AUTUMN 2013
FMI
*
IGF JOURNAL
21
To help address cost-containment
issues, improve efficiencies and support
departments in meeting Ministers’ and
stakeholders’ expectations concerning
the quality of cost estimates, we are
issuing a
Guideline on CFO Attestation for
Cabinet Submissions
. This guideline will
reinforce the role that Chief Financial
Officers (CFOs) play in developing and
challenging Cabinet submissions. It will
contain detail on due diligence in the
area of cost estimates and on the need for
CFOs to insist on sufficient information
to support decision making at all levels.
It will also emphasize the importance
of, and regularize the approach to, cost
containment considerations in financial
proposals. The overall aim is to elevate the
level of cost-consciousness in government
decision making.
Cost Accounting and Analysis
Ministers have expressed concern about the
reliability of the cost estimates contained
in decision-making documents, including
memoranda to Cabinet and Treasury Board
submissions. Departments need to make
the cost information in those documents
more reliable and use that information to
develop baselines to measure performance.
To help them do that, the OCG is
working on developing better cost-
estimation tools and standards, and is
examining ways to make more effective use
of departmental financial systems. We are
developing guidance on cost estimation
that is based on leading international
practices and on the experience gained
from our review of the F 35 costs. The
aim is to help departments determine what
financial information they need to prepare
and present at various decision points in
the acquisition of major capital assets.
We need to define terms clearly (e.g.,
asset cost, project cost and life-cycle cost),
and we need to provide guidance on what
information is required and when it is
required.
Our work in the area of cost accounting
and analysis will integrate, and ensure
consistency with, existing policy and
guidance in the areas of project andmateriel
management and in the preparation of
Treasury Board submissions. It will also
bring more rigour to decision making on
new spending and will support the ongoing
review of existing spending.
The OCG is also developing guidance
for departments that will help them prop-
erly represent the cost of departmental
operations—both program and internal ser-
vice components—in the Program Align-
ment Architecture. One of the first areas to
address is internal services and how these
costs are attributed to program areas. We
are working on defining internal service
areas, developing guidance on the attribu-
tion of internal service costs to programs
and on determining the cost of administer-
ing grants and contribution programs.
Although we are developing direction
on cost estimation methodologies and
processes and are designing tools to support
departments, departments must continue
to assess their capability to provide reliable
cost estimates in their decision-making
documents.
3. Accountabilities
Public Accounts and Estimates
The OCG produces the government’s
summary financial statements (contained
in the Public Accounts of Canada) and is
the principal point of contact between
the government and the Office of the
Auditor General regarding the audit of
those statements. The Public Accounts
of Canada have received an unqualified
opinion for 14 consecutive years.
The OCG’s initiatives have helped make
Canada a leader in public sector financial
reporting. In 2006, we instituted annual
departmental financial statements. Later,
we introduced quarterly departmental
financial reporting. These reports
supplement the annual and interim
reporting that has historically been done
at a whole-of-government level. More
recently, we added the proactive disclosure
of finance-related information, such as
travel and hospitality expenses, contracts,
and grants and contributions. These reports
give the public access to transaction-level
detail. Such disclosures are the precursor
to an expanded open data model.
We are also looking at ways to reduce,
relocate or eliminate some information that
is currently in the Public Accounts. We are
examining the information requirements
of different stakeholders and assessing
whether information is still required and
useful, and whether it is available elsewhere.
We are also looking at e-reporting and at
using data from the consolidated financial
management reporting system for quarterly
financial statement reporting. The aim is
to reduce the reporting burden and make
the information as useful as possible.
Open Government
Governments around the world, including
those in North America, are becoming
increasingly open and are making it
easier for citizens to access more and
more information. This openness creates
challenges for the financial management
community. We must make sure that
information is consistent; that it is gathered
appropriately and efficiently; and that it is
made available to the public and to key
decision makers.
For internal management purposes, we
need the correct data to be accessible so
that a variety of sophisticated analytical
procedures can be performed to address
evolving needs. For the public, we need
accountability information, as well as
databases that users outside government
can access to mine the financial information
for their own purposes.
We are currently working to make
the
Directory of Federal Real Property
and
the
Federal Contaminated Sites Inventory
available on the Open Data Portal, data.
gc.ca. We have also created standards for
vendor and customer information that will
make it easier to consolidate expenditures
and revenues. We are also working on
developing financial coding standards in
other areas to support a government-wide
view of financial information.
Our efforts to develop standard processes
and data and a common financial system
will support Open Government and
increase the accuracy, transparency and
availability of financial data.
4. Financial Management Community
Executive Talent Management
The CFO plays a critical role in support
ing cost-containment measures, informed
decision making and sound stewardship of
public finances. To maintain the required
expertise in financial management across
government, the OCG is leading a
community-based strategy to support CFO
talent management and succession planning.
The aim of this comprehensive strategy is to
strengthen the CFO and deputy CFO ranks
and to expand the pool of professionals
that can move into those ranks. The
strategy includes a talent management and
succession planning initiative, a five-year
strategic plan for the financial management
community and revisions to the training
curriculum for finance officers.
My work with the financial management
community will help give me a clear picture
of who is in the talent pool, what their
occupational levels are, and what skills they
need to develop in order to progress. This
information will help us identify, groom
and mentor the next generation of CFOs.
COMPTROLLERSHIP INITIATIVES
