Skip to content Skip to institutional links

Common menu bar links

Office of the Comptroller General

Financial Management

Financial Management System Configuration

Section IV Common FM-SC Linkages

Figure 7 illustrates the linkages of the FM-SC with policy centres and central agencies, stakeholders, government-wide directions, and horizontal initiatives.

Figure 7 – FM-SC Linkages

Figure 7 - Text version

FM-SC linkages exist within the broader financial management landscape in the GC.

Financial management in GC occurs at both a departmental and a government-wide level in the context of current, previous and future accounting periods.

There are a number of central agencies, common service organizations, and departments and agencies holding policy and/or operational authorities over the management of financial information and data in GC. The result is a complex landscape.

Departments are required to manage their finances in accordance with the FAA, other legislation, a variety of financial policy instruments and other rules.^[14] GC financial management practices are consistent with Canadian generally accepted accounting principles (GAAP) for the public sector.^[15] Departments are required to plan for future accounting periods, record transactions for the current period, and report on financial activities. The broad scope of financial management activities are depicted in Figure 8 below.

Figure 8 – Scope of GC Financial Management

Figure 8 - Text version

Accounting Policy is set by Treasury Board in the context of the FAA, the Federal Accountability Act, other policy instruments and other rules, all of which clearly identify responsibilities and accountabilities for Deputy Heads, Chief Financial Officers and managers with regards to departmental financial management operations.

The RG provides direction on processes related to issuance of payments, receipt of payments and preparation and submission of financial information and data for purposes of preparation of the Public Accounts.

Similarly, due to its responsibilities and authorities mandated through the Department of Public Works and Government Services Act, Public Works and Government Services (PWGSC) delegates authorities related to acquisitions and provides direction on processes related to submission of information for purposes of reporting on acquisitions.

Financial management in departments is, for the most part, carried out under the direction and accountability of the Deputy Head and CFO. In general, the GC operates under the principle that the RG/PWGSC holds and reports on consolidated financial information; the responsibility to hold and report on departmental financial activities rests with the Department.

The DFMS is used to support financial operations by:

Supporting operational activities (paying employees, procurement of goods and services, managing grants and contributions, etc.), most of which require the operational support of the common service agencies;
Supporting day-to-day management of the operations (reporting on free balance, expenditures to date, project reporting, support to forecasting, reallocations of budgets, etc.), the requirements of which are defined by:
- operational managers (what they need to support their activities);
- the CFO and Deputy CFO (controls on expenditures, delegation of authorities, accurate reporting, financial integrity); and
Supporting government-wide reporting requirements (the requirements associated with responding to requests for information from Treasury Board and others).

Under the FAA and the Department of Public Works and Government Services Act^[16], PWGSC holds the government-wide mandate for:

The RG function, which issues all payments out of the Consolidated Revenue Fund, processes all deposits on behalf of departments and prepares the Public Accounts of Canada;
Acquisitions activities, under which PWGSC holds some policy authority and delegates authority to acquire goods and services to departments;
Administrative and other common services regarding Public Service Compensation (payroll and benefits) and Pension management; and
Other non-financial responsibilities.

Because the RG issues payments and processes deposits, there is a daily exchange of information related to payments and revenues between PWGSC and departments. Departments send PWGSC payment instructions, and PWGSC reports deposits to the consolidated revenue fund back to departments for reconciliation purposes. This exchange of information is based on highly standardized and secure file uploads and downloads. The specifications for uploads and downloads are included in the RG Manual.^[17]

Similarly, there is a regular exchange of information between departments and PWGSC related to employee compensation (pay and benefits) and, in cases where PWGSC retains authority, for acquisitions.

The next sections describe linkages between the organizations and initiatives within the current financial management regime and FM-SC (depicted in Figure 8 above).

IV.1 Policy Centres and Central Agencies

TBS Financial Management (FM) Policy Suite

Government management functions must be conducted according to specific rules that are set out in legislation and policies. As appropriate, the Treasury Board issues policy instruments pursuant to the Financial Administration Act and more than 20 other pieces of enabling legislation that provide it with the authority to establish pay rates and benefits for government employees, control and report on public expenditures, and establish rules for managing people and public resources.

The Financial Administration Act (FAA, sections 16.3-16.5) now designates deputy ministers of departments identified in Part I of Schedule VI of the Act, as well as heads of institutions identified in Parts II and III of Schedule VI of the Act, as accounting officers for their organizations, within the framework of ministerial responsibility and accountability to Parliament.

Over and above the Policy and Directive on the Stewardship of Financial Management Systems (as described earlier in this document), the following key policies directly influence the need for common configuration requirements:

Policy on Financial Management Governance – The objective of this policy is to “strengthen public sector financial management and its leadership thereby contributing to appropriate stewardship of public resources, effective decision-making, and efficient policy and program”.^[18] FM-SC requirements, defined in accordance with current legislative and policy frameworks, will provide Deputy Heads, the CFO and Senior Departmental Managers with the guidance necessary to ensure DFMS provides required financial management functions and information in a compliant, prudent and effective manner.
Policy on Internal Control (PIC) – The PIC identifies systems as part of a department’s internal control regime. The FM-SC requirements will be defined in accordance with the current policy and legislative framework and, as such, will assist Deputy Heads with monitoring internal control compliance with policies, directives and related legislation/regulations.
Policy on Financial Resource Management, Information, and Reporting – Deputy Heads, as departmental accounting officers, are expected to organize resources to deliver departmental programs, to ensure that they have taken measures to maintain effective systems of internal control and to sign the accounts required for the preparation of the Public Accounts^[19]. A set of common financial management configuration requirements will assist departments and agencies in effectively managing resources that implement, support and maintain their DFMS as well as form part of the internal control regime supporting the completeness and accuracy of financial information.
Policy on Management Resources and Results Structure (MRRS) – Under the MRRS Policy, a common government-wide definition of GC Internal Services has been established by Treasury Board. Specifically for Financial Management Services, functions include: financial planning and budgeting; accounting management; expenditure control; payments service; collections and receivables service; asset and liability management service. These common definitions and services have been considered in defining the components of the FM-SC.

Refer to Appendix D for work to date on policy instruments related to FM-BP.

Receiver General Directives and Guidance

The Receiver General (RG) for Canada is a central government service, supporting both the treasury and accountant functions of the federal government. In line with its mandate, which is to safeguard the integrity of the Consolidated Revenue Fund (CRF) and the Accounts of Canada, directives and guidance related to maintaining the Accounts of Canada, preparing the Public Accounts and producing the government's Monthly Statements of Financial Operations, as well as payment and deposit issues, are provided to departments and agencies through Receiver General Directives, the Receiver General Manual and Information Notices.

FM-SC requirements will need to support DFMS compliance with Receiver General Directives and guidance.

IV.2. Stakeholders

Departments and Agencies

According to the Policy on the Stewardship of Financial Management Systems, Deputy Heads are responsible for allocating appropriate resources to ensure a timely implementation of standardized configurations of FMS, common financial management business processes and common enterprise data requirements as defined by the OCG.

FM-SC requirements will provide guidance to the financial management community as required under this policy.

FMS Cluster Groups

FM-SC requirements are intended to support FMS cluster groups in standardizing FMS application configurations across government. The chairs of Cluster management boards will also ensure that annual business plans for the cluster group are developed and evolve configurations in keeping with the criteria established by the OCG for cluster configurations.

Public Works and Government Services Canada (PWGSC)

Public Works and Government Services Canada (PWGSC) is mandated as a common service agency for the Government of Canada's various departments, agencies and boards.Within PWGSC, the two organizations that will be served by FM-SC requirements are the following:

Receiver General for Canada (RG) -The RG is responsible for the operations of the federal treasury, including issuing payments and collecting revenue for government departments, maintaining the Accounts of Canada, preparing the Public Accounts and producing the government's Monthly Statement of Financial Operations. These activities ensure the government's financial stability and public confidence through accurate and timely issuance of payments to Canadians and reporting of the government's financial activities. The RG is also responsible for the collection and reporting of aggregate information on the financial transactions of the Government of Canada.
FM-SC DFMS requirements, in accordance with legislation, policy, and RG directives and guidance, will provide assurance on the completeness and accuracy of departmental financial data.
Common and Shared Services - With respect to the shared services agenda, PWGSC delivers mandatory and optional common, central and shared services to federal departments in support of government operations and manages major shared service initiatives in accordance with the Common Services Policy. PWGSC is a key stakeholder in the collection and reporting of financial data related to travel, assets, real property and the procurement of goods and services.^[20]
Common DFMS requirements developed under the FM-SC Initiative will identify DFMS interactions with common and shared services as applicable.

TBS Sectors

Other TBS Sectors with significant FMS related responsibilities include the following:

The Chief Information Officer Branch (CIOB), which provides leadership for the Information Management and Information Technology (IM/IT) support needed to meet OCG and other policy centre requirements.
The Office of the Chief Human Resources Officer (OCHRO), which provides leadership on human resources common business processes and common data, both of which are key to understanding the requirements for finance / human resources process and data interactions.
The Government Operations Sector (GOS), which supports the Treasury Board in its role as a management board and budget office, providing analysis and advice to departments and agencies of government. GOS develops policy and guidance materials, offers policy interpretation and monitors implementation. GOS, along with other sectors within TBS, brings all transformative initiatives to TB and plays a significant role in the implementation of the Federal Accountability Act and Action Plan.
The Expenditure Management Sector (EMS), which provides a central focus for the functions that support and strengthen TBS's role in the government's expenditure management system through the collection and reporting of aggregate information held in financial management systems on program expenditures, in order to assess program outcomes through the program activity architecture (PAA).

Iv.3. GC-Wide Direction

Administration Services Review (ASR)

An Administrative Services Review (ASR) was established under Budget 2010 with a mandate to undertake a comprehensive review of government administrative functions and overhead costs in order to identify opportunities for additional savings and improve service delivery.^[21]

Currently being led by the Privy Council Office (PCO), the Administrative Services Review will develop a range of long-term recommendations, some of which may impact on DFMS and the delivery of financial management services in departments.

Prime Minister’s Advisory Committee on the Public Service

The Prime Minister’s Advisory Committee on the Public Service has issued three reports on various aspects of public sector operations over the course of the last four years. A number of recommendations in the Advisory Committee’s reports have been adopted and have had an impact on the operational structures of the federal government.

The FM-SC Initiative will incorporate requirements arising from the PM’s Advisory Committee on the Public Service as they are adopted over time.

Management Accountability Framework (MAF)

The Management Accountability Framework (MAF) sets out Treasury Board’s expectations for senior public service managers for good public service management. MAF is structured around 20 Areas of Management (AOM). While a number of MAF AOM fall within the scope of the financial management functions to be supported by FM-SC requirements, compliance with the FM-SC Guideline would be assessed under AOM 7: Financial Management and Control.

FM-SC requirements, consistent with the government’s legislation and policy framework, will assist deputy head and departmental compliance with MAF expectations.

IV.4. Horizontal Initiatives

FM-BP / CEDI

The linkage between FM-SC, CEDI, and FM-BP is described in Section III of this report.

FMS Cluster Group Initiatives

The FMS Cluster- managed applications that currently serve as the core of DFMS in GC departments and agencies include SAP, Oracle, FreeBalance, GX, CDFS, and CMS. Also included is the AMMIS asset and material management application.^[22] Periodically, departments, through their respective FMS Cluster Groups, undertake initiatives to modify or upgrade their FMS applications.

FM-SC requirements will provide FMS Cluster Group members with the guidance required to move to a common configuration which is consistent with the government’s legislation and policy framework. In this way, FM-SC requirements will be implemented over time throughout all departments and agencies.

Common HR Business Processes

OCHRO has documented and is continuing to refine common human resources business processes for the GC. The FM-BP initiative has defined HR / Finance interactions between OCG’s common financial management processes and OCHRO’s common human resource processes in the Guideline on the Common Financial Management Business Process for Pay Administration.

In addition to this guideline, and FM-BP common processes for Managing Other Payments, FM-SC will also ensure configuration requirements are consistent, where relevant, with OCHRO’s common business processes.