key projects by ensuring the presence of explicit project management frameworks.

5. Information and information technology (IT) management: The Secretariat is implementing a departmental IT risk management plan.

6. Human resources management: The Secretariat is making important improvements to its human resources management by developing a multi-year framework and integrating human resources plans into its internal business planning process.

The Secretariat has addressed and will continue to address issues in response to its MAF assessment through its priorities related to improving its internal management, as described each year in its RPP.

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