ARCHIVED - Summative Evaluation of the Pilot Project on Non-Lapsing Appropriations for Capital Asset Management

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3.0 Options

The evaluation found that a mechanism that simulates two-year NLAs is consistent with federal government priorities and can result in a number of benefits such as the following:

• Improved quality of decision making and longer-term planning;
• Improved value for money; and
• Optimal use of resources in the investment plan.

It also offers some value-added features over other mechanisms, including flexibility of amounts, timing, and predictability of access and use.

Options for managing capital assets were developed based on the assessment of the existing mechanisms against the benefits of the NLA as found by the evaluation and shown in Exhibit 2.3.

3.1 Options considered

Four options were considered and are described as follows:

Option 1

Extend the pilot project temporarily—This option would entail continuing the pilot project for one or two more years for participating departments only. It would include a Treasury Board requirement for performance measures, improved reporting, and clear delineation of roles and responsibilities within the Secretariat. This could provide the quantitative information and data that would facilitate a sounder basis for decisions about a potential expansion.

Option 2

Extension of NLA to qualifying departments—This option would only make the NLA mechanism available to departments that meet a range of capacity and maturity criteria such as Management Accountability Framework (MAF) assessment ratings, lapsing patterns and approved investment plans. To ensure that the value-added features of the mechanism are still present, the NLA mechanism would operate with a probationary period. Qualifying departments could have access to NLA up to a determined percentage of the capital vote (i.e., somewhere between 35% and 50%). Again, to ensure appropriate oversight, scope restrictions could also be applied depending on department capacity, including the following:

• Size of the project;
• Inclusion in the investment plan;
• Limited access to other carry-forward mechanisms; and
• Restricting application to identified high-risk cash flow projects.

This option carries some risk in that the data for this evaluation have been inadequate to fully assess the quantitative outcomes of the pilot, although the qualitative results are strong.

Option 3

Discontinue the NLA mechanism, enhance existing mechanisms and make available to qualifying departments—Some respondents believe that enhancing the existing mechanisms could offer value to the 5% carry-forward and reprofiling options as they currently exist. The extent to which this could provide the same benefits as the NLA, however, is unclear since it was beyond the scope of the evaluation to fully assess the other mechanisms in terms of their risks and benefits.

Option 4

Expand the NLA mechanism to be available to all custodial departments and agencies—This option would see the NLA operating as a mechanism available to all custodial departments and agencies, similar to other existing mechanisms.

3.2    Analysis of options

An analysis of the pros and cons of each of the considered options is presented in Exhibit 3.1.

Exhibit 3.1—Pros and Cons of Proposed Options

Option	Pros	Cons
1. Extend the pilot project for one to two years	With strengthened performance measurement requirements, this option would provide evidence to confirm the qualitative findings and provide greater certainty upon which to base a decision on a potential expansion of the pilot.	Would further delay a decision.
2. Extension of NLA to qualifying departments	Improved government-wide spending on capital assets; Consistent with evaluation findings on improved financial and project management and improved decision making; Consistent with evaluation findings on need for a mechanism that offers predictability, flexibility (in terms of timing and amounts) and decreased administrative burden.	Administrative data not extensive enough to confirm findings.
3. Discontinue NLA pilot project, enhance existing mechanisms and make available to qualifying departments	It may be administratively simpler to enhance an existing mechanism than to roll out the NLA on a larger scale.	Since the evaluation scope did not include the results of possible enhancements to existing mechanisms, it is unclear to what extent improvements in capital asset management could be achieved.
4. Expand the NLA mechanism to be available to all custodial departments and agencies	Improved government-wide spending on capital assets; Consistent with evaluation findings on improved financial and project management and improved decision making; Consistent with evaluation findings on need for a mechanism that offers predictability, flexibility (in terms of timing and amounts), better timing and decreased administrative burden.	Administrative data not extensive enough to confirm findings. The administrative burden of developing and maintaining an NLA mechanism in addition to the department's access to the existing two mechanisms may exceed the benefits achieved by the NLA. Contrary to evaluation findings, which indicate the need for criteria to select participants who have best chance of achieving similar benefits as participants in the pilot.

Options 1, 2 and 4 are consistent with the evaluation findings. However, given the small number of participating departments and the evaluation's data limitations due to late and inconsistent reporting requirements, these options may need further study. It was outside of the scope of the evaluation to assess how existing mechanisms could be expanded to achieve the benefits of the NLA. Recommendations in section 5.0 are made in the context of both evaluation findings and limitations.

4.0 Summary of Conclusions

4.1 Relevance

4.2 Success

4.3 Implementation and Design

4.4 Best Practices, Lessons Learned and Risks

4.5 Alternative Mechanisms

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