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Section II: Performance Analysis by Program Activity

Results under the Secretariat's strategic outcome—government is well managed and accountable, and resources are allocated to achieve results—strengthen the effectiveness and efficiency of the federal government machinery, support Parliament and Cabinet decisions, and ensure that Canadians are well served by a government that is accountable and transparent. The strategic outcome rests on four distinct program activities. Each of these focusses on creating a well-managed and accountable public service that achieves results for Canadians by allocating resources appropriately. The following section highlights the Secretariat's ongoing work under each program activity and its performance in 2008–09.

Program Activity 1: Management Policy Development and Oversight

The Secretariat supports the Treasury Board in its role as management board. This includes promoting the improvement of management performance and developing policies to ensure prudent and effective management of government assets—its human, financial, information, and technology resources.

Program Activity 1: Management Policy Development and Oversight

2008–09 Financial Resources ($ thousands)			2008–09 Human Resources (FTEs)
Planned Spending	Total Authorities	Actual Spending	Planned	Actual	Difference
136,137	160,777	153,568	1,062	1,119	57

The increase of approximately $24.6 million between planned spending and total authorities can be attributed to funding provided for collective agreements, funding carried forward from previous years, and the approval of new initiatives. Actual spending was below total authorities due to the reduction in requirements for litigation support and delays in project funding.

The following table provides evidence against the expected results and key performance indicators for PA 1, as set out in the 2008–09 RPP.

Expected Results	Key Performance Indicators	Lines of Evidence
Expectations are established to improve public service management.	Evolution of MAF ratings and assessments of government departments over time. Benchmarking for public service compensation.	Government performance in 13 out of 21 assessed areas of management steadily improved over the last two years (i.e., in the management of values and ethics, risk, change, finance, projects, evaluations, governance, internal audit, performance framework, performance reporting, information, security, and business continuity). In 2008–09, improvements were also observed in two additional areas of management: the quality of the workplace and the provision of citizen-focussed services.
Functional communities are provided with the appropriate knowledge and tools to comply with Treasury Board policies.	Recruitment levels are measured against targets. The level of capacity in key management areas and functional communities are assessed. Appropriate tools are developed and used, and appropriate training is provided.	The Secretariat led initiatives for central government-wide community development and capacity building to improve recruitment in key functional communities. For example, the OCG manages the FORD/IARD program to provide top recruits in finance and internal audit to federal organizations. Feedback and advice were provided to departments on 250 regulatory submissions for Cabinet consideration. Improvements were made to the risk management framework for regulatory submissions. Guidance documents on performance measurement and evaluation were issued. The Canada School of Public Service (CSPS) created two courses (Developing Effective Regulatory Impact Analysis Statements and Your Liability as a Regulator) to help the regulatory community develop the knowledge and skills needed for regulatory submissions. Bimonthly meetings were held with heads of Labour Relations and Occupational Health and Safety to give policy updates and share jurisprudence trends.
Treasury Board policies and Secretariat advice are clear, relevant, and well communicated from the standpoint of departments and agencies.	The quality of advice provided to departments and agencies. Policy implementation that is sequenced and phased in relation to departmental capacity. The extent to which Treasury Board policies achieve expected results.	The Secretariat has continued to observe due diligence throughout the policy development and renewal process. As policies were renewed, the Secretariat continued to consult with and advise departments on key implementation issues. The Secretariat met with several departments to provide advice and share lessons learned on reducing the web of rules. Implementation plans for policies renewed in 2008–09 took into account timing, sequencing, and capacity issues to alleviate the burden on departments. The Secretariat took stock of emerging implementation issues and made the necessary adjustments, based on lessons learned, to ensure complete and smooth implementation (e.g., Policy on Investment Planning - Assets and Acquired Services, Policy on the Management of Projects, Policy on Internal Audit, and Policy on Evaluation). In planning the implementation of various policies, the Secretariat took into consideration departmental capacity, especially of small departments and agencies, and adjusted policy instruments accordingly. All renewed policies have clearly stated objectives and expected results. The majority of policies renewed to date are in the initial stages of implementation, so it is too early to report on and measure success. However, logic models have been developed for several policies that are in the second and third year of implementation. A 5-year review is planned for all renewed polices.

Performance analysis

This section outlines progress against PA 1 commitments made in the 2008–09 RPP in the following areas: policy suite renewal, regulatory management, financial management, internal audit and labour relations. In addition to the initiatives described below, performance information on approaches for advancing risk-based management and for oversight of IT-enabled projects and IT security is included online in the Appendix.

Policy Suite Renewal Initiative^[17]

Under the Federal Accountability Action Plan, the Government of Canada committed to reduce the number of Treasury Board policies by 50 per cent. However, the Secretariat plans to exceed this goal by rescinding 136 of 180 policies (with only 44 policies remaining). Out of 136 policies to be rescinded, 80 have been repealed to date, including the elimination of over 30 financial management policies.

What is the impact? Roles and responsibilities of key players (deputy heads, senior officials, and other functional specialists) are more focussed and clear. The right tools are in place to support a government-wide management regime that is risk-sensitive, based on principles, and focussed on results.

Strengthened regulatory management

The Secretariat continued to work with departments and agencies in implementing the Cabinet Directive on Streamlining Regulation(CDSR). To facilitate compliance with the CDSR, the Centre of Regulatory Expertise (CORE)^[18] provided expert advice and assistance on approximately 40 of the estimated 250 regulatory submissions that were reviewed by the Secretariat prior to becoming law. The process was streamlined by reducing the paperwork required. Guidance was improved through the Regulation website, documents, tools, templates, and new training courses offered by the Canada School of Public Service.

What is the impact? The improved analysis of regulatory proposals resulted in more efficient management of the regulatory system.

Financial management and internal audit practices

The OCG led the revision and streamlining of the core financial management policies as part of the Policy Suite Renewal Initiative. These included the Policy on Financial Management Governance, the Policy on Internal Control, and the new Policy on Transfer Payments.

Implementation of the Policy on Internal Audit resulted in the appointment of 42 members to 14 new external advisory Department and Agency Audit Committees (DAAC) in 2008–09, bringing the total number of DAACs to 41, as of April 1, 2009. DAACs provide deputy heads with an independent review of their department's spending control and accountability processes. Deputy heads can use this information to reduce risks and improve departmental performance.

Targeted professional development and recruitment initiatives developed capacity and capabilities for internal audit and financial management communities. The OCG provided timely and strategic advice to chief financial officers and chief audit executives on Budget 2009.

What is the impact? The new and revised policy instruments have clarified roles, responsibilities, and expectations for financial management and internal audit practices across government. Renewal of these policies is strengthening auditing and accountability in accordance with the FedAA.

Support and leadership to departments and agencies on labour relations

The Expenditure Restraint Act, part of the Budget Implementation Act, 2009, resulted in the acceleration of the negotiation process for 26 of 27 collective bargaining tables and the signing of 19 collective agreements^[19] in 2008–09. The Public Sector Equitable Compensation Act (PSECA) was also included in the Budget Implementation Act. PSECA will come into force in 2011 and will ensure that equitable compensation (equal pay for equal work) is a joint responsibility of the employer and the unions. The Policy on Terms and Conditions of Employment was approved, and training was provided to departments and agencies.

What is the impact? By providing advice and guidance to departments, the Secretariat ensured responsible management of compensation for public sector employees (for a determined period), and strike action was averted. These activities are part of the Secretariat's support to Treasury Board as employer of the core public administration and contribute to effective and efficient government administration.

Framework for the Management of Compliance

The Framework was developed to clarify roles and responsibilities for managing compliance with government policies. This includes providing advice on how to respond appropriately and consistently to instances of non-compliance. The Framework provides clear, risk-based principles and ensures that support and training are in place. Implementation will start in 2009–10, slightly later than the original commitment.

What is the impact? The Framework for the Management of Compliance is important for strengthening government-wide compliance with legislation and policies, which improves the quality of federal public service management.

Summary

The Secretariat delivered on most of its initiatives under PA 1 in 2008–09, resulting in the progress described in the above performance analysis and in Section I. However, although the Framework for the Management of Compliance has been developed, its implementation will commence in 2009–10, slightly later than the original commitment.

Overall progress in PA 1 is consistent with the policy direction on public service management taken by most other Organisation for Economic Co-operation and Development (OECD) countries. Moreover, MAF (described in Section I) has been recognized by international partners as a best practice in assessing public sector management performance.^[20]

Benefits for Canadians

The Secretariat worked with other departments to reduce administrative delays, promote risk management, and enhance transparency—all of which improve the capacity of the public service to meet Canadians' expectations. As a result of reforms to the administration of grants and contributions, recipient groups are able to focus more resources on delivering the programs and services that Canadians need. Similarly, efforts to reduce the reporting burden and streamline policies and regulation increase the efficiency of government operations. The Secretariat has improved the government's management of public funds by clarifying accountability and management expectations and by strengthening financial and audit capacity across government. As a result, the Secretariat has improved government's overall management performance.

Program Activity 2: Expenditure Management and Financial Oversight

The Secretariat provides support to the Treasury Board in its role as the government's budget office. This includes providing advice and recommendations to Treasury Board on the allocation of resources so that they are aligned with the government's priorities and responsibilities, thereby ensuring that federal programs are effective and efficient and provide value-for-money.

Program Activity 2: Expenditure Management and Financial Oversight

2008–09 Financial Resources ($ thousands)			2008–09 Human Resources (FTEs)
Planned Spending	Total Authorities	Actual Spending	Planned	Actual	Difference
53,622	56,489	51,491	393	393	–

In 2008–09, actual spending was less than total authorities partly because of reduced spending requirements to conclude the Budget Office Systems Renewal Project. This project began the redesign of the Expenditure Management Information System to manage Budget Office processes more effectively and efficiently. Delays in staffing and project funding approval also had an impact on actual spending.

The following table provides evidence against the expected results and key performance indicators for PA 2, as set out in the 2008–09 RPP.

Expected Results	Key Performance Indicators	Lines of Evidence
Resources are allocated to achieve results.	100 per cent of direct program spending is reviewed over four years, and a percentage of funds are reallocated from low priorities to high-performing priorities.	Approximately 27 per cent of direct program spending was reviewed in the 2008 round of strategic reviews, bringing the total percentage reviewed over the first two years to 42 per cent. Reallocations (or savings) were redirected to fund new initiatives, both within the reviewed departments and for broader spending priorities.
Results-based information increasingly informs expenditure management decisions.	The extent to which departmental management, resources, and results structures are implemented. There is improvement in the overall quality and use of evaluation findings.	Step 2 of the Management, Resources and Results Structure (MRRS) road map—identification and definition of departmental Performance Measurement Frameworks (PMF) to support their existing PAAs—was completed during 2008–09 with approximately 90 federal organizations submitting the necessary documents. To a large extent, the structures necessary for managing and reporting financial and non-financial data under MRRS are now in place.
Reporting to Parliament on government spending is accurate; financial performance and stewardship are complete and timely.	The assessment of the quality of financial and non-financial information as measured by MAF expectations regarding the quality of reporting to Parliament and the effectiveness of financial management and control. The extent to which the methodology, form, and content for preparing financial and non-financial information are consistent. Estimates information is used to inform parliamentary committees, and parliamentary approval of appropriation bills is supported by relevant information.	Trend analysis for Area of Management (AoM) 7, "Quality Performance Reporting," reveals an overall improvement in the quality of RPPs and DPRs tabled in Parliament over the last three years. Prior to Round VI of MAF, no departments had been assessed as "Strong" for this AoM. However, in the most recent round of MAF, 10 departments achieved this rating. The areas of financial management and control demonstrated steady, year-over-year improvements. Main Estimates and Supplementary Estimates were tabled in accordance with the parliamentary calendar. Committees reviewed the Estimates, as demonstrated by departmental appearances before committees to explain requirements set out in the Estimates. Parliamentary approval of appropriation acts.

Performance analysis

This section discusses performance against PA 2 commitments made in the 2008–09 RPP for the monitoring and analysis of government financial and performance information. Achievements made under PA 2 demonstrate sound oversight of government expenditures and strengthen results-based management. Information on implementation of the Policy on Management, Resources and Results Structures can be found online in the Appendix.

Monitoring and analysis of government financial and performance information

The Secretariat has worked to ensure that government financial reporting is reliable, detailed, and available for timely review by parliamentarians and Canadians. Processes and methodologies for forecasting financial lapses were improved, and research was undertaken to examine why lapses occur within departments. Additionally, greater detail on horizontal programs and spending information was provided through the whole-of-government framework and included in Part 1 of the 2009–10 Main Estimates. As a result of these improvements, the government received a clean audit opinion in 2008 Public Accounts of Canada, which marks the tenth straight year it has received such an opinion.

The three-year plan to improve reporting to Parliament ended in 2008–09. The plan involved all departments adopting a concise reporting format for the 2009–10 RPPs and the 2008–09 DPRs, following a successful pilot in 2007–08. Guidance was issued to support departments with the transition. Furthermore, a pilot project for the 2009–10 RPP was completed, which involved 10 departments reporting accrual-based, future-oriented financial statements.^[21]

The new Policy on Internal Controlcame into effect on April 1, 2009. This policy clarifies the roles and responsibilities of deputy heads, chief financial officers, and the OCG regarding internal controls over financial management, financial reporting, and departmental accounts. The policy requires departments to conduct annual risk-based assessments of their system of internal control over financial reporting and to establish an annual action plan to address any adjustments required. Deputy heads and chief financial officers will be required to sign an enhanced Statement of Management Responsibilities to acknowledge these responsibilities.

The Comptroller General of Canada provides government-wide leadership and functional direction for the system of internal control over financial management (including financial reporting), monitors government-wide compliance with financial management policies, and reports periodically to the Treasury Board on the state of financial management, control, and reporting across government.

What is the impact? The principles-based Policy on Internal Control embraces a risk-based approach, strengthens the quality of internal controls, improves financial reporting, and brings Canada in line with other leading jurisdictions. The Secretariat's attention to financial reporting has increased government transparency and accountability and improved the stewardship of public funds.

Summary

First announced in Budget 2007, the renewal of the Expenditure Management System has continued to be a driving force in the Secretariat's expenditure management and financial oversight activities. In 2008–09, there were unanticipated external governance challenges and internal machinery changes that called for the Secretariat's immediate attention. Yet, the Secretariat continued to make progress on initiatives under PA 2.

The result of these efforts is an Expenditure Management System that supports programs focussed on results, provides value for taxpayers' money, and is aligned with government priorities and responsibilities. For example, the second round of strategic reviews benefitted from the implementation of the Policy on Management, Resources and Results Structures, which has better equipped departments with the necessary framework and tools to complete comprehensive expenditure reviews. The body of evidence that the government needs for informed decision making in expenditure management will be further enhanced with the renewal of the Policy on Evaluation.

Benefits for Canadians

The Expenditure Management System, built on the three pillars of managing for results, upfront discipline, and ongoing strategic reviews, ensures that the Secretariat is well equipped to perform the role of managing and overseeing the government's expenditures. With the Secretariat's focus on management excellence and value-for-money, Canadians can expect high-performing programs and services as well as effective and efficient use of their tax dollars.

During a time of global economic uncertainty, the government tabled the earliest budget in its history, in January 2009. This was needed to stimulate the economy and allow government funds to flow as quickly as possible. The Secretariat played an important role in expediting the implementation of Canada's Economic Action Plan, responding to the need to accelerate funding approvals while continuing to provide accountable and effective stewardship of tax dollars.

Program Activity 3: Government-wide Funds and Public Service Employer Payments

The Secretariat has responsibility for managing access to the central funds. Funds are held centrally to supplement other appropriations, and payments and receipts are made on behalf of other federal government departments and agencies in an administratively sound and efficient manner. The expected result is that these funds are administered in accordance with applicable legislation, Treasury Board policies, and Treasury Board standards.

Program Activity 3: Government-wide Funds and Public Service Employer Payments

2008–09 Financial Resources ($ thousands)			2008–09 Human Resources (FTEs)
Planned Spending	Total Authorities	Actual Spending	Planned	Actual	Difference
1,861,021	2,643,588	1,754,566	–	–	–

PA 3 involves the administration of centrally managed government-wide funds by the Secretariat on behalf of other departments. As a result, variances between planned, total, and actual spending are not a reflection on the Secretariat's performance. Performance analysis is therefore not required. For a description of the votes, refer to the Appendix.

Program Activity 4: Internal Services

The Internal Services program activity includes key functions and costs related to supporting the Treasury Board and the internal management of the Secretariat. Human and financial resources associated with PA 4 activities are allocated across the Secretariat's other program activities in accordance with MRRS reporting guidelines.

Performance Analysis

This section outlines progress against PA 4 commitments made in the 2008–09 RPP to implement corporate strategies and improve internal management in response to MAF assessments. It covers human resources management, the Change Agenda, and management performance.

Human resources strategy

The Secretariat continued to implement actions identified in its 2008–11 HR Strategy. It developed sector integrated business and HR plans to address challenges and gaps in its human resources capacity. To reduce time in staffing vacancies, a number of collective staffing processes were conducted to establish pools of pre-qualified candidates for various types of positions. A university recruitment campaign for economists and social scientists resulted in over 30 hires from diverse backgrounds. Competency profiles were developed and are being used to enhance the administrative community.

What is the impact? Efforts resulted in improved HR management within the Secretariat and increased its capacity to meet business priorities. Actions taken in recruitment and integrated planning also contributed to Public Service Renewal priorities.

Change Agenda

The Secretariat continues to advance organizational change to strengthen strategic leadership, collaboration, and risk management. The work plan addresses three areas: engaging employees, building capacity, and embedding change into processes. In 2008–09, the Secretariat focussed on employee engagement.

An assessment of the current organizational culture was undertaken to improve understanding and identify key issues. All employees were engaged in discussion of the assessment results, and each sector developed action plans for change. Evidence of change can now be seen across the Secretariat. Some sectors have developed grassroots networks to empower employees in the change process. Other sectors have created charters that define how they will work constructively with external and internal partners. These efforts resulted in the Secretariat being recognized for its leading practices. 

What is the impact? Commitment to organizational change was demonstrated in how the Secretariat works with its clients and in how staff work with each other. These actions enable the Secretariat to fulfill its mandate and advance the renewal of the public service.

Creation of the Corporate Services Sector

On February 1, 2009, an Order in Council came into effect creating a Corporate Services Sector within the Secretariat, and 425 employees were transferred from the Department of Finance Canada to the Secretariat. As a result, the Secretariat now has a dedicated unit to look after key strategy and stewardship functions and continues to provide other shared services with Finance. A team has been created to assist staff with the reorganization and ensure a smooth transition. The new sector will strengthen the Secretariat's capacity to provide high-quality internal services in a comprehensive and accountable manner.

What is the impact? The reorganization better supports the Secretary of the Treasury Board in fulfilling the role of departmental accounting officer. It also enhances the Secretariat's ability to comply with legislation, policy, and best practices for delivering corporate services.

Strengthening the Secretariat's governance and corporate management performance

The Secretariat's overall management processes were strengthened, with particular attention given to internal evaluation and information technology management. To strengthen internal information management and information technology management (IM/IT), responsibilities and accountabilities were centralized through the creation of a departmental chief information officer function. A senior management committee was established to ensure strong oversight. Improved results in these and other areas resulted in the Secretariat successfully meeting the commitments outlined in its 2008–09 RPP.

What is the impact? The Secretariat established clear and effective governance and management of IM/IT to support its business strategy and to ensure value-for-money for Canadians. This is one example of how the Secretariat has improved its internal management practices.

Summary

Under PA 4, the Secretariat worked diligently throughout 2008–09 to address the priorities of the Public Service Renewal Action Plan, implement the Change Agenda, and apply policy changes to improve internal management. A notable highlight this year was the development of the first-ever Integrated Business and Human Resources Plan for 2009–10. However, completion of the plan was delayed due to organizational changes. The Secretariat improved its planning processes by building on past experience, which included overall coordination, sharing best practices, and using timelines and data collection tools. In addition, the Secretariat has implemented the use of learning plans throughout the organization. Managers must review performance and career development goals with their staff on an ongoing basis. Over 90 per cent of employees have personal learning plans—a significant increase over 62 per cent last year. Overall progress in PA 4 has strengthened the Secretariat's internal management practices.

Benefits to Canadians

Efficient and effective internal services are essential to meet the management and financial performance expectations that have been set for the Secretariat and all departments in the federal government. By advancing integrated business planning and implementing HR initiatives, the Secretariat is contributing to the ongoing renewal of the public service.

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