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ARCHIVED - Internal Audit of Strategic Plan Development Process


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1.0  Executive Summary

In today's environment of rapid change, Treasury Board Secretariat's (TBS) ability to think strategically, to develop effective strategies to cope with changed circumstances and to develop management capability to adopt and implement strategies is critical to meeting the organization's mandate. The TBS Internal Audit and Evaluation Committee requested this audit to provide Secretariat management with an independent assessment of the TBS strategic planning process and to identify areas for improvement.

TBS Strategic Planning

The TBS strategic planning process was formally put into place in June 2002, with responsibility given to the TBS Strategic Policy and Planning Directorate. In July 2002, a Strategic Planning Network (the Planning Network) was re-constituted, comprising representatives from all TBS business lines, branches and sectors. The Strategic Policy and Planning Directorate with support from business line leaders and the Planning Network developed TBS's Strategic Planning and Results Framework in 2003 and led Executive Committee retreats to discuss TBS's strategic planning information and priorities. The data gathering phase of this audit was completed prior to the major organizational change at TBS in December 2003.

Audit Objectives and Scope

The overall objectives for the strategic planning audit were to assess whether the processes for preparation, development and implementation of the TBS strategic plan are effective including:

  • TBS strategic planning process meets leading practice criteria (See section 3.1 for criteria);
  • Strategic planning documents clearly reflect the results of the strategic planning process and include all the appropriate components;
  • The strategic plan is effectively communicated and understood within the Secretariat; and
  • The strategic plan provides sufficient direction to ensure that annual operating plans prioritize initiatives, allocate resources, set results and identify strategies for implementation.

Significant Findings

The strategic planning process that was followed met certain elements of the leading practice criteria for strategic planning. These are described in sections 3.2 to 3.7. Also in these sections is a description of the variances from leading practices criteria that were identified during the audit.

A significant finding was that the TBS strategic planning process did not produce a formal strategic plan. Based on an analysis of leading criteria, the following key elements expected to be part of a strategic plan were not present:

  • There is no formally adopted or approved strategic planning document;
  • The strategic planning process appears to have been primarily a bottom-up approach that did not clearly link with strategic priorities at the senior executive level;
  • Instead of one integrated environmental scanning process it was found that the Secretary, business line leaders and Strategic Planning and Policy Directorate conducted a number of independent scanning activities;
  • Key external stakeholders were not consulted for the risk assessments or environmental scan;
  • The environmental scans conducted by TBS were not effectively incorporated into the strategic planning process;
  • The Planning Network was not used to its maximum potential;
  • The output from the strategic planning process did not identify TBS-wide measurable outcomes with strategies for achieving them; and
  • The strategic planning process was not successful in gaining cross-business line integration.

The results of the strategic planning process did not provide adequate direction for TBS to drive operational planning, resource allocation, results setting or development of implementation strategies.

Recommendations

We have described in section 4, a recommended approach to strategic planning that addresses the areas for improvement identified in this report. This approach will leverage progress made over the last two years including the establishment of the TBS strategic planning process and the Planning Network. Our approach recommends developing an approved strategic plan and undertaking an annual corporate planning process, which revisits the strategic plan and feeds into the other planning activities within TBS.

The strategic plan would be developed every three years, cover a 3 – 5 year period and be consistent with the leading practice strategic planning criteria. Some of the information for the strategic plan has already been compiled as part of the previous strategic planning exercises. The missing strategic planning elements identified in the report should be incorporated into that plan.

Also proposed is a corporate planning process that would be conducted each year. This represents a hybrid planning process incorporating elements of strategic planning within the annual planning cycle at TBS. This approach has been taken to integrate with other planning requirements and activities at TBS and to help TBS cope with the frequently changing environment.

A detailed description of the proposed corporate planning process is provided in section 4.2.

Management Response

The management response to this audit can be found on page 26. Since the audit proposed a new structure, management has chosen to craft an overall reply rather than to address each observation and recommendation individually.