Financial Management Community Update
- Spring 2010

Message from the Newsletter Editor, Norma Hubley

Welcome to the inaugural edition of Financial Management Community Update. The idea for this newsletter was born during the recent Deputy Chief Financial Officer (DCFO) Conference held on October 19 and 20, 2009. The DCFO community would like to see more broad-based communication within our community, and we are hoping that this newsletter will meet this need.

I have worked in the transformation management and capacity building and community development areas since 2006 and have seen our community mature. This has been accomplished through the efforts of many people. There has been great collaboration within departments in sharing ideas and processes.

Many people in the public service consider the financial management community to be a model of good organization, communication and community. We are fortunate to have a champion in the Comptroller General and a centralized body for capacity building and community development.

We have also been very fortunate to have had Ann Marie Sahagian as Assistant Comptroller General to forge many relationships in the community and set our priorities and goals.

Since January 2010, the Financial Management Capacity & Community Transformation Division is also fortunate to continue this important work under the leadership of Bill Matthews, Assistant Comptroller General, Financial Management and Analysis Sector.

Although we feel that our community is mature in its collaborative efforts, we know that there is still more work to be done to meet the challenges ahead.

The newsletter will serve as a vehicle for communicating to our entire community. I hope you find it useful and interesting, and I welcome any suggestions you may have for future editions.

Norma Hubley, CA

Biography of James Ralston, Comptroller General of Canada

The Comptroller General is responsible for government-wide direction and leadership for financial management, internal audit, and assets and acquired services. The Comptroller General also supports capacity building and professional development in the financial management, internal audit, and assets and acquired services communities.

Prior to becoming the Comptroller General, Mr. Ralston was Chief Financial Officer and Assistant Commissioner of the Canada Revenue Agency (CRA), a position he accepted in 2004. Mr. Ralston joined that organization in 1999, first as Director General, Corporate Review Directorate, and then in 2002 as Deputy Assistant Commissioner and Agency Comptroller, leading theorganization's Modern Comptrollership Office.

Before his work at the CRA, Mr. Ralston spent 15 years with the Office of the Auditor General of Canada (OAG) and throughout most of that time was a Principal responsible for financial and value-for-money audits of Revenue Canada. Prior to joining the OAG, Mr. Ralston worked for 8 years in a national public accounting and consulting firm in Edmonton and Ottawa. He began his career with the Provincial Auditor of Alberta.

Mr. Ralston holds a Bachelor of Commerce degree from the University of Alberta, a Master of Arts in Economics from the University of Ottawa, and a Doctor of Philosophy in Political Science from Carleton University. Mr. Ralston is a member of the Institutes of Chartered Accountants of Alberta and Ontario.

Interview with James Ralston, Comptroller General of Canada

The first question one usually asks is what is your vision of the role of Comptroller General and the financial management community?

To me, the thing that provides the raison d'être for the role of Comptroller General is its focus on the effectiveness and sustainability of the professional communities that it leads within the federal government. Until recently, these have been the financial officer and internal auditor communities; however, as of January 2010, the list has been expanded to include professionals in the fields of real property management, procurement, materiel management, and project management.

The effectiveness and sustainability of these professional communities involves strategic human resource management on a federal government-wide basis. This means recruitment, training, career development, and succession planning that spans a very long time horizon.

It also means supporting the professionals in these communities with a sound policy framework and other tools of the trade.

The financial management community adds value in a variety of ways: provision of financial services; reporting for decision-making and accountability purposes; contributing to sound internal control; contributing to effective investment planning and resource allocation.

It means having financial professionals who are technically strong and who are able to work collaboratively with others who are not financial experts to arrive at decisions that are sound from a variety of perspectives.

What is the biggest challenge facing the financial management community, and how do you propose to face this challenge?

I think that in recent years the profile of the financial management community—and appreciation for the variety of roles it can play—has never been higher. That is both a blessing and a curse. It presents opportunity but also stretches resources as the level of demand increases.

Part of the advice that financial professionals will have to give financial managers is going to involve establishing the right size of the finance function within the context of each department and agency. I'm betting that the right size will be modest, which will mean financial professionals will need to be models of efficiency for their colleagues in line functions.

During the last few months the Office of the Comptroller General (OCG) has taken a number of useful steps. The renewal of the financial policy suite is key, in particular the Policy on Internal Control. We also continue to support the improvement and integration of financial systems and related business processes. Coming up, we are working on the Legislative Barriers Initiative. The themes running through these initiatives are streamlining and sharing—avoiding unnecessary effort in some areas and pooling efforts in others.

How do you plan on strengthening your relationship with departmental and agency chief financial officers and the financial management community in general, and how would you like the Office of the Comptroller General to be perceived by departments and agencies with respect to leadership?

I want to maximize my opportunities to get out among the members of the community and to listen to their concerns and suggestions. To the leaders within the community, in particular, I want to be very accessible. Collectively, they know far more than I do, see far more opportunities than I do, and are far wiser than I am. If I am to be effective, I need their support.

I want the Office of the Comptroller General to be seen as committed to upholding the finest of public service values and to be seen as a trusted ally in implanting those values throughout the federal government in a practical way.

Related to this is my ability to communicate effectively with the deputy minister community, since the more the members of that community see the value of the OCG and the professional communities it represents, the better. I want to be attentive to the positives and the negatives, since that feedback will factor into the initiatives we will choose to pursue.

Do you feel that there is an area of weakness or concern regarding financial administration that you would like resolved, and if so, how would you go about fixing it?

I think that financial administration is fundamentally sound, but as with any other aspect of government it needs to continue to evolve to stay relevant and effective. I would like to see everyone within the finance function committed to the goal of continuous improvement. I will try to support their efforts as much as I can.

Can you tell us about the senior level advisory panel or committee that you are creating?

It consists of me; my three Assistant Comptrollers General; the Assistant Secretary, Expenditure Management Sector; three chief audit executives; four chief financial officers from large departments and one from a smaller department; a representative of the deputy chief financial officer community; and a representative of the Receiver General function. Some of the membership will turn over to provide a wider opportunity for members of the financial and internal audit communities to participate.

My goal is to have it advise me in a meaningful way on the establishment and implementation of strategies for the communities as a way of building an agenda that the communities themselves will recognize as strong.

As time goes on, I will assess whether this structure is meeting my goals. For example, I will be considering how well this structure is able to provide guidance in the policy areas that have been recently assigned to the OCG.

Do you consider finance professionals as equal partners at the management table in a department or agency?

I don't think that government can be effective without the support of a strong community of financial professionals to support it. Deputy heads or senior managers who fail to appreciate that fact and fail to involve financial professionals in a serious way do so at their peril.

But there is an onus on financial professionals to demonstrate their value. For example, if a financial professional stays within the comfort zone of providing financial services only, then he or she is not delivering maximum value. Effective communication has to take place.

What enhanced role did the financial management community assume during the stimulus package implementation?

I don't think I would say that the financial management community took on an enhanced role, but I do think that implementing the Economic Action Plan allowed the financial management community to showcase the things that it is capable of doing. In particular, I think the role of the financial management community in helping to identify risk and in advising on mitigation strategies was seen and appreciated.

One unique aspect was the demonstration of speed and agility that this demanded of both the financial management and internal audit communities. I believe that the level of effort across government in a short time frame was unprecedented. Moreover, the quality of the work was not sacrificed despite the imperative for timely action.

I would also note that I expect there to be a postscript to this story. A lot of folks are now turning their minds to the challenges of bringing the federal government's budget back into balance. One way or another, this has to represent another opportunity for the financial management community to prove its worth.

Do you consider the blending of financial management and internal audit with real property management, procurement and materiel management to be the right model for the Comptroller General?

In my previous position as the Chief Financial Officer at the Canada Revenue Agency, I was responsible for finance, procurement, logistics, fleet management and real property, among other things. I found that there were many points of commonality among these functions. So, I am delighted about the new addition to the Office of the Comptroller General organization.

As for internal audit, it was as an auditor that I have spent most of my career, so the subject matter is very familiar to me. I believe that the internal audit function and the other functions (named above) have many common goals, so there is a good fit there as well.

What skills must the financial management community acquire to meet the challenges of the next five years, and what advice do you have for someone entering the community?

I believe that the kind of technical training one acquires through accreditation in accounting always offers a strong foundation. I also support continuing professional development in order to stay current with the professional body of knowledge.

Beyond that, we need technically strong individuals who are also good managers.

I've always been irked by those who buy into the stereotype that being an accountant precludes being a "people person." Lastly, we need those who can be leaders and visionaries. And I don't mean just knowing the vocabulary, but really being able to practise the art.

Upon entering government, people have to learn to appreciate some of the unique features and requirements of government. I would put at the top of the list learning about the pivotal role of Parliament as the source of all financial authority and the resultant duty of financial accountability to Parliament by all members of the public service to whom financial authority is delegated.

What are your personal goals as Comptroller General for the next two to three years?

My goal is to have the various functions I'm responsible for be stronger at the end of that period than they are today. I am open to any suggestions that will lead to that end. My focus will be on the sound execution of the strategies and initiatives that we choose.

My starting point is to finish the good work that is currently under way; the recent changes to the policy suite will inevitably generate a shift of focus to implementation and the capacity requirements in the professional communities in light of the new policy expectations

Introduction by Bill Matthews, Assistant Comptroller General

This fall saw the federal government table the Public Accounts of Canada on November 4, 2009, which was followed by a successful appearance before the Standing Committee on Public Accounts on November 23 by representatives from the Department of Finance, the Office of the Auditor General and the Office of the Comptroller General. Acknowledging that the government received a clean audit opinion for the 11th consecutive year, several Committee members complimented representatives on the quality of financial reporting in Canada. This is a reflection of the commitment and work of all department employees—thanks to you all.

Bill C-51, the Economic Recovery Act, was introduced in the House of Commons and received Royal assent on December 15, 2009. Among other items, including the Home Renovation Tax Credit, this bill contains the requirement for quarterly financial reporting by departments and Crown corporations, commencing in 2011.

On the policy development and implementation front, the current priorities are completing the Policy on Resource Management and Financial Reporting and implementing the already approved Policy on Internal Control.

The Management Accountability Framework (MAF) assessment Round VII is well under way with a number of changes in the criteria being assessed and in the process itself. The five-year evaluation undertaken by PricewaterhouseCoopers and Interis Consulting resulted in five recommendations, the first of which (implementing a risk-based approach) has been implemented with financial management and control identified as a core area of management.

Realizing the importance of MAF as one of the Treasury Board of Canada Secretariat main tools for deputy heads to review performance and set future priorities, the Financial Management and Analysis Sector is actively engaged in reviewing and aligning its indicators to the new realities of financial management practice in the federal government. Financial pressures, deficit management, alignment of priorities to resources, and the heightened accountabilities of senior management are all factors that shape the principles of how we use this area of management.

Recognizing the importance of continued improvements, over the next few months we will be reviewing and refining our methodology to ensure that MAF is measuring what counts for effective financial management performance.

Core Curriculum Update

The Office of the Comptroller General has been working with the Canada School of Public Service to develop a core curriculum dedicated to meeting the specific needs of the financial management community. To date, three required training courses have been developed:

F111 – Financial Management Control Frameworks is currently being offered by the Canada School of Public Service and has been included in the school's catalogue.

F112 – Government Planning, Budgeting, Reporting and Evaluation Cycle was piloted in October 2009 and is expected to be included in the school's 2010–11 catalogue.

F113 – Financial Management Systems is currently under development and is scheduled to be piloted in March 2010.

As part of the new curriculum for financial officers, a series of learning events is being designed to provide an opportunity for participants to understand the strategic analysis of an issue from the perspective of the senior financial management community. The Strategic Series will be piloted in February and March 2010.

Highlights of the CFO and DCFO Annual Conferences

The chief financial officer (CFO) and deputy chief financial officer (DCFO) communities met in Ottawa on November 9–10, 2009, and October 19–20, 2009, respectively, for their annual conferences hosted by the Office of the Comptroller General (OCG), Treasury Board of Canada Secretariat.

The purpose of these annual conferences is to bring together senior financial managers across government to share new information and provide updates on timely and relevant matters that affect the financial management community, to share best practices, to provide an opportunity to network among peers, and to provide a forum for frank discussion on the issues of the day.

Topics of discussion at the November CFO conference included the new Canadian auditing standards, the financial management community maturity model, the results of the US Association of Government Accountants' survey of CFOs, and how to make the most out of your departmental audit committee. Updates were provided on the Economic Action Plan, transformation management, and activities at the Canada School of Public Service, as well as on the Internal Audit Sector, the Capacity Building and Community Development Sector, and the Financial Management and Analysis Sector at the OCG.

The conference venue provided an occasion for the first official address by James Ralston, Comptroller General of Canada. Mr. Ralston candidly addressed the community's leaders and engaged them in sharing their thoughts and concerns, in addition to presenting his own ideas and perspectives on financial management (see "Interview with James Ralston, Comptroller General of Canada").

The October DCFO annual conference featured discussion topics similar to the CFO conference, as well as presentations on bid-rigging awareness and prevention, the public service financial community survey, Management Accountability Framework Round VII, financial systems authority, implementing financial management policies, and a community approach to mentoring.

Some of these issues will be the subject of separate articles in future editions of Financial Management Community Update. Should you wish to get more information on any of these topics, you are invited to contact the office of your departmental or agency CFO/DCFO or the editor of Financial Management Community Update (see "Important Links").

CFO Issues and Challenges: 2009 AGA Survey of US and Canadian Government CFOs

The Association of Government Accountants (AGA), in partnership with Grant Thornton, has sponsored an annual federal chief financial officer (CFO) survey since 1996. In 2009, AGA joined with the National Association of State Auditors, Comptrollers and Treasurers and the Financial Management Institute of Canada, with the support of the Office of the Comptroller General of Canada (OCG), to expand the reach of the survey.

In spring 2009, nearly 500 government finance executives and managers from the United States and Canada participated in AGA's 15th annual CFO survey. Key topics for 2009 included economic recovery, transparency, what new CFOs need to know, and annual financial statements.

At the invitation of the Comptroller General of Canada, two US government chief financial officers attended the 2009 annual CFO conference and shared their insights and perspectives on the results of the survey that responded to the 2007 financial crisis. The interactive panel discussion revealed that many of the issues faced by the financial management community in Canada are also prevalent in the US. The OCG plans to establish the necessary communications infrastructure for exchanging information and best practices at the CFO level, when appropriate. The OCG has also expressed interest in collaborating with and contributing to future US CFO surveys.

To review the complete report, consult the AGA website.

Financial Community Survey

In August and September 2009, Statistics Canada conducted, on behalf of the Comptroller General of Canada, the Public Service Financial Community Survey.

The purpose of this electronic survey is to gather relevant and timely information on the financial management community. It is a follow-up of similar surveys conducted in 1997 and 2003.

This survey will provide the latest trends in demographics for the financial management community as well as targeted information on new and emerging issues, such as the stability of the financial officer (FI) population, the reach of the FORD/IARD program, and the impact on career development of personal learning plans, workload drivers, and linguistic competencies. Survey results will also be used to prioritize the development of financial management training at the Canada School of Public Service.

This survey focussed on the FI community and executives who perform financial management-related duties. The questionnaire was developed collaboratively between the Office of the Comptroller General and Statistics Canada. It was then reviewed and approved by the questionnaire review committee in the Special Surveys Division and tested in focus group sessions facilitated by Statistics Canada personnel. Developing the questionnaire involved consulting experts in access to information and privacy, communications, and labour relations, as well as meeting with representatives from the Association of Canadian Financial Officers.

The questionnaire was sent by email to approximately 5,000 FIs and executives in 80 federal departments and agencies. A very positive response rate of 66 per cent was achieved. The final report from Statistics Canada should be available early in 2010, and more details about the survey will be provided in the next edition of Financial Community Management Update.

Facts and Figures: Did You Know?

• There are more women financial officers (FIs) than men. This trend started in 2003.
• Currently, women make up 55 per cent of all FIs.
• The province with the largest percentage of women FIs is British Columbia, where women make up almost 60 per cent of the FI population.
• 30 per cent of FIs are currently under the age of 35; 10 years ago, only 24 per cent of FIs were under 35 years of age.

Important Links

• Office of the Comptroller General of Canada
• Treasury Board of Canada Secretariat
• List of departmental and agency chief financial officers
• List of financial management policy instruments
• Web page for comments and questions about Financial Management Community Update

Suggestions for future Financial Management Community Update articles are encouraged. Please send us your requests via the Comments or Questions Web page or by contacting Norma Hubley.