journal
Sharing Best Practices in Managing Public Sector Resources
FMI Celebrates 40 Years!
" FMI 1962-2002
" FMI - A formula for Success
" 40 Years of Financial Management Policy
" History of Internal Audit in Government
" Importance of Financial Statements and
Reporting for the Government of Canada
" After the ‘Perfect Storm’: An Article on
Management Changes underway at the RCMP
SPRING/SUMMER 2002
VOLUME 13, NUMBER 3
journal
The fmi journal is Canada’s leading
magazine for public sector professionals involved in the field of public sector financial management.
Its major articles, columns and news
cover a broad range of government
accounting, auditing, and financial
management topics of concern to professionals.
fmi journal readers hold influential
positions in public accounting, and
have responsibilities in a variety of
areas: financial management, information systems, administration and
human resource management to
name a few.
Win a Trip to Victoria!
The Alan G. Ross Award for Writing Excellence is awarded annually to the individual(s) who
contribute the best article (feature or column) to the fmi journal during the year. The award
is a plaque and a complimentary trip to the FMI’s annual Public Sector Management Workshop. If your article is printed in the Spring or Fall 2002 or Winter 2003 issue, you will
become an eligible contestant for a trip to Victoria, British Columbia in the Spring of 2003.
The fmi journal editorial team look after, at a minimum the subject areas following their
names:
aRKay - fINANClAL mUSlNCS & iNSlGHTS
Bill Boston - Financial Management - (613) 954-6400
Jean-René Drapeau - Federal/Provincial Relations - (819) 994-3081
Bruce Hirst - Federal Financial Management - (613) 957-7168
David Jones - Office and Home of the Future - (613) 946-3083
André Robert - Audit Management - Internal - (613) 952-3141
Martin Ruben - Audit Management - External - (613) 995-3708
Roger Shears - Costing - (613) 260-7757
Michael Van Herk - Electronic Commerce and Information Technology - (613) 277-1950
Bryn Weadon - Assistant Managing Editor - (613) 945-0672
These editors welcome timely and relevant articles from you. Feature articles are generally
2500 to 4000 words. Other articles or input to a regular column are normally shorter (500
to 2500 words). Letters to the editor are also welcome.
Its authors are individuals who hold
senior or experienced positions within
government and the private sector.
These individuals share their experience and expertise in areas of concern
to professional public sector accountants and managers with financial
responsibilities.
Please address your correspondence to any of the team members or to Norma Hubley,
Managing Editor:
fmi journal
Financial Management Institute
P.O. Box 613, Station B
Ottawa, Ontario K1P 5P7
Virtually any topic of interest to the
financially-oriented public sector
executive may be found in the fmi
journal.
The recommended form of input is a 3.5” diskette in Microsoft Word or WordPerfect formats,
accompanied by original laser-quality hard copy. It is preferable that the documents be in bilingual format. Graphics must be kept separate (not inserted into the text). Advise what software was
used to produce the graphic. The author’s photo and short biography are also requested.
A non-profit organization, the FMI
has opened 11 chapters across Canada
in the past 40 years. Today, the fmi
journal enjoys a readership of more
than 2,000 professionals.
The organization hosts two annual
national conferences: PD Week based
in Ottawa and held in late November,
and the Public Sector Management
Workshop which takes place in May
at a different location each year.
If you wish to be considered as an editor of the journal, please write to the Managing Editor, and indicate your area of expertise and the type of articles or column to which you wish
to coordinate or to which you would like to contribute on a reasonably continuing basis.
The FMI can no longer supply quantities of additional copies to readers. Reprints, however, are available at a reasonable price. The minimum order is 50 copies.
Subjects of Interest to Our Readership
✔Accountability
✔Asset Management
✔Audit Practices
✔Banking & Cash Management
✔Best Practices
✔Business Planning
✔Career Advice
✔Community Profiles
✔Electronic Commerce
✔Expenditure Management
✔Federal/Provincial/Municipal Reviews
✔Government Accounting Policy
✔ Human Resource Management
✔ Humour
✔ Information Management
✔ Planning & Resource Allocation
✔ Precis of Recent Government
✔ Leaders’ Publications or Speeches
✔ Public Service Renewal
✔ Revenue Management
✔ Salary Management
✔ Summary/Highlights of Conferences or Seminars
✔ Systems
✔ Technology Trends
journal
spring/summer 2002 Volume 13, Number 3
The Financial Management
Institute of Canada
Managing Editor
Norma Hubley
Assistant Managing Editor
Bryn Weadon
Editorial Board
aRKay
Bill Boston
Jean-René Drapeau
Bruce Hirst
David Jones
André Robert
Martin Ruben
Roger Shears
Michael Van Herk
Advisory Board Chairperson
Richard Neville
Advisory Board Members
Jim McCarter
Germain Tremblay
Mary McDonald
Pierre-André Paré
Eva Plunkett
Steve McLaughlin (Secretary)
Photographers
George Dates
Tom Ritchie
Desktop Publisher
Ian Culbert
FMI Administrator
Joanne Steadman
The fmi journal is published three times a year. All rights
reserved. Reproduction in whole, or in part, without
written permission from the publisher is prohibited.
Opinions expressed are not necessarily those of the
Financial Management Institute of Canada.
inside fmij
Departments
2
Message from the President
3
From the Desk of the Managing Editor
4
FMI Board of Directors 2001-2002
6
fINANCIAL mUSINGS & iNSIGHTS
20
Chapter Histories
24
Chapter News
Features
8
Financial Management Institute of Canada (1962 - 2002)
Barbara Thompson
11
The FMI: A Formula for Success
Paul J. Gauvin
14
The History of Internal Audit in the Federal Government
Ernest Chadler
18
Forty Years of Financial Management Policy
Patrick Nephin
26
The Importance of Financial Statements and Reporting for the
Government of Canada
Raili M. Pollanen
30
After the “Perfect Storm” … An article on management changes
underway at the RCMP
Geoff Gruson
33
22nd Annual Federal/Provincial/Territorial Comptrollers’
Conference August 19 - 22, 2001
Germain Tremblay
34
Perspectives of a FORD/IARD Graduate
Bruce Manion
Columns
36
PSAB Perspectives: Keeping Up to Date
on Public Sector Accounting Standards
New Horizons: PSAB’s project on Financial Statement
Discussion and Analysis is part of a unique performance
reporting initiative.
Martha Jones Denning
37
Home and Office of the Future
Government (and business) On The Line
David G. Jones
Publications Mail Agreement Number 1686348.
The fmi journal is published by the
Financial Management Institute of Canada
P.O. Box 613, Station B, Ottawa, ON, K1P 5P7
Telephone: (613) 569-1158 Fax: (613) 569-4532
Email: [email protected]
WWW English section: www.fmi.ca
WWW French section: www.igf.ca
SPRING/SUMMER 2002
For marketing opportunities, please contact Tom Ritchie at (613) 523-0487 or [email protected]
FMI JOURNAL
1
president
MESSAGE FROM THE
A
s we come to the close of our 39th year of operation, we can look back with a sense
of pride and accomplishment. For this past year’s resounding success, I would like
to thank my Executive Committee, our FMI Board of Directors, Committee Chairpersons and all of the members and volunteers who worked on the programs and activities
for the FMI National and Chapter events.
With the upcoming Annual General Meeting, my mandate as President is coming to an
end but I am very proud of having had the honour to lead such a dynamic organization. We
have made progress in many areas and I would like to highlight a few of them.
First, the quality of our PD Week programs continues to improve from year to year. This
realisation is confirmed by an ever increasing participation that exceeded 1,700 people in
November 2001. The Public Sector Management Workshop has also become a very popular event. The success achieved from coast to coast, Victoria, Halifax, Calgary, Québec City,
and Regina is a testimony to our reputation in providing quality and valued Professional
Development.
The principal raison d’être of FMI centers on Professional Development. One of the key
instruments of this mission is the fmi journal which has developed into a professional, highly respected and relevant publication receiving attention and praise from all quarters. Surveys of our members continually rate the journal as the principal benefit of annual membership.
All successful organizations require strong, and focused leadership. Over the past year I
have had the opportunity to work with an impressive, committed and competent group of
people on our national board. Despite difficult times, heavy workload and family commitments - board members such as Cheryl Munro, Bruce Jamieson, Jim Quinn, Mary McDonald, Bruce Meredith, Norma Hubley, Roland Letarte, Nicole Campeau, Tony Marcantonio,
Peter Wolters, Fred Donaldson, Wolf Boehm, Jean Laporte, Dennis Watters, Terry Coyle
and many others at the Chapter level have done what it took to get the job done.
The highlight of my involvement with the FMI has always been and will always be the
privilege to work with such a great number of dedicated individuals. Together we have cause
to celebrate and something to be proud of. We have built an organization of VOLUNTEERS that is of real value and genuine relevance.
My role as President of the Financial Management Institute of Canada will always remain
a special highlight of my career. Thanks to all of you who have given me the opportunity. ■
2
FMI JOURNAL
Germain Tremblay
President
VOLUME 13, NO. 3
managing editor
FROM THE DESK OF THE
W
elcome to the Spring/Summer
edition of the fmi journal.
I would like to take this opportunity to
thank Stacy Van Humbeck who has devoted three years ensuring excellence in the
journal in the capacity as Managing Editor
and Assistant Managing Editor. Our new
Assistant Managing Editor is Captain (N)
Bryn Weadon. Bryn has been actively
involved with the FMI as Vice President of
both the Capital and Halifax Chapters.
Bryn is a Certified Management Accountant and also holds the Professional Logistician Designation. Bryn has served in the
Canadian Forces since 1974 and is currently the Maritime Staff Comptroller/Support
Services.
In addition Les Kom, who has provided
insightful columns on personal financial
management for the past three years, has
left our editorial board. Thank you Les for
your contributions to the fmi journal.
The FMI is celebrating its fortieth
anniversary this year. What began as a
group of senior financial administrators
talking about the impact of the Royal Commission of Government Organization (the
Glassco Commisssion) has matured into a
national organization serving the needs of
all levels of government. It is remarkable
that this organization has been built entirely on the strength of volunteers demonstrating a commitment to better financial
management. The FMI enjoys a stellar reputation in the financial management community, consistently providing timely and
valued information through its annual Pro-
SPRING/SUMMER 2002
fessional Development Week, Public Sector
Management Workshop and the publication of the fmi journal.
Throughout this anniversary year we
hope to showcase developments in the various disciplines in financial management
and for this issue we have input on the History of Internal Audit in Government, submitted by E. Chadler of the Internal Audit
Centre of Excellence and another article
discussing the past forty years in Financial
Management, submitted by Pat Nephin. It
is interesting to note that Pat Nephin was
president of the National FMI in 1988-89,
the year when the journal made its debut.
Another long-time supporter of the FMI,
Paul Gauvin, has prepared an article giving
his views on the success of the FMI. Paul
Gauvin was the honorary Co-Chair of this
years PSMW held in Fredericton in May.
Mr. Gauvin was also the President of FMI
National in 1972-73. Barb Thompson, current President of the Capital Chapter, has
traced 40 years of FMI history in this journal.
We have an interesting Chapter News
section, with regular input from the Quebec and Capital chapters and additional
inputs from Halifax, Fredericton and Manitoba Chapters. Chapter news is always welcome.
As proud as we are of our history, this
issue has also touched on some interesting
topics of a more timely nature. Dr. R. Pollanen of the Sprott School of Business of
Carleton University has provided us with
further insight on the Importance of Financial Statements and Reporting for the Gov-
Norma Hubley
Managing Editor
ernment of Canada. Geoff Gruson has discussed his organization’s desire and efforts
to implement an organization that truly has
the capacity to manage their resources
responsibly and strategically.
Martha Denning Jones, who is a regular
contributor of the PSAB Perspectives column, has enumerated PSAB’s current initiative for the development of performance
reporting. All of us, in all levels of government, will be following progress on this initiative.
David Jones, who regularly contributes
on a wide variety of topics through his
Home and Office of the Future column,
writes in this issue of Canadians expectations for easy access to government.
For those of you who have attended FMI
events over the past year, either a local
chapter event, PSMW or PD week, take a
minute to reflect what a marvelous organization this has become over the past four
decades. With a solid reputation to build
on, the FMI will serve the financial management community of all levels of governemnt for many decades to come. My
congratulations to all of those who served
to build this organization into what it is
today. ■
FMI JOURNAL
3
HEADER
FMI Board of Directors 2001-2002
Executive and Management Sub-Committee
President
Germain Tremblay
Vice-President
Bruce Jamieson
Treasurer
Jim Quinn
Secretary
Mary McDonald
Past President
Cheryl Munro
Administrator
Joanne Steadman
Phone
(613) 995-3741
(506) 452-3150
(613) 838-4352
(506) 444-4076
(613) 946-6298
(613) 569-1158
Fax
(613) 996-2151
(506) 451-6091
Bruce Meredith
Norma Hubley
Roland Letarte
Nicole Campeau
Tony Marcantonio
Peter Wolters
Cheryl Munro
(613) 992-7624
(613) 759-6796
(418) 622-5214
(613) 947-1801
(613) 947-2407
(506) 453-8187
(613) 946-6298
(613) 947-4661
(613) 759-6023
(613) 947-4661
(613) 943-1097
(506) 453-7154
(613) 952-9613
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Directors
Liaison East
Liaison West
Professional Liaison
Communications
Director
Fred Donaldson
Wolf Boehm
Jean Laporte
Dennis Watters
Terry Coyle
(902) 426-6124
(204) 945-7006
(819) 994-8004
(613) 992-4936
(613) 995-9377
(902) 426-0507
(204) 948-2338
(819) 997-2239
(613) 992-0528
(613) 947-4661
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Chapter Presidents
Alberta
Fredericton
Halifax
Manitoba
Montreal
Ottawa/Hull (Capital)
Québec
Regina
Vancouver
Victoria
Patrick Stewart
Murray Lambert
Kevin Malloy
Jeff Hnatiw
Mario B. Roy
Barbara Thompson
André Côté
Bob Cochran
Arvind Reddy
Derek Greer
(780) 435-7354
(506) 453-6939
(902) 424-2424
(204) 983-3871
(450) 646-6764
(613) 759-6431
(418) 643-5172
(306) 780-6750
(604) 264-2726
(250) 356-5103
(780) 435-7359
(506) 453-2917
(902) 424-0635
(204) 983-4208
(450) 646-8297
(613) 759-6023
(418) 643-0421
(306) 780-7555
(604) 666-8527
(250) 356-7751
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Executive
Marketing and Development
Journal Editor
Chapter Liaison
PD Week Chairs
PSFMW Chairs
(506) 453-2266
(613) 952-9613
(613) 569-4532
Email
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
FMI Membership
Have you renewed your membership?
If you have not received your renewal information, contact your
local Chapter. Do not delay! There is an exciting year planned. To
be eligible for preferred member rates, your membership must be
current. Remember the benefits FMI membership offers:
• Networking opportunities with over 2,000 professionals in the
finance field across Canada;
• Professional development conferences, seminars, workshops at
preferred rates;
• Eligibility for awards and recognition;
• Leadership participation in 10 FMI Chapters across Canada;
• fmi journal;
• And much, much more!
4
FMI JOURNAL
Contact your local Chapter President for information
regarding mailing addresses and program activities.
Victoria
$20.00
Vancouver
$25.00
Calgary
$30.70
Regina
$25.00
Winnipeg
$20.00
Ottawa/Hull (Capital)
$26.75
Montreal
$30.00
Quebec
$25.00
Fredericton
$32.35
Halifax
$50.00
National
$32.10
…or send the completed application and payment to:
FMI — P.O. Box 613, Station B
Ottawa, Ontario, K1P 5P7
VOLUME 13, NO. 3
ISO 9002
The MLL Group,
The MLL Group is a firm of more
than 60 dedicated consultants and
accounting professionals, whose
fundamental purpose is to contribute
to the success of its clientele by
providing exceptional quality
services and solutions.
an effective solution
for your success
Services provided by the MLL Group
.
.
.
.
.
Strategy and planning
Governance and management frameworks
Performance and productivity
Information and systems management
Financial management, control and
accounting operations
.
.
.
.
.
Comprehensive and assurance audits
Forensic investigations
Contracts and contributions
Auditing and taxation
Financial analysis and planning
www.mllca.com
214, MONTREAL ROAD, SUITE 500, OTTAWA (ONTARIO) K1L 8L8
TELEPHONE: (613) 745-8387 / (613) 745-7323 FAX: (613) 745-9584
fINANCIAL mUSINGS &
iNSIGHTS
LOWDOWN: If you’re the low man on the
totem pole, just remember that if it wasn’t
for you the damn thing would fall over.
25-year marriage is forgiveness. Long ago,
she forgave her husband for not being Paul
Newman.
OH HOW I HATE TO GET UP IN
THE MORNING: A morning without
coffee is like something without something
else.
THE FINGER: We asked the aforementioned woman why she wore her wedding
ring on the wrong finger? She replied “I
married the wrong man.”
WHAT’S IN A NAME?: Mangling Editor
said we could name our own salary - we call
ours Fred.
WHY DO FOOLS FALL IN LOVE?:
After a quarrel, a wife says to husband, “You
know, I was a fool when I married you.”
The husband replied, “Yes, dear, but I was
in love and didn’t notice.”
MANAGEMENT THEORY: There is
absolutely no substitute for a genuine lack
of preparation.
BE PREPARED: If you can smile when
things go wrong, you have someone in
mind to blame.
OH WHAT A LOVELY WAR: War doesn’t determine who’s right but who’s left.
HENNY YOUNGMAN 1: My wife dresses to kill. She cooks the same way.
RODNEY DANGERFIELD 1: My wife
and I were happy for twenty years. Then we
met.
CHEER UP: Our boss said that everyone
hates him. The shrink said “Don’t be
ridiculous - everyone hasn’t met you yet.”
UNHOLY MAD-RIMONY: They were
married by a judge - they should have asked
for a jury.
HOW DO I LOVE THEE?: Office sweetheart says the difference between a
boyfriend and a husband is about 30
pounds.
HENNY YOUNGMAN 2: He bought his
wife a new car. She called and said, “There
was water in the carburetor.” He said,
“Where’s the car?” She said, “In the lake.”
ADVICE TO THE LOVEWORN: Never
go to bed mad. Stay up and fight.
HENNY YOUNGMAN 3: The secret of a
happy marriage remains a secret.
WORDS OF WISDOM: According to the
office matriarch, the secret for success in a
6
FMI JOURNAL
EXCUSE ME: She hasn’t spoken to her
hubby in 18 months - she doesn’t want to
interrupt him.
MENAGE A TROIS: The office lover
claimed his girlfriend told him he should be
more affectionate. So he got two girlfriends.
VIVE LA DIFFERENCE: Women will
never be equal to men until they can walk
down the street with a bald head and a beer
belly, and still think they are beautiful.
DUNNO: Are there interstate highways in
Hawaii?
FOR YOUR DINING PLEASURE: Sign
in the fmij Towers executive cafeteria:
“Shoes are required to eat in the cafeteria.”
We presume that socks can eat any place
they want.
DRIVE THEM CRAZY: Phone someone
in the office, leave your name and say “Just
called to say I can’t talk right now. Bye” .
MIXED UP WORLD: Planes have flotation seats? Do cruise ships have parachutes?
CRAZY LANGUAGE: Fat chance and
slim chance mean the same thing.
ANSWER PLEASE?: Have you ever imagined a world with no hypothetical situations?
PIG OUT: 3 Little Pigs went out to dinner.1st orders a Pepsi, 2nd orders a Coke, 3rd
asks for 6 large glasses of water. Throughout
the meal the 3rd keeps asking for several
large glasses of water. When asked why he
aRKay
aRKay, who also refers to himself as “your obedient
servant” (yos), was born to a family of wolves, who
later abandoned him. He was then taken in by a band
of nomadic, itinerant, wandering auditors who treated him as one of their own. From these humble beginnings, he developed a deep and abiding respect for the
science (art?) of financial management, leading to his
work being published in no less than the fmij!
He would love to receive your comments and suggestions.
replied “Somebody has to go wee-wee all
the way home!’
POLITICALLY CORRECT: The Washington Bullets are changed their name. Not
wanting their team to be associated with
criminal activity, they’ll be known as the
Bullets.
WISH SOMEONE HAD TOLD YOU:
Never test the depth of the water with both
feet.
CAREER ADVICE: If at first you don’t
succeed, skydiving is not for you.
LAO TZU HAD IT WRONG: Give a
man a fish and he will eat for a day. Teach
him how to fish and he will sit in a boat and
drink beer all day.
JOHN WAYNE’S LAST WORDS: Don’t
squat with your spurs on.
AND THAT CAME FROM: The previous
item was originally, in antiquity, phrased
thusly:A truly wise man never plays
leapfrog with a Unicorn.
KLEPTOMANIACS ANONYMOUS:
The meeting was delayed, they couldn’t
find the gavel.
LIES DON’T FIGURE: Just read a report
that stated that last year 415,237 people got
married. Shouldn’t that be an even number?”
VOLUME 13, NO. 3
FINANCIAL MUSINGS AND INSIGHTS
TOGETHER FOREVER: Sweet young
thing in the office announced that she was
engaged the previous evening. The office
wit asked “Engaged in what?”
I CRIED BECAUSE I HAD NO SHOES:
Saw a barefoot street person carrying one
shoe in his hand. We asked if he had lost a
shoe. He said “No, I just found one.”
FRUGAL YOU: The office accountant told
us that he was teaching his children economy, In order to conserve milk he has his
family eat cereal with a fork.
TO A DIFFERENT DRUMSTICK:
Cross a turkey with an octopus, get enough
drumsticks for all
2 RULES FOR SUCCESS. 1 - Never tell
all you know
$2.99 per minute: Nostradamus today:
PAY UP: Bought a car a year ago. The deal
was nothing down, no interest, no deposit
etc AND “You don’t have to make the first
payment.” When the bank asked for our
cheque we replied that if we sent it, that
would be the first payment - and we don’t
have to make it.
QUIZ 1: If a lawyer and a tax auditor were
both drowning, and you could only save
one, would you go to lunch or read the
newspaper?
QUIZ 2: What do you call 25 accountants
buried up to their chins in cement? Cement
shortage.
QUIZ 3: If you saw a drowning accountant
what would you throw him? His co-workers.
QUIZ 4: What’s brown and looks really
good on an auditor? A Doberman.
ANIMALOGIC 1: When you pat a dog on
its head he will usually wag his tail. What
will a goose do? Make him bark.
A DECENT BOSS: As he ages we were
wondering which of his senses diminishes
first? It seems to be his sense of decency.
AND PEOPLE CALL HIM A GREAT
WRITER: Shelly actually said “If winter
comes, can spring be far behind?”
ANIMALOGIC 2: Elephants are the only
animal that cannot jump. That would be a
good thing.
SPRING/SUMMER 2002
SURVEY SAYS: Scientists claim a cat’s
urine glows in black light. Who paid/was
paid for that?
BUTT OUT: Remember, you are not
smoking, the cigarette is. You’re just the
sucker.
QUIT THE CLONING AROUND:
Clones are people, two.
THINK ABOUT IT: What if there were
no hypothetical questions?
ANIMALOGIC 3: Ground Beef: A Cow
With No Legs.
AND
NOW,
A
COUNTRY
FAVOURITE: If the Phone Don’t Ring,
You’ll Know It’s Me.
NON-PROPHET ORGANIZATION:
Atheism
DOES IT RING A BELL?: The name
Pavlov
WRAP IT UP, THROW IT OUT: Rap is
to music what Etch-a-Sketch is to art.
1970 vs 2000: In those 30 years, you went
from long hair to longing for hair, keg to
EKG,.acid rock to acid reflux, growing pot
to growing a pot belly, trying to look like
Marlon Brando or Elizabeth Taylor to trying NOT to look like Marlon Brando or
Elizabeth Taylor, popping pills & smoking
joints to popping joints & taking pills, getting out to a hip new joint to getting a new
hip joint, Rolling Stones to kidney stones,
AND, taking acid to taking antacid
ARBITRATOR: A cook that leaves Arby’s
to work at McDonald’s.
AVOIDABLE: What a bullfighter tries to
do.
EYEDROPPER A clumsy ophthalmologist.
HE’S SO DUMB: When he opened the
box of Cheerios he thought they were
doughnut seeds!
TERROR-IBLE ALERT: Airline officials
today refused to let a 73 year old woman
board a plane because she had two knitting
needles. They were worried that she may
knit an Afghan!
A WORD FROM OUR SPONSOR: Federal Espresso: When you absolutely, positively have to stay up all night.
EVER WONDER?: If electricity comes
from electrons, does morality come from
morons?
SIGN IN AN OLD WESTERN MOVIE:
Rain dance Friday night, weather permitting.
A TIP FOR YOU: Next time you consider
leaving a tip, quote the bible to the waiter.
“So you also, when you have done everything you were told to do, should say, ‘We
are unworthy servants; we have only done
our duty.’ “ Luke 17:10
WHAT’S IN A NAME: All the fuss over
renaming Mount Logan to Mount
Trudeau. Simple solution: Rename Trudeau
to Pierre Logan.
SOMETHING FISHY: She came from a
small fishing village. She went to a movie saw Gone With The Wind. She actually
thought he said: “Frankly, Scallop, I Don’t
Give a Clam.”
OH OH!: Our computer just gave this
message: “Were you sure?”
PAYOFF: The above dealer now advertises
that you don’t have to make your last payment, When you think the loan is paid,
they tell you that it couldn’t have been the
last payment . . . .
WHAT THE HELL?: A resident of Hell
(do we need caps for that word?) ran into
Satan and was told he was the best worker
there. He passed out. We assume he fainted
with damn praise.
ONLY IF: In one of the world’s hot spots
there was an unconditional surrender.
IMPOSSIBLE. The fact that there are no
conditions is in fact a condition, n’est-ce
pas?
FOLLOW ME: “Surely, goodness and
mercy will follow me all the days of my life”
Goodness and mercy is good. But we’re
gonna charge Shirley with stalking.
DO YOU TAKE?: Young man in the office
with a pierced ear. We told him he was
ready for marriage. He has experienced pain
and bought jewellery ■
HOW DO YOU FEEL?: Whoops! Sorry, I
thought that was a braille name tag.
FMI JOURNAL
7
Financial Management Institute of
Canada (1962 - 2002)
Barbara Thompson
T
he Financial Management Institute
is old enough to have a distinguished history, but yet young
enough to still remember its roots. What
started out as a small group of senior federal government accountants meeting around
a lunch table to discuss issues of financial
management and the role of financial advisors within government has grown to thousands of members, both within and outside
the public sector, all working to improve
the financial management of government at
all its levels. How did we get to where we
are today?
The Financial Management Institute of
Canada began its life as the Federal Financial Officer’s Institute in 1962. It began
under the auspices of the Federal Institute
of Management and was a forum for senior
financial officers. They met in the Gloucester Mess over lunch, often with a speaker
followed by a question and answer period,
with the aspirations of raising the profile of
financial managers within the public service
and implementing the recommendations of
the Glassco Commission that had inspired
the Institute’s creation.
In the early 70’s, membership criteria
broadened to include senior members of
the FI group. Meetings shifted to the RA
Centre, and the growing organization felt a
need for a set of more formal rules upon
which to guide themselves. The first set of
by-laws was agreed upon.
In 1975, then Auditor James J. Macdonell had deep criticism of the financial
management of the federal government.
Part of the response by financial officers
working in the public service was a hope to
revitalize and use the FMI as a vehicle to
strengthen the financial management community. As a result, membership criteria
broadened again to include the entire
financial management community within
government. In 1975, the first Bulletin was
published, which quickly became the life-
8
FMI JOURNAL
line of communication within the Institute.
Most importantly, the Institute’s first Professional Development Week (which at the
time was called PD Days) was held in cooperation with the Society of Management
Accountants. The theme for the first PD
Week was “Accountability” – a word that
was new at the time, but which would resonate for many years to come.
It was, and still is, a great source of pride
to FMI members that, as government
employees, the FMI was the first to address
the issue of accountability within financial
management. Shortly after PD Week, the
Lambert Commission on Financial Management and Accountability was established to which the FMI presented its own
brief, which was well received and respected. That government financial managers
themselves were taking a leading role in the
improvement of processes within government was a source of pride for both public
service employees and the FMI.
In the late 1970s it became apparent that
FMI could benefit greatly by including
provincial government financial management within the mandate of its operations.
A proposal to accept regional Chapters was
accepted, but it was not until 1982 that the
first Chapter started, in Victoria, B.C.
Chapters in several other cities quickly followed, including the Capital Chapter in
1985 which is now the largest. In 1982, the
FMI took another step in asserting its professionalism by becoming an official corporation.
The 1980’s were a decade of revitalization for the FMI. In 1982, a Past Presidents’ committee was established to advise
on strategy and programs, and in 1983 an
awards program was established to honour
some of our outstanding members. The
FMI Award was intended for individuals
who have demonstrated outstanding leadership and notable contributions to financial management in government (federal,
Barbara Thompson
Barbara Thompson is the Head of the Revenue and
Accounts Receivable Unit within the Corporate Management Branch of Agriculture and Agri-Food Canada, having just recently left the Treasury Board Secretariat after having spent 7 years there. Before coming
to the Treasury Board she spent 26 years in Statistics
Canada. She has had much experience in the areas of
administration and finance, managing contributions,
as well as survey taking, data dissemination, processing, training, census evaluation and census publicity
programs.
provincial, or municipal).
In 1987, the PD Week co-sponsorship
agreement with the Society of Management
Accountants (now the Certified Management Accountants) was re-negotiated with
the FMI taking a leading role. The FMI at
that time also approached both the CGA
and CA associations which, along with the
Suppliers Showcase added in 1983, made
PD Week even larger and more informative
and relevant than ever.
The FMI celebrated its 25th Anniversary
in 1987-88. With that celebration came the
fmi journal, which replaced the much-loved
Bulletin. In Vol. 1 No 1 - the very first edition of the fmi journal issued in January of
1988, the then President of National, Pat
Nephin, in his President’s message, talked
about expanding FMI coverage of the issues
faced in government through the introduction of this brand new periodical. Today, we
know only too well how accurate Pat’s prediction would be, as the quarterly, glossystyle magazine quickly became as indispensable to FMI members as the Bulletin had
been – a timely, relevant, and professional
publication for anyone involved in public
sector financial management.
What were some of the key issues and
events that anniversary year?
• Electronic Data Interchange (EDI) - the
exchange of information contained in
routine business transations such as purchase orders, invoices and payments
VOLUME 13, NO. 3
FINANCIAL MANAGEMENT INSTITUTE OF CANADA
where data is transmitted “in machine
readable format sent electronically (via
phone lines) rather than paper form.
• The FMI held the first “Government
Directors of Finance Workshop” - in
Montreal. This workshop would turn out
to be an intrinsic and invaluable part of
the FMI program, and today they continue to be well-received, with participation from officials across Canada at all
levels of government.
During that anniversary year, the FMI
Awards program was expanded to include
the President’s Award for distinguished
service to the Institute and the FMI Scholarship Award for sons or daughters of FMI
members.
The winner of the first FMI President’s
award (1983) was a founder and the first
President of the Institute, Guy Cousineau.
The following year, the award was presented to Don Yeomans, another individual
who had contributed much to financial
management. In 1986, Paul Gauvin was
recognized for his contribution to the FMI
and to government financial management.
In 1987 Alan Ross received this prestigious
award in recognition of his hard work. As
well, the FMI named its first honourary
president that year, Mr. Raymond Dubois,
who had been instrumental in the organization of the initial fledgling organization
that started the FMI.
Vol. 1 No 3 of the fmi journal - the summer edition 1988 - carried Part I of J.Q.
McCrindell’s (then Deputy Comptroller
General) article on “The Evolution of
Financial Control in the Government of
Canada”. In this article, Mr. McCrindell
provided an excellent description of government roles and processes, including the
roles of Parliament (Legislative), Cabinet
(Executive), the Treasury Board, the Minister of Finance, the then Supply and Services, Departments and Agencies, the Auditor General, Public Accounts, as well as
processes and practices such as the Consolidated Revenue Fund, Estimates and
Appropriations, the Budget, Revenues and
Expenditures, Public Debt, Accounts and
Financial Statements, and Internal Audit
and Legislative Audit. Mr. McCrindlell also
delved into the promulgation of the Financial Administration Act and described its
progression from the British North Americal Act of 1867 to the Consolidated RevSPRING/SUMMER 2002
enue and Audit Act of 1878 to Sir Henry
Drayton’s Statement that the purpose of
assets and liabilities is to disclose net debt 1920 to the Major Revisions to Consolidated Revenue and Audit Act of 1931 to the
Financial Administration Act of 1951.
Part II followed in the next edition, covering the Royal Commission’s Report (better known as the Glassco Commission) of
1962, the Government Organization Act of
1966, Amendments to the Financial
Administration Act of 1969, the Guide on
Financial Administration of 1973, and the
Report on the Study of the Accounts of
Canada of 1975. This historical recapitulation also delved into the Auditor General’s
final conclusions on the financial management and control study, as well as the Auditor General Act of 1977, the Amendment
of the Financial Administration Act to
Establish the Office of the Comptroller
General of 1978, the Report of the Royal
Commission on Financial Management
and Accountability (the Lambert Report),
Adjustments to the Accounts Act (Bill C22), the CICA Public Sector Accounting
and Auditing Committee (PSAAC), the
Amendments to the Financial Administration Act (Bill C-96) of 1983, the Amendment to Financial Administration Act Control and Accountability of Crown corporations (Bill C-24) of 1984.
1988 saw a new strategic five-year plan
conceived to carry the FMI into the 90’s,
and, in 1991, the National Executive of the
FMI hired an Executive Director and
opened up it’s own office. The Capsule was
established at that time as a quarterly publication intended to inform members of
news from the National Office. In 1992,
the Government Directors of Finance
Workshop became the Public Sector Financial Management Workshop, to reflect the
growing diversity of our membership and
the regional quality of the workshop. It was
in this year that the comprehensive, fiveyear strategic plan was refined and written
in order to move the Institute forward.
The early 90’s saw many new issues facing government, and the FMI demonstrated that the organization was up to the challenge, hosting many seminars on current
topics, and the fmi journal carried articles
on the issues of the day:
• Performance Measurement - a disciplined approach to setting targets and
measuring performance;
• Accrual Accounting in Government - the
beginning of a long debate which would
ultimately result in the implementation
of the Financial Information Strategy;
• FI Standards - “overkill” or “overskill” entry level requirements for FI’s;
• Ethical Decision Making:
• Act in the public interest;
• Be non-partisan and politically neutral;
• Do not disclose confidential information;
• Protect the privacy of citizens and
employees;
• Provide efficient, effective and fair
service to the public;
• Be accountable; and
• Avoid conflicts of interest.
• Control Implications of Public Service
2000 - renewal of the Public Service:
trusting people with authority, providing
a positive work environment, emphasizing individual judgement and initiative
in providing better service, and holding
public servants accountable for results;
public servants willing to put the client
first, assume more responsibility, challenge old ways, strive for excellent results,
and be accountable for decisions.
• The creation of a Sub-committee on
Information Management (TIMS) of the
Treasury Board Senior Advisory Committee (TBSAC) to improve on Information Management - common service
agencies to facilitate departmental management of information and information
technology.
• Smart Card Technology - the idea that a
standard plastic credit card could be hard
wired or programmed with logic and digital storage capability, or “intelligence”,
and the prediction that the smart card
would change the way we do things.
• The creation of ACIM - Advisory Committee on Information Management:
• Challenges for Financial Managers in
the ’90’s;
• Maintaining state of the art knowledge
and skills’;
• Understanding and practising quality
and service management;
• Managing Changing Technology;
• Assessing and implementing alternative program delivery mechanisms;
• Creating new forms of organization
FMI JOURNAL
9
FINANCIAL MANAGEMENT INSTITUTE OF CANADA
and flatter structures;
• Facilitating organizational effectiveness;
• Increasing productivity;
• Understanding globalization, free
trade, increased competitiveness;
• Developing soft skills (interpersonal,
“people” management, leadership,
motivation, listening); and
• Sustaining hardiness against stress and
burnout.
• Home and Office of the Future - the
introduction of the idea that a person
could connect, through wireless communications, to one’s work environment
irrespective of where that person may be.
The mid 90’s saw more emerging
progress and the fmi journal kept its readers
informed on the development of the Acquisition Card pilot and eventual implementation, giving managers a “convenient and
less burdensome method of procuring and
paying for low value goods and services”, as
well as “the electronic super highway” capable of “creating highways for multi-dimensional information flows at speeds which
match human responsiveness to events”,
and “Global Connectivity” - whereby, from
your workstation, you can “wander about
global space and tap into public information whether stored in a government office,
in a university or any other world wide
facility subscribing to the Internet”.
Other key “buzz” words emerging
included “Reengineering” - the fundamental rethinking and redesign of the entire
business system in order to achieve dramatic improvements in cost, quality, capital,
service and speed (business system comprising business processes, jobs and job profiles,
organizational structures, management and
measurement systems, and the values and
beliefs of the employees and the organization). “Transition” was also a key word used
to describe a time of “passage” when people
are apt to carry around some of the baggage
of their past, as well as feel the first stirrings
of their future. It was also a time when
employees had to face a number of challenges as old processes and ways of doing
10
FMI JOURNAL
business made way for the new.
“Partnerships” began to emerge - in continuous learning, in system and policy
development, from the private sector as
well as from the public sector, and many
discussions centered around “ensuring a
successful partnership”.
The need for capitalization and depreciation of capital property for the Government
of Canada became a hot issue that would
come to be debated in many forums over
the next few years, including discussions of
definitions of capital assets, threshold values, components of costs, betterments,
amortization methods as well as write
downs and appropriations.
In the winter of 1996, then President of
the Treasury Board, Art Eggleton, spoke of
“getting government right” throught the
use of Business Plans and the Expenditure
Management System, the Financial Information Strategy (FIS), Reform of the Estimates, and Assessment of Programs (Program Review).
By 1997, the Y-2K issue was becoming
apparent and fmi journal articles screamed
“Your job is at risk - by the Millenium Bug”
- a simple flaw with catastrophic results; the
grim reaper waits for no person!
In 1998 we saw the creation of the Independent Review on the Modernization of
Comptrollership in the Government of
Canada headed by Jean-Pierre Boisclair,
and the fmi journal carried a review of the
Panel’s key findings - that comptrollership
is a management responsibility, not simply
a specialist function, an integrating function for both financial and non-financial
information - in support of management
direction-setting, resource allocation, control and accountability; that comptrollership is a contributor to effective governance, an essential element of the public
service “mind-set”. Jean-Pierre Boisclair’s
Panel recommended that there be a change
in culture, that comptrollership must be
brought out of the realm of financial specialists and into the domain of the line
managers. The Panel also recommended
that tools such as risk management, business planning, information systems and
performance measurement be modernized
to encourage Modern Comptrollership
practices. The Panel demonstrated that the
essentials of Modern Comptrollership are:
• Leadership;
• People;
• Values and Ethics;
• Performance Information;
• Risk Management;
• Stewardship; and
• Accountability.
The fmi journal carried the Comptrollership Modernization Road Map in its Fall
edition of 1999.
By the late 90’s we were “Caught in the
World Wide Web”, and the focus was on
the “information overload” we found ourselves in with the vastness of internet access.
Many of us found ourselves saying “Okay,
so we’ve build a web site ... now what?”.
David Jones’ article in the fall fmi journal
issue delved into the complexities of the
Web, with technical references to
“HTML”, “HotBot”, “GOPHER”, “FTP”,
“TALK”, “MUD”, and “hackers”.
As we approached the year 2000, government became very focused on “Beating the
Millennium Bug”, the implementation of
the Financial Information Strategy, costing
services, measuring performance and
enhancing accountability.
Today, the FMI continues to keep abreast
of government issues facing public servants
today. This is clearly evident when seminars
of the day include Financial Statement
preparation under FIS, Grants and Contributions, the Expenditure Management System, Government Online, Modern Comptrollership and Financial Policy, and much,
much more.
The FMI has continued to offer its membership and participants the very best in
quality, current events at low, low prices.
Congratulations, FMI, on a job well done!
VOLUME 13, NO. 3
The FMI: A Formula for Success
Paul J. Gauvin
I
am very pleased to extend my congratulations to the Financial Management
Institute (FMI) as it celebrates a remarkable 40 years successfully promoting excellence in public sector financial management. I have been an active supporter of the
FMI since the early 1970s when I served as
a Director, and then President, and over the
years, I have been a regular contributor to its
professional development forums and workshops, as well as to the FMI Journal. I also
very much look forward to serving as one of
the Honourary Co-Chairman of the FMI’s
upcoming Public Sector Financial Management Workshop in May 2002.
Obviously a great deal has changed within government as well as within the discipline of financial administration since the
FMI was originally formed, and many of
these changes have helped to shape its evolution as a respected leader within the professional finance community. For example,
in 1962, the Royal Commission on Government Organization (the Glassco Commission) tabled its report on the management of the Public Service. Among the
report’s recommendations (approved by the
government) were those related to delegation of authority to departments to manage
their own personnel and to be held
accountable for efficient performance. In
this same year, the forerunner of the FMI,
the Federal Financial Officers’ Institute,
was created with the long-term goal of raising the profile of financial management
(and financial officers) in the Federal government. In the shorter term, however, the
Institute was focussed on contributing to
the development of departmental strategies
associated with the implementation of
Glassco Commission recommendations. In
both of these areas, it made substantial
progress, while also continuing to focus on
emerging new challenges.
Expanding and enhancing the quality of
the professional development programs
SPRING/SUMMER 2002
offered by the Institute was one such challenge and a particular interest of mine (then
and now). In 1971-72, when I became a
Director of the FMI, I made it a priority.
The work undertaken by a number of us
during this period carried over to 1972-73
when I served as President of the FMI. In
that year, the FMI successfully organized its
first “Professional Development Week”
achieving unprecedented high attendance
and superior ratings for the excellence of its
sessions. Since that time, the FMI has continued to successfully build on this
approach and today its professional development forums are among the best organized, best attended, and best presented
learning opportunities available to financial
officers within or outside the Public Service.
Another goal during my tenure as President was to achieve a major increase in the
level of membership in the FMI and we
dedicated considerable efforts to developing
and implementing strategies that would
attain this objective. As a result of this
work, by the end of 1972-73, the membership base of the FMI had broadened significantly from 700 to over 1,000 members - a
very significant milestone of which we were
all extremely proud. Membership levels
today are at an all-time high (and still growing), which is another indication of the
solid reputation of the FMI. Currently,
there are 2,000 members (in 10 active
chapters across Canada) from all levels of
the FI community, and senior financial and
other managers, as well as from the private
sector.
During the 1970s, the financial management environment continued to change
e.g. the Treasury Board Secretariat (TBS)
introduced the Program, Planning and
Budgeting System (PPBS) as well as zerobased budgeting. The Royal Commission
on Financial Management and Accountability (the Lambert Commission) was also
Paul J. Gauvin
In November 1999, Paul J. Gauvin was appointed as
Deputy Commissioner, Corporate Management and
Comptrollership at the Royal Canadian Mounted
Police in Ottawa. A native of Moncton, New
Brunswick, Mr. Gauvin began his career as an
accountant with Blue Cross/Blue Shield. Since that
time, Mr. Gauvin has dedicated over 30 years to public service, in increasingly senior financial and program management positions, in some of the largest
most complex federal government departments,
including Transport Canada and Employment and
Immigration Canada where he served as Senior Financial Officer and Assistant Deputy Minister, Finance
and Administration.
Among his career accomplishments are his leadership of the successful development and implementation of the Government’s first major integrated
finance and materiel management system and his role
as Chief Negotiator for the Government’s commercialization of the Air Navigation Service, a $1.5 billion
sale to the private sector, and the single largest Government commercialization activity. The sale was a
cornerstone of the Government’s deficit reduction,
streamlining and divestiture agenda and continues to
serve as a model for other privatization initiatives.
Mr. Gauvin is a former President of the Financial
Management Institute and a champion of the excellence and professionalism of the finance community.
He is the recipient of numerous honours and awards,
including the National Transportation Week Award of
Achievement and the Public Service Award of Excellence, and a frequent speaker on the challenges of government and departmental financial administration;
major financial systems implementation; and commercialization and divestiture of government entities.
established to examine and make recommendations on the government structures,
organizations, management systems, and
processes needed to ensure effective
accountability for public funds. The report
was tabled in 1979 and departments and
agencies were immediately tasked with tailoring strategic approaches to support the
implementation of many of its recommendations. Financial officers played crucial
roles in this process and the FMI facilitated
sharing of departmental plans, expertise
and experiences.
The major expansion in office automation, including the development and implementation of large, centralized financial
information systems, (and efforts to make
FMI JOURNAL 11
THE FMI: A FORMULA FOR SUCCESS
these more locally accessible), were dominant themes in the 1980s. In January 1988,
the FMI launched its impressive new Journal to provide another formal mechanism
for “sharing best practices in managing
public sector resources.” Beginning with its
first issue, the editorial staff has devoted
itself to ensuring that the Journal attracted
knowledgeable and expert authors to provide thought-provoking, insightful and
timely articles, columns, and news. In addition, the FMI has ensured that the Journal’s
editorial board reflects a range of departmental perspectives and experience, including central agency representation, and this
approach has been a cornerstone of the
Journal’s continued relevance and value
over the years. More recent initiatives such
as the FMI’s useful website, and newsletters
from the various FMI chapters, have only
served to further strengthen information
sharing and accessibility.
In 1989, the Public Service 2000 initiative was launched to facilitate administrative and other reforms throughout the Federal government. Like a number of my
financial colleagues, I was invited to be a
and agencies, and now, government-wide.
With each new direction and priority, the
FMI has provided exceptional leadership
e.g. its most recent workshops and forums
associated with FIS and Modern Comptrollership, (combined with the integration of
these themes in complementary and
informative issues of the Journal), has been
a formula for success. Another crucial element of this formula is the strong support
given to the FMI by dedicated, competent
departmental volunteers who contribute
their skills to the FMI executive, the delivery of professional development programs,
the production of the FMI Journal, and
other activities. The core element of the formula, however, is the steadfast commitment of the FMI itself to effectively supporting the financial community over the
past 40 years. This support will be even
more important in the future as we address
the added complexities and challenges of
modern financial management in the new
millenium. I wish the FMI much continued success in the coming years. ■
member of various PS2000 task forces; this
and other indicators further reinforced the
growing recognition that the Finance function, and financial officers, were increasingly pivotal to departmental and governmentwide strategic planning and decision making. Financial officers were making the
transition from “the back room to the
boardroom” and the FMI’s ceaseless efforts
to promote their professionalism were contributing to this transition.
Throughout the 1990s, deficit reduction
and “getting government right” were priorities and the financial community was a key
partner in related initiatives designed to
ensure improved government accountability, transparency, and results for Canadians.
Such initiatives included restructuring;
streamlining; commercialization; business
process re-engineering; alternate service
delivery; and shared, integrated systems.
More recent challenges and successes have
included departmental implementation of
the Financial Information Strategy effective
April 1, 2001 and the application of Modern Comptrollership principles and practices initially through pilot departments
AMMIS offers a full range of
transaction processing and
reporting capabilities and provides
tools that can be used in all
business functions, including
contracting, grants
and contributions.
Over 20 client
departments make up the
AMMIS User Management
Group, making it one
of the most successful
cluster groups in the
federal government.
AMMIS
Automated Materiel Management
Information System
www.ammis.ca
AMMIS is an open system
with leading edge technologies.
AMMIS architecture allows
for the development of
interfaces to other systems.
The cost to a department
acquiring AMMIS is
relatively low, enabling
departments to achieve
hard-dollar productivity
improvements.
FOR MORE INFORMATION, CONTACT
[ Mr. Jean-Marie Godard ] AMMIS Product Director [ 613-997-6413 ] or by e-mail at [ [email protected] ]
12
FMI JOURNAL
VOLUME 13, NO. 3
Procurement
™
Beyond
Co u n t o n B M O e P u rc h a s i n g
E-purchasing is the way B2B procurement
will be done. And your success will come
from finding a substantial provider with
a truly automatic and integrated, end-toend web-based solution.
BMO ePurchasing Solutions can provide
the most effective technological solution
for driving excess costs out of your
company’s procurement process.
B M O F l ex Po r t ™ combines
electronic purchase order delivery,
multi-dimensional file/message
mapping, flexible payment capability,
and advanced reporting in one
integrated solution.
B M O P ro c u re 2 Pay™ rules based
customized online catalogs takes clients
from product searching, pricing, ordering
and tracking, through to payment and
accurate general ledger recording.
BMO details Online® delivers
detailed transaction information for
viewing, editing and cost allocation. It
allows for seamless integration with
ERP systems and provides standard and
customized reports.
Extend your reach.
And your control.
Shift your focus. Optimize.
Make the connections.
Go Beyond.
BMO e Purchasing Solutions
® Registered trade-mark of Bank of Montreal
™ Trade-mark of Bank of Montreal
BMO ePurchasing Solutions is a division
of Bank of Montreal, chartered in 1817,
the 13th largest bank in North America
and a recognized leader in e-business
innovation.
Co n t a c t u s a t
1.888.838.4401
E m a i l b i z @ b m o. co m
V i s i t w w w. b m o e p s . co m
The History of Internal Audit
in the Federal Government
Ernest Chadler
Ancient Roots of Auditing
The presence of auditing has been
inferred from records of a Mesopotamian
civilization going back as early as 3500 BC.
These records, involving financial transactions that displayed various markings, may
be construed as a system of verification.
Internal controls and separation of duties
probably arose at the same time. Records of
other early civilizations, including early
Egyptian, Greek, Chinese, Persian and
Hebrew, display similar systems.
Ancient Rome employed the “hearing of
accounts”, where one official would compare his records with those of another, an
application of both separation of duties and
verification. It is this practice, of hearing of
accounts, which probably gave rise to the
term “audit”, from the Latin “auditus”.
With the fall of the Roman Empire many
of the financial systems, including verification, disappeared. However, they reappeared as the volume of financial activity
recovered towards the end of the dark ages.
It was not until the Industrial Revolution
in Europe that auditing with characteristics
similar to current auditing, i.e. that went
beyond the hearing of accounts to include
verification of accounting records and associated supporting documentation, came
into being. The Europeans then brought
over these practices to the North-American
colonies.
More Recent Antecedents of the Practice
of Modern Internal Auditing
The proliferation of large, dispersed,
complex corporations, starting early in the
twentieth century, spurred the accelerated
development of the internal audit function.
The Institute of Internal Auditors (IIA) was
founded in 1941. Modern internal auditing
owes much of its early progress to the IIA.
This includes the gradual expansion of the
scope of internal audit activities and of the
professionalization of the practice of inter14
FMI JOURNAL
nal auditing.
The development of professional underpinnings for the profession, however, did
not come all at once. It was not until 1947
that the IIA issued its first Statement of
Responsibilities. The Code of Ethics was
issued in 1968 and the Standards in 1979.
The first Certified Internal Auditor (CIA)
exams were written in 1974, indicating that
there was, at that time, a recognized body of
knowledge available for internal audit professionals.
The Beginnings of the Practice of
Internal Auditing in the Federal
Government
Recognition of the potential value of the
internal audit function came later to the
public sector than to the private sector, but
with similar motivation. The US Congress
first recognized the potential contribution
of internal audit in 1950 in requiring, by
statute, that each executive agency include
internal audit in the agency’s system of
internal controls.
In Canada, the Report of the Royal
Commission on Government Organizations (the GLASSCO Report), in 1962,
recommended that departmental management be responsible for the establishment
of proper systems of internal audit, rather
than relying exclusively on the Auditor
General to identify inadequate financial
control.
The Treasury Board’s Guide on Financial
Management, issued in 1966, stated that
“as the process of decentralizing control to
departments proceeds, the need emerges for
- - - audits specifically designed to inform
both the department and the executive
branch of government whether resources
are being used legally and effectively”. It
went on to say that the audit function “has
an important place in all departments to
review and appraise the soundness, adequacy and application of all accounting, finan-
Ernest Chadler
Mr.Chadler’s educational background includes a B.Sc.
in Electrical Engineering from the University of
Saskatchewan and an M.B.A. from McGill and he is
both a Professional Engineer and a Certified Management Accountant.
His early work background includes 20 years in the
private sector, with Northern Electric (now Northern
Telcom) and Bell-Northern Research, as a systems,
standards and industrial engineer, and as Manager of
Management Information Information Development
and Information Systems R&D respectively. He then
joined the Public service in 1975 and worked in various internal audit and financial positions, in the Audit
Services Bureau, Public Service Commission, Fisheries
and Oceans, Foreign Affairs and International Trade
and back at Treasury Board, including as a Director of
Internal Audit, Director of Financial Policy and Systems and a Director of Financial Planning, Analysis
and Reporting. He is currently at the Centre of Excellence for Internal Audit, Treasury Board Secretariat.
cial and operating controls”.
In 1973, the Treasury Board made it
mandatory for all departments and agencies
to have internal audits performed on their
financial administration systems. Directive
9.1 of the policy stated:
“Departments shall have financial audits
performed, which include:
• Reviewing and appraising the effectiveness and efficiency of departmental
financial administration systems, including the safeguarding of assets, and
• Ascertaining the extent of compliance of
departmental systems and procedures
with financial policies, regulations and
other instructions of Parliament, Treasury Board and the department or
agency.”
The practice of internal audit in federal
government departments and agencies in
the 60s and 70s was not by any means
restricted to financial audit, Treasury Board
pronouncements notwithstanding. During
this period the scope of the practice varied
from narrowly based, financial auditing to
Operational Auditing, with virtually
unlimited scope. As would be expected, the
rigour of internal audit practice varied considerably as well, remembering that when
you moved any distance from the financial
auditing domain, methodology and standards were sparse.
Not surprisingly, reports of Treasury
Board and Auditor General reviews, in
1975 and 1976, indicated that internal
audit, where established, was largely ineffective. In response to these and many other
challenges, in 1976 Treasury Board
approved the creation of a Financial
Administration Branch, within the SecreVOLUME 13, NO. 3
HISTORY OF INTERNAL AUDIT IN THE FEDERAL GOVERNMENT
tariat, to strengthen financial administration, including internal audit.
For internal audit, this culminated, initially, in a 1976 Treasury Board Circular,
reasserting the role of internal audit. In
1978, partly in response to the Royal Commission on Financial Management and
Accountability (Lambert Commission;
1976 to 1979), the federal government created the Office of the Comptroller General,
within Treasury Board, and issued the
“Standards for Internal Financial Audit”.
This latter document was meant to both
standardize the scope and provide standards
of performance for the practice of internal
auditing in the federal government.
The Standards did, however, recognize
the existence of other forms of internal
auditing and review (e.g. Operational
Auditing, Management Review) and coexisted with the practice of Program Evaluation, launched through Treasury Board Circular 1977-47, aimed at the provision of
services, which evaluated the effectiveness
of programs. At that time the frequency of
audits advocated was such that each major
financial component in a department or
agency was to be examined within a threeyear period.
Evolution of the Internal Audit Function
Since 1978
By the seventies, internal audit practice
had been expanding in scope in many parts
of the world for some time, in many guises.
In the U.S., financial auditing was being
stretched to the review of all areas where
money was being spent, which led the auditors, inevitably, into the examination of
operations; in the U.K., the thrust was
value-for-money auditing; in Canada and
elsewhere, the practice of Operational
Auditing was gaining a following, while the
Auditor General coined the term “Comprehensive Auditing”, with characteristics similar to Operational Auditing.
The Comptroller General of Canada
came to the conclusion, in the early 1980s,
that it was time for the federal government
to follow suit, for two reasons. First, it
seemed to make sense to provide the same,
independent review service to all managers
that was being provided to financial managers. Second, there seemed to be a need to
provide more rigour, in the form of standards, for such an expanded internal audit
SPRING/SUMMER 2002
practice.
The result was the “Standards for Internal Audit in the Government of Canada”,
published in 1982. This Policy and Standards, however, coexisted with the “Principles for the Evaluation of Programs” and its
companion “Guide for the Program Evaluation Function”, which effectively limited
the scope of internal audit to the examination of all things within the boundaries of
the host organization, while the evaluation
function took on the role of evaluation program effects, beyond the borders of the host
organization. There was some overlap, in
that evaluation was also to examine the efficacy of the program delivery platform. At
this time, the frequency of audits of all
major components was lengthened from
within three years to every three to five
years.
The impetus for the next change in the
review regime in the federal government
came, at least in part, from the 1993 Auditor General’s audits of the internal audit
and evaluation functions in departments
and agencies. The Auditor General’s Report
concluded the internal audit and evaluation
functions were, generally, not meeting
expectations and that the information for
decision-making and for reporting results,
provided by the internal audit and evaluation functions, could be better integrated
with that provided by management.
Parenthetically, the downsizing years
resulted in a reduction of between twothirds and three-quarters of the federal government audit and evaluation population, a
development which, no doubt, contributed
considerably to its deteriorating performance during this time period.
The Treasury Board’s response was the
Review Policy, issued in 1994. This policy
brought together various Treasury Board
performance and review requirements. It
was intended to support the principles of
managing for results through:
• Emphasizing the responsibility line managers have for demonstrating performance and acting on performance information, and
• Creating a productive alliance between
managers and review professionals that
will link review more visibly to management decision-making and innovation, as
well as accountability practices.
The new policy promoted the use of
review to help introduce and credibly assess
innovative uses of management reforms and
incentives, such as single-window service
delivery; strategic use of new information
technologies; Special Operating Agencies;
quality management; delayering, decentralization and empowerment; forming service
delivery alliances with third parties; new
approaches to manage risks better; and flexible operating budgets.
The Internal Audit Policy component of
the Review Policy made no substantive
changes to the scope of internal audit but
bolstered the professional underpinnings of
the practice by integrating Treasury Board
and IIA Standards and Ethics provisions.
Also, in this policy, frequency requirements
were dropped and the concept of risk-based
audit planning was introduced.
The most recent phase of the evolution
of the internal audit practice in the federal
government was launched as part of the
“Results for Canadians” and “Comptrollership Modernization” initiatives.
The main thrusts of the new approach to
internal auditing (aside from, once again,
separating the Internal Audit and Evaluation functions), includes:
• A new Policy on Internal audit, which
repositions the function as a provider of
“assurance” services to senior management, that focuses on:
– Risk management strategy and practices;
– Management control framework and
practices; and
– Information for decision-making and
reporting.
This policy aims to change the mix of
services to encourage greater use of assurance services, as compared to advise and
assist engagements (e.g. consulting services); it also recognizes that internal auditors
will be called upon to provide other, related
services, such as investigations, control selfassessment facilitation, and special reviews
as well. This policy not only shares the
review universe with the evaluation function, but with management as well.
• The establishment of a Centre of Excellence for Internal Audit, at Treasury
Board, which will provide the following
support to the internal audit community:
– Policy advice, as well as advice on standards, methodology, practices tools
and techniques;
FMI JOURNAL 15
HISTORY OF INTERNAL AUDIT IN THE FEDERAL GOVERNMENT
– Foster the development of audit guidance in key areas;
– Seek funding for rebuilding departmental internal audit capability;
– Initiate an omnibus recruitment initiative, to help departments to acquire
new staff in an expeditious manner;
– Develop internal audit training courses, and
– Provide a liaison service, which deals
with internal audit ad-hoc issues in a
timely manner and provides a convenient means for feeding important
issues from departments to policy
authorities and vice-versa.
In many respects, the evolution of internal audit practice over the last forty to fifty
years is a case of “back to the future”, in
that “assurance” auditing draws heavily on
the methodology and standards of private
sector, external auditing, which is the genesis of the early practice of internal auditing.
The differences, however, are significant.
The early internal audit practice was established, in no small way, as much for the
support of external audit activities (in order
to minimize growing external audit costs)
as for the benefit of management. On the
other hand, the current version of assurance
retains the broad scope of previous versions,
while adding the rigour typically associated
with the private sector external audit practice. ■
2001 FreeBalance
Innovation Award Winner
The 2001 FreeBalance Innovation Award was presented to
Sophie Cauchon. Sophie is currently in her second year in
Business Administration at l’École des Hautes études
commercilaes de Montréal.
The award was presented by Mr. Bruce Lazenby of FreeBalance.
AMA
ANTHONY MACAULEY ASSOCIATES
Government eXcellence & Leadership
for over 20 years…
e-GX Public Sector Solutions
#
#
#
#
#
#
GOL creation tools and framework
extensive grants and contributions
comprehensive financials
salary management
integrated procurement and assets
SAP™ real-time connection
Robust
Flexible
www.gx.ca
Ottawa & Victoria, Canada
16
FMI JOURNAL
#
Empowering
613.230.3833
Kingston, JA
VOLUME 13, NO. 3
Smart Decisions.
Smart Government.
Effective organizations the world over turn to Cognos, the
global leader in business intelligence. Business intelligence
enables them to turn masses of data into relevant, actionable information. Information that leads to operational
efficiencies, more effective management of services, and
greater public accountability.
BETTER DECISIONS
DRIVE BETTER
PERFORMANCE.
Today more than 19,000 leading organizations worldwide
use Cognos business intelligence to improve their performance. Discover their groundbreaking strategies. Order
your free copy of Connecting the User to the Business with
Reporting and Analysis, a Cognos White Paper to learn
how smart organizations put information to work.
Cognos—the business intelligence inside the world’s most
intelligent organizations.
www.cognos.com /smartgov
© Cognos, and the Cognos logo, are trademarks of Cognos incorporated.
OUR MISSION: TO MAKE
OUR CUSTOMERS THE
BEST DECISION-MAKERS
IN THE WORLD.
Forty Years of Financial
Management Policy
Patrick Nephin
A
bunch of the boys were whooping it
up in the Malamute saloon….
oops, wrong story. The story of the
evolution of financial management policy
in the federal government over the past 40
years is not quite so strange as some of the
sights seen by the northern lights, but it has
seen its share of twists, turns and strange
events.
As one might expect, the government
environment, organization and management culture, precedents and personalities
have influenced financial policy over the
years. Financial policy development has
been characterized by the 2 C’s of conservatism and caution; at the same time, financial officers have found creative ways to
bend, but not break, financial policy to
meet program exigencies or evolving situations.
Financial management policy has usually
been developed in a sound progressive
manner but occasionally as a somewhat
reactive response to a specific event. Examples of the sound approach include the
1973 Guide on Financial Administration
and the majority of current financial policies. Examples of “over the top” reactive
type of policies include the 1957 policy
prohibiting the use of government funds to
purchase Christmas cards and the early
1980’s policy prohibiting first class air travel. Another example was the taxi chit
overkill – rather than provide appropriate
delegation of authority and deal with values
and ethics when abuse was detected, it
almost took more signatures to take a taxi
ride than to get a $1 million project
approved!
One can surmise how the greeting card
policy came into effect, but it is interesting
to note that the policy continued to exist
for decades, long after the Treasury Board
practice was to no longer issue such prohibitions. In this case, officials did not want
to repeal the policy for fear that its withdrawal would be seen as an implicit sign
that it was OK to buy greeting cards. And
18
FMI JOURNAL
sure enough, soon after the policy was quietly dropped from a list of policies in effect,
the calls came in asking if greeting cards
could now be purchased. The policy prohibiting first class air travel came about
when the then President of the Treasury
Board, departing on a flight out of Ottawa,
found more public servants sipping cocktails in the first class lounge than ministers!
Personalities have clearly influenced the
context of financial policy development.
Two royal commissions, a bull-dog Auditor
General and a host of other characters have
contributed to the movement towards a
robust financial policy framework.
The Glassco Royal Commission of the
early 1960’s is generally regarded as the cornerstone of modern financial management
practices in the federal government. Its
theme of “let the managers manage” led to
a significant decentralization of management (including financial) responsibility.
Until the late 1960’s, very few departments had financial officers since financial
responsibilities were assigned to a central
Controller of the Treasury (the precursor of
the current Receiver General). When financial elements were centrally controlled and
all financial officers worked for one organization, financial policies could be kept simple since it was not difficult to communicate in a smaller, centralized organization.
Still, a 10-volume Treasury Manual existed
to define financial rules.
Financial management policy continued
to be issued by the Treasury Board, which
was now constituted as a separate entity,
instead of being part of the Department of
Finance. By 1966, it had published a series
of “Treasury Board Management Improvement Policies”. It created a Financial Management Division within its Administrative
Policy Branch. With the Glassco inspired
push to decentralization, changes in the
Financial Administration Act in 1969 placed
primary responsibility for financial management on deputy ministers. A new Treasury Board Policy on Financial Administra-
Patrick Nephin
Patrick Nephin ([email protected]) had a 15-year
public service career before moving to the consulting
fraternity in 1990. He provides consulting services
through Top Box Consulting Group and develops
training programs with SkilPlus Training Corp. Special thanks to John McCrea, Dave Woodcock and
Bernard Ouellet for their contribution to the article.
tion followed in 1973 to replace the Management Improvement Policies. For those
quantifiably inclined, it is of interest to
note that the 1973 policy contained 21
pages, one 6-bullet policy statement defining deputy ministerial responsibility, 9 topics, 21 directives (i.e. mandatory elements)
and 34 guidelines (optional elements);
check the TBS web site to see how many
policies currently exist.
One of the Financial Management Division’s key contributions to the financial
management framework was the preparation of a Guide on Financial Administration, published in September 1973 as a
hardbound document (did they think it
would never need to be amended?). In the
foreword to the Guide, Bud Drury, then
President of the Treasury Board wrote:
“Traditionally, the main objective for
financial administration has been to control
cash disbursements in relation to appropriations approved by Parliament. While this
objective remains important, increasingly
there is a need for departmental and central
agency managers to relate financial costs to
program achievements or outputs to ensure
that maximum effectiveness and efficiency are
attained in the expenditure of public funds.”
It is of interest to compare this quote,
written almost 30 years ago, to one of the
four pillars of today’s modern comptrollership initiative that says “Modern Comptrollership presumes that departments can not
only report on their program performance but
can also, in a relatively systematic fashion,
link their resources spent with the results
VOLUME 13, NO. 3
FORTY YEARS OF FINANCIAL MANAGEMENT POLICY
achieved. It is understandable that Parliamentarians would want to know what it costs
to produce certain results.” The more things
change, the more they stay the same.
Maxwell Henderson was the Auditor
General of Canada for most of the 1960’s
and his office focused on the detection and
disclosure of “non-productive payments”.
The size of government was relatively small
and it was common for auditors to examine
most payment transactions. One of the
strange practices of the time was the
amount of repetition in the AG’s reports;
the report was largely a series of “audit
notes” and the notes were repeated from
year to year until either the AG was satisfied
that the situation had been corrected or the
Public Accounts Committee had discussed
the issue.
Jim Macdonnell’s appointment as the
Auditor General of Canada in 1973 was an
inflection point for financial management
policy. With his management consultant’s
mentality, he quickly altered OAG audit
practice to focus on systems and management controls. He pushed for radical
change, believing that if the management
culture could be fixed, then the risk of nonproductive payments would be minimized
and the ability of managers to demonstrate
cost effective program delivery would be
enhanced.
Macdonnell’s remark in the mid 1970’s
that “government has, or is close to losing
effective control of the public purse” was a
wake up call (it was rumoured that Macdonnell and the then Prime Minister Pierre
Trudeau had an interesting conversation or
two). The statement led to a flurry of financial policy activity, the creation of the Lambert Royal Commission on Financial Management (with its theme of “make the managers manage”) and eventually to a host of
changes in financial practices and reporting
to Parliament. One of the effects of Macdonnell’s report was a doubling of the number of financial officers in government.
When it became common in the late 1970s
for financial officers to receive two or even
three promotions in a year, Treasury Board
Secretariat issued a pronouncement that
limited promotions to no more than one
per year (in the 1990’s, one promotion per
decade may have been more common…).
As in the story of the tortoise and the
hare, the approach to policy development
SPRING/SUMMER 2002
by the Financial Management Division in
the 1970’s, the Office of the Comptroller
General in the 1980’s and more recently by
the Comptrollership Branch of TBS, has
been a case of “slow and steady wins the
race”. It is understandable that care must be
taken to ensure that policies affecting billions of dollars are developed in a manner
that covers all the bases and anticipates as
many contingencies as possible. Occasionally, the process gets accelerated, as illustrated by a policy developed in the mid 1980s
– the draft policy came to the attention of
Jack Manion, then Secretary to the Treasury
Board, when it was 6 to 12 months from
being issued in the normal process. It was a
topic of close interest to him given his previous position as Deputy Minister for the
Unemployment Insurance Commission.
Making a few marginal notes on the draft
policy, he pencilled a note (no e-mail in
those days …) to the Comptroller General
saying that he thought it should be published asap. Months were collapsed into
weeks and the policy came into being.
Some financial officers have built reputations around being creative in applying
financial policy. In the 1970’s, managers
controlled head count but not necessarily
salary budgets. Creative ways were found to
hire staff in ways that did not count towards
“person years” but could use salary dollars.
Stories abound about creative ideas related to maximizing spending at year-end.
Some prescient managers of programs that
required major equipment purchases were
known to put in orders for equipment in
January, with the caveat to the supplier that
the purchase would only be confirmed in
mid-March (once departmental lapses were
known) with delivery required by March
31. One department is reputed to have
been the most creative in regard to year end
spending – buying an oil tanker load of fuel
in March and then telling the supplier that
they could borrow the fuel until the department actually needed to use it later in the
year. Current policies such as payables at
year end and the carry forward have eliminated the need for such creativity – in the
days before these policies, one departmental
Chief Accountant reportedly had all supplier cheques issued towards the end of March
sent to his office rather than being mailed
to suppliers. Once he more clearly knew the
balance in the appropriation, he mailed out
some cheques and returned the rest to the
Receiver General for cancellation – voila, a
balanced appropriation!
No doubt the financial policy story will
continue to evolve in the years ahead, and
hopefully the story will be populated with
interesting characters, anecdotes and the
occasional controversy, but not too many!! ■
Salary budgeting and
forecasting with SMSTM
At Influatec, experts in finance
and high tech work side by side
to develop and implement innovative long-term solutions to
help organizations manage their
resources more efficiently.
See further and more clearly!
www.influatec.com
888/(819) 595-1794
FMI JOURNAL 19
history
HALIFAX CHAPTER
T
he Halifax Chapter (originally the Halifax-Dartmouth
Chapter) inaugural meeting was held 7th December 1989.
The first Annual Meeting was held in 1990 with the Constitution
being adopted, and a Bank balance of $1600.
The initial fees were set at $35, and remained at that level for
some time.
The following were the elected officers for 1990/91
• President - Peter Estey
• Vice-President - Bryn Weadon
• Secretary - Debi McDonald
• Treasurer - Doreen Campbell
• Program Co-Ordinator - Earl Milbury
• Membership Co-Ordinator - Dave Smart (later to be President)
• Directors: Ron Myers / Francis (Frank) Fleet / Fred Donaldson
(also later President)
As many of the initial executive were Federal (Armed Forces) it
was some time before Provincial members joined in numbers. Our
meeting place was the Halifax Armories, which had a lot of parking
and no rent. Later parking became a problem. In 1992/93 new locations were explored with a variety of different speakers and venues.
Our frequency of meetings, attendance and interest all started to
decline in 1995. This situation continued to exist until after we
hosted the 1998 PSFMW where we had 312 attendees, and when
20
FMI JOURNAL
we were able to attract the attention and interest of the province.
Our Financial base improved as well.
In 1998/99 we had a membership of 59 members. This was very
encouraging as we had sought regular Provincial input from our
inception. Under the leadership of Dave Smart we performed a
comprehensive review of ALL the Chapter Activities, resulting in a
direction to obtain a standard meeting place & time & attempt to
attract a more varied attendance. In April 2000 Richard Neville
spoke to a joint meeting of FMI and Nova Scotia Federal Council.
From 2000 a new executive emerged with a strong Provincial
presence, Kevin Malloy, the Controller for the Province emerged as
the new President. He was determined to keep the Chapter Financially sound and plan a more focused and less frequent delivery of
topics that would be of interest to our members. We have carried on
from this point with increasing efforts to now entice the Federal
members to attend on a more regular basis. We have developed a
Memo of Understanding with Health Canada to use the Learning
Centre Plus and have attempted to meet with the Federal Council
and similar agencies to develop interest and commitment.
Our speakers have always been of high caliber and we are continuing to increase our efforts in publicity and feedback from the public sector in the Halifax Metro Area. Our membership is currently
at 65 members (and growing). ■
VOLUME 13, NO. 3
history
FREDERICTON CHAPTER
T
he Fredericton Chapter of FMI was officially launched in
May 1991. Since then, our membership has grown to over
150 people consisting largely of provincial civil servants
with financial or administrative backgrounds.
The Chapter holds regular monthly events, consisting of seven
luncheon speakers, one and one-half professional development days
and an annual general meeting and membership appreciation event.
The very first luncheon speaker event, an Address to Members by
the Minister of Finance of New Brunswick, has become an annual
tradition and has tracked the visions of four Ministers of Finance.
During the eleven-year history, the Fredericton Chapter of FMI has
hosted speakers like Denis Desautel (Auditor General of Canada)
and Richard Neville (Assistant Comptroller General of Canada).
From the provincial scene, the chapter boasts speakers like Bernard
Lord (Premier of New Brunswick), Norman Betts (former Minister
of Finance) and Daryl Wilson (Auditor General).
In addition to these regular chapter events, the Fredericton Chapter hosted and organized the 1996 Public Sector Financial Management Workshop. The Chapter is honoured to have this opportunity once again in May of 2002 with Peter Wolters and Cheryl Munro
as co-chairs of this event. In 1998, FMI-Fredericton committed to
a bursary program with the University of New Brunswick, which
provides a $500 cash award to an appropriate student. ■
No other bank is better positioned
to offer integrated financial
solutions for government and
public sector organizations.
You can reach our dedicated team
at (514) 394-4378 or via e-mail
at [email protected]
SPRING/SUMMER 2002
FMI JOURNAL 21
history
QUEBEC CHAPTER
IGF-Québec:
A history that goes back 15 years
Suzanne Gingras
Vice-President of IGF-Québec
Its beginning
Created in 1988, the Quebec chapter of the Financial Management Institute of Canada (IGF-Québec) will be celebrating its 15th
anniversary in 2002-2003.
Starting in 1985 with around one hundred members that came
mainly from the Quebec finance controller, IGF-Québec now has
430 members representing 47 departments and organizations of the
Government of Quebec and the Federal Government. Most of them
are professionals or executives working in the field of resource management.
Its activities
The annual schedule of activities includes four lunch-conferences
and two thematic days on different aspects of public administration.
This formula has become more popular with the average number of
people taking part in our training activities increasing steadily since
1988. The first lunch-conference held on December 1, 1988 was
attended by 119 people, while in 2001-2002 the average number of
participants peaked at 441. This increase owes itself mainly to the
sales of packages to departments and organizations at the beginning
of the season.
In June 2000, the Quebec chapter hosted the 13th edition of Public Sector Management Workshop. Revolving around the theme of
“Quebec, fortress of the new millenium”, several speakers discussed,
among others, topics such as modernizing public management,
management by results and accountability. Over 417 people from
different provinces met in Quebec City.
Its organization
The board of directors of IGF-Québec now has 16 members and
has enjoyed, since 1993, the support of the Board of Governors that
consists of eight representatives from the provincial public service
and one representative from the federal public service. Being true
builders, these governors, who occupy key managing positions in
several departments, impress their vision upon IGF-Québec and
support the board of directors in preparing its annual program.
In order to better plan its growth and stabilize the organization,
IGF-Québec adopted a strategic plan for 2000-2003. Intending to
meet the objectives of this plan, directors have created several work
committees on the programming of activities, membership, sponsors, marketing, finance, evaluation of activities, the IGF Journal,
the web site, etc. Last March, the Board of Governors praised IGFQuébec for its success, its vitality and harmonious growth.
Throughout the years, the organization relied on the faithful support of several sponsors that contributed in their own way to our
actual success.
Its image
In 2001-2002, in order to improve its visibility and to offer a better service to its members, IGF-Québec has entirely reviewed its
image by offering renewed promotional material. The Web site was
also reviewed and improved. Since September 2001, clients are
being contacted mostly by email, thus avoiding the need to mail
over 800 invitations for each activity. In order to register to activities, people also resort to this electronic method.
Its future
For 2002-2003, we are preparing a new program of activities, not
to mention that we also intend to offer our new and older members
a special activity to commemorate our 15th anniversary. In addition,
IGF-Québec has set a target of reaching out more for the young
people and in finding the means to get them interested in our training activities. ■
If you wish to find out more about IGF-Québec, refer to our Web site
at the following address: www.igfquebec.com
Suzanne Gingras
Serving as Director at IGF-Québec for over 8 years, the author is a chartered
accountant employed as Chief of the Treasury Service at the Financial Resources
Department of the Société de l’assurance automobile du Québec.
22
FMI JOURNAL
VOLUME 13, NO. 3
history
MANITOBA CHAPTER
The FMI Manitoba Chapter –
History and Highlights
T
he underlying strengths of FMI Manitoba are dedication
The same high standard of programming was continued into the
and lasting friendships. These strengths have surfaced connineties. Luncheons and other special events included high profile
sistently over the twenty-one year history of the Chapter.
political people including the Mayor of Winnipeg and senior
A small group of dedicated finance officials from Federal GovProvincial Ministers, as well as experts in many areas of financial
ernment Departments responded to
management and related disciplines.
overtures from the Ottawa-based
Some social events, such as golf tournaFinancial Management Institute to
ments, were also held. Chapter memform the Manitoba Region of the FMI
berships continued to grow and
in early 1981. An organizational meetreached a peak of 152 in July, 1994.
ing attended by 39 people was held
One reason for the growing memberMarch 11, 1981. At this meeting, a
ship roster was the addition of a large
constitution was adopted and a
number of people from the municipal
Regional Executive Committee was
sector – primarily from the City of
elected. At a subsequent meeting held
Winnipeg - and also from non-governon June 1, a formal seven person execment areas. A major reason for a drop
utive committee for the 1981/82 term
in membership since the mid-ninety’s
was elected, headed by the first Presipeak has been substantial downsizing
dent – Wayne Buck of Supply and Ser- At an April, 2002 Manitoba Chapter function, Western Regional impacting all three levels of governvices Canada. Three of the original Director and Manitoba Chapter former president Wolf Boehm is ment. The major event of the decade
flanked by long time FMI member Ron Stoesz (left) and founding
executive committee members remain Manitoba Chapter executive member and former president Ron was the hosting of the Eighth Annual
active in the Manitoba Chapter today. Smith.
Public Sector Financial Management
The Organization’s first Annual GenerWorkshop held at the Winnipeg Holial Meeting was held on June 10, 1981. By the second executive
day Inn Crowne Plaza on May 28-30, 1995. The workshop theme
term, the Constitution had been amended and the organization’s
was “Breaking Down The Barriers”, and the local organizing Comname became the present name - the Manitoba Chapter of the
mittee, headed by Past President John McCullough were able to line
Financial Management Institute of Canada.
up an impressive array of participants including Manitoba Premier
During the eighties, the Manitoba Chapter grew to 56 members
Gary Filmon, who hosted the Sunday Evening Reception, and
in 1983/84 and 90 members by 1984/85. The membership in that
Keynote Speaker Russell Morris, Commissioner of Financial Manterm included, for the first time, a small number from other than
agement Services, U.S. Department of the Treasury. The social
Federal Departments and Agencies. By the end of the eighties, FMI
highlight of the event was the Western Casino Night.
Manitoba’s membership included a substantial representation from
Although membership numbers are down, the Manitoba Chapter
Province of Manitoba Departments and Agencies. Program activicontinues to flourish and has been able to carry on the strong proties consisted mostly of luncheons with featured speakers discussing
gramming tradition established in the eighties and nineties. It is
core topics as well as an annual professional development day. The
unique among FMI Chapters in that it has strong membership parmajor event of the eighties sponsored by the Manitoba Chapter was
ticipation from all levels of government. Of the 90 current mema national workshop held on May 15 and 16, 1989 at the Winnipeg
bers, 40% come from the federal sector, 28% are provincial, and
Sheraton Hotel. This was the Government Directors of Finance
27% municipal and 5% from non-governmental organizations. The
Workshop. It was attended by 155 participants, and featured a
Chapter is backed by an active group of past presidents, five of
number of prominent guest speakers, including Manitoba Governwhom meet for lunch regularly throughout the year. Current chalment Minister Brian Ransom, Manitoba Deputy Minister of
lenges include identifying innovative professional development proFinance C. E. Curtis, and Brian Marsen, Comptroller-General for
gramming opportunities and expanding the membership base outBritish Columbia. The Manitoba organizing group was backed by
side of Winnipeg. ■
Chapter President, Susan Murphy.
SPRING/SUMMER 2002
FMI JOURNAL 23
news
QUEBEC CHAPTER
Performance:
Current situation and future prospects
O
n December 5, 2001, the FMI’s
Quebec City chapter, along with
the Groupe d’action en gestion
financière (GAGF), a group of financial
resource managers working in Quebec
Government departments and agencies,
held a development day with the theme
“Performance: current situation and future
prospects”. Renée Brassard of the FMI’s
Quebec City chapter headed the organizing
committee for the event. Gaétan Thériault,
GAGF president, led the activity, which
brought together a number of speakers and
managers from the provincial government,
universities and the private sector.
Pierre Voyer, a professor at the École
nationale de l’Administration publique,
opened the day by talking about performance. He discussed the definition of performance, the model of measurable components, the role of financial resources and the
five interrelated features of performance.
Mr. Voyer’s presentation was followed by
a presentation on the practical experiences
of two autonomous service units that have
concluded a performance and accountability agreement.
Jean-Guy Tessier, director general of the
tax collection centre at the Quebec Department of Revenue, spoke about how to
move towards management by results. After
describing his organization, Mr. Tessier
outlined conditions and actions for making
a successful change. He ended the presentation by talking about how the introduction
of results-based management had affected
the centre’s performance.
Sylvie Barcelo, vice-president for organizational services at the Quebec Pension
Board, entitled her talk “Reconciling quality of service to the public and performance:
24
FMI JOURNAL
a utopia?” After giving a profile of the pension board and describing its values, she
covered the following points: the Pension
Board’s integrated performance management model, its management culture, cost
performance, satisfaction, the strategic
approach and the vision of the financial and
material resources branch. She concluded
by stating that “a public organization’s performance relies on a good balance between
cost control and customer satisfaction.”
The morning ended with a round table
on performance improvement led by Pierre
Voyer and made up of managers who have
experience with performance and accountability agreements: Jean-Guy Tessier; Sylvie
Barcelo; Gérard Bricheau, director of the
rolling stock management centre, Department of Transport; and Paul-René Roy, an
advisor with the under-secretariat for public service modernization, part of Quebec’s
Treasury Board Secretariat. The panel
members identified the concerted efforts of
staff, respect for people and a client-centred
policy as critical success factors.
The afternoon began with presentations
on performance appraisals within an organization and the public’s importance in performance. It ended with a talk on personal
performance.
Ombudsperson Pauline ChampouxLesage focussed on performance as it relates
to serving the public. She talked about why
performance is important, her vision of
performance, improving services for the
public, and precautions to take. She finished by emphasizing that government
must retain its unique character and not
“copy” the private sector’s way of making
decisions and measuring its performance.
“True performance is measured by the
results of our social choices, by the quality
of life of all citizens. It is measured as much
by our society’s well-being as by our financial performance.”
Michel Deschamps, director of performance appraisal at Investment Quebec, gave
a presentation on measuring performance.
After defining performance measurement,
he identified the various facets of performance appraisal, described the principles of
the appraisal process, demonstrated how to
measure performance, using Investment
Quebec as a case study, and spoke about
success factors.
Sylvie Legare, an author and speaker on
self-marketing, talked about “How to make
my personal performance stand out,”
which she looked at from three angles: the
performer’s image, the difference between
performance in a task and performance in
developing and maintaining excellent interpersonal relationships, and the seven keys
to personal performance.
The event gave participants the chance to
delve deeper into the significance of performance, discuss performance experiences,
reflect on how to make performance part of
their organizations, better situate performance in the context of society and service to
the public and become aware of how to
promote their personal performance.
We encourage you to read the presentations on the Web site of the FMI’s Quebec
City chapter: www.igfquebec.com/
Réjean Thellend
Director General
Groupe d’action en gestion financière
Member of the organizing committee for
the FMI-GAGF theme day
VOLUME 13, NO. 3
news
CAPITAL CHAPTER
T
he Capital Chapter has completed another very successful year. The 20-person
Board of Directors, of which five persons form the Executive Committee, leads the
Capital Chapter. The Chapter has an Administrative Assistant, under a 2-year
renewable services contract, who provides administrative services to the Board of Directors
and plays a key coordination role for Chapter functions. The Capital Chapter was formed
in 1985.
2001-2002 Goals
The Capital Chapter pursued the following goals and priorities for the 2001-2002 year:
• Deliver a high standard of program events and seminars for the FMI-CC membership.
This year’s program was very well received by the membership and attendees;
• Maintain membership fees; contribute to the JOURNAL; contribute to the FMI 40th
anniversary fund, contribute to an FMI kiosk;
• Continue to solicit input from SFFO’s through the SFFO Breakfast, which was well
attended and provided an excellent source of feedback and advice for the upcoming year;
• Expand the FMI-CC Board into better representation across departments, which has
opened up the Board’s circle of contacts, and provided fresh viewpoints on old issues and
some altogether new issues;
• Continue to work through the Capital Chapter Liaison Officers; and
• Communicate closely with National.
Barbara Thompson
Barbara Thompson is the Head of the Revenue and
Accounts Receivable Unit within the Corporate Management Branch of Agriculture and Agri-Food Canada, having just recently left the Treasury Board Secretariat after having spent 7 years there. Before coming
to the Treasury Board she spent 26 years in Statistics
Canada. She has had much experience in the areas of
administration and finance, managing contributions,
as well as survey taking, data dissemination, processing, training, census evaluation and census publicity
programs.
Programming
The Capital Chapter held 9 events this year; 6 of which were full day seminars for paying participants, one half day event, and the Kick-off and AGM, which were free to participants:
Season Opener (Kick-off ) & FIS Celebration .September 20, 2001
Financial Statement preparation under FIS .....October 25, 2001
Grants and Contributions ...............................November 7, 2001
Expenditure Management System ...................January 24, 2002
Government on Line.......................................February 13, 2002
Year-End Procedures .......................................February 27, 2002
Modern Comptrollership ................................March 21, 2002
Multiple Issues ................................................April 25, 2002
Annual General Meeting .................................May 9, 2002
The 2001-2002 program was very successful with attendance of approximately 859 participants. This was the result of a lot of hard work and organization by the Program Committee who aimed to meet the needs of the membership. All seminars were well-received by
the participants.
Other Activities
The President and Vice-President of the Capital Chapter addressed two FORD/IARD
classes to communicate the benefits of FMI membership; as well, both the President and VP
spoke briefly at the SFFO conference in October to convey the importance of FMI support
at senior levels. The Board of Directors also continued the tradition of meeting SFFO representatives in April to discuss the Program for the upcoming year.
Membership
Members
2001-2002
804
SPRING/SUMMER 2002
2000-2001
720
1999-2000
700
1998-1999
820
FMI JOURNAL 25
The Importance of Financial
Statements and Reporting for the
Government of Canada
Raili M. Pollanen
W
hy is the topic of financial statements and reporting relevant
and timely to public-service
financial officers and managers with financial responsibilities? Its importance can be
demonstrated, e.g., by the following
excerpts:
The Auditor General of Canada, in the
commentary on the financial statements of
the Government of Canada, in the Public
Accounts of Canada, 2000-2001, declares:
[T]he Government’s financial statements,
included in these Public Accounts, and the
Annual Financial Report published separately by the Minister of Finance are
extremely important accountability documents. They must be credible, understandable, useful, and timely.
The Guide to Preparing the 2001 Departmental Performance Reports by the Treasury
Board Secretariat (TBS) states:
An effective public performance report … is
an important instrument of accountability
to Parliament. Parliamentarians bear
responsibility for effective stewardship of
public resources. To meet their responsibility, they require clear, concise and credible
information on departmental performance.
Jones Denning (Governments Are Different, CAmagazine, December 2000) concludes:
The accountability for, and transparency of,
government decision-making has never
been more critical.
This article examines the importance of
financial statements of the Government of
Canada, specifically the criteria for financial statements, potential consequences of
not meeting such criteria, and factors contributing to the usefulness of financial statements and reporting. Implications for public-service managers and accountants are
also addressed. The article, which is part of
broader research on public-sector accounting and management by the author, focuses
on financial reporting, with policy and gov26
FMI JOURNAL
ernance issues being beyond its scope.
Criteria for Financial Statements
The Section 1000 of the CICA Handbook describes the objectives of financial
statements and four necessary characteristics of useful financial information. The
fundamental objective of financial statements is “decision usefulness”, i.e., information provided must be useful to stakeholders, such as the Ministers, the Parliament, the general public, and the financial
community, for decision making and
accountability purposes. The four criteria
for useful financial information are: understandability, reliability, relevance, and comparability. First, financial information must
be understandable by reasonably sophisticated users. Second, information must be
relevant, i.e., pertinent to the decision on
hand. Third, information must be reliable,
i.e., independently verifiable and reasonably free from errors and biases. Finally,
financial statements must be comparable
among different periods and entities. Relevance and reliability can be considered as
the overriding criteria, as information cannot be relevant unless it is also understandable, and reliability can be interpreted to
encompass comparability. In practice, a
trade-off between relevance and reliability is
often necessary in order to achieve optimum decision usefulness.
Financial statements prepared in accordance with the generally accepted accounting principles (GAAP) best meet the criteria of relevance and reliability. According to
GAAP, revenues and expenses are recognized in the accounting period in which
they are earned or incurred on an accrual
basis, regardless of when cash is received or
paid. As accrual accounting matches
expenses and revenues for the accounting
period, it reflects the economic substance of
the underlying transactions. Up to the current fiscal year, the Government has pre-
Raili M. Pollanen
Raili Pollanen, PhD, MBA, CMA, is an Assistant Professor of Accounting and the Accounting Coordinator
at the Sprott School of Business, Carleton University.
Previously, she was an Assistant Professor and the
Saskatchewan Accounting Education Foundation Faculty Fellow at the Faculty of Administration, University of Regina. Her professional background includes
public-sector accounting and related experience, both
in administrative and consulting capacity. She is an
author and a coauthor of several articles and reports
on public-sector accounting and comptrollership.
Some of her recent research has been supported by
research grants from the Canadian Institute of Chartered Accountants and the Association of Public Service Financial Administrators.
pared its financial statements on a modified
accrual basis, i.e., it has recorded transactions on a cash basis during the year and
made some accrual adjustments at the end
of the year, but it has not capitalized and
amortized tangible capital assets. Effective
for the 2001-2002 fiscal year, the Government has adopted full accrual accounting,
following similar initiatives by governments
in New Zealand, Australia, the U.K., and
the U.S. However, if accrual accounting is
not appropriately and fully implemented,
the criteria of relevance and reliability may
not be fully met, and serious consequences
can result due to incomplete and inaccurate
financial representation.
Potential Consequences of Financial
Statements and Reporting
Potential consequences of financial
reporting can fall broadly in three main
areas: economic, social, and political.
Economic Consequences
Economic consequences of inaccurate or
incomplete financial information can occur
to investors and creditors. They may make
investment decisions trusting the financial
information reported. If such information
is not relevant and reliable, the investors are
unable to assess the Government’s financial
VOLUME 13, NO. 3
FINANCIAL STATEMENTS AND REPORTING
condition and their investment risk accurately. A conventional measure of the Government’s financial condition is net debt,
defined as the difference between liabilities
and financial assets. It focuses on future revenue requirements resulting from past
transactions, but it cannot reveal full economic consequences, as it does not reflect
tangible capital assets. If only partial capital
asset information were reported, the consequences may be even more serious, as
incomplete and inconsistent information
may be perceived as reliable by investors.
In order to help assess financial condition
further, the CICA research report, Indicators of Government Financial Condition
(1997), recommends ten indicators of
financial condition in the areas of sustainability, vulnerability, and flexibility. Sustainability is defined as “the degree to
which a government can maintain existing
programs and meet existing creditor
requirements without increasing the debt
burden on the economy”; flexibility as “the
degree to which a government can increase
its financial resources to respond to rising
commitments…”; and vulnerability as “the
degree to which a government becomes
dependent on, and therefore vulnerable to,
sources of funding outside its control or
influence....”. For example, the report recommends two indicators of sustainability:
the ratio of deficit to the gross domestic
product (GDP) and the ratio of debt to
GDP. If the deficit and debt amounts
reported in the financial statements are not
reliable due to errors or omissions, the two
ratios cannot be reliable indicators of financial condition. Similar limitations also
apply to the usefulness of the other recommended indicators.
Social Consequences
Public policies are aimed at achieving
certain desirable social objectives. The lack
of relevant and reliable financial information can result in misguided priorities, misallocated resources, and suboptimal decisions, with serious social consequences to
the general public, taxpayers, and other
groups. For example, some individuals may
not receive services to which they are entitled, while other untargeted individuals
may receive them instead. Such incidents,
when they become public, could be perceived as mismanagement of tax revenues
SPRING/SUMMER 2002
and undermine public confidence in the
Government and its policies. Accounting
policies, systems, and practices that encourage timely reporting of relevant and reliable
financial information can mitigate the
impact of such incidents and help avoid
them from occurring in the future.
The full assessment of social consequences, however, is complicated and
requires broad social indicators. Some steps
have already been taken by the Government
in this direction as part of its results-based
management mandate. For example, the
report of the President of the Treasury
Board, Managing for Results 2000, Annual
Report to Parliament, discusses 16 societal
indicators and notes that some departments
have already begun to report such indicators in their annual performance reports. In
another initiative, the Social Union Framework Agreement (SUFA), the Government
and some provinces have committed to
developing joint accountability frameworks
for social programs receiving intergovernmental funding. The SUFA Accountability
Template Guide to Federal Government
Reporting (2000) by the TBS provides a
template for documenting relevant information for future reporting on government-wide management of broad social initiatives. In order for such information, both
financial and nonfinancial, to be useful for
policy decisions, it will also have to meet
the criteria of relevance and reliability in an
independent audit.
Political Consequences
Political consequences of inaccurate or
incomplete financial information can also
accrue to the elected officials. Under the
ministerial accountability arrangement prevailing in Canada, departmental officials
are accountable for program management
to their Ministers, who in turn are accountable to the Parliament, and ultimately to
the public. If the Ministers rely on information that is not relevant and reliable,
incorrect policy decisions can be made, possibly resulting in embarrassment and detrimental political consequences to the Ministers. Inappropriate or inadequate information can also result in conflicting political
and administrative objectives, as information formally reported may be different
from information used in internal decision
making. Such circumstances could occur,
e.g., if formal reports are considered unreliable and managers resort to using informal
“black books” for information in decision
making. Similarly, misalignment of responsibilities and accountability can also result,
as the “true state of affairs” may remain
undisclosed.
Factors Influencing Usefulness of
Financial Statements and Reporting
Major factors that can affect the quality
of financial information include accounting
standards and practices, accounting systems
and technology, staff skills and competencies, and management commitment and
support.
Accounting Standards and Practices
Public-sector accounting standards in
Canada are governed by the Public-Sector
Accounting Committee (PSAB) of the
CICA. As guidance to the departments in
implementing accrual accounting, the TBS
also issued the Treasury Board Accounting
Standards (TBAS). Morgan (Public Sector
Accounting Standards: To Globalize or Not to
Globalize – That is the Question, FMI Journal, Winter 2001) explains that, as all
important issues are not covered by the
PSAB Handbook, international accounting
standards (IPSAS) of the Public Sector
Committee (PSC) of the International Federation of Accountants (IFAC) were also
used as guidance in developing the TBAS.
Such practice is desirable and necessary, in
particular, given the work-in-process nature
of the current Canadian public-sector
reporting model. Jones Denning (Governments Are Different, CAmagazine, December 2000) states that the CICA reinitiated
wide consultation due to the “cool” reception for the 1997 reporting model for tangible capital assets (Section PS 3150). Preliminary proposals for changes to this
reporting model were issued for initial comment in 2000, with an exposure draft and
the final approval anticipated in 2002
(http://www.cica.ca/cica/cicawebsite.nsf/pu
blic/SGAce_govrptmdl). Under such circumstances, the TBAS serve as useful application guidelines.
Full accrual accounting improves the relevance of the Government’s financial statements, as material amounts of previously
unreported assets and liabilities are
accounted for and reported. However, the
FMI JOURNAL 27
FINANCIAL STATEMENTS AND REPORTING
Report of the Auditor General of Canada,
2001 (Ch. 1, Financial Information Strategy: Infrastructure Readiness) questions the
readiness of the departments to produce
reliable estimates of some environmental
liabilities, liabilities related to Aboriginal
claims, accrued tax revenues, and interdepartmental transactions for the 2001-2002
fiscal year. The report concludes, “without
these liabilities, costs, and asset valuation
allowances, the proposed departmental
financial statements will not provide reliable information on departments’ program
costs or on their financial position…”
Financial statements prepared under such
premises, although in principle prepared
using accrual accounting, do not fully meet
the criteria of relevance and reliability, and
have to be interpreted with extreme care.
Recognizing this potential problem, the
report supports the TBS’s decision not to
require the inclusion of departmental
financial statements in their annual performance reports for the 2001-2002 fiscal
year. It appears that significant work
remains to be completed during the current
fiscal year with due care in order to ensure
that the future financial statements of the
Government will fully meet the criteria of
relevance and reliability.
Accounting Systems and Technology
The implementation of full accrual
accounting was a component of the Financial Information Strategy (FIS) initiative
that commenced in 1995 as part of broader
strategic management initiatives. Under
FIS, the departments are responsible for
maintaining their own financial systems
and submitting summary information to
the new central information system for government-wide reporting. By April 2001, all
departments had been connected to the
central system over the previous three-year
period. Based on their needs, the departments could choose from seven possible
systems options, including human
resources, financial, materials management,
and administrative components using several platforms. For example, Perkins (Parks
Canada Agency’s First GAAP Financial Statements, FMI Journal, Winter 2001) credited
the Parks Canada Agency’s success in implementing accrual accounting significantly to
the implementation of SAP. A key objective
of the FIS is to provide managers with more
28
FMI JOURNAL
relevant, reliable, and timely information
for making program and operating decisions, as well as for reporting to the Parliament, or as stated by Morgan (fmi journal,
Winter 2001), “to improve decision-making by better linking financial and nonfinancial performance indicators and to
place more emphasis on the results
achieved.” It is obvious that well-implemented financial information systems, can
greatly enhance the production of relevant,
reliable, and timely information to all
stakeholders.
Data integrity and effective controls are
prerequisites for effective reporting and use
of financial information. The Report of the
Auditor General of Canada, 2001 (Ch. 1)
states, “Ensuring data integrity is an important government-wide responsibility. It is
needed for creating complete, accurate, and
credible financial information, including
both departmental and government-wide
statements.” In order to ensure data integrity, the report suggests that the TBS should
provide the departments with support and
guidance for completing and stabilizing
their FIS systems and ensure that the
departments develop appropriate quality
assurance policies, procedures, and controls
for the ongoing operations of their systems.
Furthermore, the development of accrual
budgeting and appropriations is essential to
complement accrual financial reporting.
Without accrual budgets and appropriations, the use of different bases for budget
estimates and financial statements seriously
complicates the budget approval and
accountability processes, as relevant costs
are not available for approving budgets and
budget-actual comparisons become confounded and largely meaningless. The availability of complete, relevant, and reliable
information, including accrual budgeting
and appropriations, should increase the
users’ confidence in the information provided and, consequently, the use of such
information.
Staff Skills and Competencies
The effective implementation and operation of new systems, such as the FIS,
requires new skills and competencies by
financial managers and staff. Experiences
with financial systems implementation in
other jurisdictions indicate that existing
staff requires training and that additional
professional staff needs to be recruited.
Claydon (Financial Information Strategy,
FMI Journal, Winter 2001) states, “It is
only when managers and their staff are
using this [FIS] information for day-to-day
decision-making that the benefits of FIS
will be fully realized. In order to begin harvesting all the benefits, managers will need
training and learning.” For example,
Perkins (FMI Journal, Winter 2001) notes
the importance of training and credits the
recruitment of two professional accountants as a key factor in the successful implementation of accrual accounting by the
Parks Canada Agency. The Report of the
Auditor General of Canada, 2001 (Ch. 1)
acknowledges that the departments are
starting to train managers but anticipates a
lengthy learning process. Creech (British
Columbia’s Evolution to Full Accrual
Accounting, fmi journal, Winter 2001)
reports that it took five years for accrual
accounting to become fully accepted in the
Government of British Columbia. As to the
recruitment of new staff, it is important to
realize that the Government will have to be
able to compete with the private sector for
the most qualified financial professionals.
The need for enhanced competencies
and professionalism has also been recognized by professional bodies. The learning
of skills and competencies can be facilitated
through a professional accreditation
process. The President and CEO of the
CMA Canada, in an address to the publicsector accounting forum, Sprott School of
Business, Carleton University (December
2001), stated that, in the future, public
organizations will increasingly require
strategic financial management professionals who can think strategically and work
effectively in process-based management
teams. Professional accounting bodies can
play a critical role in accrediting publicservice financial professionals with such
skills and competencies. In fact, the President of the Association of Public Service
Financial Administrators (APSFA) (FI
News, Sept. 2001, www.apsfa-agffp.com)
announced a planned joint study sponsored
by the TBS, the CMA Canada, and the
APSFA to examine the feasibility of providing the Chartered Public Finance Accountant (CPFA) designation of the U.K.-based
Certified Institute of Public Finance
Accountants (CIPFA) in Canada. AccordVOLUME 13, NO. 3
FINANCIAL STATEMENTS AND REPORTING
ing to the President, “An accreditation similar to CPFA is needed in
Canada to recognize the unique qualifications needed for financial
management professionals in the public sector.” Pursuing such an
accreditation is considered important, given the enhanced accounting responsibilities that the departments have assumed under the
new financial information system.
Management Commitment and Support
The effective implementation of major Government-wide change
initiatives, such as FIS, requires strong political and management
commitment and support. The importance of such support in effective change management has been widely documented in other
jurisdictions. The Report of the Auditor General of Canada, 1999
(Ch. 21, Financial Information Strategy: Departmental Readiness)
urges the TBS to assume a leading role in managing the necessary
cultural change and in providing guidance and lessons learned to
the departments. The Report of the Auditor General of Canada, 2001
(Ch. 1) provides an update and reports that the Government recognizes the importance of change management and that the departments have change management plans, e.g., for developing management reporting and providing management training, at various
stages of completion. According to the report, the careful implementation of such plans is essential for realizing the full potential
benefits of FIS. Furthermore, as the FIS project is formally nearing
its conclusion, the full realization of its potential benefits also
remains contingent on the commitment of the Government and
senior officials to the development and effective implementation of
accrual budgeting and appropriations.
Conclusion
Effective financial information systems are the cornerstone of
effective results-based management and accountability practices, as
relevant and reliable financial information is critical for making
sound program decisions and for assessing program outcomes.
Financial professionals, as standard setters for and producers, managers, and auditors of financial information play the primary role in
ensuring the relevance and reliability of financial information, thus
contributing to effective program delivery. Given the recently
implemented financial information systems, accounting standards,
and outcome-focused management practices in the Government, it
is critical that public-service financial professionals have the necessary skills and support for performing both their traditional and
enhanced roles effectively. Should the credibility of financial statements and reports be compromised for any reason, significant economic, social, and political consequences can result due to diminishing public confidence in the policies and management practices
of the Government. ■
SPRING/SUMMER 2002
FMI JOURNAL 29
After the “Perfect Storm” …
An article on management changes
underway at the RCMP
Geoff Gruson
The Perfect Storm
Anyone who has been following the
management evolution of the RCMP these
days knows that management “change” is
well-underway - call it modernization, business focus, modern comptrollership, or
implementing results-based management whatever you call it, it’s the fallout from
what we euphemistically refer to as the
“perfect storm.”
For those who read the book, or for the
George Clooney fans, you will remember
that the perfect storm happened off the
Grand Banks and was the result of “… a
series of otherwise benign low-pressure systems, colliding and coalescing until the seas
reached 200 foot heights with winds in
excess of 200mile/hour speeds…” Unfortunately George and company perished. The
storm re-drew many parts of the eastern
seaboard, and caused more re-crafting of
weather tracking and search and rescue policy than any event in recent memory.
Well, the RCMP had its own perfect
storm, resulting in a series of initiatives to
overhaul management practices.
The first of our “low-pressure systems”
was the arrival of the new Commissioner G. Zaccardelli - in September 2000. The
new Commissioner brought with him a zeal
for change and a religion about management improvement. As you can appreciate,
it is hard to ignore change initiated by a
“champion” at that level of an organization.
The second low-pressure system – the
RCMP had experienced a couple of fiscal
year-ends with minor, but noticeable,
budget-balancing problems. This created
some dark clouds at the Center. Management “renewal” became critical and a number of initiatives, to change and modernize
the management structures and practices,
were hastily considered.
Add to that mix a new management team
– 8 or 10 of the most senior positions had
been in their chairs for less than a year.
30
FMI JOURNAL
Energetic people – both from inside the
member ranks as well as some “civilians” –
with reputations for change and a real
desire to put their “thumb-print” on the
organization. So emerged the ingredients
for a third cyclonic cell.
About the same time the Conference
Board of Canada published a report that
provided an informative ten-year rear-view
mirror on RCMP management initiatives
and behaviour. And, a report was tabled by
the OAG with some less than laudatory
words about certain program/service elements and some concerns about our capacity for revenue recovery. And …
Well, you get the picture - our “perfect
storm” materialized, tracking significant
waves in the otherwise placid waters of the
management of the RCMP. But, the RCMP
didn’t run for cover. In the wake of the
“storm”, the organization has undertaken a
number of initiatives that can be brought
together under a “management of excellence” umbrella - focused mostly on performance management and being strategy
driven.
The Wave Breaks
The “change” started with becoming a
pilot department for Modern Comptrollership. The organization took on a diagnostic, or “management capacity check”, that
resulted in a number of recommendations
to address organizational systems and culture change. In the OAG’s report this year
the RCMP was cited as one of only three
organizations showing “strong support for
the initiative … with a plan that covers all
capabilities that need to be strengthened.”
Although we have yet to specify performance indicators, the Modern Comptrollership die is well-cast.
The organization also created a focal point
to bring into line the activities of 22,000
employees and a $2.5B budget. A bright new
Strategic Framework was developed to pro-
Geoff Gruson
Mr Gruson is the Assistant Commissioner in the
RCMP responsible for Strategic Policy and Planning.
He has been with the RCMP since August 2000.
Mr Gruson has over 20 years experience in strategic planning and performance management, working
with both the Public and private sector organizations
including: Health and Welfare Canada, Citizen and
Immigration, Human Resource Development Canada, Customs and Excise, and PricewaterhouseCoopers.
Mr Gruson has been a proponent of the Balanced
Scorecard tool and methodology for public sector
organizations for the past 3 years, and has focused on
the strategy-focused management, strategic value
management, performance management and the
organizational “readiness” aspects of modern management frameworks.
vide focus and clarity. With the framework
came a new management structure, and new
and better integrated strategic, operational
and tactical planning/budgeting cycles. The
Strategic Framework is considered the keystone to developing the organization of excellence and ensuring the appropriate focus on
the Commissioner’s vision.
Which brings me to the key point – the
reason for change is not just smoke and
mirrors. We are not just implementing
results-based management to impress the
Central Agencies. It runs deeper and centers on two areas – the Commissioner’s
vision for the future and our capacity to
deliver.
The Undertow
From the outset of his “watch”, the Commissioner had a vision of a very different
RCMP in the not too distant future - an
RCMP as a key policy player, able to influence policy agendas - pro-actively participating, rather than the traditional reactive
enforcement function. Because we are so
instrumental in the Canadian communities
we serve, we have extensive insight into
what works and doesn’t work at the community level. He also saw an evolving leadership role in integrating the strategic agenVOLUME 13, NO. 3
AFTER THE “PERFECT STORM”…
da/priorities and leveraging the resources of
police and law enforcement efforts on a
global scale. The Commissioner recognized
that Canada’s national police force continues to evolve. But, he wants us to better
influence that evolution.
This new vision and strategic approach
to policing reflects the complex realities of
the new world, and is a continued evolution of our own community-policing
model. It responds to the needs of a more
global community that we live within and
serve to protect. The Commissioner and his
management team have created a compelling vision, but a compelling vision
means compelling change. We want to be
able to anticipate and plan for our future. If
the RCMP is to provide global leadership
in integrated policing - to become a worldclass police force for the 21st century, we’ll
need to build capacity and credibility - not
only operationally but organizationally.
The resourcing issue clearly tags along,
not that far behind. If we are taking on an
expanded or enhanced role in a rapidly
changing global community – we need more
appropriate resourcing. We do not yet have
the capacity for a policing and law-enforcement answer appropriate to the 3rd millennium criminal setting. Transnational organized
crime and terrorism/national security challenge us on global scale, and current resourcing is not up to that challenge.
To acquire appropriate resourcing, clearly we need to be more fully accountable to
and responsible to Parliament, partners,
public & all levels of the organization. We
need to demonstrate we are delivering value
for money currently invested in us, and
unequivocally show the increased value for
any new funds appropriated. Which means
we need effective processes and systems to
give us that kind of information - to “tell
our story” well.
“Telling the Story”
All of which drives the most pervasive of
management changes. The RCMP became
strategy-focussed and embraced “performance management” - telling our story in
performance terms, rationalizing how well
and how many, and demonstrating the
value citizens/stakeholders and partners are
receiving from the programs and services.
We needed a mechanism to chart how we
have improved - to be able to measure and
SPRING/SUMMER 2002
demonstrate our progress in key areas –
service improvement, fairness, efficiency,
etc. More importantly, we needed to build
a culture of “good management” at all levels in the organization. Whether you call it
- Results for Canadians, Modern Comptrollership, Performance Management – in
the end, they all mean the same thing –
managing resources responsibly and strategically. Our prime objective is to measure
our progress and our success, and, as a
result, better “tell our story”.
Performance management focuses on
doing five things well – planning, budgeting, executing, evaluating and reporting.
We need: to plan for results that are well
defined, that are based on and linked clearly to the Government’s and our strategic
priorities; to monitor and measure results
in a way that ensures adjustments can be
made at the earliest opportunity; to report
on results clearly, and link them to the
resources required; to use results information to support strategic analysis, priority
setting; and to provide timely, strategicallyfocused, objective and evidence-based
information on the performance of our
programs/services/initiatives.
The environment is not getting easier as
we get better. The RCMP needs to implement policy decisions quickly - this requires
management systems capable of responding
rapidly. Our strategic alliances with external
partners are growing and require
reliable/appropriate information. Senior
managers need to execute strategic plans,
communicate them throughout the organization and transform them into operational
reality. We need to convert mountains of
data and reports to the knowledge we need
for intelligence-based decision-making.
Performance management is clearly our
preferred response. But, it is a management
practice that will take a number of years to
fully implement. In time, it will give us key
results information against strategic objectives and priorities so that we, and others,
can appreciate how well we are doing and
how we are continuously improving. Performance Management is the approach and
the Balanced Scorecard (BSC) is the tool we
have selected to make it a reality.
The Storm Creates Change - Scorecard
The philosophy behind the Balanced
Scorecard is simple. It is all about:
• the creation of value - consistent with
the mission/mandate, is the overarching purpose of organizations;
• building strategy - defines the unique
organization approach to creating
value; and
• measuring results - communicates values, priorities & direction, and motivates behaviour.
The scorecard provides a cause and effect
assessment mechanism to our approach and
a robust/structured process to report and
verify strategic hypotheses. It also creates a
new culture of learning and continuous
improvement.
We started implementing performance
management and the balanced scorecard in
November 2000 with the development of
the Strategic Framework. Work began in
earnest early in the spring of 2001. This, the
second year of implementation - having
developed the scorecards at all levels, from
senior executive to divisional head - the
focus is on ensuring that there is alignment
with the Strategic Framework throughout
the organization. To make the scorecards
“real” at each level of the organization, the
BSC process identifies and captures both
the key priorities from the scorecard above
and the key priorities of the local environment. These priorities or strategic objectives
are defined against four key dimensions clients, stakeholders/partners, process, people/learning and growth. It is those four
dimensions that provide the “balance” in
the balanced scorecard – we need to be fully
aware of the impact of what we do, or want
to do, on our people, our processes, our
partners and finally on the citizens.
Every scorecard in the organization has
the same look and feel or “scorecard architecture.” The Strategic Framework is the
overarching goal of the scorecard. The next
level describes what the organization will
deliver to Canadians and how we will provide value to partners/ stakeholders – “what
we need to look like to them.” The process
level - represents the core internal “get
rights” – things to do well to deliver value to
Canadians, partners and stakeholders. The
foundation or people level - addresses the
critical enablers of performance improvement, change and learning and technology.
At each successive level the scorecard is
refined and tailored to link more precisely
to the particular organizational unit and its
FMI JOURNAL 31
AFTER THE “PERFECT STORM”…
environment - setting local and regional
priorities and actions in line with national
ones.
The process itself has benefits. The ongoing discussion, exchange of ideas and information-sharing taking place during the Balanced Scorecard implementation results in
the good things that happen when management teams work together towards a common, shared goal. If we do it right it will:
clarify the vision throughout the organization, gain consensus and ownership by the
executive team, provide a framework to
align the organization, integrate the strate-
32
FMI JOURNAL
gic/operational planning and implementation processes, drive the capital and
resource allocation, and improve management effectiveness through real-time decision making.
In Summary – The Storm Persists
Becoming the “strategy-focused organization of excellence”, using the implementation of the Balanced Scorecard tool,
requires short-term but significant time
commitment by the management teams they need to own the scorecard objectives
and the process - at each stage, as it cascades
through the organization. The RCMP is a
large agency – implementing change of this
magnitude will take time and needs to be a
carefully managed effort. Developing our
performance management approach and
our whole “good management” culture
takes a lot of commitment.
Which brings us back to the “perfect
storm.” Two things we do have are leadership and commitment at the senior management level. We have a genuine vision of,
and a strategy for, building on our 128-year
legacy and creating the world-class RCMP
of the future. ■
VOLUME 13, NO. 3
22nd Annual
Federal/Provincial/Territorial
Comptrollers’ Conference
August 19 - 22, 2001
Germain Tremblay
T
he site of beautiful Lake Waskesiu,
Prince Albert National Park, was
the location for the 22nd Annual
Federal/Provincial/Territorial Comptrollers’
Conference. This short article is primarily
aimed at giving you a brief outline of the
topics discussed at the conference.
The conference was very well attended
with representatives from all Provinces and
Territories including the federal government.
First on the agenda was an update on the
Public Sector Accounting Board (PSAB)
activities including a quick overview of current and new projects on the Board’s agenda dealing with new Public Sector Accounting Standards. Some of the specific areas
mentioned were employment benefits, foreign currency translation, financial statements, liabilities, commitments, contingencies, transfers and revenues.
The presentation from PSAB really set
the tone for the conference as a number of
presentations/discussions took place dealing with specific issues related to the imple-
mentation of accrual accounting. The
material covered included:
• The creation of the Canadian Blood
Services organization and the intricacies of dealing in a multi-provincial
environment.
• Arn van lersel, the Comptroller General
for the Province of British Columbia,
gave a presentation on the future direction of the Public Accounts and his
experience so far in dealing with a number of sections of the PSAB handbook
and providing recommendations on
how governments could work together
in dealing with some of the issues to
improve consistency across the country.
• Rob Siddall, Comptroller for the
Province of Ontario, covered the need
for specific guidance for the accounting and reporting of rate regulated
enterprises.
• Representatives from the Government
of Saskatchewan presented a discussion
on Entitlements and Transfers. The
presentation covered the types of prob-
Germain Tremblay
A Certified Management Accountant (CMA) and a
Graduate of Queens’ University MBA Program, Germain has occupied a number of positions within the
Federal Government. Currently, he is employed as
Director, Financial Projects, Natural Resources Canada.
lems encountered, ambiguities within
the Transfers section, conflicts with
other sections and inconsistencies
among jurisdictions.
• Tim Wiles, Comptroller for the
Province of Alberta, presented a coordinated approach to Financial Reporting Issues.
• John Morgan from the Federal Government presented a number of practical
issues related to Asset Capitalization and
its implication for budgets and appropriations and, of course, policy issues.
From the discussions and presentations
that took place, one can conclude that the
adoption of accrual accounting in the Public Sector has put on the table a number of
issues but, in the end, this will help standardize Public Sector accounting processes
and reporting across the country. ■
Back Row: Rod Malcolm, Michel Bujold, Yves Frenette, Steve Thompson, Gregg Smyth, Ron Salole, Mike Ferguson, Tim Wiles, Richard Lowen, Brian
MacVicar, Paul O’Leary, Chris Bayda, Arn van Iersel, Terry Patrick, Kevin Malloy, Gerry Gaudreau, Jim Libbey, Gerry Tremblay
Front Row: Lisa Pan, Scott Stevens, Kit Chapman, Ron Williams, John Carter, Rob Siddall, Terry Paton, Richard Neville, Suzanne Wile, Martha Jones Denning, Barb Lillie, Tim Beauchamp, Janet Gallagher
SPRING/SUMMER 2002
FMI JOURNAL 33
Perspectives of a
FORD/IARD Graduate
Bruce Manion
A
s part of its coverage of the 40th
anniversary of the FMI, I was somehow offered up to the FMI Journal
as someone who might have something to
say about a financial management career in
the Public Service of Canada. While I am
well known for having something to say
about most subjects, I will leave it to the
readers to judge my real credentials on this
particular subject.
I am currently employed as the Director
General of Financial Management at the
Department of Canadian Heritage. I like to
tell people that I am the ‘Finance Guy’
from Heritage but my full duties include
responsibility for all aspects of financial
planning and reporting, accounting operations and systems, financial policy and
training and all aspects of materiel management and contracting. As the department is
also a major deliverer of Grant and Contribution programs, I am responsible for a
Grants and Contribution Secretariat that
oversees the processing and approval of
related application files and payments
which amount to over $800 million each
year.
I came to Canadian Heritage in October
of 2001 after three years with the Department of National Defence where I was
responsible for the implementation of both
the Financial Information Strategy (FIS)
and the Modern Comptrollership initiative
within the largest operational program of
the federal government. Prior to my amazing time at DND, I was lucky to perform a
vary wide range of functions in both
finance and audit (Jack of all trades – master of none?) in a number of federal organizations both large and small. These include
the Office of the Superintendent of Financial Institutions, the Canadian Forest Sector of Natural Resources Canada, and the
Audit Services Group of Consulting and
Audit Canada (formerly known as the
Audit Services Bureau). In every one of my
past lives, I was privileged to work on a
wide variety of issues, from the operational
34
FMI JOURNAL
to the most strategic, and to participate in
changes of many kinds. I was also fortunate
to work with great individuals and teams
who have left an indelible mark on who I
am both professionally and personally.
Perhaps the most interesting part of my
story is how I came to join the federal public service in the first place. I am proud to
say that I grew up in a public service family.
In fact, between the three public servant
members of my immediate family, we have
racked up nearly eighty years of experience
and are still counting. But prior to my actual recruitment into the Financial Officer
Recruitment and Development/Internal
Auditor Recruitment and Development
Program (FORD/IARD) of the former
Office of the Comptroller General in 1983,
I was at somewhat of a crossroads in my
choice of careers. I had done the rounds of
the accounting firms during my final year at
the University of Ottawa and had really not
been swept off my feet by the prospect of
the life as a student in accounts. I remember
one firm’s partner who actually made it
quite clear that he did not see me fitting in
with the corporate culture of his firm (This
was perhaps due to my long hair, beard and
penchant for black leather jackets). I had
also met with several other on-campus
recruiters and had not found a good fit.
Being somewhat desperate, I broke down
and did the unthinkable for someone of my
age and generation, I sought my parents
advice!!! One night as he waded through his
usual two briefcases of briefing notes and
cabinet documents, I asked my father what
he thought of my joining the Public Service. I had worked two summers for the
Department of Public Works and had an
inkling of what the public service was about
but not really enough to base a major life
decision on. My father’s apparent hesitation
to be tagged as the prompter of my decision
to possibly follow in his footsteps was
unnerving to say the least. However, his
firm commitment to find the best people
for me to talk to about my possible career
Bruce Manion
Bruce Manion joined the Public Service in 1983
through the FORD/IARD recruitment program. He
was accepted into the Society of Management
Accountants of Ontario in 1986. After holding a
number of positions with the Audit Services Bureau of
Supply and Services Canada and the Department of
Energy, Mines and Resources (now NRCan), in 1997
he was appointed Director of Finance and Corporate
Planning at the Office of the Superintendent of
Financial Institutions (OSFI). Bruce became the
Director of Managerial Accountability and Comptrollership in the Department of National Defence in
October 1998 and was named Director General,
Financial Management Branch at Canadian Heritage
in October 2001. In this role, he is responsible for all
aspects of financial management, systems and reporting as well as procurement and materiel management.
When not working, Bruce is an avid tool guy and
home renovation maniac. In past lives, he has been a
professional musician, actor, stand-up comic and
gravedigger. He is certainly not your average accountant.
choice gave me much needed confidence
and perhaps my first great insight into the
workings of the bureaucratic mind.
So, armed with two summers of experience and as much information on the Federal Public Service as I could possibly cram
into my now neatly barbered head, I was off
to meet with two very senior executives.
The first, then Auditor General Ken Dye,
and the second, the Comptroller General of
the day, Harry Rogers, were amazingly
forthcoming and sincerely interested in my
career aspirations and goals. For the first
time in my interview process, I felt a great
sense of fit and connection with an institution rather than an organization. I could see
great opportunities opening up for me
through the words of these fine public service spokespersons. In this career choice, I
would not be making millions but would
clearly be making a difference. I was
hooked and a few months later received my
letter of acceptance into the FORD/IARD
Program.
So it was that in June of 1983, I joined
twenty-one other new recruits for our week
VOLUME 13, NO. 3
PERSPECTIVES OF A FORD/IARD GRADUATE
of orientation before joining my host
department. Interestingly enough, my initial sense of lack of fit with the private sector audit world notwithstanding, I was put
in the audit side of FORD/IARD and went
to work as a baby auditor at the Audit Services Bureau. Somebody up there really
works in strange ways!
I quickly learned the value of having
come in by means of this type of recruitment program. I felt strong support from
every level of manager, right up to the
Director of the day, and a keen and sincere
interest in my professional development. In
addition, I still had the support of a great
bunch of folks back in the FORD/IARD
office who were always willing to lend an
ear or a shoulder as necessary. I won’t say
that is was always an easy adaptation
process (me to them and them to me) but I
learned so much so fast that I am still
amazed at how much I took in during those
first years and how willing people were to
help me learn.
In the nearly nineteen years since my
arrival as an ’83 FORD, I have seen much
change in the Public Service and in how it
manages its finances. The mid-eighties and
early-nineties were not banner years for
public servants. Successive downsizing and
restructuring brought a new relationship
between public servants and their employer.
In my view, the concept of loyalty (a twoway street between employer and employee) was severely tested and somewhat
reshaped back then. How could it not with
statements about ‘bureaucrats in running
shoes’ being made by our political masters
and finding their way onto the front pages?
These were dark days when being a public
servant was not something you wore on
your sleeve at cocktail parties, especially
outside of Ottawa!
These were also very interesting times for
financial managers and specialists as we
SPRING/SUMMER 2002
grappled with the coming and going of
many new management ideals and principles while having to vigorously defend the
basic tenets of probity and prudence under
the strict code of parliamentary authority
for spending. These changes were sometimes valuable experiments in new ways of
managing in a public sector world. Other
times, I must admit that hard core finance
folks found them somewhat silly and even
frustrating as they seemed to fly in the face
of the go to jail clauses in our financial rules
and regulations. In many cases, we have
seemingly gone full circle. While the echoes
of the laissez-faire battle cry ‘Let the Manager manage!’ still reverberate in many corners of our world, the more reasoned and
balanced management principles stated in
the Modern Comptrollership initiative ring
much truer today. As a former auditor, I
could never quite get my mind around a
corporate world ‘sans contrôles’ or where
control was banished from the organizational vocabulary.
Modernizing Comptrollership is just one
of many changes that have impacted and
continue to shape how financial specialists
do their job in the federal public service. In
my view, the most notable change is the
development of a client relationship with
our operational managers and the emerging
need to provide both a service and support
role while sometimes needing to put on a
control hat, many times in the same discussion. Add to this the fairly technical aspect
of our work and the devolution of some
financial activities to non-financial specialists and we have a world where we are no
longer the cop on the beat but needing to
be an integral part of departmental business
lines. The recent implementation of complex ERP applications (soup-to-nuts, all
singing and dancing systems) and the
implementation of full accrual accounting
for our financial transactions, have again
entrenched our role as brokers of technical
knowledge but now to a much vaster audience.
I am very happy to say that a very positive attitude is now prevalent in both the
public service at large and its financial community. Yet many challenges lie ahead. New
financial officers will need to be multiskilled team players with a strong financial
grounding and good business (read public
sector business) acumen. The advent of ecommerce and virtual connections between
parties to financial transactions will require
that financial officers embrace technology
while understanding its impact on a rapidly evolving control framework. In addition,
technology needs to be properly harnessed
to generate meaningful and timely information for decision-makers and for those who
hold us accountable for the use of taxpayers’
money.
In closing, I am very optimistic for the
future of my public sector world. Every year
as I attend the FORD/IARD graduation
ceremonies, I see an increasingly larger
group of fresh new talent to take up the
torch from us older folks. I have also seen
an influx of more mature financial specialists who are looking to the federal public
service as a career of choice. To all new
financial officers I offer some simple advice:
1) seek out the advice of senior managers,
they really care about their successors; 2)
have an unending curiosity about your
organization and its business and how
things and people work; and 3) keep challenging the people above you, you bring
out the best in us.
So from a new member of the financial
old guard, I wish all who decide on living
the amazing life of public service, health,
happiness and no end to interesting times.
You deserve no less. For those considering a
public service career, I say what are you
waiting for? ■
FMI JOURNAL 35
PSAB PERSPECTIVES
Keeping Up to Date on Public Sector Accounting Standards
New Horizons
PSAB’s project on Financial Statement Discussion and Analysis
is part of a unique performance reporting initiative.
Martha Jones Denning
I
n June 2000, the Public Sector
Accounting Board (PSAB) of the Canadian Institute of Chartered Accountants
(CICA) approved an important project
proposal that set PSAB on a course to
explore new horizons and set new boundaries for its standard setting efforts. Historically, PSAB has focused on developing
accounting and financial reporting standards for the public sector in Canada. The
new project on Financial Statement Discussion & Analysis (FSD&A) is the first step
in a performance reporting initiative that
broadens PSAB’s horizons and the scope of
its activities.
This project is the first of a series of projects that will enable PSAB to meet one of
its strategic plan objectives, “To issue pronouncements that enhance the usefulness of
public sector financial and non-financial performance information”.
Performance reporting enhances the
quality, credibility and understandability of
financial statements for measuring and
reporting public sector performance.
Governments are beginning to include
information such as a financial statement
review, financial indicators and performance measures in their financial reports.
Since the mid-1990s, more and more of the
legislative auditors of the senior governments also began providing similar information in their reports. Nevertheless, such
practices are still in their infancy and standards in this area would shape the direction
and increase the consistency of such disclosures and thereby improve the information
provided.
The Need for Management Discussion &
Analysis in Government Reporting
A 1986 joint study by the Office of the
Auditor General of Canada and the United
States General Accounting Office (The
Federal Government Reporting Study)
noted that along with basic financial infor-
36
FMI JOURNAL
mation such as the government’s assets, liabilities, revenues and expenditures, most
users need information that increases their
understanding of these particular financial
statement measures. FSD&A, as an integral
part of a broader Management Discussion
and Analysis (MD&A) report, would fulfill
the need for such supplementary explanatory information.
The US Securities Exchange Commission
and the various securities commissions in
Canada have required MD&A reports for
publicly traded companies for many years.
Regulators such as the Ontario Securities
Commission (OSC) indicate that MD&A
provides management with the opportunity
to explain its current financial situation and
future prospects. Thus, readers of financial
statements are given the ability to look
through the eyes of management by providing both a historical and a prospective
analysis of the business. For the Public Sector, this ability translates into a better
understanding of the conditions within
which the government was operating.
Financial accountability of a government
relates to its responsibility to report on its
administration of the public financial
affairs and resources for which it has been
entrusted. As governments move towards
improving accountability and transparency,
MD&A plays a vital role in improving the
understanding and usefulness of the financial information presented in financial
statements.
To meet the changing paradigm of public sector financial reporting and to adequately address stewardship responsibilities,
public sector administrators should communicate the significance of financial information to a broader audience than just the
entity’s management. They need to explain
the strategies adopted by the government
that affected results and the implications
for future operations based on events that
have or are likely to occur.
Martha Jones Denning
Martha Jones Denning is a Principal with the Public
Sector Accounting Board of the Canadian Institute of
Chartered Accountants (CICA). She is a Chartered
Accountant and has been with the CICA since March
1991. Prior to joining the CICA, she was an audit
manager with KPMG, Toronto. The public sector web
page of The Canadian Institute of Chartered Accountants is at www.cica.ca/PublicSector.
Current Practice – Performance
Measurement and MD&A
Although the initiative is relatively new
for the public sector, many governments in
Canada have begun to recognize the need
for improving the understanding of public
finances and government performance.
Some highlights include the following:
• In 1989 the federal government
launched Public Service 2000, an initiative which in part requires that the
Parliament receive more balanced and
complete information on the results of
performance including such things as
trends, costs and external factors that
have affected outcomes. The federal
government now produces an annual
report that provides a financial review
and some trends and ratios. A monthly “Fiscal Monitor” is also prepared
that provides some elements of financial statement analysis. The Ontario
government produces a comparable
annual report.
• The Provincial Auditor’s Fall 1999
Report to the Legislative Assembly of
Saskatchewan included financial and
economic information to assist the
public in assessing the state of the
finances of the province.
• The Annual Report of the Government of Alberta dated March 31 2001
contained various elements of MD&A.
For example, it included references to
the government’s goals and tracks
progress on a series of core performance measures to assess achievement of
attaining those goals, as well as providVOLUME 13, NO. 3
PSAB PERSPECTIVES
ing a high level financial review.
• At the local government level, the
Government Finance Officers’ Association administers an award program
designed to recognize excellence in and
encourage improvement in financial
reporting in the public sector. As part
of that program, and to enhance the
usefulness of financial reports by
improving their understandability,
MD&A is required disclosure.
• Recognizing the need for consistent
national disclosures, PSAB commissioned a study, Indicators of Government Financial Condition, in 1994 that
recommends a common set of financial indicators relevant to assessing the
financial condition of the federal,
provincial and territorial governments.
• The academic research project “Broadening Performance Measurement in
Management and External Reporting: A
Survey in Canadian Municipalities”
(Pollanen and Young 2000) looked at
the extent to and the manner in which
local governments in Canada use performance measures for decision making
and external reporting as well as the
effect of such use on the performance
of the municipality.
• In 2000, the Ontario Ministry of
Municipal Affairs and Housing
announced that, in addition to publishing their financial statements,
Ontario municipalities would be
required to prepare and publicize a
report card showing how well they
deliver key municipal services. It is
called the Municipal Performance
Measurement Program (MPMP). The
goals of the program are to:
– promote better local services, continuous improvement in service delivery and clear government accountability;
– improve taxpayer awareness of
municipal service delivery; and
– compare costs and level of performances of municipal services both
internally, year to year, and externally among municipalities.
A related initiative is the Ontario Municipal Benchmarking Initiative (OMBI) started
by the chief administrative officers of 11
regional municipalities and three large cities
– Toronto, London and Thunder Bay, which
SPRING/SUMMER 2002
developed measures for winter road maintenance, long term care, water, wastewater,
solid waste disposal and land ambulance.
In August 2001, the Association of
Municipalities of Ontario (AMO) received
the support of the Ontario Ministry of
Municipal Affairs and Housing to establish
a Centre for Municipal Best Practices. The
Centre will be a collaborative effort
between the Ontario government, AMO
and other key stakeholders from the municipal sector in Ontario. The purpose of the
Centre will be to continue the evolution of
a standard performance measurement
framework for Ontario municipalities. It
will accomplish this goal by reviewing and
analyzing performance data (including, but
not limited to, MPMP results, OMBI data
and industry association benchmarks) to
identify best practices. The Centre will also
prepare reports offering guidance for practitioners interested in applying the identified
best practices.
Although there are a number of initiatives underway to improve the understanding of government financial statements and
other performance information, there is no
consistent definition or standards that
describe the required contents of MD&A
for the public sector. It can encompass
analyses related to an entity’s mission and
vision statements, future-oriented information, systems and internal controls, performance reporting, organizational structure, and financial information. In fact this
is the general approach as set out in Statement 15 of the Federal Accounting Standards Advisory Board (FASAB) of the United States, which sets standards for the federal government. Alternatively, a much narrower definition can be found in Statement
34 of the Governmental Accounting Standards Board (GASB) of the United States
which recommends that MD&A focus
solely on an analytical overview of financial
statement information.
PSAB’s Approach
PSAB’s Five-year Plan recognizes the
need for government reporting to be broader than financial statements and proposes
undertaking activities that address issues
such as MD&A. PSAB was not wedded to
any particular definition or approach to
meet this commitment and so faced a
strategic choice along the spectrum of an
all-encompassing approach like that of the
FASAB to a much narrower approach akin
to that recommended by the GASB.
Given the size, and perhaps controversy,
involved in doing an all encompassing project similar to that of the FASAB, PSAB
decided to tackle the performance reporting
initiative using a multi-phased approach.
As contemplated in the project proposal,
the first phase would focus specifically on
Financial Statement Discussion and Analysis (FSD&A). The second phase would
develop financial indicators that include
non-financial information such as comparing a government’s debt to Gross Domestic
Product (GDP) for senior governments or
describing a local government’s debt in
terms of its assessment base. Finally, the
third phase comprises the much broader
topic of performance reporting.
PSAB chose this approach for a number
of reasons. The first phase represents an area
where PSAB is recognized as the national
authoritative source for standards. The project is limited to current financial statement
information. Further, limiting the project in
this way means that for governments, the
information necessary to develop the analyses is already available and easily verifiable.
As such, the practical issues of implementation and auditability, which will be critical
to resolve for the success of the other two
phases, may be avoided. Finally, because
MD&A disclosures in the public sector are
at an early stage, this step-by-step approach
will allow practices to develop in an issuespecific and manageable way.
As such, the FSD&A project will provide
guidance to preparers and auditors of public
sector financial statements regarding the
major types of financial statement analyses
that should be included in a management
report. For example, providing an analysis of
debt interest costs to total revenues is useful
to help readers understand the amount of
taxation that is needed to service debt. Likewise, analyzing the sources of any surpluses or
the causes of deficits will also help the reader
understand the causes of annual results.
FSD&A standards would provide guidance on what aspects of financial statement
information must be highlighted and analyzed. This project is groundbreaking because
no other comprehensive guidance for providing such information currently exists for the
public sector in Canada. The standards will
FMI JOURNAL 37
PSAB PERSPECTIVES
ensure that governments provide this information whether the results are favourable or
not. It will create a common set of ratios, for
example, that must be provided in each government’s financial statements.
Another consideration for PSAB was
whether this project would apply only to
the general purpose summary financial
statements of the government reporting
entity or whether guidance should be developed and recommended as required reporting for all major components of the consolidated reporting entity.
PSAB concluded that the scope of the
project should be narrowed to limit the
application of the guidance to a government’s summary financial statements. The
rationale for this approach is that consolidated financial statements receive the
widest exposure and reach the largest number of users. Addressing all major components of the reporting entity such as Crown
Corporations, ministries and departments
would introduce another of level of complexity into the project. Further, it would
require PSAB to specifically analyze each
type of organization in order to make a
determination of which aspects of its financial position and results needed to be discussed. A broad approach of this kind could
ultimately stall acceptance of the project
given the myriad of activities and organization types that exist within a government.
As a result, the first phase of this project
is reasonably narrow given the broad spectrum of possible MD&A information and
the overall number of public sector organizations that could be considered. PSAB’s
choice of FSD&A for government summary financial statements as the first step in its
initiative will allow for a more manageable
approach to addressing the many issues
involved in MD&A.
What would be included in FSD&A?
Total government reporting envisions a
multi-dimensional accountability report
comprising: a financial report that includes
government financial statements;1 simple,
understandable information that uses
trends, ratios and other analyses to explain
to taxpayers what has happened to government finances in the period; other information about a government’s financial condition2, and supplementary financial performance information; as well as non38
FMI JOURNAL
financial information.
FSD&A would expand on and explain
government financial statements, making
the reports more useful and extending the
understanding of financial reporting
beyond just those with the technical expertise to interpret financial statements. The
proposed narrative format of FSD&A
would provide a vehicle to complement the
government’s financial statements, allowing
management to better express qualitative
information given their detailed knowledge
of the transactions, events and conditions
reflected in the financial statements as well
as their expectations regarding the future.
Standards for FSD&A would have to
identify the primary users of the information and tailor it to respond to their needs.
The qualitative characteristics of what constitutes good FSD&A information would
also need to be established.
An FSD&A report would include a
financial statement review that lists and
describes the nature of each of the financial
statements as well as describing in simple
terms what the major transactions and
events were in the period that affected the
government’s financial position and results.
A second component of FSD&A could be
a financial analysis, including a variance
analysis and an assessment of financial statement trends. The variance analysis would
compare and explain the differences between
the current and prior year’s numbers as well
as between the current year actual and budget figures. Trends, ratios and indicators
inherent in the financial statements would
be highlighted and their significance
explained as part of this financial analysis. A
financial analysis would assist users in understanding where the government has been,
where the government is now and what the
implications may be for the future.
A third component of FSD&A would
likely address the risk and uncertainties that
are inherent in the underlying financial
statements of the government as well as the
risk management strategies adopted. The
primary users of the FSD&A need to understand a government’s exposure to risk and
uncertainties to enable them to make
informed judgments about the implications
of such risks on the government’s financial
position and the potential implications on
future operating results and the government’s ability to continue to deliver services.
New horizons beckon…
Better information for decision-making
and accountability has long been PSAB’s
goal. While to date PSAB has focused solely on financial statement information, it
recognizes the need for ensuring that government financial reports are communicating information that maximizes its usefulness. As part of its ongoing efforts to
improve that process, the FSD&A project is
intended to establish common indicators
and measures that will serve to improve the
comparability and understandability of
government financial statements.
PSAB has chosen to begin its performance reporting initiative by developing
required disclosures on basic financial statement information. The standards will
require that governments provide essential
financial statement ratios and analyses of
such things as debt interest to revenues, and
explanations of why targeted surpluses or
deficits were or were not met, or why the
government’s debt has increased when an
operating surplus was realized for the period. The second and third proposed phases
of the initiative will encompass broadening
those disclosures. The initiative foresees a
total government-reporting package that
will improve information for both decisionmaking and accountability.
The overall objective of creating performance-reporting standards is important.
It responds to the needs of the users of government reports and explores new horizons
in government accountability reporting.
New horizons create unforeseen challenges
and issues. But, PSAB has chosen a systematic and practical approach to this initiative
that is complementary to its recognized
strengths. PSAB’s multi-phased approach
should allow it to chart a course that will
effectively meet those challenges and issues
from both a standards development and
implementation perspective. ■
References
1. “Government financial statements” refers to the
summary financial statements published by a government that report on the financial position and
changes in financial position of the government
reporting entity.
2. Financial condition is a broad, complex concept
with both short- and long-term implications that
describes a government’s financial health in the
context of the overall economic and financial
environment.
VOLUME 13, NO. 3
HOME AND OFFICE OF THE FUTURE
Government (and business)
On The Line
David G. Jones
T
he Internet and its associated technologies have caused a revolution in
some circles. Book selling for example, will clearly never be the same. Nor will
genealogical research. Soon purchasing
travel tickets, booking a hotel and renting a
car will be similarly transformed. All that
needs to fall into place is customer readiness
and willingness. These industries are ready.
In fact, scientists have been exploiting the
Internet for sharing DNA data for a very
long time. It was one of the first major user
groups.
There are good reasons for “going online,” even if we are still a long way from a
ubiquitous Internet. In the North American market - at any rate – the user demographics are significant. For a wide band of
the socio-economic community, the Internet is a prime, or at least equal tool for
communications and social or business
transactions. And as noted, certain communities of interest have become fully dependent upon the Internet’s near-instantaneous
capabilities to transfer humongous volumes
of data in an instant. At negligible cost.
With minimal degradation or loss.
With these folks, their first inclination
when renting a car is not to go to the yellow
pages. They check out the last minute bargains that rental agencies and travel agents
post on their Web sites. Savvy Internet users
know they can get direct access to public
and private sector information (in multiple
formats) that once took a long time to
obtain, even if you knew whom to ask.
Now downloading files, reports, speeches
and databases (as well as songs and song
sheets) is a simple matter that can be done
from just about anywhere with relatively
inexpensive equipment.
These new ways of doing things have had
a profound effect on the marketplace. Many
new businesses and new types of old businesses were born of these new technologies.
There have been also new ways to do busi-
SPRING/SUMMER 2002
ness, with far more brokering going on than
ever before as but one example. Today’s virtual enterprise can exist with no stock, minimum staff, an unknown location(s) and
even a cash flow that never passes through
their “doors”. There have been a lot of success stories as enterprises exploit the new
technologies in order to retain, or gain, market share, or in order to better serve their
clients and customers. But many of the reinvented firms have failed just as badly as
many of the dot.coms. Why is that so?
When the Internet started out a few
decades ago, its two key attributes were low
cost and speed. On the down side, the early
Internet was not easy to use. It demanded a
whole host of new skills. The language and
technology was harder to learn than ham
radio. It required expensive equipment and
a lot of patience because it was userunfriendly and there were few experts
around to help you. And all that confronted those who had the rare privilege of getting an account. Internet access was not
available beyond the rarified circles of the
military, science and high technology. It
also demanded a huge shift in administrative thinking: like when you found a really
useful document, you didn’t have to make a
copy of it. I went through bundles of paper
before I realized this.
But for cost and speed, it had no parallel
for moving information around. It still
doesn’t. It was also a quite marvelous networking tool. It still is. But technological
“advances” (i.e. the “Web”) have made the
Internet at the same time more than it was,
and less. Today we have a vastly greater
information resource, but also reduced
speed. We have a much, much friendlier
environment to work and play within, but
the Internet is now also much more expensive for everyone: users and providers both.
For these and other related reasons, Internet
growth is nothing like projections suggested it would be.
David G. Jones
David G. Jones is a senior manager with the Canadian federal government. A specialist in Knowledge and
Information Management, he was recently recognized
for his contribution to training in government services by being named an Honourary Fellow of the University of King’s College.
One of these “other reasons” is cost to
users. But can we blame Internet technology for those costs? The Internet never did
charge for e-mail and still doesn’t. While
there are infrastructure costs for file storage
and transmission, they are negligible when
compared to the costs for clerks and
postage. The technology is still relatively
inexpensive, and the access provider’s
charge – well not “nominal” fees but they
are far from prohibitive.
Is the issue performance? One very real
difference between the Internet of old and
that of today is how dreadfully slow the
Web can be. Serious lag may be a factor in
stalling growth, but many still find the
Internet hard to use. Search engines baffle
most people. They complain that when
they do searches they get 250,000 hits – as
if that were a bad thing. But even when
folks do find the right site or the right subject, sadly, it is very often out of date. It is
still much easier – and probably more accurate – to call the shoe store and ask about
their open hours.
Organizations that have gone on-line
have huge sunk investments in hardware,
software and adjusted business practices.
They may have robust application, information development, and maintenance
bureaucracies. This is the source of costs
that have come to make the Internet more
expensive – in many cases – than the benefits that it delivers.
Governments and business have started
to take a long hard look at their Internet
and Web-based applications and processes.
Some have discovered to their horror that
FMI JOURNAL 39
HOME AND OFFICE OF THE FUTURE
rather than re-engineering, what has been
happening is parallel engineering. And
rather than simplifying the organization
and consolidating to a single point of service, we have instead complexities and
redundancies – with different “facts” contained in different locations. The outfall of
these practices has not been helpful. Costs
climb, clients and customers lose confidence, and ironically market share may fall
despite (and perhaps because of ) the significant time and investment that has gone
into the on-line exercise.
Business and public sector clients have
had, and continue to have simple needs. To
start with, they wanted easily accessible,
easy to read and easy to use information.
Then, as their capabilities grew, they wanted the ability to interact with organizations
and their systems. Just as folks found they
could live with voice mail and automatic
operator intercepts, they started to lose
their apprehension about on-line financial
transactions too. But many of the organizations they dealt with were not keeping up
with them.
Canada has had some dramatic success
stories in the public sector: CCRA’s tax
applications, HRDC’s Intranet, StatsCanada’s direct data access are just three examples among many. Every province and territory and the vast majority of local governments are very well advanced. On the business side, most local and national media
occupy vibrant sites. You can book a flight,
rent a car and reserve a hotel room just
about anywhere in the country by Internet
or toll-free call, and even local B&B’s are
available this way.
But being good is not good enough.
These new tools and technologies demand
more than ease of use, low cost and correct
information. They need to deliver new or
similar programs and services in a much
more effective or satisfying way, and they
need to do this by changing the fundamental way business is done. Air Canada’s electronic ticket is a very good example of business process change using new technologies, as are its air terminal kiosks. These
leading organizations have lots of reasons
for re-inventing the way they do business.
Buying a book from a virtual bookstore or
40
FMI JOURNAL
a bookstore on-line is a marvel of ease and
enhanced functionality: consider Amazon’s
ready access to author information and customer reviews.
Clients take for granted multi-channel,
24 hour a day bank access; 7/24 shopping;
cell phones, blackberries and global positioning technologies. We are used to fast
food chains that sell toys, and grocery stores
that sell furniture and do film processing on
site. It is hardly extraordinary for a hunter
to call home and say: “I’ll be a little late getting back. I’m still 2,723 metres from my 4
x 4.”
The client demand today is for services
that are better, faster and cheaper. And they
want it personalized - responsive to their
needs for technical competence and capacity, time availability, privacy and security.
We know that major international corporations use call centres for client service, and
that they are located not where the clients
are (for that is now irrelevant) - but where
labour and accommodation costs are lowest. Technology may be a key factor in all
this, but clearly what we are seeing is business organizations responding to what their
customers want.
Some business sectors are responding to
these new consumers. TV info channels
know that people want up-to-the-moment
news, weather, sports and stock market
reports available on demand. How long will
people be satisfied with a daily paper that is
printed the day before? There are already
options available for those who are unsatisfied with the services they are getting. If
one’s pharmacist is too expensive, too secretive or too far away you can buy your pharmaceuticals on-line. And if you want medical advice, there are hundreds of Internet
sites that will give you information from
medical professionals, a community of sufferers, or outright quacks.
There is a rather significant power shift –
from provider to receiver, from owner to
client, from professional to amateur. Customers and clients, mouse in hand or fingers pressed to touch-tone phone or TV
screen, are in the driver’s seat. They shift
allegiances without a second thought.
When unsatisfied, they will either litigate or
conduct a wide-area broadcast condemna-
tion without a second thought. In either
case, the disgruntled customers will cost the
provider plenty.
Government, which strives to be in step
with its clients and responsive, is hardly
aloof from all of these changes in society
and the marketplace. But government must
meet myriad legal and policy challenges in
such issues as sensitivity and privacy. It has
to be sensitive to differences in culture, language, region, ideological, and political
viewpoints. It has to make every effort to
ensure equality in service and standards
while striving to meet the needs of those
especially challenged or needy.
In the final analysis, getting government
on-line will be about how government uses
new information technologies to revamp
and up ramp services to meet the needs of a
changing client environment. It will be
about service, but in delivering service there
will be a need for whole new outlooks on
information: how it is valued, how it is created and how it is used. There will have to
be a better understanding about client
needs and how to exploit the best elements
of the Internet – such as its speed and
potential low cost. There will have to be
serious study of the ways in which new
technologies and the information they
carry can be integrated into the mainstream
of government operations and not relegated
to “separate channel” status.
These are awesome challenges. But imagine a future where “government on-line”
might be the principle “persona” of government. This would be virtual government –
that is everywhere and therefore everywhere
accessible. This would be a realization of
the power of the Internet, but it demands
that there be a whole lot more people using
it if it is going to work well. And getting to
that state means we have to manage very
carefully the way we bring the key elements
of information and technology together
with appropriate program management.
None of this will be easy. But it looks like
we have a key element in place that any
information and technology product or
service needs right up front: a clear customer expectation. ■
VOLUME 13, NO. 3
The Organizing Committee of PSMW 2002
“Highways to the Future”
Gratefully acknowledges the support
of the following Corporate Patrons
P R O F E S S I O N A L
D E V E L O P M E N T
W E E K
2 0 0 2
Ottawa Congress Centre • 55 Colonel by Drive
Ottawa, Ontario
.
November 26 to 29, 2002
Strategic Alliances ~ Opportunities
Honorary Chair:
Sheila Fraser, FCA, Auditor General of Canada
This four-day event will deal with a whole range of issues and changes related to this year’s
theme. In addition to eight program sessions, there will be four workshops specifically tailored to
provide participants with practical tools and exercises. This program will be of interest to all
those who want first-hand information on current and future trends and issues.