ARCHIVED - Treasury Board of Canada Secretariat - 2011-12 Departmental Performance Report

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Strategic Outcome: Government is well managed and accountable, and resources are allocated to achieve results

2011–12 Financial Resources ($ thousands)

Planned Spending	Total Authorities See 2011–12 Financial Resources for Strategic Outcome 1 note *	Actual Spending See 2011–12 Financial Resources for Strategic Outcome 1 note *
* Excludes amount deemed appropriated to Shared Services Canada.
2,734,649	4,088,738	2,504,508

Most of the variance between planned spending and total authorities, and total authorities and actual spending, can be attributed to the requirement to report the central government-wide funds of $1.4 billion in total authorities (Votes 5, 10, 25, 30 and 33) ^{See footnote [5]}, which are redistributed to other departments and agencies (i.e. not spent by the Secretariat, but by other departments). These funds remained unallocated at year-end under total authorities. The bulk of the remaining variance of approximately $230.1 million between planned and actual spending is largely due to a lapse/transfer in public service employer payments of $259 million offset by increased authorities of $29.2 million in Vote 1 operating expenditures.

2011–12 Human Resources (full-time equivalents – FTEs)

Planned	Actual	Difference
2,216	2,121	-95

Actual FTEs were fewer than planned largely due to the transfer of employees to Shared Services Canada and the implementation of the 2010 Strategic Review.

Strategic Outcome Performance Summary

Performance Indicators	Targets	2011–12 Actual Performance
Canada's ranking in The World Bank's Worldwide Governance Indicators for indicator three, “Government Effectiveness.”	Top ten among Organisation for Economic Co-operation and Development (OECD) member countries (annually).	The World Bank's Worldwide Governance Indicators rank Canada sixth among OECD countries for government effectiveness.

The World Bank's Government Effectiveness Index (GEI) is one of six indexes included in the World Bank's Worldwide Governance Indicators, which are issued annually. In 2011, Canada ranked 6th out of 34 OECD countries. The GEI captures perceptions of the quality of public services; the quality of the civil service and the degree of its independence from political pressures; and the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies.

Program 1: Management Frameworks

The Management Frameworks program establishes guiding principles and expectations for public sector management. It includes setting government-wide policy directions in targeted areas such as governance, regulatory management, the Management Accountability Framework (MAF), service, information management and technology. Working with all federal organizations, the Secretariat provides leadership, challenge, and a community enablement function in areas related to policy development, compliance, performance reporting, and functional community development. This work includes new and emerging issues and priorities related to the management of the public service, and promoting a cultural shift in how government deals with risk and innovation. In turn, this work informs the policies in the Expenditure, Financial, and People Management programs. This program is underpinned by a broad set of enabling legislation, including the Financial Administration Act.

Program Performance Summary

2011–12 Financial Resources ($ thousands)

Planned Spending	Total Authorities	Actual Spending
73,043	80,628	72,944

The net increase of approximately $7.6 million between planned spending and total authorities can be attributed to the funds provided for paylist requirements (i.e., paylist requirements related to parental benefits, severance and other allowances), initiatives to modernize human resources systems government-wide, one-time severance payouts stemming from new collective agreement provisions, and the operating budget carry-forward (OBCF), less reductions from the implementation of the 2010 Strategic Review. Actual spending was less than total authorities by almost $7.7 million due to timing differences on projects and a general slowdown of spending in advance of Budget 2012. The 2010 Strategic Review also accounts for the majority of the FTE variance shown below.

2011–12 Human Resources (FTEs)

Planned	Actual	Difference
533	505	-28

Program 1: Performance Summary

Expected Results	Performance Indicators	Targets	Actual Results
Continuous improvement in the quality of public service management in the Government of Canada.	Averaged percentage improvement in overall MAF scores across departments and agencies for identified areas of weakness from previous round.	5%	18%

The Secretariat exceeded its target for the Management Frameworks program. Between the 2010–11 and 2011–12 rounds of MAF assessments, departments and agencies improved by 18 per cent in the areas of weakness that had been identified.

Performance Highlights

Supported consolidation of internal and external services

During 2011–12, the Secretariat supported the government's efforts to consolidate services and standardize government business processes through a number of initiatives. The Secretariat, for example:

• Advanced the Common Enterprise Data Initiative by developing standardized coding and structures; by providing governance and standards for financial information and data; and by facilitating the delivery of policy instruments to allow for easier sharing of data;
• Used information technology (IT) expenditure data, as reported by departments and agencies for the fiscal year 2009–10, to support the creation of Shared Services Canada, a new government department that has a mandate to consolidate Government of Canada IT infrastructure in the areas of electronic networks, data centres and email systems; and
• Initiated the Human Resources Business Solution Pilot, one of the four components of the Human Resources Modernization Initiative, to demonstrate the benefits of adopting a single system as the government-wide standard for human resources (HR) services delivery. The new approach reduces overall costs by replacing multiple HR applications currently in use throughout the federal public administration.

Reduced administrative burden across government

The Secretariat led initiatives to reduce administrative and rules burden across the government. The Secretariat, for example:

• Completed a targeted review of Treasury Board policies, which resulted in changes to 15 policy instruments and the rescission of 5 instruments;
• Helped develop project charters for five national, interdepartmental pilot projects on grants and contributions to test innovative delivery models;
• Revised the Policy on Transfer Payments to simplify the departmental approval process by broadening the authorities of ministers and deputy heads to amend the terms and conditions of grants and contributions. The revision also permits ministers to delegate the approval of some minor amendments of grants and contributions to deputy heads; and
• Developed an amendment to the Financial Administration Act that gives authority to departments ^{See footnote [6]} to provide internal support services to each other.

Supported the reduction of regulatory red tape for Canadian businesses

The Secretariat advanced the federal regulatory agenda by actively supporting the work of the Red Tape Reduction Commission (RTRC). In 2011, the RTRC secretariat held an extensive engagement process to identify irritants to business that stem from federal regulatory requirements. This engagement process included 15 round table sessions in 13 cities. It attracted nearly 200 participants and resulted in the identification of roughly 2,000 irritants. Given the diverse nature of the irritants registered, the “What Was Heard” Report was released in September 2011 with the objective to group these irritants into themes to ultimately provide the government with solutions. To fulfill this objective, the RTRC released its Recommendations Report in January 2012. This report presents 15 systemic recommendations and 90 department-specific recommendations to address red tape. The government received the report and immediately announced that it was moving forward with one of the Commission's key recommendations, namely, to implement a “One-for-One” rule. This rule will reduce regulatory administrative burden on business in two ways:

• Regulatory changes that increase administrative burden on business will need to be offset by an equal amount of administrative burden costs on business; and
• If these changes result in a brand new regulation, regulators will be required to remove from their books an existing regulation that imposes administrative burden.

Increased departmental capacity

The Secretariat supported capacity building across government in a number of key areas. The Secretariat, for example:

• Worked with departments and agencies to move forward on implementing the Cabinet Directive on Streamlining Regulation. This directive helps departments meet their requirements for cost-benefit analysis, performance measurement and evaluation planning. The Secretariat provided advice, assistance and challenge on proposed regulations. In this way, it supported the rigorous analysis that is needed for quality regulatory design and government decision making on regulations.
• Engaged federal departments and agencies, through its Centre of Excellence on Risk Management, in ongoing improvements to the design and implementation of effective integrated risk management practices across the government. The 2011 June Status Report of the Auditor General of Canada recognized an improvement since 2006 in the guidance and support that the Secretariat provides to departments for developing and implementing risk management practices.

Promoted common approaches to IM/IT

Through a number of key initiatives, the Secretariat made progress on a government-wide approach to information management and information technology (IM/IT) that is more strategic and cost-effective. The Secretariat, for example:

• Completed an assessment of the IT application inventories of 98 departments and agencies, and developed recommendations to address the issue of aging IT systems in government. Recommendations focused on strengthening risk assessment and planning to address aging, mission-critical systems;
• Defined the preliminary strategy for moving to more standardized, clustered IT solutions as a way to reduce risks and the overall costs associated with IT;
• Issued guidance to departments and agencies to assist them in developing proposals for the review of departmental spending that support an enterprise approach to information system requirements. This approach would include standardization, consolidation and re-engineering of IT systems across the government;
• Established standardized tools and streamlined processes to monitor the health and performance of IT projects under the Secretariat's oversight;
• Advanced the government's IM strategy to establish key enterprise IM objectives, to define specific priorities, and to align government activities to a common vision. Elements of the vision include safeguarding information as a public trust and managing it as a strategic asset to better serve Canadians; and
• Developed an Access to Information and Privacy Administration Modernization Strategy. This included amending the Directive on the Administration of the Access to Information Act to mandate the monthly posting of completed summaries of access to information requests by institutions, as well as rationalizing the need for consultations between institutions.

Advanced work on the Policy on Managing Procurement

The Secretariat advanced work on the Policy on Managing Procurement and related directives on Crown procurement contracting, contracting approval, and limiting contractor liability. These initiatives will improve accountability, encourage management efficiency and help government achieve its policy outcomes. At the same time, they will ensure that the procurement process is fair, open and transparent. The Secretariat is developing plans and related guidance to assist departments ^{See footnote [7]} with their implementation efforts.

Advanced Open Government

The Secretariat led initiatives to improve government transparency and accessibility through Open Government, which includes three streams: Open Data, Open Information, and Open Dialogue. The Secretariat, for example:

• Enabled departments and agencies to make more than 271,000 data sets available through the Open Data portal. This is a one-stop shop for federal government data from statistics on building permits and wait times for non-emergency surgeries to data on pollution emissions and border-crossing wait times;
• Mandated the posting of monthly summaries of completed access to information requests by institution; and
• Supported the government's efforts to join the international Open Government Partnership. The Secretariat led a national online consultation on Open Government, which culminated in the launch of Canada's Action Plan on Open Government.

Lessons Learned

Across the government, the management of IT has been largely centred in “silos” or stand-alone systems within departments and agencies. While this has ensured the alignment of IT services with the mandate of each organization, it has also resulted in significant duplication or customization, costs, and an inability to take advantage of commoditized services. In order to achieve efficiencies moving forward, IT systems across departments and agencies need to be standardized and consolidated, and collaborative solutions that allow for increased information exchange must be created. To enable this change, the Secretariat will focus on developing a government-wide IT strategy and on renewing the current IT policy suite. This exercise will reorient IT policy instruments to support an enterprise model for common back-office applications and related services.

Program 2: People Management

The People Management program supports efforts across the federal public service to achieve strong leadership and a well-managed workforce and workplace. These elements provide the foundation that drives employee engagement and a culture of excellence, leading to high-quality policies, programs and services and a sustained and productive public service. In certain instances this program includes efforts that extend beyond the core public administration to separate employers and Crown corporations. This program undertakes direction-setting activities that include: developing and implementing people management–related frameworks and policies; setting and monitoring departmental people management performance expectations; conducting research and analysis regarding the state of people management; and supporting the effective management of the leadership cadre. The program also provides public service–wide leadership on managing compensation, which it shares with the Expenditure Management program. This includes: collective bargaining and associated labour relations, and establishing and maintaining the public service pension and benefits regime. The People Management program supports enabling infrastructure including the human resources functional community and the underlying business processes and systems, and is underpinned by legislation that includes: the Financial Administration Act; Public Service Employment Act; Public Service Labour Relations Act; Public Servants Disclosure Protection Act; Official Languages Act; and Employment Equity Act.

Program Performance Summary

2011–12 Financial Resources ($ thousands)

Planned Spending	Total Authorities	Actual Spending
59,541	67,119	65,444

The net increase of approximately $7.6 million between planned spending and total authorities can be attributed to funding provided for paylist requirements and the OBCF. Actual spending was almost $1.7 million less than total authorities due to funds not required for the implementation of the Public Service Equitable Compensation Act (PSECA), litigation for challenges to the Canadian Charter of Rights and Freedoms, and delayed staffing.

2011–12 Human Resources (FTEs)

Planned	Actual	Difference
490	474	-16

Program 2: Performance Summary

Expected Results	Performance Indicators	Targets	Actual Results
A federal public service characterized by a culture of excellence and highly engaged employees through strong leadership and a well-managed workforce and workplace.	Improvement in the Public Service Employee Survey (PSES) in the areas of engagement and culture of excellence.	Improvement in survey results (ongoing).	Survey results improved by 0.9 points (from an average public service–wide score of 74.7 in 2008 to 75.6 in 2011) on a 100-point scale. Due to changes in the 2011–12 MAF rating scale for the two administrative data measures for retention (a component of employee engagement), we are unable to compare results at this time.
Improved people management performance across the federal government.	Percentage (%) of departments and agencies demonstrating year-over-year improvement in Area of Management (AoM) 10, people management, as assessed through the MAF.	25.0% Target is based on 2010–11 MAF scores as benchmarks.	25.6% Of the 39 organizations assessed, 10 saw an increase in their overall score for people management from the previous MAF round.

Public service–wide performance indicators for employee engagement and culture of excellence are derived from the results of the 2008 and 2011 PSES by comparing the average scores of identified responses. The actual scores for these two indicators show an overall performance increase of 0.9 points and include the following:

• Results for employee engagement (job satisfaction, commitment to the organization and satisfaction with the organization) declined by 0.7 points (from 70.5 in 2008 to 69.8 in 2011).
• Results for culture of excellence (innovative and people oriented practices) increased by 2.4 points (from 78.9 in 2008 to 81.3 in 2011).

The response rate for the PSES is noteworthy:

• The response rate obtained in 2011 (72.2 per cent) was the highest ever achieved in the public service; and
• The rate has increased each time the PSES has been administered, which could be an indication that public servants value the PSES as an avenue to express their opinions on various aspects of people management. The increased level of participation supports the conclusion that public servants are engaged and committed to their work.

People management performance across the public service improved above the targeted measure. Of the 39 departments and agencies assessed, 10 achieved improvements. In addition, almost all of the assessed departments and agencies had an “acceptable” or “strong” rating for values and ethics in the area of culture of excellence (i.e., 85.4 per cent scored “acceptable,” and 12.2 per cent achieved a “strong” rating).

Performance Highlights

Supported deputy heads in conducting workforce planning

To support deputy heads across government in managing the impacts of fiscal restraint, the Secretariat undertook the following initiatives:

• Supported and advised deputy heads to enable them to identify efficiencies;
• Presented regular updates to interdepartmental committees and forums to align all roles and responsibilities and address cross-cutting issues; and
• Provided monthly data reports, guides and tools to support deputy head decision making.

Advanced renewal of the people management policy suite

The Secretariat continued to consult and draft renewed policy instruments to support deputy head accountability and effective management. The Secretariat, for example:

• Tabled in Parliament, in December 2011, the new Values and Ethics Code for the Public Sector (Public Sector Code), which clarifies expected behaviours that correspond to public sector values: respect for democracy, respect for people, integrity, stewardship, and excellence. The value of stewardship reflects the ongoing public service commitment to effective and efficient use of public money, property and resources;
• Launched the new Policy on Conflict of Interest and Post-Employment. This policy complements the Public Sector Code to facilitate ethical decision making within organizations and by public servants to resolve conflicts between private and public interests; and
• Developed approaches to improve the management of employee performance across the public service by ensuring that performance management in departments and agencies is more consistent and effective. Support for managers will include training, tools and other resources.

Work continued on improvements to additional Treasury Board policies to reflect and enhance deputy head accountability for the management of their people resources, including workplace, workforce and official languages policies.

Developed a standard process for human resources service delivery

The Common Human Resources Business Process (CHRBP) is now the standard for the delivery of human resources services across the Government of Canada. In its role of custodian of the CHRBP, the Secretariat led and facilitated the development and roll-out of this standard and provided support to departments and agencies. The Secretariat undertook the following initiatives to contribute to the ultimate goal of departments fully implementing the CHRBP by March 31, 2014:

• Released a new version of the CHRBP to reflect leading practices and align with the legislative review of the Public Service Modernization Act;
• Developed measures to assess, through the MAF, the progress and results of departmental implementation;
• Facilitated regular events and forums, including the annual CHRBP Symposium; and
• Participated in several government-wide horizontal initiatives, such as the Pay Modernization Project, to ensure linkages between the CHRPB and these initiatives.

The CHRBP is the foundation on which new investments in HR systems will be built.

Advanced work toward a comprehensive approach to compensation management

The Secretariat achieved several milestones in the management of total compensation and in the modernization of the federal public sector pension plans. The Secretariat, for example:

• Negotiated collective agreements with most employees in the public service. This included the removal of severance payments for voluntary separations (retirement or resignation) from the terms and conditions of their employment;
• Made progress on modernizing the classification system so that it serves department business needs by aligning public service work with the labour market and by ensuring that classification infrastructure facilitates operations. The review of the Program and Administrative Services (PA) group is well advanced, and the Computer Systems (CS) group is underway. A performance measurement strategy for the Classification Program was also developed;
• Made improvements to Public Service Health Care Plan data and information systems, which have contributed to reducing the growth of total expenditures and to improving reporting on plan activities.
• Modernized the payments processing system under the Public Service Dental Care Plan to improve oversight by the Secretariat; and
• Contributed to the introduction of federal budget measures aimed at securing long-term financial sustainability for the pension plans.

Advanced a government-wide initiative on employee wellness and productivity

Over the past three years, the Secretariat has focused on designing a more effective and sustainable disability management regime for the federal public service that promotes employee health and wellness. This initiative was advanced in 2011–12 in a number of ways. The Secretariat, for example: 

• Developed a business case for the transformation of disability management; 
• Enhanced departmental capacity to report data that are relevant to disability case management on the Public Service Management Dashboard;
• Developed and launched a Web resource to assist departments and agencies in setting up a disability management program and in managing such cases; and
• Facilitated a three-day training workshop for disability management advisors in order to build capacity in this area across government.

Work on public service–wide strategies, policies and programs regarding employee wellness and productivity is ongoing.

Supported implementation of the Public Sector Equitable Compensation Act

Significant progress was made on developing regulations for the coming into force of the PSECA to position the government to implement a modernized equitable compensation system in the federal public sector. This is a complex undertaking involving many stakeholders, including the Treasury Board, separate agencies, the Royal Canadian Mounted Police, the Canadian Forces, bargaining agents, the HR community, federal public sector employees and executives, and the general public. During 2012, all stakeholders are being consulted on the proposed policy directions for the regulations, and the regulations will be made in 2013.

Addressed the results of the Public Service Modernization Act (PSMA) legislative review

The Report of the Review of the “Public Service Modernization Act” was tabled in Parliament in December 2011. The report concluded that the Public Service Employment Act and the Public Service Labour Relations Act have been technically implemented and that the legislation offers an adequate framework to transform the way that the government hires, manages and supports its employees. The Report recommended that senior public service leaders focus on modernizing staffing, improving learning opportunities, fostering collaborative labour relations, and clarifying managerial roles and accountability. The report also recommended that public service leaders focus on driving behavioural changes needed to modernize the public service.

Many such initiatives were already occurring, and the following accomplishments addressed the results of the PSMA review. The Secretariat, for example:

• Initiated the establishment of a common vision of public service and HR management;
• Enabled the active management of disability in the workplace;
• Modernized and streamlined the Treasury Board's people management policies;
• Encouraged public­ service–wide use of Web 2.0 technologies to promote employee collaboration, consultation, learning and awareness; and
• Integrated commitments on values and ethics into senior management performance agreements.

Lessons Learned

The Secretariat streamlined departmental and agency reporting to Parliament in 2011–12 by simplifying the Public Servants Disclosure Protection Act and the reports on employment equity.

To address duplication in annual reporting, the Secretariat's Official Languages Centre of Excellence, in collaboration with Canadian Heritage, launched a streamlined and coordinated data and information collection process. Institutions subject to the Official Languages Act were asked to fill out a joint questionnaire, thereby helping to reduce reporting burden.

During 2011–12, systems adjustments were made to introduce the public service–wide budget module for the Performance Management Program for Executives to the existing Executive Talent Management System in order to capture reporting on the new collective corporate commitment required of all executives as of June 2011. The result was improved calculation and reduced reporting burden in reflecting the distinction between collective and individual at-risk pay. In addition, the Secretariat identified opportunities to adjust pensioner contribution rates more regularly.

As part of the new approach to people management, the Secretariat is learning that a close link is needed between HR business owners and those responsible for IT in order to ensure a strong alignment between business processes and IT applications. This will require greater collaboration and integrated approaches to governance between the Secretariat's Office of the Chief Human Resources Officer and the Chief Information Officer Branch.

Program 3: Expenditure Management

The Expenditure Management program helps ensure alignment of resources to achieve government priorities in a way that maximizes value for money and provides a whole-of-government perspective on matters related to direct program spending. Working with all federal organizations that are subject to budget appropriation, this program undertakes the review, analysis, and challenge of plans and proposals involving departmental spending, expenditure forecasting and strategies, compensation management, and results-based management. This work, as well as the production of government Estimates documents and reporting to Parliament, is facilitated by the Expenditure Management Information System. This program forms part of the Expenditure Management System, the framework for the development and implementation of the government's spending plans and priorities within the limits established by the Budget, which is implemented in coordination with the Department of Finance Canada and the Privy Council Office. The primary piece of legislation underpinning the program's activities is the Financial Administration Act.

Program Performance Summary

2011–12 Financial Resources ($ thousands)

Planned Spending	Total Authorities	Actual Spending
36,312	55,275	50,893

Most of the net increase of almost $19.0 million between planned spending and total authorities can be attributed to funding for paylist requirements and the OBCF, and funding provided for the services of external experts to support the review of departmental spending. Actual spending was less than total authorities by almost $4.4 million because expenditures for services of external experts were less than anticipated and because of the timing of the projects.

2011–12 Human Resources (FTEs)

Planned	Actual	Difference
301	255	-46

Program 3: Performance Summary

Expected Results	Performance Indicators See Program 3: Performance Summary note *	Targets	Actual Results
* In Section II: Analysis of Program Activities by Strategic Outcome of the 2011–12 Report on Plans and Priorities, the Secretariat reported different indicators for Program 3. The Secretariat has revised the indicators in its endeavour to effectively report on results. The alternative indicators that appear in the above table continue to evolve in order to create stability and alignment against the expected results of the program.
Sound analysis of financial information to support decision making on allocating funds to achieve priorities and provide value for money for program expenditures.	Percentage of Treasury Board submissions on new and renewed spending that use Management, Resources and Results Structure (MRRS) results (i.e., performance information) and evaluation data.	80%	Out of the Treasury Board submissions that were reviewed, 69% used MRRS results data, and 53% used evaluation data.
	Percentage of departments that attain a minimum acceptable rating for use of MRRS results information and evaluation data.	50%	Out of the large departments that were assessed through MAF, 90% attained a rating of at least “acceptable” in the use of evaluation information. Out of the departments that were assessed through MAF, 44% attained a rating of at least “acceptable” in the use of MRRS results information.
	Percentage of direct program spending assessed by departments and agencies undertaking the departmental spending reviews.	100%	100%

The overall use of evaluation and MRRS (i.e., performance) information to support decision making has been improving, as indicated through the departmental MAF assessments. The usage of results-based information and evaluation in decision-making documents such as Treasury Board submissions is improving but slightly below targets. This result, however, is based on a small sample of departments and review of a limited number of Treasury Board submissions. Therefore, this result is not a good indicator for how the whole public service was able to provide credible support to decision makers through Treasury Board Submissions. The Secretariat will continue to work with departments to further improve beyond current levels of performance and accurately demonstrate performance results for this indicator.

Performance Highlights

Supported a comprehensive spending review and government cost-containment measures

The Secretariat supported departments and a committee of Ministers to undertake a comprehensive review of direct program spending, the results of which were reported in Budget 2012. The Secretariat also continued its ongoing monitoring and reporting of the cost-containment initiatives announced in Budget 2010. These initiatives included the three-year operating budget freeze and the results of Strategic Reviews.

Throughout the year, departmental senior officials received guidance from the Secretariat as they prepared Estimates documents to be presented before Parliament for authority to spend public funds. The Secretariat also provided information and advice to Treasury Board ministers and parliamentary committees.

Governor General Special Warrants

Parliament dissolved on March 26, 2011, for the purposes of a general election without having voted on supply for 2011–12. The Secretariat led the process for Governor General Special Warrants. The Secretariat worked with all appropriated organizations to, for example:

• Ensure that the requirements of the Financial Administration Act were met;
• Promote transparency of the process including publications in the Canada Gazette;
• Prepare a Statement on the Use of Governor General Special Warrants, which was tabled in the House on June 7, 2011, after Parliament reconvened; and
• Exercise due diligence.

Two Governor General Special Warrants were issued: April 1 to May 15, 2011, for $13.4 billion and May 16 to June 29, 2011, for $11.1 billion, totalling $24.5 billion.

Lessons Learned

Based on the results of an earlier study, the Secretariat concluded that Treasury Board submissions could be improved through greater use of performance and evaluation information. The Secretariat worked with organizations to raise awareness about the kind of performance information that should be made available for reporting and decision making, and outreach has been extensive to assist them in defining useful data. The Secretariat anticipates that the expected release of the revised Treasury Board submission guide in 2012–13, as well as further outreach activities, will contribute to an increase in the use of performance and evaluation information in Treasury Board submissions.

In the area of compensation expenditure management, the Secretariat introduced an audit framework as part of the modernization of the Public Service Health Care Plan that will lead to more effective plan management through enhanced oversight. This could result in recoveries of overpayments and will ensure value for money by protecting the plan from inappropriate billing practices. An enhanced audit program will ensure that adequate controls are present and will assist in the overall sustainability of the plans.

In 2011–12, an Audit of the Treasury Board of Canada Secretariat's Management Control Framework of the Public Service Pension Plan was completed. It concluded that the management control framework that is currently in place is effective and serves to ensure that legislative and policy requirements for the Public Service Pension Plan are being met.

In 2011, the Interim Auditor General noted in his observations regarding the Public Accounts of Canada that current Treasury Board guidance concerning capital votes was dated, because “it allows departments to broadly interpret which capital expenditures may be charged to an operating vote rather than a capital vote,” and that this had led to inconsistencies. The Standing Committee on Public Accounts recommended in its 2011 report that the Secretariat review and update its guidance on these matters in time for the preparation of the 2013–14 Estimates. The Secretariat agreed with this observation, and has worked with organizations to develop a common definition of the items to be charged to a capital vote. Organizations are developing implementation plans and will be phasing in the new definition over three Estimates cycles, beginning with the 2013–14 Estimates.

Program 4: Financial Management

The Financial Management program promotes good financial management practices across government to ensure financial activities are carried out effectively and efficiently. Working with all federal organizations, the Secretariat delivers on this role by:

• Developing financial management, accounting, transfer payment and internal audit policies, directives and standards;
• Assisting departments by providing leadership, policy advice and guidance; setting performance expectations; and monitoring performance;
• Capacity building and community development within the functional communities;
• Planning horizontal audits and conducting audits of small departments and agencies;
• Providing financial oversight and reporting; and
• Advising central agencies and departments on financial authority issues associated with the Financial Administration Act and Appropriation Acts, the primary pieces of legislation underpinning the Financial Management program.

Program Performance Summary

2011–12 Financial Resources ($ thousands)

Planned Spending	Total Authorities	Actual Spending
33,057	35,176	28,830

The net increase of approximately $2.1 million between planned spending and total authorities can be attributed to funding provided for paylist requirements, the OBCF, reductions from the implementation of the 2010 Strategic Review and transfers to other government departments for the implementation of the Departmental Audit Software Initiative (DASI). Actual spending was less than total authorities by approximately $6.3 million due largely to contracting delays with respect to DASI, the implementation of the 2010 Strategic Review and the cancellation of agreements due to the wind-down of Consulting and Audit Services at Public Works and Government Services Canada.

2011–12 Human Resources (FTEs)

Planned	Actual	Difference
183	168	-15

Program 4: Performance Summary

Expected Results	Performance Indicators	Targets	Actual Results
Effective financial management function in the Government of Canada.	Improving content and timeliness of public financial reporting (data source: Public Accounts).	Clean audit opinion from the Auditor General (annually).	Clean audit opinion received.
Effective internal audit function in the Government of Canada.	Percentage (%) of planned risk-based horizontal audits conducted in large and small departments and agencies.	80% annually.	Overall completion to date: 95%.

Performance Highlights

Ensured an effective internal audit function within departments and agencies

In order to strengthen the internal audit function and professional internal audit practices, the Policy on Internal Audit and the Directive on Internal Auditing in the Government of Canada were revised, effective April 1, 2012. Revisions are intended to achieve the following:

• Address issues raised by the evaluation of the policy;
• Reduce the reporting burden for smaller departments;
• Clarify expectations of departmental audit committees; and
• Simplify and streamline the policy requirements in accordance with Secretariat policy suite renewal guidance.

Moving forward, the Secretariat will use the MAF process to monitor and assess the implementation of the policy.

Provided consistency of financial information across the government

To ensure that deputy heads receive consistent financial information, the Secretariat undertook a number of initiatives during 2011–12. The Secretariat, for example:

• Implemented the Treasury Board Accounting Standard 1.3 – Departmental and Agency Quarterly Financial Report, effective April 1, 2011. Along with other legislation for financial reports, this standard mandates quarterly financial reporting for departments, agencies and Crown corporations in order to improve government transparency and accountability and the timeliness of the publication of financial information;
• Developed a single-window Web page on Quarterly Financial Reporting to facilitate access to departmental and agency reports; and
• Offered information sessions and provided support and guidance to departments and agencies.

As the MAF assessments demonstrated, reliable and timely financial information was made available to users of the reports, in compliance with the standards. The Parliamentary Budget Officer concluded in the January 2012 report Interim Financial Reporting: Second Quarter Update that the quality and consistency of organizations' quarterly financial reports has continued to improve. The report further stated that, in general, these documents are a good source of data and information for parliamentarians.

Supported efficiency and conformity with financial management policies

The Secretariat assisted the government in moving toward a standardized financial management structure and in improving the transparency, accountability and timeliness of financial information. To this effect the Secretariat, for example:

• Delivered a number of new policy tools via the Common Financial Management Business Process Initiative, the Common Enterprise Data Initiative, and the Common Financial Management System Configuration Initiative; and
• Ensured the alignment of new instruments through various initiatives conducted by financial management clusters and departments.

Continued to support implementation of the suite of financial management policies

To enhance the effectiveness and strength of financial management across government, the Secretariat continued to enable the implementation of the suite of foundational financial management policies, with particular focus on the Policy on Internal Control:

• The second cohort of government organizations released their first public reports regarding internal controls; and
• The Secretariat developed tools and guidelines, and established interdepartmental committees to develop knowledge and awareness, and leverage best practices.

Since the Policy on Internal Control was implemented in 2009–10, departments have made significant progress in assessing the effectiveness of their controls. For example, less than 60 per cent of the largest departments had started the most advanced level of effectiveness testing of some or all of their controls by the fall of 2010. A year later, over 80 per cent of these departments were at this level of progress.

Lessons Learned

Through the implementation of the Chief Financial Officer (CFO) model under the Policy on Financial Management Governance, the financial management community has been seeking to clarify the role and attestations of CFOs with regard to Memoranda to Cabinet and Treasury Board submissions. In response, the Secretariat, through the Office of the Comptroller General, has developed a guideline that will set the framework for the CFO's due diligence, including a mechanism to communicate the CFO's conclusions to decision makers. It is expected to be in place in 2012–13.

Program 5: Government-Wide Funds and Public Service Employer Payments

The Government-Wide Funds and Public Service Employer Payments program accounts for funds that are held centrally to supplement other appropriations, from which payments and receipts are made on behalf of other federal organizations. These funds supplement the standard appropriations process and meet certain responsibilities of the Secretariat as the employer of the federal public service. The administration of these funds falls under the Expenditure Management and People Management programs, but their financial resources are shown separately in the Program Alignment Architecture for visibility and reporting purposes. Related information on planned spending is presented as online supplementary information under Financial Highlights and Statements.

Program Performance Summary

2011–12 Financial Resources ($ thousands)

Planned Spending	Total Authorities	Actual Spending
2,452,225	3,756,958	2,192,869

This program involves the Secretariat's administration of centrally managed government-wide funds on behalf of other departments and agencies. Planned spending includes $2.4 billion for public service employer payments and $20 thousand for payments under the Public Service Pension Adjustment Act (PSPA). Total authorities include $2.4 billion for public service employer payments and $1.4 billion in residual authorities for Votes 5, 10, 25, 30 and 33 ^{See footnote [8]}, which are redistributed to other departments and agencies (i.e. not spent by the Secretariat, but by other departments).This is the reason for the difference between planned spending and authorities. Actual spending includes $2.2 billion for public service employer payments and statutory payments for PSPA, pay equity settlements and employer contributions made under the Public Service Superannuation Act and other retirement acts, and the Employment Insurance Act.

2011–12 Human Resources (FTEs)

Planned	Actual	Difference
0	0	0

Program 5: Performance Summary

Expected Results	Performance Indicators	Targets	Actual Results
Payments and receipts, held centrally by the Secretariat, are made on behalf of other federal government departments and agencies in an administratively sound and efficient manner.	Payments are made appropriately and on time.	Payments made as required (end of fiscal year 2011–12).	Allocations from central votes were made as appropriate.

Lessons Learned

Regarding public service employer payments, this past year the Secretariat continued to build on its internal processes for preparing expenditures and revenue forecasts for the public service group insurance and benefit plans (i.e., the Public Service Health Care Plan). This work has culminated in a comprehensive forecasting framework that fully documents the methodologies and assumptions applied when preparing these forecasts. Understanding how these forecasts are prepared is important because they serve as the basis for seeking adjustments to the Secretariat's appropriations under Vote 20 (Public Service Insurance).