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President's Message

A photograph of the Honourable Tony Clement, President of the Treasury Board and Minister for the Federal Economic Development Initiative for Northern Ontario

I am pleased to present the 2011–12 Departmental Performance Report of the Treasury Board of Canada Secretariat in an electronic format. This marks a significant, innovative step in modernizing and rendering more accessible and efficient departmental reporting on performance.

In the past year, the Secretariat has played a leading role in advancing the transformation of government into a leaner and more efficient organization, with a focus on containing costs, modernizing processes through IT innovation and strengthening the approach to people management.

The Secretariat supported ministers in leading a comprehensive review of direct program spending across federal departments and agencies. The results, announced in Economic Action Plan 2012, have set the stage to further improve the efficiency and effectiveness of government operations and programs, as well as ensure value for taxpayers' money.

The Secretariat also made progress in enhancing productivity and in modernizing the way the government interacts with and serves Canadians and businesses. For example, we have been removing costly and unnecessary duplication and paperwork for business as part of the Government's ongoing efforts to reform Canada's regulatory system. We announced the "One-for-One" Rule which will reduce the time and resources businesses spend to comply with government regulations. It will do this by requiring regulators to offset an administrative burden of equal value each time they impose a new one. In addition, the Secretariat focused on expanding the number of datasets available on the government's Open Data portal and worked on making the site more accessible and usable for Canadians as part of the Open Government initiative. It also contributed to the creation of Shared Services Canada.

The Secretariat strengthened and updated the approach to people management across government to reflect current realities by issuing the new Values and Ethics Code for the Public Sector, by meeting the government's commitment to bring public service compensation in line with private and other public sectors, and by continuing the implementation of a government-wide Common Human Resources Business Process. In addition, the Secretariat played an important role in supporting and advising deputy heads as they managed the impacts of fiscal restraint and prepared for workforce reductions.

These reforms, among many others, reflect a strong commitment to fundamentally change the role of the public service and how it serves citizens. I invite you to read this report to learn more about the progress that the Secretariat is making in supporting and driving this process of renewal based on a clear vision for the future.

Original signed by

The Honourable Tony Clement
President of the Treasury Board and Minister for FedNor



Table of Contents




Raison d'être

The Treasury Board of Canada Secretariat (the Secretariat) is the administrative arm of the Treasury Board. It supports Treasury Board ministers and strengthens the way government is managed. In this way, the Secretariat helps ensure value for money in government spending and results for Canadians.

Responsibilities

Treasury Board Roles

The Treasury Board is a Cabinet committee of ministers established in 1867. It oversees the government’s financial, human resources and administrative responsibilities, and establishes policies that govern each of these areas. In addition, the Prime Minister has designated the Treasury Board to act as the committee of the Queen’s Privy Council with respect to the consideration and approval of regulations and most orders-in-council. The Treasury Board, as the Management Board for the government, has three principle roles:

  • It acts as the government’s Management Office by promoting improved management performance. It also approves policies to support the prudent and effective management of the government’s assets and financial, information, and technology resources.
  • It acts as the government’s Budget Office by examining and approving the proposed spending plans of government departments and by reviewing the development of approved programs.
  • It acts as the human resources office and the employer or People Management Office by managing compensation. It also sets people management policies (including determining the terms and conditions of employment) to ensure coherence and consistency, where needed.

The Secretariat makes recommendations and supports the Treasury Board in each of its roles. It provides advice on policies, directives, regulations and program spending to promote sound management of government resources. The Secretariat also provides leadership and guidance on management functions within departments and agencies, while respecting the primary responsibility of deputy heads See footnote [1] in managing their organizations and their roles as accounting officers before Parliament.

Within the Secretariat, the Comptroller General of Canada provides government-wide leadership, direction, oversight and capacity building for financial management, internal audit and the management of acquired services and assets.

The Chief Human Resources Officer leads people management across the core public administration by developing workplace and workforce policies and programs; by centrally managing labour relations, compensation, and pension and benefit plans; and by developing executive leadership.

The Chief Information Officer provides government-wide leadership, direction, oversight and capacity building for information management (IM), information technology (IT), government security (including identity management), and access to information, privacy, and internal and external service delivery.

The Treasury Board Portfolio is made up of the Secretariat and the Canada School of Public Service. The Public Service Pension Investment Board, the Office of the Commissioner of Lobbying of Canada, and the Office of the Public Sector Integrity Commissioner of Canada are arm's-length organizations whose reports to Parliament are tabled by the President of the Treasury Board.

The Secretariat is guided by its vision statement, “Better government: with partners, for Canadians.” When working with federal departments, agencies and Crown corporations, the Secretariat plays three central agency roles:

  • An enabling role to help organizations improve management performance;
  • An oversight role that includes developing policies and standards, and reporting on the government's overall management and budgetary performance; and
  • A leadership role in driving and modelling excellence in public sector management.

In recent years, through legislation such as the Federal Accountability Act as well as through the renewal of the suite of Treasury Board policies, greater emphasis has been placed on the Secretariat's enabling role—helping deputy heads maximize their flexibility to achieve management excellence within their organizations.

The following diagram shows how the Secretariat works with organizations to fulfill its three central agency roles, and how it supports the Treasury Board.

Figure 1: How the Secretariat Works With Organizations

How the Secretariat Works with Organizations

Figure 1: How the Secretariat Works with Organizations - Text version



Strategic Outcome and Program Alignment See footnote [2] Architecture

The Secretariat's Program Alignment Architecture (PAA) is made up of six programs that contribute to the achievement of the Secretariat's Strategic Outcome. Detailed information about the Secretariat's Strategic Outcome and about each of the programs in the PAA can be found under Results and Performance.

2011–12 Program Alignment Architecture

Strategic Outcome: Government is well managed and accountable, and resources are allocated to achieve results

  • 1.1 Management Frameworks
    • 1.1.1 Innovative Management
    • 1.1.2 Management Accountability
    • 1.1.3 Service Modernization
    • 1.1.4 Information Management, Access and Privacy
    • 1.1.5 Management of Information Technology
    • 1.1.6 Government Security
    • 1.1.7 Communications and Corporate Identity
    • 1.1.8 Regulatory Management
    • 1.1.9 Assets and Acquired Services
  • 1.2 People Management
    • 1.2.1 Direction Setting
    • 1.2.2 Enabling Infrastructure
    • 1.2.3 Comprehensive Management of Compensation
  • 1.3 Expenditure Management
    • 1.3.1 Results-Based Expenditure Management
    • 1.3.2 Government of Canada Estimates
    • 1.3.3 Expenditure Management Advice
    • 1.3.4 Compensation Expenditure Management
  • 1.4 Financial Management
    • 1.4.1 Financial Management, Oversight and Reporting
    • 1.4.2 Internal Audit
    • 1.4.3 Community, Capacity Building and Sustainability
  • 1.5 Government-Wide Funds and Public Service Employer Payments
    • 1.5.1 Government Contingencies
    • 1.5.2 Government-Wide Management Initiatives
    • 1.5.3 Compensation Adjustment
    • 1.5.4 Government of Canada Operating Budget Carry-Forward
    • 1.5.5 Paylist Requirements
    • 1.5.6 Public Service Employer Payments
  • 1.6 Internal Services
    • 1.6.1 Governance and Management Support
    • 1.6.2 Resource Management Services
    • 1.6.3 Asset Management Services


Organizational Priorities

In its 2011–12 Report on Plans and Priorities, the Secretariat established five organizational priorities that contribute to its Strategic Outcome, “Government is well managed and accountable, and resources are allocated to achieve results.

The results achieved under each priority are briefly summarized in the following section. Further information on these results can be found in the Performance Highlights section for each of the Secretariat's programs under Results and Performance.

Operating Environment

Throughout 2011–12, the Secretariat operated in a complex environment within the federal government that was characterized by significant, ongoing change.

The government continued to focus on securing Canada's recovery from the economic crisis, with the goal of returning to a balanced budget over the medium term. To this end, a review of departmental spending was announced as a key government-wide initiative, and departments and agencies shifted their focus to fiscal restraint as a means of helping to establish the conditions for sustainable economic growth.

The drive to reduce costs and improve efficiency presented opportunities to accelerate government modernization. Shared Services Canada was established with the mandate to streamline and reduce duplication in the government's internal information technology (IT) services for email, data centres and electronic networks. Efforts continued to standardize the government systems and processes underpinning human and financial management. The Open Government initiative advanced public access to government data and information.

Reducing red tape also remained a key focus in 2011–12. The Red Tape Reduction Commission completed its Recommendations Report to the government in January 2012. It recommended methods to reduce unnecessary regulatory burden on business while ensuring the continued protection of the health, safety and security of Canadians and their environment and the economy. Also, efforts continued to reduce red tape within government, with an emphasis on simplifying administrative processes.

The public sector's aging workforce, along with the need for fiscal restraint, continued to drive modernization of the government's approach to people management. For example, in an effort to ensure that total costs of compensation are reasonable, the government took measures to bring public service compensation in line with the private and other public sectors. Public Service Renewal, as championed by the Clerk of the Privy Council in the Nineteenth Annual Report to the Prime Minister on the Public Service of Canada, remained a priority, with a focus on engaging employees in the drive to excellence and in the renewal of the workforce and the workplace.


Priority 1: Support the government in ensuring value for money and sound financial management
Type Linked to

* Note: A review of departmental spending replaced the Strategic Review process, which was an annual cycle of spending reviews that had been initiated in 2007.

Ongoing Program 3: Expenditure Management and Financial Management

The Secretariat followed through on plans identified in its 2011–12 Report on Plans and Priorities to support this priority. The Secretariat, for example:

  • Continued to guide the implementation of government cost-containment measures;
  • Led a comprehensive review of approximately $75 billion of direct program spending by federal departments and agencies; See Priority 1 Note * and
  • Supported deputy heads in improving and standardizing the government-wide financial management system, in preparing financial reports, and in building capacity in the financial management community.

Efforts in this area supported the government's plan to return to balanced budgets, with a focus on ensuring value for money in government programs, services and operations and on providing sound management and accountability for government resources.

More details on related initiatives and results achieved in support of this priority can be found in the Results and Performance section of this report, under Program 3: Expenditure Management and Program 4: Financial Management.



Priority 2: Advance initiatives to modernize government operations
Type Linked to
Ongoing Management Frameworks, People Management and Financial Management

The Secretariat moved forward on a number of plans identified in its 2011–12 Report on Plans and Priorities to support this priority. The Secretariat, for example:

  • Implemented initiatives to reduce regulatory red tape, including supporting the work of the Red Tape Reduction Commission;
  • Supported the government's efforts to consolidate internal and external services and to standardize government business processes, including financial and human resources business processes; and
  • Provided direction for a more strategic, government-wide approach to IM/IT management, infrastructure and investments.

In addition, the Secretariat made significant progress in advancing Open Government, including expanding the Open Data portal and supporting the government's participation in the international Open Government Partnership. It also mandated that institutions covered under the Access to Information Act publish monthly summaries of completed access to information requests.

Results achieved in support of this priority are contributing to greater effectiveness and efficiency in government operations, administration and services. Also, Open Government is leading to greater accessibility and transparency.

More details on related initiatives and results achieved in support of this priority can be found in the Results and Performance section of this report, under Program 1: Management Frameworks, Program 2: People Management and Program 4: Financial Management.



Priority 3: Crystallize and implement the new approach to people management
Type Linked to
Ongoing People Management

The Secretariat made significant progress on plans identified in its 2011–12 Report on Plans and Priorities to address this priority. The Secretariat, for example:

These activities contributed to a more modern approach to people management across the federal government, which will enable a higher-performing and more productive workforce. The Secretariat also devoted resources in 2011–12 to support departments and agencies in conducting their workforce planning and management activities as they prepared to implement the results of the departmental spending review (announced in Budget 2012) and the Administrative Services Review (announced in Budget 2011).

More details on related initiatives and results achieved in support of this priority can be found in the Results and Performance section of this report, under Program 2: People Management.



Priority 4: Pursue continuous improvement of the operations of the Secretariat
Type Linked to
Ongoing Internal Services

The Secretariat made progress on plans identified in its 2011–12 Report on Plans and Priorities to achieve greater efficiency and effectiveness in its internal operations. The Secretariat, for example:

  • Effectively managed implementation of its 2010 Strategic Review results;
  • Strengthened integrated planning within the Secretariat by moving to a more strategic three-year planning horizon;
  • Continued to identify ways to improve efficiency and effectiveness within the Secretariat; and
  • Developed a long-term accommodations plan that includes plans to renew the Secretariat's workplace using Workplace 2.0, a government-wide initiative to modernize the workspace, update processes and systems that support public servants in their work, and provide new technologies that allow them to collaborate and communicate across government and with Canadians.

Through its 2010 Strategic Review, the Secretariat identified $11.5 million in savings over three years and successfully met its savings target for 2011–12. The Secretariat continued to identify opportunities to further streamline its internal operations, which will lead to future cost savings.

More details on related initiatives and results achieved in support of this priority can be found in the Results and Performance section of this report, under Program 6: Internal Services.



Priority 5: Embed the role of the Secretariat as an enabler, and simplify the oversight function
Type Linked to
Ongoing Strategic Outcome (supported by all of the Secretariat's programs)

Embedding the Secretariat's enabler role continued to be a priority. The Secretariat supported this priority through a series of initiatives identified in its 2011–12 Report on Plans and Priorities. The Secretariat, for example:

  • Used feedback from departments and agencies to strengthen its internal capacity to carry out its enabler role;
  • Made more effective use of existing data to enable oversight activities; and
  • Supported departmental implementation of policies and initiatives, including capacity building across government.

Work in this area strengthened the Secretariat's role as a strategic partner and trusted advisor, which is essential to delivering cost-containment objectives and sound management. It also enhanced the Secretariat's collaborative and inclusive approach in working with deputy heads and departments to advance government priorities, ensure the efficient management of their organizations, and reduce internal red tape and reporting burden. To that end, actions were also taken to further embed risk-based approaches to the Secretariat's central agency role, including its policy-making and challenge functions.

More details on related initiatives and results achieved in support of this priority can be found in the Results and Performance section of this report, under Program 6: Internal Services.




Risk Analysis

Each year, the Secretariat identifies key risks that could affect progress toward its Strategic Outcome. Key risks are captured in the Secretariat's corporate risk profile, which is updated at least once per year. In 2011–12, the Secretariat identified corporate risks, grouped into two categories: i) risks affecting the Secretariat's central agency functions; and ii) departmental risks related to its internal operations. Significant progress was made in mitigating these risks.

Central Agency Risks

The Secretariat managed a risk that had to do with the possible effect of the number and range of cost-containment measures (e.g., operating budget freeze, Strategic Review savings) on government operations and the capacity of departments and agencies to manage. The Secretariat was effective in enabling the government's fiscal restraint objectives: it kept up regular dialogue with deputy heads to anticipate upcoming expenses and financial pressures; it ensured that resource management practices were consistent across government; and it also took part in active, ongoing dialogue with bargaining agents to promote effective management of government compensation. This risk was most relevant to the People Management and Program 3: Expenditure Management programs.

Substantial progress was also made in mitigating a risk that had to do with to a shift in the Secretariat's roles and responsibilities (toward an enabling role) and a corresponding shift for deputy heads (to clearer accountability for departmental management performance), as envisaged in the Federal Accountability Act. In recent years, 80 per cent of Treasury Board policies have been renewed to reflect this shift in responsibilities, work that was ongoing in 2011–12. The Secretariat also clarified expected results and provided deputy heads with flexibilities in managing people within their organizations while complying with Treasury Board policy requirements. It expanded its efforts to build capacity in communities of practice across government, such as human resources, information technology (IT) and finance. This risk was relevant to the Management Frameworks program.

Departmental Risks

During 2011–12, the Secretariat addressed risks that had to do with its aging IT infrastructure and the need to safeguard information against ever-changing security threats. A cyber attack in 2011 exposed the need to further strengthen the Secretariat's network. As a result, the Secretariat accelerated planned initiatives to enhance both physical and IT security measures to protect sensitive data and information. The Secretariat's data centre was moved to a more secure location, and disaster recovery measures were improved. The Secretariat also improved controlled security perimeters (e.g., enhanced firewalls, reduced access to certain work zones) and completed a departmental IT Disaster Recovery Plan, which is integrated with its Business Continuity Plan.

The Secretariat also addressed a risk related to its ability to respond to an emergency situation (e.g., natural disasters, infrastructure-related problems). Accomplishments in 2011–12 included completing emergency scenario walkthroughs with key internal stakeholders and senior management and increasing employee awareness of emergency management procedures through mandatory training. The Secretariat also reviewed and improved its emergency plans and procedures based on lessons learned during emergency test exercises and through government-wide best practices. Departmental risks are relevant to the Internal Services program.



Summary of Performance


2011–12 Financial Resources ($ thousands)
Planned Spending Total Authorities See 2011–12 Financial Resources note * Actual Spending See 2011–12 Financial Resources note *

* Excludes amount deemed appropriated to Shared Services Canada.

2,734,649 4,088,738 2,504,508

Most of the variance between planned spending and total authorities, and total authorities and actual spending, can be attributed to the requirement to report the central government-wide funds of $1.4 billion in total authorities (Votes 5, 10, 25, 30 and 33) See footnote [3], which are redistributed to other departments and agencies (i.e., not spent by the Secretariat, but by other departments). These funds remained unallocated at year-end under total authorities. The bulk of the remaining variance of approximately $230.1 million between planned and actual spending is largely due to a lapse in public service employer payments of $259 million offset by increased authorities of $29.2 million in Vote 1 operating expenditures.


2011–12 Human Resources (full-time equivalents – FTEs)
Planned Actual Difference
2,216 2,121 -95

Actual FTEs were fewer than planned largely due to the transfer of employees to Shared Services Canada and the implementation of the 2010 Strategic Review.

2011–12 Performance Summary Table: Financial Data by Program
Program 2010-11
Actual
Spending
($ thousands)
2011-12 ($ thousands) Alignment to Government of Canada Outcomes
Main
Estimates
Planned
Spending
Total
Authorities
Actual
Spending

Note: Any minor differences are due to rounding.

Management Frameworks 65,382 65,547 73,043 80,628 72,944 Well-managed and efficient government operations See footnote [4]
People Management 64,923 57,603 59,541 67,119 65,444
Expenditure Management 30,167 36,312 36,312 55,275 50,893
Financial Management 29,201 30,919 33,057 35,176 28,830
Government-Wide Funds and Public Service Employer Payments 1,968,478 5,610,736 2,452,225 3,756,958 2,192,869
Total 2,158,151 5,801,117 2,654,178 3,995,155 2,410,980


2011–12 Performance Summary Table: Internal Services
Program 2010-11
Actual
Spending
($ thousands)
2011-12 ($ thousands)
Main
Estimates
Planned
Spending
Total
Authorities See Internal Services Performance Summary note *
Actual
Spending See Internal Services Performance Summary note *

* Excludes amount deemed appropriated to Shared Services Canada

Internal Services 95,829 77,001 80,471 95,583 93,528

This table provides a financial summary of all six programs for 2011–12. All of the planned and actual spending for the program Government-Wide Funds and Public Service Employer Payments is related to public service employer payments. Spending on government-wide funds was nil. An analysis of significant variances between planned spending, total authorities and actual spending is found under Results and Performance.

Contribution to the Federal Sustainable Development Strategy

The Federal Sustainable Development Strategy (FSDS) outlines the Government of Canada's commitment to improving the transparency of environmental decision making by articulating its key strategic environment goals and targets. The Secretariat ensures that consideration of these outcomes is an integral part of its decision-making processes. The Secretariat contributes to the following FSDS theme as denoted by the visual identifier and the associated program.

Federal Sustainable Development Strategy Theme IV, Shrinking the Environmental Footprint – Beginning with Government

Program 6: Internal Services

For further information on the Secretariat's activities to support sustainable development and strategic environmental assessments, please visit the Secretariat's website under Contributing to the Federal Sustainability Development Strategy. For complete information on the FSDS, please visit the Environment Canada website.



Expenditure Profile

Figure 2: Treasury Board of Canada Secretariat 2011–12 Actual Spending ($ millions)

Treasury Board of Canada Secretariat 2011-12 Actual Spending

Figure 2: Treasury Board of Canada Secretariat 2011–12 Actual Spending - Text version

The Secretariat spent a total of $2.5 billion toward achieving its strategic outcome. Only 13 per cent of total spending represents expenditures for its operations. The remainder relates to funds for public service employer payments that the Secretariat manages centrally on the government's behalf.

Figure 3: Treasury Board of Canada Secretariat Public Service Employer Payments 2011–12 Vote 20 Actual Spending ($ millions)

Treasury Board of Canada Secretariat Public Service Employer Payments 2011-12 Vote 20 Actual Spending

Figure 3: Treasury Board of Canada Secretariat Public Service Employer Payments 2011-12 Vote 20 Actual Spending - Text version

Total spending on public service employer payments was $2.187 billion in 2011–12. Actual spending includes payments under 16 public service benefit plans and associated expenditures that include the Public Service Health Care Plan, the Public Service and the Pensioners' Dental Services Plan, provincial health insurance plans and payroll taxes. The preceding chart excludes $6.0 million in statutory payments.

Departmental Spending Trend

Figure 4: Spending Trend for Program Expenditures

Spending Trend for Program Expenditures

Figure 4: Spending Trend for Program Expenditures - Text version

Program expenditures includes Vote 1 for salaries, contributions and costs that support the operations of the Secretariat as well as the statutory items for contributions to employee benefit plans in respect of its own employees, and the salary and motor car allowance for the President of the Treasury Board and Minister for the Federal Economic Development Initiative for Northern Ontario.

Actual spending for all programs that comprise Vote 1 increased from 2008–09 to 2009–10 by approximately $68 million in total, due to the creation of the Office of the Chief Human Resources Officer and increases in collective agreement rates of pay for the Secretariat's employees.

The Secretariat's actual spending increased from 2009–10 to 2010–11 by approximately $12 million, largely due to the following:

  • Funding for litigation management ($5.3 million);
  • Funding to improve financial systems and to support financial decision making in the Government of Canada ($3.4 million);
  • Funding for the ongoing management of the classification program for the core public administration ($1.9 million); and
  • Funding for the ongoing management of the Treasury Board's employer obligations under the Public Sector Equitable Compensation Act ($1.3 million).

The Secretariat's net actual spending increased from 2010–11 to 2011–12 by approximately $26 million largely due to the one-time disbursement of severance cash-outs by employees, pursuant to collective agreements that eliminate future severance pay accumulation ($21 million), and to an increase to cover professional services with external experts to support the review of departmental spending ($15 million). These increases are offset by decreases in funding due to the following:

  • 2010 Strategic Review ($4.4 million);
  • Deemed appropriation for Shared Services Canada (SSC) (approximately $4.2 million);
  • Decrease in resources to improve financial systems and to support financial decision making government-wide ($1.8 million); and
  • Cost-containment measures and various initiatives ($3.8 million).

The Secretariat's planned spending will decrease by almost $48.7 million (net) in 2012–13, when compared with the actual spending in 2011–12, due to the following:

  • 2010 Strategic Review (eventually reaching the full target of $11.5 million in 2013–14);
  • Cost-containment measures announced in previous federal budgets;
  • Transfer to support SSC ($10.6 million ongoing); and
  • Sunsetting of funds for various initiatives within the Secretariat, including the one-time funding to support consultant work for the review of departmental spending.

Planned spending will be further decreased by the implementation of the Budget 2012 Economic Action Plan.

The Secretariat's planned spending will decrease by approximately $22.4 million (net) between 2012–13 and 2014–15 due to the 2010 Strategic Review, cost-containment measures announced in previous federal budgets, the Budget 2012 Economic Action Plan, the transfer to support SSC, and the sunsetting of funds for various initiatives within the Secretariat.

Figure 5: Spending Trend for Public Service Employer Payments and Various Statutory Items

Spending Trend for Public Service Employer Payments and Various Statutory Items

Figure 5: Spending Trend for Public Service Employer Payments and Various Statutory Items - Text version

The bulk of the amounts presented in the preceding graph relates to the trend of expenditures in public service insurance, which include the payment of the employer's share of contributions required under the various insurance plans sponsored by the Government of Canada, and employment insurance and other related expenses. These amounts also include statutory items for payments under the Public Service Pension Adjustment Act and pay equity settlements, pursuant to section 30 of the Crown Liability and Proceedings Act, and unallocated employer contributions made under the PSSA and other retirement acts and the Employment Insurance Act.

After adjusting for a reversal of charges for 2009–10 of approximately $62 million (refer to the Supplementary Information table Non-Respendable Revenue), the net public service employer payments decreased by approximately $38 million from 2009–10 to 2010–11, largely due to the premium holidays under Disability Insurance and reduced provincial payroll taxes incurred.

Net public service employer payments increased by approximately $224 million from 2010–11 to 2011–12 as a result of a one-time lump sum payment for improvement of long term disability benefits provided under the Service Income Security Insurance Plan for Regular Forces and Primary Reserve Forces and increased payments under the Public Service Health Care Plan, the Public Service Dental Care Plan, the Pensioners' Dental Services Plan, Disability Insurance and payroll taxes. These increases were offset by the transfer of the management of pension, insurance and social security programs for locally engaged staff to Foreign Affairs and International Trade Canada and to National Defence.

Estimates by Vote

For information on the Treasury Board of Canada Secretariat's organizational Votes and/or statutory expenditures, please see the Public Accounts of Canada 2012 (Volume II) publication.



Results and Performance

The results achieved in support of the Secretariat's Strategic Outcome strengthen the effectiveness and efficiency of the federal government; support decision making by Parliament, Treasury Board and Cabinet; and ensure that Canadians are well served by a government that is accountable and transparent. Effective government contributes to Canada's competitive advantage, providing a strong foundation for security, stability and prosperity.

The following links connect to performance summaries for each of the Secretariat's programs that report progress against their expected results, performance indicators and targets in line with the Policy on Management, Resources and Results Structures. Financial and human resources for each program, as well as performance highlights for 2011–12, are also found here.

2011–12 Program Alignment Architecture

Strategic Outcome: Government is well managed and accountable, and resources are allocated to achieve results



Strategic Outcome: Government is well managed and accountable, and resources are allocated to achieve results


2011–12 Financial Resources ($ thousands)
Planned Spending Total Authorities See 2011–12 Financial Resources for Strategic Outcome 1 note * Actual Spending See 2011–12 Financial Resources for Strategic Outcome 1 note *

* Excludes amount deemed appropriated to Shared Services Canada.

2,734,649 4,088,738 2,504,508

Most of the variance between planned spending and total authorities, and total authorities and actual spending, can be attributed to the requirement to report the central government-wide funds of $1.4 billion in total authorities (Votes 5, 10, 25, 30 and 33) See footnote [5], which are redistributed to other departments and agencies (i.e. not spent by the Secretariat, but by other departments). These funds remained unallocated at year-end under total authorities. The bulk of the remaining variance of approximately $230.1 million between planned and actual spending is largely due to a lapse/transfer in public service employer payments of $259 million offset by increased authorities of $29.2 million in Vote 1 operating expenditures.


2011–12 Human Resources (full-time equivalents – FTEs)
Planned Actual Difference
2,216 2,121 -95

Actual FTEs were fewer than planned largely due to the transfer of employees to Shared Services Canada and the implementation of the 2010 Strategic Review.


Strategic Outcome Performance Summary
Performance
Indicators
Targets 2011–12 Actual Performance
Canada's ranking in The World Bank's Worldwide Governance Indicators for indicator three, “Government Effectiveness.” Top ten among Organisation for Economic Co-operation and Development (OECD) member countries (annually). The World Bank's Worldwide Governance Indicators rank Canada sixth among OECD countries for government effectiveness.

The World Bank's Government Effectiveness Index (GEI) is one of six indexes included in the World Bank's Worldwide Governance Indicators, which are issued annually. In 2011, Canada ranked 6th out of 34 OECD countries. The GEI captures perceptions of the quality of public services; the quality of the civil service and the degree of its independence from political pressures; and the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies.

Program 1: Management Frameworks

The Management Frameworks program establishes guiding principles and expectations for public sector management. It includes setting government-wide policy directions in targeted areas such as governance, regulatory management, the Management Accountability Framework (MAF), service, information management and technology. Working with all federal organizations, the Secretariat provides leadership, challenge, and a community enablement function in areas related to policy development, compliance, performance reporting, and functional community development. This work includes new and emerging issues and priorities related to the management of the public service, and promoting a cultural shift in how government deals with risk and innovation. In turn, this work informs the policies in the Expenditure, Financial, and People Management programs. This program is underpinned by a broad set of enabling legislation, including the Financial Administration Act.

Program Performance Summary


2011–12 Financial Resources ($ thousands)
Planned Spending Total Authorities Actual Spending
73,043 80,628 72,944

The net increase of approximately $7.6 million between planned spending and total authorities can be attributed to the funds provided for paylist requirements (i.e., paylist requirements related to parental benefits, severance and other allowances), initiatives to modernize human resources systems government-wide, one-time severance payouts stemming from new collective agreement provisions, and the operating budget carry-forward (OBCF), less reductions from the implementation of the 2010 Strategic Review. Actual spending was less than total authorities by almost $7.7 million due to timing differences on projects and a general slowdown of spending in advance of Budget 2012. The 2010 Strategic Review also accounts for the majority of the FTE variance shown below.


2011–12 Human Resources (FTEs)
Planned Actual Difference
533 505 -28


Program 1: Performance Summary
Expected
Results
Performance
Indicators
Targets Actual
Results
Continuous improvement in the quality of public service management in the Government of Canada. Averaged percentage improvement in overall MAF scores across departments and agencies for identified areas of weakness from previous round. 5% 18%

The Secretariat exceeded its target for the Management Frameworks program. Between the 2010–11 and 2011–12 rounds of MAF assessments, departments and agencies improved by 18 per cent in the areas of weakness that had been identified.

Performance Highlights

Supported consolidation of internal and external services

During 2011–12, the Secretariat supported the government's efforts to consolidate services and standardize government business processes through a number of initiatives. The Secretariat, for example:

  • Advanced the Common Enterprise Data Initiative by developing standardized coding and structures; by providing governance and standards for financial information and data; and by facilitating the delivery of policy instruments to allow for easier sharing of data;
  • Used information technology (IT) expenditure data, as reported by departments and agencies for the fiscal year 2009–10, to support the creation of Shared Services Canada, a new government department that has a mandate to consolidate Government of Canada IT infrastructure in the areas of electronic networks, data centres and email systems; and
  • Initiated the Human Resources Business Solution Pilot, one of the four components of the Human Resources Modernization Initiative, to demonstrate the benefits of adopting a single system as the government-wide standard for human resources (HR) services delivery. The new approach reduces overall costs by replacing multiple HR applications currently in use throughout the federal public administration.
Reduced administrative burden across government

The Secretariat led initiatives to reduce administrative and rules burden across the government. The Secretariat, for example:

  • Completed a targeted review of Treasury Board policies, which resulted in changes to 15 policy instruments and the rescission of 5 instruments;
  • Helped develop project charters for five national, interdepartmental pilot projects on grants and contributions to test innovative delivery models;
  • Revised the Policy on Transfer Payments to simplify the departmental approval process by broadening the authorities of ministers and deputy heads to amend the terms and conditions of grants and contributions. The revision also permits ministers to delegate the approval of some minor amendments of grants and contributions to deputy heads; and
  • Developed an amendment to the Financial Administration Act that gives authority to departments See footnote [6] to provide internal support services to each other.
Supported the reduction of regulatory red tape for Canadian businesses

The Secretariat advanced the federal regulatory agenda by actively supporting the work of the Red Tape Reduction Commission (RTRC). In 2011, the RTRC secretariat held an extensive engagement process to identify irritants to business that stem from federal regulatory requirements. This engagement process included 15 round table sessions in 13 cities. It attracted nearly 200 participants and resulted in the identification of roughly 2,000 irritants. Given the diverse nature of the irritants registered, the “What Was Heard” Report was released in September 2011 with the objective to group these irritants into themes to ultimately provide the government with solutions. To fulfill this objective, the RTRC released its Recommendations Report in January 2012. This report presents 15 systemic recommendations and 90 department-specific recommendations to address red tape. The government received the report and immediately announced that it was moving forward with one of the Commission's key recommendations, namely, to implement a “One-for-One” rule. This rule will reduce regulatory administrative burden on business in two ways:

  • Regulatory changes that increase administrative burden on business will need to be offset by an equal amount of administrative burden costs on business; and
  • If these changes result in a brand new regulation, regulators will be required to remove from their books an existing regulation that imposes administrative burden.
Increased departmental capacity

The Secretariat supported capacity building across government in a number of key areas. The Secretariat, for example:

  • Worked with departments and agencies to move forward on implementing the Cabinet Directive on Streamlining Regulation. This directive helps departments meet their requirements for cost-benefit analysis, performance measurement and evaluation planning. The Secretariat provided advice, assistance and challenge on proposed regulations. In this way, it supported the rigorous analysis that is needed for quality regulatory design and government decision making on regulations.
  • Engaged federal departments and agencies, through its Centre of Excellence on Risk Management, in ongoing improvements to the design and implementation of effective integrated risk management practices across the government. The 2011 June Status Report of the Auditor General of Canada recognized an improvement since 2006 in the guidance and support that the Secretariat provides to departments for developing and implementing risk management practices.
Promoted common approaches to IM/IT

Through a number of key initiatives, the Secretariat made progress on a government-wide approach to information management and information technology (IM/IT) that is more strategic and cost-effective. The Secretariat, for example:

  • Completed an assessment of the IT application inventories of 98 departments and agencies, and developed recommendations to address the issue of aging IT systems in government. Recommendations focused on strengthening risk assessment and planning to address aging, mission-critical systems;
  • Defined the preliminary strategy for moving to more standardized, clustered IT solutions as a way to reduce risks and the overall costs associated with IT;
  • Issued guidance to departments and agencies to assist them in developing proposals for the review of departmental spending that support an enterprise approach to information system requirements. This approach would include standardization, consolidation and re-engineering of IT systems across the government;
  • Established standardized tools and streamlined processes to monitor the health and performance of IT projects under the Secretariat's oversight;
  • Advanced the government's IM strategy to establish key enterprise IM objectives, to define specific priorities, and to align government activities to a common vision. Elements of the vision include safeguarding information as a public trust and managing it as a strategic asset to better serve Canadians; and
  • Developed an Access to Information and Privacy Administration Modernization Strategy. This included amending the Directive on the Administration of the Access to Information Act to mandate the monthly posting of completed summaries of access to information requests by institutions, as well as rationalizing the need for consultations between institutions.
Advanced work on the Policy on Managing Procurement

The Secretariat advanced work on the Policy on Managing Procurement and related directives on Crown procurement contracting, contracting approval, and limiting contractor liability. These initiatives will improve accountability, encourage management efficiency and help government achieve its policy outcomes. At the same time, they will ensure that the procurement process is fair, open and transparent. The Secretariat is developing plans and related guidance to assist departments See footnote [7] with their implementation efforts.

Advanced Open Government

The Secretariat led initiatives to improve government transparency and accessibility through Open Government, which includes three streams: Open Data, Open Information, and Open Dialogue. The Secretariat, for example:

  • Enabled departments and agencies to make more than 271,000 data sets available through the Open Data portal. This is a one-stop shop for federal government data from statistics on building permits and wait times for non-emergency surgeries to data on pollution emissions and border-crossing wait times;
  • Mandated the posting of monthly summaries of completed access to information requests by institution; and
  • Supported the government's efforts to join the international Open Government Partnership. The Secretariat led a national online consultation on Open Government, which culminated in the launch of Canada's Action Plan on Open Government.

Lessons Learned

Across the government, the management of IT has been largely centred in “silos” or stand-alone systems within departments and agencies. While this has ensured the alignment of IT services with the mandate of each organization, it has also resulted in significant duplication or customization, costs, and an inability to take advantage of commoditized services. In order to achieve efficiencies moving forward, IT systems across departments and agencies need to be standardized and consolidated, and collaborative solutions that allow for increased information exchange must be created. To enable this change, the Secretariat will focus on developing a government-wide IT strategy and on renewing the current IT policy suite. This exercise will reorient IT policy instruments to support an enterprise model for common back-office applications and related services.

Program 2: People Management

The People Management program supports efforts across the federal public service to achieve strong leadership and a well-managed workforce and workplace. These elements provide the foundation that drives employee engagement and a culture of excellence, leading to high-quality policies, programs and services and a sustained and productive public service. In certain instances this program includes efforts that extend beyond the core public administration to separate employers and Crown corporations. This program undertakes direction-setting activities that include: developing and implementing people management–related frameworks and policies; setting and monitoring departmental people management performance expectations; conducting research and analysis regarding the state of people management; and supporting the effective management of the leadership cadre. The program also provides public service–wide leadership on managing compensation, which it shares with the Expenditure Management program. This includes: collective bargaining and associated labour relations, and establishing and maintaining the public service pension and benefits regime. The People Management program supports enabling infrastructure including the human resources functional community and the underlying business processes and systems, and is underpinned by legislation that includes: the Financial Administration Act; Public Service Employment Act; Public Service Labour Relations Act; Public Servants Disclosure Protection Act; Official Languages Act; and Employment Equity Act.

Program Performance Summary


2011–12 Financial Resources ($ thousands)
Planned Spending Total Authorities Actual Spending
59,541 67,119 65,444

The net increase of approximately $7.6 million between planned spending and total authorities can be attributed to funding provided for paylist requirements and the OBCF. Actual spending was almost $1.7 million less than total authorities due to funds not required for the implementation of the Public Service Equitable Compensation Act (PSECA), litigation for challenges to the Canadian Charter of Rights and Freedoms, and delayed staffing.


2011–12 Human Resources (FTEs)
Planned Actual Difference
490 474 -16


Program 2: Performance Summary
Expected
Results
Performance
Indicators
Targets Actual
Results
A federal public service characterized by a culture of excellence and highly engaged employees through strong leadership and a well-managed workforce and workplace. Improvement in the Public Service Employee Survey (PSES) in the areas of engagement and culture of excellence. Improvement in survey results (ongoing).

Survey results improved by 0.9 points (from an average public service–wide score of 74.7 in 2008 to 75.6 in 2011) on a 100-point scale.

Due to changes in the 2011–12 MAF rating scale for the two administrative data measures for retention (a component of employee engagement), we are unable to compare results at this time.

Improved people management performance across the federal government. Percentage (%) of departments and agencies demonstrating year-over-year improvement in Area of Management (AoM) 10, people management, as assessed through the MAF.

25.0%

Target is based on 2010–11 MAF scores as benchmarks.

25.6%

Of the 39 organizations assessed, 10 saw an increase in their overall score for people management from the previous MAF round.


Public service–wide performance indicators for employee engagement and culture of excellence are derived from the results of the 2008 and 2011 PSES by comparing the average scores of identified responses. The actual scores for these two indicators show an overall performance increase of 0.9 points and include the following:

  • Results for employee engagement (job satisfaction, commitment to the organization and satisfaction with the organization) declined by 0.7 points (from 70.5 in 2008 to 69.8 in 2011).
  • Results for culture of excellence (innovative and people oriented practices) increased by 2.4 points (from 78.9 in 2008 to 81.3 in 2011).

The response rate for the PSES is noteworthy:

  • The response rate obtained in 2011 (72.2 per cent) was the highest ever achieved in the public service; and
  • The rate has increased each time the PSES has been administered, which could be an indication that public servants value the PSES as an avenue to express their opinions on various aspects of people management. The increased level of participation supports the conclusion that public servants are engaged and committed to their work.

People management performance across the public service improved above the targeted measure. Of the 39 departments and agencies assessed, 10 achieved improvements. In addition, almost all of the assessed departments and agencies had an “acceptable” or “strong” rating for values and ethics in the area of culture of excellence (i.e., 85.4 per cent scored “acceptable,” and 12.2 per cent achieved a “strong” rating).

Performance Highlights

Supported deputy heads in conducting workforce planning

To support deputy heads across government in managing the impacts of fiscal restraint, the Secretariat undertook the following initiatives:

  • Supported and advised deputy heads to enable them to identify efficiencies;
  • Presented regular updates to interdepartmental committees and forums to align all roles and responsibilities and address cross-cutting issues; and
  • Provided monthly data reports, guides and tools to support deputy head decision making.
Advanced renewal of the people management policy suite

The Secretariat continued to consult and draft renewed policy instruments to support deputy head accountability and effective management. The Secretariat, for example:

  • Tabled in Parliament, in December 2011, the new Values and Ethics Code for the Public Sector (Public Sector Code), which clarifies expected behaviours that correspond to public sector values: respect for democracy, respect for people, integrity, stewardship, and excellence. The value of stewardship reflects the ongoing public service commitment to effective and efficient use of public money, property and resources;
  • Launched the new Policy on Conflict of Interest and Post-Employment. This policy complements the Public Sector Code to facilitate ethical decision making within organizations and by public servants to resolve conflicts between private and public interests; and
  • Developed approaches to improve the management of employee performance across the public service by ensuring that performance management in departments and agencies is more consistent and effective. Support for managers will include training, tools and other resources.

Work continued on improvements to additional Treasury Board policies to reflect and enhance deputy head accountability for the management of their people resources, including workplace, workforce and official languages policies.

Developed a standard process for human resources service delivery

The Common Human Resources Business Process (CHRBP) is now the standard for the delivery of human resources services across the Government of Canada. In its role of custodian of the CHRBP, the Secretariat led and facilitated the development and roll-out of this standard and provided support to departments and agencies. The Secretariat undertook the following initiatives to contribute to the ultimate goal of departments fully implementing the CHRBP by March 31, 2014:

  • Released a new version of the CHRBP to reflect leading practices and align with the legislative review of the Public Service Modernization Act;
  • Developed measures to assess, through the MAF, the progress and results of departmental implementation;
  • Facilitated regular events and forums, including the annual CHRBP Symposium; and
  • Participated in several government-wide horizontal initiatives, such as the Pay Modernization Project, to ensure linkages between the CHRPB and these initiatives.

The CHRBP is the foundation on which new investments in HR systems will be built.

Advanced work toward a comprehensive approach to compensation management

The Secretariat achieved several milestones in the management of total compensation and in the modernization of the federal public sector pension plans. The Secretariat, for example:

  • Negotiated collective agreements with most employees in the public service. This included the removal of severance payments for voluntary separations (retirement or resignation) from the terms and conditions of their employment;
  • Made progress on modernizing the classification system so that it serves department business needs by aligning public service work with the labour market and by ensuring that classification infrastructure facilitates operations. The review of the Program and Administrative Services (PA) group is well advanced, and the Computer Systems (CS) group is underway. A performance measurement strategy for the Classification Program was also developed;
  • Made improvements to Public Service Health Care Plan data and information systems, which have contributed to reducing the growth of total expenditures and to improving reporting on plan activities.
  • Modernized the payments processing system under the Public Service Dental Care Plan to improve oversight by the Secretariat; and
  • Contributed to the introduction of federal budget measures aimed at securing long-term financial sustainability for the pension plans.
Advanced a government-wide initiative on employee wellness and productivity

Over the past three years, the Secretariat has focused on designing a more effective and sustainable disability management regime for the federal public service that promotes employee health and wellness. This initiative was advanced in 2011–12 in a number of ways. The Secretariat, for example: 

  • Developed a business case for the transformation of disability management; 
  • Enhanced departmental capacity to report data that are relevant to disability case management on the Public Service Management Dashboard;
  • Developed and launched a Web resource to assist departments and agencies in setting up a disability management program and in managing such cases; and
  • Facilitated a three-day training workshop for disability management advisors in order to build capacity in this area across government.

Work on public service–wide strategies, policies and programs regarding employee wellness and productivity is ongoing.

Supported implementation of the Public Sector Equitable Compensation Act

Significant progress was made on developing regulations for the coming into force of the PSECA to position the government to implement a modernized equitable compensation system in the federal public sector. This is a complex undertaking involving many stakeholders, including the Treasury Board, separate agencies, the Royal Canadian Mounted Police, the Canadian Forces, bargaining agents, the HR community, federal public sector employees and executives, and the general public. During 2012, all stakeholders are being consulted on the proposed policy directions for the regulations, and the regulations will be made in 2013.

Addressed the results of the Public Service Modernization Act (PSMA) legislative review

The Report of the Review of the “Public Service Modernization Act” was tabled in Parliament in December 2011. The report concluded that the Public Service Employment Act and the Public Service Labour Relations Act have been technically implemented and that the legislation offers an adequate framework to transform the way that the government hires, manages and supports its employees. The Report recommended that senior public service leaders focus on modernizing staffing, improving learning opportunities, fostering collaborative labour relations, and clarifying managerial roles and accountability. The report also recommended that public service leaders focus on driving behavioural changes needed to modernize the public service.

Many such initiatives were already occurring, and the following accomplishments addressed the results of the PSMA review. The Secretariat, for example:

  • Initiated the establishment of a common vision of public service and HR management;
  • Enabled the active management of disability in the workplace;
  • Modernized and streamlined the Treasury Board's people management policies;
  • Encouraged public­ service–wide use of Web 2.0 technologies to promote employee collaboration, consultation, learning and awareness; and
  • Integrated commitments on values and ethics into senior management performance agreements.

Lessons Learned

The Secretariat streamlined departmental and agency reporting to Parliament in 2011–12 by simplifying the Public Servants Disclosure Protection Act and the reports on employment equity.

To address duplication in annual reporting, the Secretariat's Official Languages Centre of Excellence, in collaboration with Canadian Heritage, launched a streamlined and coordinated data and information collection process. Institutions subject to the Official Languages Act were asked to fill out a joint questionnaire, thereby helping to reduce reporting burden.

During 2011–12, systems adjustments were made to introduce the public service–wide budget module for the Performance Management Program for Executives to the existing Executive Talent Management System in order to capture reporting on the new collective corporate commitment required of all executives as of June 2011. The result was improved calculation and reduced reporting burden in reflecting the distinction between collective and individual at-risk pay. In addition, the Secretariat identified opportunities to adjust pensioner contribution rates more regularly.

As part of the new approach to people management, the Secretariat is learning that a close link is needed between HR business owners and those responsible for IT in order to ensure a strong alignment between business processes and IT applications. This will require greater collaboration and integrated approaches to governance between the Secretariat's Office of the Chief Human Resources Officer and the Chief Information Officer Branch.

Program 3: Expenditure Management

The Expenditure Management program helps ensure alignment of resources to achieve government priorities in a way that maximizes value for money and provides a whole-of-government perspective on matters related to direct program spending. Working with all federal organizations that are subject to budget appropriation, this program undertakes the review, analysis, and challenge of plans and proposals involving departmental spending, expenditure forecasting and strategies, compensation management, and results-based management. This work, as well as the production of government Estimates documents and reporting to Parliament, is facilitated by the Expenditure Management Information System. This program forms part of the Expenditure Management System, the framework for the development and implementation of the government's spending plans and priorities within the limits established by the Budget, which is implemented in coordination with the Department of Finance Canada and the Privy Council Office. The primary piece of legislation underpinning the program's activities is the Financial Administration Act.

Program Performance Summary


2011–12 Financial Resources ($ thousands)
Planned Spending Total Authorities Actual Spending
36,312 55,275 50,893

Most of the net increase of almost $19.0 million between planned spending and total authorities can be attributed to funding for paylist requirements and the OBCF, and funding provided for the services of external experts to support the review of departmental spending. Actual spending was less than total authorities by almost $4.4 million because expenditures for services of external experts were less than anticipated and because of the timing of the projects.


2011–12 Human Resources (FTEs)
Planned Actual Difference
301 255 -46


Program 3: Performance Summary
Expected
Results
Performance
Indicators
See Program 3: Performance Summary note *
Targets Actual
Results

* In Section II: Analysis of Program Activities by Strategic Outcome of the 2011–12 Report on Plans and Priorities, the Secretariat reported different indicators for Program 3. The Secretariat has revised the indicators in its endeavour to effectively report on results. The alternative indicators that appear in the above table continue to evolve in order to create stability and alignment against the expected results of the program.

Sound analysis of financial information to support decision making on allocating funds to achieve priorities and provide value for money for program expenditures. Percentage of Treasury Board submissions on new and renewed spending that use Management, Resources and Results Structure (MRRS) results (i.e., performance information) and evaluation data. 80% Out of the Treasury Board submissions that were reviewed, 69% used MRRS results data, and 53% used evaluation data.
Percentage of departments that attain a minimum acceptable rating for use of MRRS results information and evaluation data. 50%

Out of the large departments that were assessed through MAF, 90% attained a rating of at least “acceptable” in the use of evaluation information.

Out of the departments that were assessed through MAF, 44% attained a rating of at least “acceptable” in the use of MRRS results information.

Percentage of direct program spending assessed by departments and agencies undertaking the departmental spending reviews. 100% 100%

The overall use of evaluation and MRRS (i.e., performance) information to support decision making has been improving, as indicated through the departmental MAF assessments. The usage of results-based information and evaluation in decision-making documents such as Treasury Board submissions is improving but slightly below targets. This result, however, is based on a small sample of departments and review of a limited number of Treasury Board submissions. Therefore, this result is not a good indicator for how the whole public service was able to provide credible support to decision makers through Treasury Board Submissions. The Secretariat will continue to work with departments to further improve beyond current levels of performance and accurately demonstrate performance results for this indicator.

Performance Highlights

Supported a comprehensive spending review and government cost-containment measures

The Secretariat supported departments and a committee of Ministers to undertake a comprehensive review of direct program spending, the results of which were reported in Budget 2012. The Secretariat also continued its ongoing monitoring and reporting of the cost-containment initiatives announced in Budget 2010. These initiatives included the three-year operating budget freeze and the results of Strategic Reviews.

Throughout the year, departmental senior officials received guidance from the Secretariat as they prepared Estimates documents to be presented before Parliament for authority to spend public funds. The Secretariat also provided information and advice to Treasury Board ministers and parliamentary committees.

Governor General Special Warrants

Parliament dissolved on March 26, 2011, for the purposes of a general election without having voted on supply for 2011–12. The Secretariat led the process for Governor General Special Warrants. The Secretariat worked with all appropriated organizations to, for example:

  • Ensure that the requirements of the Financial Administration Act were met;
  • Promote transparency of the process including publications in the Canada Gazette;
  • Prepare a Statement on the Use of Governor General Special Warrants, which was tabled in the House on June 7, 2011, after Parliament reconvened; and
  • Exercise due diligence.

Two Governor General Special Warrants were issued: April 1 to May 15, 2011, for $13.4 billion and May 16 to June 29, 2011, for $11.1 billion, totalling $24.5 billion.

Lessons Learned

Based on the results of an earlier study, the Secretariat concluded that Treasury Board submissions could be improved through greater use of performance and evaluation information. The Secretariat worked with organizations to raise awareness about the kind of performance information that should be made available for reporting and decision making, and outreach has been extensive to assist them in defining useful data. The Secretariat anticipates that the expected release of the revised Treasury Board submission guide in 2012–13, as well as further outreach activities, will contribute to an increase in the use of performance and evaluation information in Treasury Board submissions.

In the area of compensation expenditure management, the Secretariat introduced an audit framework as part of the modernization of the Public Service Health Care Plan that will lead to more effective plan management through enhanced oversight. This could result in recoveries of overpayments and will ensure value for money by protecting the plan from inappropriate billing practices. An enhanced audit program will ensure that adequate controls are present and will assist in the overall sustainability of the plans.

In 2011–12, an Audit of the Treasury Board of Canada Secretariat's Management Control Framework of the Public Service Pension Plan was completed. It concluded that the management control framework that is currently in place is effective and serves to ensure that legislative and policy requirements for the Public Service Pension Plan are being met.

In 2011, the Interim Auditor General noted in his observations regarding the Public Accounts of Canada that current Treasury Board guidance concerning capital votes was dated, because “it allows departments to broadly interpret which capital expenditures may be charged to an operating vote rather than a capital vote,” and that this had led to inconsistencies. The Standing Committee on Public Accounts recommended in its 2011 report that the Secretariat review and update its guidance on these matters in time for the preparation of the 2013–14 Estimates. The Secretariat agreed with this observation, and has worked with organizations to develop a common definition of the items to be charged to a capital vote. Organizations are developing implementation plans and will be phasing in the new definition over three Estimates cycles, beginning with the 2013–14 Estimates.

Program 4: Financial Management

The Financial Management program promotes good financial management practices across government to ensure financial activities are carried out effectively and efficiently. Working with all federal organizations, the Secretariat delivers on this role by:

  • Developing financial management, accounting, transfer payment and internal audit policies, directives and standards;
  • Assisting departments by providing leadership, policy advice and guidance; setting performance expectations; and monitoring performance;
  • Capacity building and community development within the functional communities;
  • Planning horizontal audits and conducting audits of small departments and agencies;
  • Providing financial oversight and reporting; and
  • Advising central agencies and departments on financial authority issues associated with the Financial Administration Act and Appropriation Acts, the primary pieces of legislation underpinning the Financial Management program.

Program Performance Summary


2011–12 Financial Resources ($ thousands)
Planned Spending Total Authorities Actual Spending
33,057 35,176 28,830

The net increase of approximately $2.1 million between planned spending and total authorities can be attributed to funding provided for paylist requirements, the OBCF, reductions from the implementation of the 2010 Strategic Review and transfers to other government departments for the implementation of the Departmental Audit Software Initiative (DASI). Actual spending was less than total authorities by approximately $6.3 million due largely to contracting delays with respect to DASI, the implementation of the 2010 Strategic Review and the cancellation of agreements due to the wind-down of Consulting and Audit Services at Public Works and Government Services Canada.


2011–12 Human Resources (FTEs)
Planned Actual Difference
183 168 -15


Program 4: Performance Summary
Expected
Results
Performance
Indicators
Targets Actual
Results
Effective financial management function in the Government of Canada. Improving content and timeliness of public financial reporting (data source: Public Accounts). Clean audit opinion from the Auditor General (annually). Clean audit opinion received.
Effective internal audit function in the Government of Canada. Percentage (%) of planned risk-based horizontal audits conducted in large and small departments and agencies. 80% annually. Overall completion to date: 95%.

Performance Highlights

Ensured an effective internal audit function within departments and agencies

In order to strengthen the internal audit function and professional internal audit practices, the Policy on Internal Audit and the Directive on Internal Auditing in the Government of Canada were revised, effective April 1, 2012. Revisions are intended to achieve the following:

  • Address issues raised by the evaluation of the policy;
  • Reduce the reporting burden for smaller departments;
  • Clarify expectations of departmental audit committees; and
  • Simplify and streamline the policy requirements in accordance with Secretariat policy suite renewal guidance.

Moving forward, the Secretariat will use the MAF process to monitor and assess the implementation of the policy.

Provided consistency of financial information across the government

To ensure that deputy heads receive consistent financial information, the Secretariat undertook a number of initiatives during 2011–12. The Secretariat, for example:

  • Implemented the Treasury Board Accounting Standard 1.3 – Departmental and Agency Quarterly Financial Report, effective April 1, 2011. Along with other legislation for financial reports, this standard mandates quarterly financial reporting for departments, agencies and Crown corporations in order to improve government transparency and accountability and the timeliness of the publication of financial information;
  • Developed a single-window Web page on Quarterly Financial Reporting to facilitate access to departmental and agency reports; and
  • Offered information sessions and provided support and guidance to departments and agencies.

As the MAF assessments demonstrated, reliable and timely financial information was made available to users of the reports, in compliance with the standards. The Parliamentary Budget Officer concluded in the January 2012 report Interim Financial Reporting: Second Quarter Update that the quality and consistency of organizations' quarterly financial reports has continued to improve. The report further stated that, in general, these documents are a good source of data and information for parliamentarians.

Supported efficiency and conformity with financial management policies

The Secretariat assisted the government in moving toward a standardized financial management structure and in improving the transparency, accountability and timeliness of financial information. To this effect the Secretariat, for example:

  • Delivered a number of new policy tools via the Common Financial Management Business Process Initiative, the Common Enterprise Data Initiative, and the Common Financial Management System Configuration Initiative; and
  • Ensured the alignment of new instruments through various initiatives conducted by financial management clusters and departments.
Continued to support implementation of the suite of financial management policies

To enhance the effectiveness and strength of financial management across government, the Secretariat continued to enable the implementation of the suite of foundational financial management policies, with particular focus on the Policy on Internal Control:

  • The second cohort of government organizations released their first public reports regarding internal controls; and
  • The Secretariat developed tools and guidelines, and established interdepartmental committees to develop knowledge and awareness, and leverage best practices.

Since the Policy on Internal Control was implemented in 2009–10, departments have made significant progress in assessing the effectiveness of their controls. For example, less than 60 per cent of the largest departments had started the most advanced level of effectiveness testing of some or all of their controls by the fall of 2010. A year later, over 80 per cent of these departments were at this level of progress.

Lessons Learned

Through the implementation of the Chief Financial Officer (CFO) model under the Policy on Financial Management Governance, the financial management community has been seeking to clarify the role and attestations of CFOs with regard to Memoranda to Cabinet and Treasury Board submissions. In response, the Secretariat, through the Office of the Comptroller General, has developed a guideline that will set the framework for the CFO's due diligence, including a mechanism to communicate the CFO's conclusions to decision makers. It is expected to be in place in 2012–13.

Program 5: Government-Wide Funds and Public Service Employer Payments

The Government-Wide Funds and Public Service Employer Payments program accounts for funds that are held centrally to supplement other appropriations, from which payments and receipts are made on behalf of other federal organizations. These funds supplement the standard appropriations process and meet certain responsibilities of the Secretariat as the employer of the federal public service. The administration of these funds falls under the Expenditure Management and People Management programs, but their financial resources are shown separately in the Program Alignment Architecture for visibility and reporting purposes. Related information on planned spending is presented as online supplementary information under Financial Highlights and Statements.

Program Performance Summary


2011–12 Financial Resources ($ thousands)
Planned Spending Total Authorities Actual Spending
2,452,225 3,756,958 2,192,869

This program involves the Secretariat's administration of centrally managed government-wide funds on behalf of other departments and agencies. Planned spending includes $2.4 billion for public service employer payments and $20 thousand for payments under the Public Service Pension Adjustment Act (PSPA). Total authorities include $2.4 billion for public service employer payments and $1.4 billion in residual authorities for Votes 5, 10, 25, 30 and 33 See footnote [8], which are redistributed to other departments and agencies (i.e. not spent by the Secretariat, but by other departments).This is the reason for the difference between planned spending and authorities. Actual spending includes $2.2 billion for public service employer payments and statutory payments for PSPA, pay equity settlements and employer contributions made under the Public Service Superannuation Act and other retirement acts, and the Employment Insurance Act.


2011–12 Human Resources (FTEs)
Planned Actual Difference
0 0 0


Program 5: Performance Summary
Expected
Results
Performance
Indicators
Targets Actual
Results
Payments and receipts, held centrally by the Secretariat, are made on behalf of other federal government departments and agencies in an administratively sound and efficient manner. Payments are made appropriately and on time. Payments made as required (end of fiscal year 2011–12). Allocations from central votes were made as appropriate.

Lessons Learned

Regarding public service employer payments, this past year the Secretariat continued to build on its internal processes for preparing expenditures and revenue forecasts for the public service group insurance and benefit plans (i.e., the Public Service Health Care Plan). This work has culminated in a comprehensive forecasting framework that fully documents the methodologies and assumptions applied when preparing these forecasts. Understanding how these forecasts are prepared is important because they serve as the basis for seeking adjustments to the Secretariat's appropriations under Vote 20 (Public Service Insurance).



Internal Services

Program 6: Internal Services

Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are:

  • Management and Oversight Services;
  • Communications Services;
  • Legal Services;
  • Human Resources Management Services;
  • Financial Management Services;
  • Information Management Services;
  • Information Technology Services;
  • Real Property Services;
  • Materiel Services;
  • Acquisition Services; and
  • Travel and Other Administrative Services.

Internal Services include only those activities and resources that apply across an organization and not those provided specifically to a program.

Contribution to the Federal Sustainable Development Strategy

Federal Sustainable Development Strategy Theme IV, Shrinking the Environmental Footprint – Beginning with Government

The Treasury Board of Canada Secretariat (Secretariat) participates in the Federal Sustainable Development Strategy and contributes to its Greening Government Operations targets through the Internal Services program. The Secretariat contributes to the following target areas of Theme IV: “Shrinking the Environmental Footprint – Beginning with Government”: electronic waste, managed printing devices, paper consumption, green meetings, and green procurement. For additional details on the Secretariat's activities in this area, please refer to the supplementary information in Greening Government Operations.

Program Performance Summary

Expected results are not required for internal services under the Policy on Management, Resources and Results Structures. However, the Secretariat identified key initiatives that support the Internal Services program to ensure that resource management, governance and management support, and asset management are effectively aligned to priorities and programs.


2011–12 Financial Resources ($ thousands)
Planned Spending Total Authorities See 2011–12 Financial Resources for Internal Services note * Actual Spending See 2011–12 Financial Resources for Internal Services note *

* Excludes amount deemed appropriated to Shared Services Canada

80,471 93,583 93,528

The net increase of approximately $13.1 million between planned spending and total authorities can be attributed to the sum of funding for litigation support, paylist requirements, the Secretariat's workspace renewal and network separation projects, the cyber security strategy, centralization of the management of second language training, software licence renewal and the operating budget carry-forward, less reductions due to the implementation of the 2010 Strategic Review. The variance between total authorities and actual spending is negligible.


2011–12 Human Resources (full-time equivalents – FTEs)
Planned Actual Difference
709 720 11

Performance Highlights

I) Continuous improvement in the Secretariat's operations

In 2011–12, the Secretariat began the implementation of the 2010 Strategic Review while developing additional cost-reduction strategies as part of the review of departmental spending. Efforts to drive efficiencies will continue and will build on initiatives that were undertaken in 2011–12.

Effectively managed implementation of the results of the Secretariat's 2010 Strategic Review and undertook a further review in 2011–12
  • The Secretariat successfully met the savings target of $4.9 million for 2011–12. It is ahead of schedule for future year targets, having already achieved 72 per cent and 63 per cent of its strategic review savings for 2012–13 and 2013–14, respectively; and
  • The strategy focuses on aligning the Secretariat's resources with its core roles and responsibilities; modernizing and streamlining business processes; and applying a simplified, risk-based approach to its oversight functions as a central agency. Some of the planned initiatives are included in the following section.
Effectively managed the impact of cost-containment measures by identifying efficiencies in the Secretariat's internal operations, such as streamlining business processes

The Secretariat, for example:

  • Moved forward on transforming its approach to policy delivery by leveraging technology and Web 2.0 tools within government to respond to requests for information from departments and agencies;
  • Streamlined presentations of Treasury Board submissions at meetings by replacing paper-based processes with electronic devices;
  • Increased the efficiency and effectiveness of internal processes related to procurement. This was supported by extensive training for staff and management on the new procedures;
  • Developed a strategy to centralize the purchase and management of print imaging devices to achieve economies of scale, which will reduce costs and improve productivity;
  • Piloted an electronic approval process for electronic correspondence. The process is aimed at decreasing administrative workload and increasing the timeliness of internal approvals; and
  • Implemented the Common HR Business Process within the Secretariat's Human Resources Division to improve process efficiency and enhance client service.
Strengthened integrated planning and evaluation
  • The Secretariat's integrated business planning was strengthened by moving to a more strategic three-year planning horizon. This enhanced the effectiveness of financial and human resource allocation, enabled more informed decision making by senior management, and supported effective planning to contain costs. The Secretariat further enhanced the planning process by:
    • Conducting integrated quarterly budget reviews to ensure the timely reallocation of internal resources to higher priorities; and
    • Streamlining the internal collection process for planning and reporting information in order to reduce unnecessary administrative burden and increase efficiency.
  • The Secretariat strengthened the evaluation function by:
    • Developing and supporting a robust evaluation function within the Secretariat that meets or exceeds policy requirements; and
    • Implementing a new model for the conduct of evaluations to enhance the neutrality of results and recommendations.
Advanced renewal of the workplace
  • The Secretariat advanced its long-term accommodation plan by:
    • Securing approval to move to the planning stage for a more consolidated, modern and efficient office space; and
    • Reviewing the mid-term plans to minimize investments in current office locations that will not be transferable to the new accommodations.
Consolidated and relocated the Secretariat's data centre
  • In August 2011, the Secretariat's data centre was moved to a new facility to protect its electronic data and information. The Secretariat also segregated its networks and applications, implemented a more secure standard desktop configuration for all employees, and transitioned common IT services such as email and telecommunications to Shared Services Canada.
II) Simplified the oversight function

Efforts and resources to support this management priority are reflected in many of the Secretariat's programs, including Management Frameworks, People Management, Expenditure Management and Financial Management.

Used feedback from departments and agencies to strengthen the Secretariat's internal capacity to take risk-based approaches in carrying out its oversight function

The Secretariat, for example:

  • Undertook a targeted review of policy instruments and reporting requirements, applying a risk lens to identify specific policy changes that will reduce the burden on departments and agencies while still maintaining appropriate management accountability;
  • Developed tools to ensure that risk considerations are consistently applied in the periodic review of Treasury Board policy instruments. These tools include a policy implementation maturity model and a policy review guide; and
  • Developed an “earned delegation” decision-making model that uses existing risk and management capacity information about departments to enable increased delegation of authorities. The model will assist in further streamlining the number of submissions to the Treasury Board.
Developed an information management (IM) and information technology (IT) strategy and made more effective use of data and information

The Secretariat, for example:

  • Created an IM/IT strategic vision and IM roadmap to improve the Secretariat's ability to manage data and information in support of its business functions. The strategy will introduce new processes and technology, reduce duplication and increase corporate knowledge by managing information assets across internal boundaries;
  • Examined options to optimize and leverage the use of business and expenditure data collected from departments. The aim is to simplify and improve the data collection process, provide better analysis of data and give better access to citizens, parliamentarians and other end users; and
  • Enhanced the Public Service Management (PSM) Dashboard, which provides departments and agencies with human resources data and information to support decision making. The PSM Dashboard minimizes reporting requirements by leveraging information from central data systems.
Supported departmental implementation of policies and initiatives, including capacity building across government

Further details on how the Secretariat supported communities across the government are reflected in the Management Frameworks, People Management, Expenditure Management and Financial Management programs.

Lessons Learned

Business and workflow processes need to be changed in order to sustain newly implemented efficiency measures. IM practices play an integral role in transforming these processes. Through internal consultations, the Secretariat identified areas in IM that require improvement and outlined actions to address these areas in an IM roadmap implementation plan. The plan has been developed, and steps are underway to ensure that performance objectives, metrics and targets are in line with Secretariat needs. A phased implementation has already begun, which first focuses on updating technology tools and then supports employees through changes to IM processes.

Changes to Government Structure

Impacts on Financial and Human Resources Resulting from the Establishment of Shared Services Canada


2011–12 Financial Resources ($ thousands)
  Planned Spending See Changes to Government Structure - Internal Service note 1 1 Total Authorities See Changes to Government Structure - Internal Service note 2 2 See Changes to Government Structure - Internal Service note 3 *

* Pursuant to section 31.1 of the Financial Administration Act and Orders-in-Council P.C. 2011-0881, P.C. 2011-0877 and P.C. 2011-1297, this amount was deemed to have been appropriated to SSC, which resulted in a reduction in the appropriation for the Treasury Board of Canada Secretariat.

** Total authorities, as presented in the 2011–12 Financial Resources table (and other relevant tables) in the Summary of Performance section, is the net of any transfers to SSC. Actual spending does not include expenditures incurred on behalf of SSC as of the order-in-council date.

1 No planned spending was reported in the 2011–12 Report on Plans and Priorities because SSC came into existence in November 2011.

2 Total authorities include the Employee Benefit Plan and are net of revenues.

Net transfer post Orders in Council (OIC) See Changes to Government Structure - Internal Service note 4 ** to Shared Services Canada (SSC) N/A 3,932


2011–12 Human Resources (full-time equivalents – FTEs)
  Planned Actual
Deemed to Shared Services Canada N/A 15



Financial Highlights

The financial highlights presented in this section are drawn from the Secretariat's financial statements. These financial statements have been prepared using Government of Canada accounting policies, which are based on Canadian public sector accounting standards.

The Secretariat's assets consist mainly of accounts receivables from other government departments and agencies, whereas its liabilities are mainly for accounts payable to these government organizations, as well as for payables related to the employer's share of public service insurance. Expenses include $2.1 billion for government-wide programs such as the employer's share of the Public Service Health Care Plan, the Public Service Dental Care Plan, and other insurance and pension programs. Revenues of $12 million consist mainly of government-wide parking revenues, internal support services and recovery of pension administration costs.


Condensed Statement of Financial Position (Unaudited)
As at March 31, 2012
($ thousands)
  Change % 2011-12 2010-11
Total net liabilities -18.5% 471,316 578,466
Total net financial assets -31.2% 330,203 480,235
Departmental net debt +43.7% 141,113 98,231
Total non-financial assets -42.3% 8,826 15,300
Departmental net financial position +59.5% (132,287) (82,931)

The decrease in total liabilities of $107 million is mostly attributable to a decrease in accounts payable outstanding as at March 31 to external parties for the Public Service Health Care Plan, the Public Service Dental Care Plan, the Pensioners' Dental Services Plan and year-end adjustments for other government departments' share of employee benefit plans.

The decrease of $150 million in net financial assets is related to a decrease in receivables. Almost all of the decrease in receivables is related to year-end adjustments for other government departments' share of employee benefit plans. Most of these receivables from other government departments are cleared within the first two months of the new fiscal year.

Departmental net debt, calculated as the difference between total liabilities less net financial assets, has increased by $42 million compared to the previous year. The net debt indicator represents future revenue requirements to pay for past transactions and events, and is one indicator of a department's financial position. The change in the net debt indicator relates to departmental spending that was in excess of departmental revenues (appropriations received) during the 2011–12 fiscal year. Net debt will fluctuate from year to year in accordance with the level and timing of both departmental spending and revenues received through appropriations.

Total non-financial assets have decreased by $6 million mainly because of the transfer of tangible capital assets to Shared Services Canada.

The overall changes in assets and liabilities are reflected in the departmental net financial position.


Condensed Statement of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31, 2012
($ thousands)
  Change % 2011-12 2010-11
Total expenses +8.0% 2,469,452 2,286,344
Total revenues -27.8% 12,801 17,733
Net cost of operations before government funding and transfers +8.3% 2,456,651 2,268,611
Departmental net financial position +59.5% (132,287) (82,931)

The increase in total expenses of $183 million is attributable mostly to increases in costs for the various health, dental and insurance plans, and related provincial health care premiums and taxes. Although these expenses are for public servants across all departments and agencies, the costs are recorded by the Secretariat.

The decrease in total revenues of $5 million is due to a decrease in government-wide parking fees and a decrease in revenues from Internal Support Services. Effective April 1, 2011, Public Works and Government Services Canada no longer has the responsibility of providing parking at some locations across the country. Instead, employees make their own arrangements with private sector companies. The change to the policy is being implemented on a site-by-site basis and, therefore, the parking revenue is expected to continue to decline gradually over the next few years. The decline in revenue attributable to Internal Support Services is mainly related to the transition of the Secretariat's Information Management and Technology Directorate from a shared services model to a dedicated model.

The overall changes in expenses and revenues are reflected in the net cost of operations and in the departmental net financial position.

Financial Statements

See the complete Treasury Board of Canada Secretariat Financial Statements for the Year Ended March 31, 2012, which include the Statement of Management Responsibility Including Internal Control Over Financial Reporting and its Annex for fiscal year 2011–12, at their designated page on the Secretariat's website.



List of Supplementary Information Tables



Greening Government Operations (GGO)

Overview

The following outlines the Secretariat’s targets and implementation strategies to meet federal targets identified in the Federal Sustainable Development Strategy (FSDS) under Goal 8: Greening Government Operations (GGO). The targets that are relevant to the Secretariat’s operations relate to the areas of electronic waste (8.6), printing units (8.7), paper consumption (8.8), green meetings (8.9), and green procurement (8.10 and 8.11). For more information on the GGO targets, visit the Environment Canada website.

Surplus Electronic and Electrical Equipment Target


8.6 By March 31, 2014, each department will reuse or recycle all surplus electronic and electrical equipment (EEE) in an environmentally sound and secure manner.
Performance Measure RPP DPR
Target Status Achieved
Existence of implementation plan for the disposal of all departmentally-generated EEE. (Optional in RPP 2011–12) Yes, completed December 2011 Yes, completed December 2011
Total number of departmental locations with EEE implementation plan fully implemented, expressed as a percentage of all locations, by the end of the given fiscal year. FY 2011–12 100% 100%
FY 2012–13 100%  
FY 2013–14 100%  

Strategies / Comments

  1. FY 2011–12: The Secretariat has evaluated and adjusted its practices to be fully compliant in all 11 of its employment locations. These practices are documented in the Secretariat’s Asset Management Framework and reinforced at operational levels.
  2. FY 2012–13: The Secretariat will monitor compliance and adjust operations as appropriate.
  3. FY 2013–14: The Secretariat will monitor compliance and adjust operations as appropriate.
  4. Rationale for traffic light indicator selected: The Secretariat has achieved 100 per cent of locations that have an EEE implementation plan fully implemented.

Printing Unit Reduction Target


8.7 By March 31, 2013, each department will achieve an 8:1 average ratio of office employees to printing units. Departments will apply the target where building occupancy levels, security considerations, and space configuration allow.
Performance Measure RPP DPR
Target Status On Track
Ratio of departmental office employees to printing units in fiscal year (FY) 2010–11, where building occupancy levels, security considerations and space configuration allow. (Optional) N/A N/A
Ratio of departmental office employees to printing units at the end of the given fiscal year, where building occupancy levels, security considerations and space configuration allow. FY 2011–12 2.4:1 2.4:1
FY 2012–13 8:1  
FY 2013–14 8:1  

Strategies / Comments

  1. FY 2011–12: The Secretariat has undertaken a study to determine the departmental inventory of printing units.
    1. A centralized procurement model and associated controls were implemented to replace the decentralized approach historically used within the department.
    2. A plan has been developed to consolidate and reduce the number of printing units in order to move rapidly toward achieving the 8:1 ratio of staff to printing units in 2012–13. A senior advisor and a project manager are in place to ensure that the plan is implemented; they will be working with the Secretariat’s administrators in the first two quarters of 2012–13 to confirm plans and implement next steps.
    3. “Printing units” has been defined as desktop printers, networked printers, multi-functional devices, photocopiers and facsimile machines.
    4. A tracking methodology for the printing units deployed and the number of office employees has been established. The number and location of printers are available through information technology (IT) system reports. The number of office employees is provided by the department’s financial management plans (2,273 employees). This number includes casual, term, and full-time employees, as well as consultants.
    5. A non-compliance directive is being developed for senior management approval.
  2. FY 2012–13: The Secretariat will implement the printer device reduction plan.
  3. Rationale for traffic light indicator selected: The Secretariat is on track to achieve its target.

Paper Consumption Target


8.8 By March 31, 2014, each department will reduce internal paper consumption per office employee by 20 per cent. Each department will establish a baseline between 2005–2006 and 2011–2012, and applicable scope.
Performance Measure RPP DPR
Target Status On Track
Number of sheets of internal office paper purchased or consumed per office employee in the baseline year selected, as per departmental scope. (Optional in RPP 2011–12) 12,318 per employee in 2011–12 (51 sheets per employee per day)
Cumulative reduction (or increase) in paper consumption, expressed as a percentage, relative to baseline year selected. (Optional in RPP 2011–12) FY 2011–12 12,318 per employee in 2011–12 (51 sheets per employee per day) 12,318 per employee in 2011–12 (51 sheets per employee per day)
FY 2012–13 10% or 5 fewer sheets per employee per day  
FY 2013–14 20% or 10 fewer sheets per employee per day  

Strategies / Comments

  1. In FY 2011–12, the Secretariat conducted a baseline study of its estimated annual paper usage per employee per day.
  2. A measurement methodology for tracking paper consumption and employee counts has been developed. The paper consumption rate was determined from the quantity of paper used in one fiscal year. The employee number of 2,273 was derived from financial management plans for the department. This number includes casual, term and full-time employees, as well as consultants.
  3. A strategy to reduce consumption by targeting a number of specific initiatives has been developed (green meetings, double-sided printing and employee engagement). New technologies (e.g., tablets) are also being piloted in the department to demonstrate leadership in achieving the digital office of the future.
  4. The ratio of 51 sheets per employee per day was calculated by dividing the overall quantity of paper used by the number of employees and then dividing the result by the average number of annual working days (242) in a fiscal year.
  5. In FY 2011–12, Departmental Performance Reports and the 11th edition of the Canada’s Performance report were made available to members of Parliament and Canadians in electronic format, rather than in thousands of pages of printed volumes, as was done only a year ago.
  6. In FY 2012–13, the Secretariat will track and report paper usage internally to assess progress against the objectives of the Federal Sustainable Development Strategy.
  7. Rationale for traffic light indicator selected: The Secretariat is on track to achieve a 20 per cent reduction in paper consumption.

Green Meetings Target


8.9 By March 31, 2012, each department will adopt a guide for greening meetings.
Performance Measure RPP DPR
Target Status Achieved
Presence of a green meeting guide. (Optional in RPP 2011–12) N/A Yes: March 2012

Strategies / Comments

  1. The Secretariat defines adoption as occurring once the guide has been formally endorsed by the appropriate senior management committee.
  2. In FY 2011–12, the Secretariat’s Sustainable Development Committee assessed a proven, federally accepted guide for green meetings and adapted it for the department’s meeting purposes.
  3. The key components of the guide include information for meeting organizers and meeting participants, roles and responsibilities, key principles of green meetings and key greening areas.
  4. The Secretariat will formally endorse and communicate the guide.
  5. Rationale for traffic light indicator selected: The Secretariat has adopted a green meeting guide.

Green Procurement Targets

8.10 As of April 1, 2011, each department will establish at least three SMART (specific measurable, achievable, realistic, time-bound) green procurement targets to reduce environmental impacts.


1. By April 1, 2014, all workstation monitors will have default settings to shut off after a certain length of time the computer is not being used and computer workstations will be completely shut down after hours.
Performance Measure RPP DPR
Target Status On Track
By March 31, 2012, the Secretariat has surveyed its existing equipment, procures only compliant equipment and has developed an implementation plan. N/A 100%
By April 1, 2014, the Secretariat has implemented its plan.    

Strategies / Comments

  1. This SMART target was selected by management after a full review of internal corporate services' operations. It meets the criteria for being specific, measurable, achievable, relevant and time-bound.
  2. The settings are applied to all employees without exception. Shut-down time is set to start after midnight to provide flexibility for employees working late. Workstations include desktops and laptops.
  3. FY 2011–12: The Secretariat has surveyed its current equipment and has implemented a third-party application for desktop power management at the enterprise level. All new computers and monitors will support this power management system.
  4. FY 2012–13: The Secretariat will seek to continuously improve power management capabilities by deploying SMART IT procurement strategies and extending the duration of the shut-down periods, as the technology of the desktop operating system permits.
  5. FY 2013–14: The Secretariat seeks ongoing continuous improvement.
  6. Rationale for traffic light indicator selected: The Secretariat is on track to achieve its self-selected target.


2. By March 31, 2014, all purchases of appliances (e.g., microwave ovens and refrigerators) will be of an Energy Star standard, or equivalent.
Performance Measure RPP DPR
Target Status Achieved
By March 31, 2012, Secretariat procedures are documented and a monitoring strategy is developed. N/A 100%
By March 31, 2013, the monitoring strategy has been implemented. 100%  
By March 31, 2014, all purchases comply with the target. 100%  

Strategies / Comments

  1. This SMART target was selected by management after a full review of internal corporate services’ operations. It meets the criteria for being specific, measurable, achievable, relevant and time-bound.
  2. FY 2011–12: The Secretariat has ensured that the procedures for the purchase of small appliances were received by all employees through a formal communiqué. All purchases are now vetted through a central corporate services team to ensure consistency with energy use standards.
  3. Rationale for traffic light indicator selected: The Secretariat has achieved its self-selected target.


3. All new fleet vehicle purchases by the Secretariat will be hybrids or ultra-low emissions vehicles (ULEV).
Performance Measure RPP DPR
Target Status Achieved
By April 1, 2011, all new vehicles are hybrids or ultra-low emissions vehicles N/A 100%

Strategies / Comments

  1. This SMART target was selected by management after a full review of internal corporate services’ operations. It meets the criteria for being specific, measurable, achievable, relevant and time-bound.
  2. The Secretariat operates a very small fleet of executive vehicles, which are purchased centrally. Effective April 1, 2011, any vehicles purchased to support these activities will meet the stated target. No vehicles were purchased this fiscal year.
  3. Rationale for traffic light indicator selected: The Secretariat has achieved its self-selected target.

Departmental SMART Targets

8.11 As of April 1, 2011, each department will establish SMART targets for training, employee performance evaluations, and management processes and controls, as they pertain to procurement decision-making.


1. By March 31, 2014, all Secretariat fund centre managers with contracting authority will receive green procurement training.
Performance Measure RPP DPR
Target Status Achieved
By March 31, 2013, the Secretariat has developed a procurement training program for fund centre managers that includes green procurement training.   100% of relevant fund centre managers have received green procurement training as of March 31, 2012.
By March 31, 2014, all fund centre managers have completed the green procurement training.   100%

Strategies / Comments

  1. This SMART target was selected by management after a full review of internal corporate services’ operations. It meets the criteria for being specific, measurable, achievable, relevant and time-bound.
  2. The Secretariat’s Contracting and Procurement Division has reviewed and accepted the training material offered in the Delegation of Authority course for fund centre managers that is mandated by the department and offered by the Canada School of Public Service.
  3. The Secretariat’s fund centre managers receive green procurement training as part of their mandatory training to receive delegation of financial signing authority. Training statuses are monitored to ensure they are up to date.
  4. The Secretariat’s Contracting and Procurement Division is currently offering two-hour bilingual training sessions to all interested employees. Training material and discussion forums include Federal Sustainable Development Strategy components.
  5. FY 2012–13 and ongoing: Continuous monitoring.
  6. Rationale for traffic light indicator selected: The Secretariat has achieved its training target.


2. By March 31, 2012, the Secretariat will ensure that environmental considerations are factored into the development of the procurement strategies for the acquisition of goods and services.
Performance Measure RPP DPR
Target Status Achieved
By December 31, 2011, all procurement strategies developed in support of Secretariat requirements include green procurement considerations. N/A 100%

Strategies / Comments

  1. This SMART target was selected by management after a full review of internal corporate services’ operations. It meets the criteria for being specific, measurable, achievable, relevant and time-bound.
  2. The Secretariat has documented its procurement procedures and incorporated green procurement considerations in the development of the procurement strategies for contracted goods and services; they form part of the integrated procurement planning process.
  3. For every significant purchase through the Contracting and Procurement Division, the Secretariat has adopted documented procedures that capture any green procurement considerations via a Procurement Strategy Form, which must be filled out and included in all contracting files.
  4. Rationale for traffic light indicator selected: The Secretariat has achieved its target.


3. By December 31, 2011, processes and controls relating to green procurement will be formally documented and communicated to fund centre managers making procurement decisions.
Performance Measure RPP DPR
Target Status Achieved
By December 31, 2011, the Secretariat has procurement processes that clearly incorporate green procurement considerations. Processes and controls have been developed and are in place.

Strategies / Comments

  1. This SMART target was selected by management after a full review of internal corporate services' operations. It meets the criteria for being specific, measurable, achievable, relevant and time-bound.
  2. FY 2011–12: The Secretariat has documented its procurement procedures and controls.
  3. FY 2012–13: The Secretariat will incorporate its green procurement processes into its procurement guidance, and this will be communicated to all fund centre managers involved in procurement decisions.
  4. Rationale for traffic light indicator selected: The Secretariat has achieved its target.


Employee performance evaluations for managers and functional heads of procurement and materiel management.
As of April 1, 2012, 90 per cent of identified managers will have environmental considerations incorporated into their performance evaluations.
Performance Measure RPP DPR
Target Status Achieved
Number of performance evaluations of identified positions that have environmental considerations relative to the total of identified positions. 100% 100%
Progress against measure in the given fiscal year. 100% 100%

Strategies / Comments

  1. This SMART target was selected by management after a full review of internal corporate services’ operations. It meets the criteria for being specific, measurable, achievable, relevant and time-bound.
  2. FY 2011–12: The Secretariat identified six key positions within the department that have responsibility to manage or lead procurement services for programs and services.
  3. FY 2012–13 and ongoing: Environmental considerations will remain part of performance measures.
  4. Rationale for traffic light indicator selected: The Secretariat has achieved its target departmental performance evaluations target.



Internal Audits and Evaluations

Internal Audits (current reporting period)


Name of Internal Audit Internal Audit Type Status Completion Date
Audit of Acquisition Cards Assurance Completed May 2011
Audit of Electronic Record Keeping Assurance Completed September 2011
Audit of the Treasury Board of Canada Secretariat’s Management Control Framework of the Public Service Pension Plan Assurance Completed December 2011
Audit of the Administration of the External Expert Contract for the Strategic and Operating Review Assurance Completed June 2012
Audit of Business Continuity Planning Assurance Completed June 2012
Audit of the Interdepartmental Settlements Process Assurance In progress October 2012


Evaluations (current reporting period)


Name of Evaluation Program Activity Status Completion Date
Mid-Term Evaluation of the Implementation of the Cabinet Directive on Streamlining Regulation Management Frameworks Completed May 2011
Evaluation of International Public Sector Accounting Standards Board Contribution Program Financial Management Completed May 2011
Five-Year Evaluation of the 2006 Policy on Internal Audit Financial Management Completed June 2011
Evaluation of the Public Service Modernization Act Strategic Investment Framework People Management (Former Canada Public Service Agency) Completed December 2011
Evaluation of the Joint Learning Program People Management In progress November 2012
Evaluation of the Official Languages Centre of Excellence Initiative in Support of the Horizontal Evaluation of the Roadmap for Canada’s Linguistic Duality 2008–13: Acting for the Future People Management In progress November 2012




Response to Parliamentary Committees and External Audits

Response to Parliamentary Committees

Standing Senate Committee on Official Languages: Report 2, The Vitality of Quebec’s English-Speaking Communities: From Myth to Reality

(Adopted by the Committee on October 6, 2011; presented and adopted by the Senate on October 18, 2011)


Summary of Report Discussion of progress made to address recommendations Link to the Secretariat's response
The report focuses on the challenges experienced by Quebec’s English-speaking communities and reminds the federal government that it has a responsibility to enhance the vitality of both of Canada’s linguistic communities. The Standing Senate Committee on Official Languages seeks to draw the federal government’s attention to, and attract its interest in, the English-speaking minority’s concerns and the measures that should be taken to support its development.

The Official Languages Centre of Excellence of the Treasury Board of Canada Secretariat participated in the government response, led by Canadian Heritage, by providing input related to the support and guidance it provides to federal institutions.

Analysis of the impact of federal initiatives on official languages: The Committee raised concerns about federal institutions’ compliance with the directives set out in A Guide to Preparing Treasury Board Submissions. The Secretariat requests that all federal institutions ensure that initiatives submitted for Treasury Board approval are systematically analyzed for impact on official languages. The analysis is reviewed by the Secretariat before final recommendations are submitted. The Secretariat is updating A Guide to Preparing Treasury Board Submissions, which will provide an opportunity to remind federal institutions of the official language requirements in Appendix E of the guide.

Participation in the public service: The Committee’s report notes the under-representation of English speakers from Quebec in the federal public service. The Secretariat conducts an annual review, through reports prepared by federal institutions, to ensure that institutions are fulfilling their commitment to provide equal opportunities for English-speaking Canadians and French-speaking Canadians to obtain employment and advancement in their organizations.

As recommended by the Committee, the Secretariat will analyze, as part of the annual reporting process, the importance of addressing the issue of equitable participation by encouraging federal institutions (particularly those in Quebec or those that have regional offices in Quebec) to submit an annual review. The review would include issues related to measures taken to ensure the equitable participation of English speakers and French speakers in their workforces.

Communication with the public and provision of services in both official languages: The Committee reminded the government that communications and services provided in both official languages in Quebec must be of equal quality, and it recommended that the review of its policy instruments be completed in a timely manner. The Secretariat is revising the official languages policy instruments. These will be implemented once approved by the Treasury Board.

Government Response
(Presented to the Senate on March 27, 2012)

Response to the Auditor General (including to the Commissioner of the Environment and Sustainable Development)

2011 June Status Report of the Auditor General of Canada

Chapter 1, “Financial Management and Control and Risk Management

The objective of the audit was to determine whether the Treasury Board of Canada Secretariat, the Office of the Comptroller General of Canada within the Secretariat, and each of the seven selected departments have made satisfactory progress in implementing selected recommendations and in addressing relevant observations reported in the Office of the Auditor General’s (OAG) 2006 May Status Report, Chapter 1, “Managing Government: Financial Information,” and the OAG’s 2003 April Report, Chapter 1, “Integrated Risk Management.” The Secretariat received one recommendation; the Secretariat’s response can be found in this chapter’s Appendix – List of recommendations.

Chapter 2, “Large Information Technology Projects

The objective of the OAG’s audit was to determine whether the selected departments and agencies have made satisfactory progress in implementing the recommendations related to the 2006 November Report, Chapter 3, “Large Information Technology Projects.” The Secretariat received one recommendation; the Secretariat’s response can be found in this chapter’s Appendix – List of recommendations.

Chapter 3, “Internal Audit”

The overall audit objective was to assess the progress that the government has made in addressing the concerns the OAG raised in Chapter 1, “Internal Audit in Departments and Agencies of our 2004 November Report.” This follow-up audit assessed whether the Office of the Comptroller General of Canada is carrying out its duties and responsibilities to provide leadership and direction to the internal audit community. The Secretariat received one recommendation; the Secretariat’s response can be found in this chapter’s Appendix – List of recommendations.

Chapter 4, “Programs for First Nations on Reserves”

The overall audit objective was to determine whether then Indian and Northern Affairs Canada, Health Canada, the Canada Mortgage and Housing Corporation, and the Treasury Board of Canada Secretariat have made satisfactory progress in addressing key observations and in implementing key recommendations on First Nations programs from previous chapters related to Aboriginal issues appearing in reports of the Office of the Auditor General. The Secretariat received no recommendations.

2011 Spring Report of the Auditor General of Canada

Chapter 1, “Expenditures for the 2010 G8 and G20 Summits”

The objectives of this audit were: to determine whether, at selected entities, the processes used to plan for and estimate the budget and allocate funding for the G8 and G20 summits included senior management challenge and whether financial plans were linked to operational plans; to determine whether, at selected entities, the funding specifically requested from Parliament for the G8 and G20 summits was used for approved purposes; and to present information on how the cost of the events was estimated and authority to spend was received from Parliament. The Secretariat received one recommendation; the Secretariat’s response can be found in this chapter’s Appendix – List of recommendations.

Chapter 2, “G8 Legacy Infrastructure Fund”

The objectives of this audit were to examine the process for allocating federal funds for the G8 Legacy Infrastructure Fund to determine how the fund was established and how projects were selected. The Secretariat received one recommendation; the Secretariat’s response can be found in this chapter’s Appendix – List of recommendations.

2011 Fall Report of the Auditor General of Canada

Chapter 1, “Canada’s Economic Action Plan”

The objective of the OAG’s audit was to determine whether selected federal departments and agencies monitored and reported on progress and federal spending for selected Economic Action Plan programs. The Secretariat received two recommendations; the Secretariat’s responses can be found in this chapter’s Appendix – List of recommendations

External audits conducted by the Public Service Commission of Canada or the Office of the Commissioner of Official Languages

Not applicable



Sources of Respendable and Non-Respendable Revenue

Respendable Revenue


Program 2009-10
Actual
($ thousands)
2010-11
Actual
($ thousands)
2011-12 ($ thousands)
Main
Estimates
Planned
Revenue
Total
Authorities
Actual

1 Respendable revenue is received to cover salaries and operating costs from public service superannuation with respect to chargeable costs associated with administering the Public Service Superannuation Act. In previous years, it was reported under the Management Policy Development and Oversight program activity.

2 Respendable revenue is received to cover health care insurance plans’ costs from revolving funds and from departments and agencies that pay for employee benefit plans from a non-statutory appropriation. This account is also used to record pensioners’ share of pensioners’ dental services plan contributions.

3 Effective April 1, 2012, and pursuant to section 29.2 of the Financial Administration Act, departments are authorized to provide internal support services to, and receive such services from, one or more other departments. In previous years, these costs for services provided were recovered from other departments and offset against the related expenses.

People Management
Revenue related to the administration of the Public Service Superannuation Act See Respendable Revenue note 1 3,913 4,564 6,243 6,243 6,243 4,375
Internal Services See Respendable Revenue note 3 0 0 0 0 8,860 8,407
Government-Wide Funds and Public Service Employer Payments
Revenue related to public service insurance See Respendable Revenue note 2 361,321 371,986 469,252 469,252 469,252 425,959
Total Respendable Revenue 365,234 376,550 475,495 475,495 484,355 438,742

Non-Respendable Revenue


Program Activity 2009-10
Actual
($ thousands)
2010-11
Actual
($ thousands)
2011-12 ($ thousands)
Main
Estimates
Planned
Revenue
Total
Authorities
Actual

1 The revenue represents parking fees collected from public servants in government-owned or government-leased facilities. This revenue is deposited directly to the Consolidated Revenue Fund and cannot be used to offset operating expenditures. Revenue has been decreasing due to the implementation of the 2010 policy requiring employees to pay market rates for government parking.

2 Revenue received from public service superannuation with respect to costs associated with administering the Public Service Superannuation Act and covers the costs of employee benefit plans, health and accommodation.

3 The reversals of the payables at year end (PAYE) are attributed to estimated claims based on plan experience for the Public Service Health Care Plan (PSHCP), the Public Service Dental Care Plan and the Pensioners’ Dental Services Plan. The majority of the PAYE reversals relate to a 2009–10 actuarial estimate for a one-time expected increase in paper claims to be submitted by members for benefits that were not previously claimed during the transition to the PSHCP benefit card. These increases in paper claims did not occur as expected.

Revenue from parking fees See Non-Respendable Revenue note 1 11,595 10,672 0 8,965 7,545 7,545
External revenue from access to information 1 4 0 0 1 1
Revenue related to the administration of the Public Service Superannuation Act See Non-Respendable Revenue note 2 860 931 0 1,557 981 981
Refunds of previous year’s expenditures See Non-Respendable Revenue note 3 384 590 0 0 62,449 62,449
Disciplinary penalties 63 38 0 0 23 23
Proceeds from the disposal of surplus Crown assets 1 0 0 0 0 0
Other 15 34 0 0 2 2
Total Respendable Revenue 12,919 12,269 0 10,522 71,000 71,000



Status Report on Projects Operating with Specific Treasury Board Approval See Status Report on Projects Operating note 1


Project See Status Report on Projects Operating note 2 Original Estimated
Total Cost
($ thousands)
Revised Estimated
Total Cost
($ thousands)
Actual
Cost Total
($ thousands)
2011-12 ($ thousands) Expected date of
close-out
Main
Estimates
Planned
Spending
Total
Authorities
Actual

* PPA—preliminary project approval

** EPA—effective project approval

Notes:

1 As a result of Treasury Board approval in March 2012 of the Secretariat's Investment Plan and Organizational Project Management Capacity Rating (Class 2) only projects rated above Class 2 (based on their level of complexity and risk) require approval by the Treasury Board. For this reporting period, the Secretariat does not have any projects ranked Class 3 or higher. Projects included in the Departmental Performance Report are those that received Treasury Board approval prior to receipt of the new authorities.

2 Project details and expenditures include salaries (e.g., FTEs), contracts (e.g., services) and assets (e.g., goods), where applicable. The figures provided above do not include GST/HST.

3 The Human Resource Business Solution pilot project received approval late in the year; therefore, funds for 2011–12 were accessed on an as-required basis. As a result, the 2011–12 actual funds spent were lower than the original planned spending. Planned project work has been moved to later years.

4 The remaining funds from fiscal year 2011–12 are expected to be reprofiled to fiscal year 2012–13 to complete project work.

Real Property Services
Workspace Renewal Project (PPA See Status Report on Projects Operating note 5 *) 54,000 54,000 962 0 1,000 1,000 962 2016
Management of Information Technology
Human Resource Business Solution Pilot See Status Report on Projects Operating note 3 (EPA See Status Report on Projects Operating note 6 **) 13,189 13,189 3,284 0 5,990 3,284 3,284 2014
Human Resource Data Interoperability See Status Report on Projects Operating note 4 (PPA See Status Report on Projects Operating note 5 *) 2,960 2,960 0 0 600 0 0 2014



Treasury Board of Canada Secretariat
Financial Statements (Unaudited)
For the Year Ended March 31, 2012

Statement of Management Responsibility Including Internal Control Over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2012, and all information contained in these statements rests with the management of the Treasury Board of Canada Secretariat. These financial statements have been prepared by management using the government's accounting policies, which are based on Canadian public sector accounting standards.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment, and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the Secretariat's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada and included in the Secretariat's Departmental Performance Report is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training, and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the Secretariat; and through conducting an annual risk-based assessment of the effectiveness of the system of internal control over financial reporting.

A risk-based assessment for the year ended March 31, 2012 was completed in accordance with the Policy on Internal Control, and the results and action plans are summarized in the Annex.

The system of internal control over financial reporting is designed to mitigate risks to a reasonable level based on an ongoing process to assess key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

The system of internal control is monitored by Internal Audit, which conducts periodic audits and reviews of different areas of the Secretariat's operations. In addition, the Chief Audit Executive has free access to the Audit Committee, which oversees and provides advice to management on its responsibilities for maintaining adequate control systems and the quality of financial reporting. The Committee undertakes a review of the financial statements, including all significant accounting estimates and judgments therein, and advises the Secretariat on any apparent material concerns.

The financial statements of the Secretariat have not been audited.

The original version was signed by:

Michelle d'Auray
Secretary of the Treasury Board
Ottawa, Canada
August 31, 2012

Christine Walker
Chief Financial Officer
Ottawa, Canada
August 31, 2012

Statement of Financial Position (Unaudited)
As at March 31
  2012 2011
Restated
(note 13)
(in thousands of dollars)

Contractual obligations (note 8)
Contingent liabilities (note 9)

The accompanying notes form an integral part of these financial statements.

Liabilities
Accounts payable and accrued liabilities (note 4) 438,134 530,343
Vacation pay and compensatory leave 8,805 9,093
Employee future benefits (note 5) 24,377 39,030
Total liabilities 471,316 578,466
Financial assets
Due from Consolidated Revenue Fund 128,899 128,815
Accounts receivable and advances (note 6) 206,195 353,385
Total gross financial assets 335,094 482,200
Financial assets held on behalf of government
Accounts receivable and advances (note 6) (4,891) (1,965)
Total financial assets held on behalf of government (4,891) (1,965)
Total net financial assets 330,203 480,235
Departmental net debt 141,113 98,231
Non-financial assets
Prepaid expenses 81 58
Tangible capital assets (note 7) 8,745 15,242
Total non-financial assets 8,826 15,300
Departmental net financial position (132,287) (82,931)

The original version was signed by:  

Michelle d'Auray
Secretary of the Treasury Board
Ottawa, Canada
August 31, 2012

Christine Walker
Chief Financial Officer
Ottawa, Canada
August 31, 2012


Statement of Operations and Departmental Net Financial Position (Unaudited)
For the year ended March 31
  2012
Planned Results RestatedSee endnote 1*
(note 2)
2012 2011
Restated
(note 13)
(in thousands of dollars)

Segmented information (note 12)

The accompanying notes form an integral part of these financial statements.

Return to endnote reference 1 * Planned results were presented in the 2011–12 future-oriented financial statements and included in the 2011–12 Report on Plans and Priorities (RPP), which are based on plans as at February 14, 2011 (see also note 2a).

Expenses
Government-Wide Funds and Public Service Employer Payments 2,388,305 2,126,950 1,904,123
Management Frameworks 79,204 75,528 71,415
People Management 71,546 74,872 73,571
Expenditure Management 39,972 52,424 33,519
Financial Management 36,171 30,766 31,410
Internal Services 90,947 101,195 105,260
Total Expenses 2,706,145 2,461,735 2,219,298
Revenues
Parking fees – Government-wide 8,965 7,544 10,672
Internal support services 8,016 8,016 12,493
Recovery of pension administration costs 7,800 5,356 5,495
Other 47 68 156
Revenues earned on behalf of government (10,569) (8,574) (11,746)
Total revenues 14,259 12,410 17,070
Net cost from continuing operations 2,691,886 2,449,325 2,202,228
Transferred operations (note 11)
Expenses 76,388 7,717 67,046
Revenue 391 391 663
Net cost of transferred operations 75,997 7,326 66,383
Net cost of operations before government funding and transfers 2,767,883 2,456, 651 2,268,611
Government funding and transfers
Net cash provided by government 2,705,567 2,389,068 1,970,862
Change in due from Consolidated Revenue Fund (41,552) 84 (101,933)
Services provided without charge by other government departments (note 10) 24,619 23,801 25,129
Transfer of assets and liabilities from (to) other government departments (note 7 and note 11) 0 (5,658) 129
Net cost of operations after government funding and transfers 79,249 49,356 374,424
Departmental net financial position – Beginning of year (105,829) (82,931) 291,493
Departmental net financial position – End of year (185,078) (132,287) (82,931)


Statement of Change in Departmental Net Debt (Unaudited)
For the year ended March 31
  2012
Planned
ResultsSee endnote*
2012 2011
(in thousands of dollars)

The accompanying notes form an integral part of these financial statements.

Return to endnote reference * Planned results were presented in the 2011–12 future-oriented financial statements and included in the 2011–12 Report on Plans and Priorities (RPP), which are based on plans as at February 14, 2011 (see also note 2a).

Net cost of operations after government funding and transfers 79,249 49,356 374,424
Change due to tangible capital assets
Acquisition of tangible capital assets 922 3,110 3,693
Amortization of tangible capital assets (3,830) (2,983) (3,302)
Proceeds from disposal of tangible capital assets 0 (23) 0
Gain on disposal of tangible capital assets 0 9 0
Transfer from (to) other government departments 0 (6,610) 129
Total change due to tangible capital assets (2,908) (6,497) 520
Change due to prepaid expenses 0 23 (6)
Net increase (decrease) in departmental net debt 76,341 42,882 374,938
Departmental net debt – Beginning of year 120,453 98,231 (276,707)
Departmental net debt – End of year 196,794 141,113 98,231


Statement of Cash Flows (Unaudited)
For the year ended March 31
  2012 2011
Restated
(note 13)
(in thousands of dollars)
The accompanying notes form an integral part of these financial statements.
Operating activities
Net cost of operations before government funding and transfers 2,456,651 2,268,611
Non-cash items:
Amortization of tangible capital assets (2,983) (3,302)
Gain on disposal of tangible capital assets 9 0
Services provided without charge by other government departments (note 10) (23,801) (25,129)
Variations in Statement of Financial Position:
Decrease in accounts receivable and advances (150,116) (307,577)
Increase (decrease) in prepaid expenses 23 (6)
Decrease in accounts payable and accrued liabilities 92,209 36,432
Decrease in vacation pay and compensatory leave 288 1,044
Decrease (increase) in future employee benefits 14,653 (2,904)
Transfer of liabilities to other government departments (note 11) (952) 0
Cash used in operating activities 2,385,981 1,967,169
Capital investing activities
Acquisitions of tangible capital assets 3,110 3,693
Proceeds from disposition of tangible capital assets (23) 0
Cash used in capital investing activities 3,087 3,693
Net cash provided by the Government of Canada 2,389,068 1,970,862

1. Authority and Objectives

Under the broad authority of sections 5 to 13 of the Financial Administration Act, the Secretariat supports the Treasury Board as a committee of ministers in its role as the general manager and employer of the public administration. It is headed by a Secretary, who reports to the President of the Treasury Board.

The mission of the Secretariat is to ensure that the rigorous stewardship of public resources achieves results for Canadians.

The core business of the Secretariat is currently organized into the following key areas of program activities:

a) Government-Wide Funds and Public Service Employer Payments

The Government-Wide Funds and Public Service Employer Payments program activity accounts for funds that are held centrally by the Secretariat to supplement other appropriations, and from which payments and receipts are made on behalf of other federal organizations. These funds supplement the standard appropriations process and meet certain responsibilities of the Treasury Board as employer of the core public administration.

b) Management Frameworks

In support of Treasury Board's role as management board, the Secretariat provides the framework for the management of government operations. It does so by developing specific policies, regulations, directives, and guidelines that, once approved by the Treasury Board, provide the parameters within which deputy heads manage their departments. The Secretariat also helps build understanding and capacity by reaching out to the different communities within departments and agencies (e.g., finance, human resources) that support deputy heads in implementing Treasury Board policies.

c) People Management

The Treasury Board's people management role is supported by the Secretariat's People Management program activity. The Secretariat provides analysis and recommendations to Treasury Board to ensure that deputy heads across government have the policies and guidance they need to manage all aspects of human resources within their departments and agencies. This program activity also includes the Secretariat's responsibilities for overseeing collective bargaining, labour relations, and pension and benefits plans.

d) Expenditure Management

Of all the Treasury Board's roles, the budget office is probably the best known. It is supported by two program activities: Expenditure Management and Financial Management. Through the Expenditure Management program activity, the Secretariat provides analysis and support to the President of the Treasury Board to report to Parliament, first on the funding estimated for government operations in a specific year and then on the amounts actually expended. The Expenditure Management program activity also includes the Secretariat's responsibility for managing public sector compensation (i.e., the costs of pay and benefits), as well as its role in reviewing, analyzing, and challenging departmental spending proposals to ensure a focus on results and values for Canadians.

e) Financial Management

The Financial Management program activity is the other aspect of the budget office function. Through this program activity, the Secretariat develops policies and guidance to ensure that the financial management community across government has the right direction to carry out its financial responsibilities. The quality of financial management across departments is important for maintaining the accuracy and integrity of the government's financial records and accounts. This program activity also includes the Secretariat's efforts to build capacity within the financial and audit communities, as well as its audit responsibilities.

f) Internal Services

The Secretariat must implement Treasury Board policies to ensure the smooth running of its internal operations. Efforts in this area are captured in the Internal Services program activity. These include support functions such as communications, financial and human resources management, real property, information technology, legal and procurement. These services support all the Secretariat's other program activities.

2. Summary of Significant Accounting Policies

These financial statements have been prepared using the government's accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

a) Parliamentary authorities

The Secretariat is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the Secretariat do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the Statement of Operations and Departmental Net Financial Position and the Statement of Change in Departmental Net Debt are the amounts reported in the future-oriented financial statements included in the 201112 Report on Plans and Priorities. The planned results amounts have been restated to reflect the revenue net of non-respendable amounts. This restatement resulted in a $10,569 thousands increase in net costs of operations before government funding and transfers. In addition, the planned results amounts have also been reclassified to conform to the current year presentation.

b) Net cash provided by government

The Secretariat operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Secretariat is deposited to the CRF and, all cash disbursements made by the Secretariat are paid from the CRF. The net cash provided by government is the difference between all cash receipts and all cash disbursements including transactions between departments of the government.

c) Amounts due from or to the Consolidated Revenue Funds

Amounts due from or to the Consolidated Revenue Funds (CRF) are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Secretariat is entitled to draw from the CRF without further authorities to discharge its liabilities.

d) Revenues

Revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

Revenues that are non-respendable are not available to discharge the Secretariat's liabilities. While the Secretary is expected to maintain accounting control, he or she has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the entity's gross revenues.

e) Expenses

Expenses are recorded on an accrual basis:

  • Transfer payments are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program. Transfer payments that become repayable as a result of conditions specified in the contribution agreement that have come into being are recorded as a reduction to transfer payment expense and as a receivable.
  • Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
  • Services provided without charge by other government departments for accommodation and legal services are recorded as operating expenses at their estimated cost.

f) Government-wide employee benefits

(i) Pension and other employee benefits:

Eligible public service employees participate in the Public Service Pension Plan, a multi-employer pension plan sponsored by the Government of Canada. In its role as employer for the public service, employer contributions to the Plan for all departments and agencies, including additional contributions in respect of any actuarial deficiencies, are funded via centrally managed funds by the Secretariat and they are expensed in the year incurred. The Secretariat recovers a portion of the employer contributions to the Public Service Pension Plan from other departments and agencies.

Eligible employees of the Secretariat also participate in the Public Service Pension Plan, and the Secretariat's financial reporting responsibility in respect of its own employees' participation in the Plan is limited to its employer contributions.

The Government of Canada also sponsors a variety of other current and future employee benefit plans that the Secretariat is responsible to administer and/or fund through its centrally managed funds. Benefit payments for these plans are recognized as expenses when they become due and no accruals are recorded for future benefits. A portion of these benefits is also recovered from other departments and agencies. This accounting treatment corresponds to the funding provided to the Secretariat through parliamentary appropriations.

For all pension and other employee future benefits, the actuarial liabilities and related disclosures, as well as actuarial surpluses or deficiencies for the whole of government are recognized in the financial statements of the Government of Canada, which ultimately bears actuarial and investment risks inherent to these defined benefit plans as the plans' sponsor.

(ii) Severance benefits:

Certain employee groups are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government of Canada as a whole. As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. As a result, the obligation related to those employee groups has ceased to accumulate.

g) Accounts receivable and advances

Accounts receivable and advances are stated at the lower of cost and net recoverable value; a valuation allowance would be recorded for receivables where recovery is considered uncertain.

h) Contingent liabilities

Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

i) Tangible capital assets

All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. The Secretariat does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic, or historical value.

Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:


Asset class Amortization period
Computer hardware 3 years
Computer software 3 to 10 years
Machinery and equipment 3 to 10 years
Motor vehicles 3 years
Leasehold improvements Lesser of the remaining term of the lease or useful life of the improvement

j) Measurement uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are contingent liabilities, the liability for employee future benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary Authorities

The Secretariat receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and the Statement of Financial Position in one year may be funded through parliamentary authorities in a prior, current or future year. Accordingly, the Secretariat has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

a) Reconciliation of net cost of operations to current year authorities used


  2012 2011
Restated
(note 13)
(in thousands of dollars)
Net cost of operations before government funding and transfers 2,456,651 2,268,611
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (2,983) (3,302)
Gain on disposal of tangible capital assets 9 0
Services provided without charge by other government departments (23,801) (25,129)
Decrease in vacation pay and compensatory leave 74 1,044
Decrease (increase) in employee future benefits 13,915 (2,904)
Refund of prior years' expenditures 62,742 10,711
Increase in accrued liabilities related to workforce adjustment costs (8,095) 0
Other 2,857 1,634
Subtotal 44,718 (17,946)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets 3,110 3,693
Proceeds from disposal of tangible capital assets (23) 0
Decrease (increase) Advances 52 (378)
Subtotal 3,139 3,315
Current year authorities used 2,504,508 2,253,980

b) Authorities provided and used


  2012 2011
(in thousands of dollars)
Authorities provided
Vote 1 — Operating expenditures 299,631 262,656
Vote 5 — Government contingencies 750,000 230,668
Vote 10 — Government-wide initiatives 8,511 6,563
Vote 20 — Public service insurance 2,380,408 2,223,794
Vote 25 — Operating budget carry-forward 8,061 128,041
Vote 30 — Pay list Requirements 361,781 175,324
Vote 33 — Capital budget carry-forward 241,899 0
Subtotal 4,050,291 3,027,046
Statutory authorities:
Contributions to employee benefit plans 32,073 30,466
Unallocated employer contributions made under the Public Service Superannuation Act and other retirement Acts, and the Employment Insurance Act 6,200 6,200
Payments for the pay equity settlement pursuant to section 30 of the Crown Liability and Proceedings Act 72 (470)
President of the Treasury Board - Salary and car allowance 78 78
Spending of proceeds from the disposal of surplus Crown assets 24 1
Subtotal 38,447 36,275
Less:
Lapsed authorities:
Vote 1 — Operating expenditures (20,141) (7,697)
Vote 5 — Government contingencies (750,000) (230,668)
Vote 10 — Government-wide initiatives (8,511) (6,563)
Vote 20 — Public service insurance (193,813) (261,047)
Vote 25 — Operating budget carry-forward (8,061) (128,041)
Vote 30 — Pay list Requirements (361,781) (175,324)
Vote 33 — Capital budget carry-forward (241,899) 0
Spending of proceeds from the disposal of surplus crown assets (24) (1)
Subtotal (1,584,230) (809,341)
Current year authorities used 2,504,508 2,253,980

4. Accounts Payable and Accrued Liabilities

The following table presents the details of the Secretariat accounts payable and accrued liabilities:


  2012 2011
(in thousands of dollars)
Accounts payable to other government departments and agencies 289,031 340,182
Accounts payable to external parties 11,301 9,400
Subtotal 300,332 349,582
Accrued liabilities 137,802 180,761
Total accounts payable and accrued liabilities 438,134 530,343

In Canada's Economic Action Plan 2012, the Government announced savings measures to be implemented by departments over the next three fiscal years starting in 2012–13. As a result, the department has recorded at March 31, 2012, an obligation for termination benefits for an amount of $8,095 thousand as part of accrued liabilities to reflect the estimated workforce adjustment costs.

5. Employee Future Benefits

a) Pension benefits

The Secretariat's employees participate in the Public Service Pension Plan, which is sponsored and administered by the government. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.

Employees and the Secretariat both contribute to the cost of the Plan. The 2011–12 employer expense amounts to $23,059 thousand ($21,387 thousand in 2010–11) in respect of its own employees, which represents approximately 1.8 times (1.9 times in 2010–11) the contributions by employees.

The Secretariat's financial reporting responsibility regarding the pension plan is limited to its contributions. Actuarial surpluses or deficiencies for the Secretariat and the whole of government are recognized in the financial statements of the Government of Canada, as the pension plan's sponsor.

b) Severance benefits

The Secretariat provides severance benefits to certain employee groups based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:


  2012 2011
(in thousands of dollars)
Accrued benefit obligation - Beginning of year 39,030 36,126
Transferred to other government departments, effective November 15, 2011 (note 11) (738) 0
Subtotal 38,292 36,126
Expense for the year 5,005 6,676
Benefits paid during the year (18,920) (3,772)
Accrued benefit obligation - End of year 24,377 39,030

As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date to collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.

6. Accounts Receivable and Advances

The following table presents details of the Secretariat accounts receivable and advances balances:


  2012 2011
Restated
(note 13)
(in thousands of dollars)
Receivables - Other government departments and agencies 200,200 350,669
Receivables - External parties 5,920 2,633
Advances to employees 71 78
Deposits in transit to the Receiver General 4 5
Gross accounts receivable and advances 206,195 353,385
Accounts receivable held on behalf of government (4,891) (1,965)
Net accounts receivable and advances 201,304 351,420

The bulk of receivables from other government departments and agencies are related to receivables established at year-end as a result of employee benefit plans. These receivables have decreased as a result of a reduced variance between planned benefits recovered during the year from other government departments and actual year end benefits expense.

The increase in receivables from external parties is largely due to a recoverable of the advance for the Public Service Dental Plan.

7. Tangible Capital Assets

The following table presents the details of Tangible Capital Assets:


Capital Asset Class Cost Accumulated Amortization Net Book Value
Opening Balance Acquisitions Adjustments See endnote 2 * Disposals and Write-Offs Closing Balance Opening Balance Amortization Adjustments See endnote 2 * Disposals and Write-Offs Closing Balance 2012 2011
(in thousands of dollars)

Return to endnote reference 2 * The adjustments columns mainly include transfer of computer hardware, software, and machinery and equipment with a net book value of $6,221,561 (cost of $12,271,926) and of $409,783 (cost of $1,798,565) to Shared Services Canada and to the Department of Finance Canada respectively and a transfer of the President's motor vehicle from Industry Canada with a net book value of $21,190 (cost of $24,929).

Machinery and equipment 382 88 (78) 227 165 313 23 (32) 227 77 88 69
Motor vehicles 151 0 25 56 120 94 39 4 42 95 25 57
Leasehold improvements 1,952 0 0 0 1,952 1,952 0 0 0 1,952 0 0
Computer hardware 13,565 2,911 (13,716) 2,750 10 8,538 1,482 (7,260) 2,750 10 0 5,027
Computer software 14,661 111 (275) 317 14,810 4,572 1,439 (146) 317 5,548 8,632 10,089
Total 30,711 3,110 (14,044) 3,350 16,247 15,469 2,983 (7,434) 3,336 7,682 8,745 15,242

8. Contractual Obligations

The nature of the Secretariat's activities can result in some large multi-year contracts and obligations whereby the Secretariat will be obligated to make future payments when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:


  2013 2014 2015 2016 2017 and thereafter Total
(in thousands of dollars)
Public Service Health/Dental Plans 40,446 31,178 32,523 35,373 21,224 160,744
Other professional services 13,443 80 80 80 65 13,748
Management consulting 1,195 47 0 0 0 1,242
Computer services 1,869 74 0 0 0 1,943
Total 56,953 31,379 32,603 35,453 21,289 177,677

Shared Services Canada's portion of contractual obligations for an amount of $2,319 thousand is not included in the above table. These contractual obligations were transferred to Shared Services Canada.

9. Contingent Liabilities

Claims and litigations

Claims have been made against the Secretariat in the normal course of operations. These claims include items with pleading amounts and other for which no amount is specified. Claims for which the outcome is not determinable and a reasonable estimate can be made by management amount approximately to $65 billion ($65 billion in 2010–11) at March 31, 2012. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded in the financial statements. No accrual for these contingent liabilities has been made in these financial statements.

The most significant of these legal actions is described as follows:

In September 1999, the Public Sector Pension Investment Board Act (Bill C-78) was passed by Parliament, providing for improvements in the financial management of federal public service pension plans, including the Public Service (PSSA), RCMP (RCMPSA), and Canadian Forces (CFSA) superannuation plans. The new Act authorized the President of the Treasury Board to debit the accounts in order to reduce the amount of certain excess balances in the superannuation accounts. In late 1999, the major public service unions and pensioner associations launched three lawsuits against the Crown challenging the validity of the legislation. On November 20, 2007, the plaintiffs' actions were dismissed. In February 2008, all three plaintiffs appealed the decisions to the Ontario Court of Appeal. The appeal was heard in April 2010. On October 8, 2010, the Ontario Court of Appeal dismissed the plaintiffs' appeal. The plaintiffs applied for leave to appeal to the Supreme Court of Canada which granted leave to appeal on May 5, 2011. The hearing was held on February 9, 2012 and the judgment is yet to be delivered.

10. Related-Party Transactions

The Secretariat is related as a result of common ownership to all Government departments, agencies, and Crown corporations. The Secretariat enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, the Secretariat has the responsibility to administer on behalf of other government departments, and fund the employer's contribution to the Public Health and Dental insurance plans through its centrally managed funds. During the year, the Secretariat received and provided common services as disclosed below.

a) Common services provided without charge by other government departments

During the year, the Secretariat received services without charge from certain common service organizations, related to accommodation and legal services. These services provided without charge have been recorded in the department's Statement of Operations and Departmental Net Financial Position as follows:


  2012 2011
(in thousands of dollars)
Accommodation 20,294 19,734
Legal services 3,507 5,395
Total 23,801 25,129

The government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada are not included in the department's Statement of Operations and Departmental Net Financial Position.

b) Common services provided without charge to other government departments

The Secretariat provided services without charge to other government departments, related to the provision of the employer's contribution to the health, dental and other employee insurance plans and payroll benefits in the amount of $1,690,387 thousand in 2011–12 (compared with $1,643,251 thousand in 2010–11).


Other transactions with related parties
  2012 2011
(in thousands of dollars)
Expenses – Other government departments and agencies 24,808 23,423
Revenues – Other government departments and agencies 13,372 17,988

11. Transfers from (to) other government departments

Effective November 15, 2011, the Secretariat transferred the control and supervision of the portion of its administration costs and functions related to email, network and data centre to Shared Services Canada in accordance with order-in-council OIC-2011-1297, including stewardship responsibility of the assets related to these functions.

Effective October 1, 2011, the Secretariat transferred computer hardware and machinery and equipment to the Department of Finance Canada.

Effective January 1, 2012, the management of pension, insurance and social security programs for locally engaged staff was transferred from the Secretariat to Foreign Affairs and International Trade Canada and to National Defence. The transfer of these programs is the result of the 2008 Human Resources Agency Horizontal Strategic Review including Public Service Employer Payments.

The impact of transfers from (to) other government departments in the financial statements is as follows:


  2012
(in thousands of dollars)
Assets 
Tangible capital assets transfer (from) to other government departments 
To Shared Services Canada (net book value) (note 7) 6,222
To the Department of Finance Canada 409
From Industry Canada (21)
Total assets transferred (from) to other government departments 6,610
Liabilities 
Vacation pay and compensatory leave transferred to Shared Services Canada 214
Employee future benefits transferred to Shared Services Canada 738
Total liabilities transferred to Shared Services Canada 952
Adjustment to the departmental net financial position 5,658

In addition, the 2011 comparative figures have been reclassified on the Statement of Operations and Departmental Net Financial Position to present the revenues and expenses of the transferred operations related to Shared Services Canada, and the transfer to Foreign Affairs and International Trade Canada and to National Defence the management of pension insurance and the social security program for locally engaged staff.

During the transition period, the Secretariat continued to administer the transferred activities on behalf of Shared Services Canada. The administered expenses and revenues amounted to $4,898 thousand and to $316 thousand respectively, for the period from November 15, to March 31, 2012. These expenses and revenues are not recorded in these financial statements.

12. Segmented information

a) Presentation by segment is based on the Secretariat's program alignment architecture. The presentation by segment is based on the same accounting policies as described in the summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:


  GF &
PSEP
MF PM EM FM IS 2012 total 2011 total
Restated
(note 13)
(in thousands of dollars)
Legend:
  • GF & PSEP – Government-Wide Funds and Public Service Employer Payments
  • MF – Management Framework
  • PM – People Management
  • EM – Expenditure Management
  • FM – Financial Management
  • IS – Internal Services
Transfer payment        
Industry 0 252 0 0 200 0 452 253
Total transfer payment 0 252 0 0 200 0 452 253
Operating Expenses
Government-wide funds and publics ervice employer payments 2,126,950 0 0 0 0 0 2,126,950 1,904,123
Salary and employee benefits 0 60,486 54,724 31,182 20,940 63,475 230,807 219,896
Professional and special services 0 8,311 10,260 17,993 7,258 20,461 64,283 55,408
Accommodation 0 4,668 4,668 2,434 1,624 6,900 20,294 19,734
Transport and telecommunications 0 664 945 128 250 864 2,851 3,615
Machinery, equipment, parts and tools 0 410 406 410 247 5,160 6,633 2,632
Repair and maintenance 0 71 74 15 6 1,167 1,333 2,517
Utilities, materiel and supplies 0 229 274 102 123 552 1,280 3,335
Information 0 93 99 82 20 305 599 784
Rentals 0 113 289 54 86 403 945 1,175
Amortization 0 19 11 0 0 1,610 1,640 1,825
Other Expenses 0 212 3,122 24 12 298 3,668 4,001
Total Operating Expenses 2,126,950 75,276 74,872 52,424 30,566 101,195 2,461,283 2,219,045
Total expenses 2,126,950 72,528 74,872 52,424 30,766 101,195 2,461,735 2,219,298
Revenues        
Parking fees – Government-wide 7,544 0 0 0 0 0 7,544 10,672
Internal support services 0 0 0 0 0 8,016 8,016 12,493
Recovery of pension administration costs 0 0 5,356 0 0 0 5,356 5,495
Other Revenue 45 0 2 0 0 21 68 156
Revenues earned on behalf of government (7,589) 0 (983) 0 0 (2) (8,574) (11,746)
Total Revenues 0 0 4,375 0 0 8,035 12,410 17,070
Net cost from continuing operations 2,126,950 75,528 70,497 52,424 30,766 93,160 2,449,325 2,202,228

b) Centrally Managed Funds

The Government of Canada sponsors defined benefit pension plans covering most of its employees. The Secretariat funds the employer's contributions to the Public Service Pension Plan and Retirement Compensation Arrangement, including additional contributions in respect of actuarial deficiencies.

The Secretariat also funds payments to or in respect of:

  • the employer's share of contributions to the Public Service Death Benefit Account;
  • the employer's share of Canada/Québec Pension Plan contributions and Employment Insurance premiums;
  • the employer's share of health, disability, and life insurance premiums and related Quebec sales tax;
  • the employer's share of the Québec Parental Insurance Plan premium;
  • claims and related costs under the Public Service Dental Care Plan and the Pensioners' Dental Services Plan;
  • provincial payroll taxes;
  • pension, benefit, and insurance plans for employees engaged locally outside Canada by Canadian missions abroad; and
  • returns to certain employees of their share of the Employment Insurance premium reduction.

Generally, Public Service Pension Plan contributions, Public Service Death Benefit Account contributions, Canada/Québec Pension Plan contributions, and Employment Insurance premiums are recovered from all departments, agencies, and revolving funds pro rata, based on salaries and wages incurred. Contributions to health care plans are recovered from certain departments and agencies, and all revolving funds based on 8.5 per cent (8.5 per cent in 2010–11) of salaries and wages incurred.

A breakdown by major category is as follows:

  2012 2011
(in thousands of dollars)
Public Service Pension Plan and Retirement Compensation Arrangement contributions (Statutory) 2,682,048 2,669,956
Public Service Health Care Plan (Vote 20) 906,252 865,819
Canada/Québec Pension Plan contributions (Statutory) 659,944 634,762
Provincial payroll taxes (Vote 20) 535,107 509,187
Group disability and life insurance (Vote 20) 610,817 432,887
Employment Insurance premiums (Statutory) 285,759 272,083
Public Service Dental Care Plan (Vote 20) 279,270 258,821
Pensioners' Dental Services Plan (Vote 20) 136,980 129,135
Pension and other government employee benefits in respect of locally engaged staff employed in Canadian missions abroad (Vote 20) 106 55,646
Provincial health insurance plan premiums (Vote 20) 33,576 31,452
Québec Parental Insurance Plan premiums (Vote 20) 35,484 32,181
Public Service Death Benefit Account contributions (Statutory) 12,753 12,083
Public Service Pension Plan and Retirement Compensation Arrangement contributions in respect of actuarial deficits (Statutory) 6,200 6,200
Operating expenses (Vote 20) 3,375 5,627
Pension and similar payments to former government employees
(Vote 20 and Statutory)
3,684 3,626
Employment Insurance premium reduction (Vote 20) 2,092 1,645
Miscellaneous special payments (Statutory) 72 (470)
Total Expenses 6,193,519 5,920,640
Recoveries  
Employer's contributions to government employee benefit plans recovered from government departments and agencies (Statutory) 3,640,503 3,588,885
Employer's contributions to government employee insurance plans recovered from government departments and agencies (Vote 20) 184,421 174,059
Employee's contributions to the Public Service Health Care Plan recovered from government departments and other organizations (Vote 20) 171,806 136,419
Pensioners' contributions to the Pensioners' Dental Services Plan
(Vote 20)
69,733 61,508
Total Recoveries 4,066,463 3,960,871
Net Expenses before reclassified activities 2,127,056 1,959,769
Less: Reclassified activities (note11) 106 55,646
Net Expenses after reclassified activities 2,126,950 1,904,123

13. Accounting Changes

During 2011, amendments were made to Treasury Board Accounting Standard 1.2 – Departmental and Agency Financial Statements to improve financial reporting by government departments and agencies. The amendments are effective for financial reporting of fiscal years ending March 31, 2012, and later. The significant changes to the Secretariat's financial statements are described below. These changes have been applied retroactively, and comparative information for 2010–11 has been restated.

Net debt (calculated as liabilities less financial assets) is now presented in the Statement of Financial Position. Accompanying this change, the Secretariat now presents a Statement of Change in Net Debt and no longer presents a Statement of Equity.

Revenue and related accounts receivable are now presented net of non-respendable amounts in the Statement of Operations and Departmental Net Financial Position and Statement of Financial Position. The effect of this change was to increase the net cost of operations before government funding and transfers by $8,574 thousand for 2012 ($11,746 thousand for 2011) and decrease total financial assets by $4,891 thousand for 2012 ($1,965 thousand for 2011).

Government funding and transfers, as well as the credit related to services provided without charge by other government departments are now recognized in the Statement of Operations and Departmental Net Financial Position below “net cost of operations before government funding and transfers.” In previous years, the Secretariat recognized these transactions directly in the Statement of Equity of Canada. The effect of this change was to decrease the net cost of operations after government funding and transfers by $2,407,295 thousand for 2012 ($1,894,187 thousand for 2011).

14. Comparative Information

Comparative figures have been reclassified to conform to the current year's presentation.



Annex to the Statement of Management Responsibility Including Internal Control Over Financial Reporting
Treasury Board of Canada Secretariat
Fiscal Year 2011–12

Note to the reader

The Treasury Board Policy on Internal Control, effective April 1, 2009, requires departments to demonstrate the measures they are taking to maintain effective systems of internal control over financial reporting (ICFR).

As part of this policy, departments are expected to conduct annual assessments of their system of ICFR, establish action plan(s) to address any necessary adjustments, and attach to their Statements of Management Responsibility a summary of their assessment results and action plan.

Effective systems of ICFR aim to achieve reliable financial statements and to provide assurances that:

  • Transactions are appropriately authorized;
  • Financial records are properly maintained;
  • Assets are safeguarded;
  • Applicable laws, regulations and policies are followed.

It is important to note that the system of ICFR is not designed to eliminate all risks, rather to mitigate risk to a reasonable level with controls that are balanced with and proportionate to the risks they aim to mitigate.

The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess the effectiveness of associated key controls, to adjust them as required, and to monitor the system in support of continuous improvement. As a result, the scope, pace and status of those departmental assessments of the effectiveness of their system of ICFR will vary from one organization to the other based on risks and on taking into account their unique circumstances.

Table of Contents

1. Introduction

This document is the annex to the Treasury Board of Canada Secretariat's (the Secretariat's) Statement of Management Responsibility Including Internal Control Over Financial Reporting for the fiscal year 2011–12. It is the third annex prepared by the Secretariat following on those prepared in 2010–11 and 2009–10. As required by the Treasury Board Policy on Internal Control, effective April 1, 2009, this document provides summary information on the measures taken by the Secretariat to maintain an effective system of internal control over financial reporting (ICFR). In particular, it provides summary information on the internal control assessments conducted by the Secretariat as at March 31, 2012, including progress, results and related action plans along with some financial highlights pertinent to understanding the control environment unique to the Secretariat.

1.1 Authority, mandate and programs

The Secretariat is the administrative arm of the Treasury Board. The Treasury Board is a Cabinet committee of ministers invested with a broad range of responsibilities for management excellence, policy development, and budget and human resources oversight. The Secretariat supports Treasury Board ministers and strengthens the way government is managed to better serve Canadians and ensure value for money in government spending. The Secretariat achieves these objectives by:

  1. Fulfilling its responsibilities as a department and central agency of the federal government; and
  2. Making central payments and receiving revenues as the employer for government-wide public service pensions and benefits.

While both of these roles are important, the overwhelming majority of the expenditures, in these financial statements, relate to the central payments for pensions and benefits.

Detailed information on the Secretariat's authority, mandate and programs can be found in its Departmental Performance Report and in its Report on Plans and Priorities.

1.2 Financial highlights

Financial statements (unaudited) of the Secretariat for fiscal year 2011–12 can be found on the Secretariat's website. Information can also be found in the Public Accounts of Canada website.

Financial highlights of the Secretariat:

  • Government-wide funds and public service employer payments accounted for 86 per cent or $2.127 billion of total expenses ($2.469 billion). Public service employer payments relate to the Secretariat's role as employer of the core public administration. These funds are used for the public service pension, benefits, and insurance payments, including payment of the employer's share of health, dental, income maintenance, and life insurance premiums as well as payments to, or in respect of, provincial health insurance and other related costs. The Pension and Benefits Sector within the Secretariat manages most of these expenditures.
  • Parking fee revenue was $7.5 million or 61 per cent of total revenues ($12.4 million). These fees are paid by public servants across government for renting parking spaces in government-owned or -leased facilities. Public Works and Government Services Canada (PWGSC) revised its Custodial Parking Policy in February 2010, which requires public servants to arrange for their own parking and to pay parking fees directly to the parking lot operator. The change to the policy is being implemented on a site-by-site basis, and so the parking fee revenue recorded by the Secretariat will continue to decline over the next several years. The Secretariat continues to fulfill a central accounting function by recording all parking fees deposited by other government departments. These fees are deposited directly to the Consolidated Revenue Fund and are not available for re-spending by the Secretariat.
  • Accounts receivable related to other departments' shares of employee benefit costs account for 48 per cent or $164 million of total gross assets ($344 million). Also, accounts payable, which relate to adjustments for other departments' share of employee benefit costs, comprise 56 per cent or $262 million of total liabilities ($471 million). In addition, 25 per cent or $117 million of total liabilities ($471 million) are for end-year payables set up for the Public Service Health Care Plan (PSHCP), the Public Service Dental Care Plan (PSDCP) and the Pensioners' Dental Services Plan (PDSP). These significant payables and receivables result from the requirement for year-end adjustments to ensure the appropriate distribution of employee benefit costs to government departments.

1.3 Service arrangements relevant to financial statements

1.3.1 Secretariat reliance on other government service providers:

The Secretariat relies on other organizations for the processing of certain transactions that are recorded in its financial statements. These arrangements include but are not limited to:

Common Arrangements:

  • PWGSC centrally administers the payments of salaries and benefits, the procurement of some goods and services, as well as the provision of accommodations on behalf of the Secretariat.
  • The Department of Justice Canada provides legal services to the Secretariat.

Specific Arrangements:

  • PWGSC performs the day-to-day administration of the Public Service Pension Plan (PSPP).
  • The Office of The Chief Actuary within the Office of the Superintendent of Financial Institutions prepares a triennial actuarial valuation of the PSPP.
  • PWGSC performs the day-to-day administration of some centrally funded expenses such as the employer's share of Canada/Québec Pension Plan contributions, Employment Insurance premiums and provincial payroll taxes. These types of expenses are recorded on the Secretariat's financial statements as government-wide funds and are representative of the Secretariat's role as the employer of the public service.
1.3.2 Secretariat reliance on non-governmental service providers:

The Secretariat relies on the internal controls of a number of companies that provide specific services such as medical plan administration, dental plan administration, and insurance services.

1.3.3 Secretariat services upon which other departments rely:

Other government departments rely on the Secretariat for the processing of certain transactions or the provision of information that impacts their financial statements:

Common Arrangements:

  • The Office of the Comptroller General within the Secretariat provides all departments with a percentage ratio to be used when calculating their severance pay liability for purposes of their departmental financial statements.
  • The Secretariat provides all departments with a percentage amount that allows them to calculate an annual dollar figure for the services they receive without charge for the insurance benefit plans that are funded centrally.
  • The Secretariat provides all departments with details regarding the required calculation to determine the employer's share of Employee Benefit Plans (EBP). EBP include costs to the government for the employer's matching contributions and payments to the Public Service Superannuation Plan, the Canada and Québec Pension Plans (CPP/QPP), and the Death Benefit and Employment Insurance accounts.

Specific Arrangements:

  • The Secretariat provides corporate services to several departments including the Department of Finance Canada, the Privy Council Office, the Office of the Commissioner of Lobbying and the Canada School of Public Service.

1.4 Material changes in fiscal year 2011–12

Effective November 15, 2011, the responsibility for email, data centre and network services, including associated resources, was transferred from the Secretariat to Shared Services Canada (SSC) including the stewardship responsibility of the assets related to these functions, which had a total net book value of $6.2 million. The administration and delivery of these services were shared during the 2011–12 transition period while SSC was being established.

Effective January 1, 2012, the Secretariat transferred funding in the amount of $70.2 million to Foreign Affairs and International Trade Canada and to National Defence for the management of pension, insurance, and social security programs for locally engaged staff. The impact of this change is $55.5 million, which represents the year-over-year reduction in recorded expenses (actual expenses of $106,000 for 2011–12).

Treasury Board Accounting Standard 1.2 was recently revised and is effective for the preparation of the 2011–12 departmental financial statements. It requires the presentation of the departmental Net Debt in the Statement of Financial Position and the preparation of a new Statement of Change in Departmental Net Debt and the integration of the elements formally presented in the Statement of Equity with the Statement of Operations and Departmental Net Financial Position.

2. Control environment of the Treasury Board of Canada Secretariat relevant to ICFR

The Secretariat recognizes the importance of senior management leadership in ensuring that staff at all levels understand their roles in maintaining effective systems of ICFR and are well equipped to exercise these responsibilities. The Secretariat's objective is to continually improve its internal control environment using a risk-based approach and targeted resource investment so that the required level of effectiveness is achieved at a manageable cost.

2.1 Key positions, roles and responsibilities

Below are the Secretariat's key positions and committees with responsibilities for maintaining and reviewing the effectiveness of its system of ICFR.

Secretary

The Secretariat's deputy head, as accounting officer, assumes overall responsibility and leadership for the measures taken to maintain an effective system of internal control. In this role, the Secretary chairs the Secretariat Executive Committee and is a member of the Departmental Audit Committee.

Chief Financial Officer (CFO)

The Secretariat's CFO reports directly to the Secretary and provides leadership for the coordination, coherence and focus on the design and maintenance of an effective and integrated system of ICFR, including its annual assessment.

Assistant Secretaries and other Senior Departmental Managers

The Secretariat's senior departmental managers in charge of program delivery are responsible for maintaining and reviewing the effectiveness of the system of ICFR falling within their mandate.

Chief Audit Executive(CAE)

The Secretariat's CAE reports directly to the Secretary and provides assurance through periodic internal audits, which are instrumental to the maintenance of an effective system of ICFR.

Government of Canada Audit Committee (GCAC)

The GCAC is an advisory committee to the Secretary that provides objective views on the Secretariat's financial statements, risk management, control and governance frameworks. It is comprised of three external members, a deputy minister external to the Secretariat, and the Secretary of the Treasury Board. As such, it reviews the Secretariat's Corporate Risk Profile, its internal audit reports, and its system of internal control, including the assessment and action plans relating to the system of ICFR.

2.2 Key organization-wide controls in the Treasury Board of Canada Secretariat

The Secretariat's control environment includes measures and tools to help raise awareness and to develop employees' internal control knowledge and skill sets. These include:

  • A Secretariat Values and Ethics Office, which provides educational/awareness programs and which is currently drafting a departmental code of conduct;
  • A Secretariat Corporate Risk Profile that is updated annually;
  • A requirement for accounting designations in key financial management positions as well as a section within the Financial Management Directorate focused on ICFR;
  • Financial management policies as well as the documentation of its main business processes and related key risk and control points to support the management and oversight of its system of ICFR;
  • A risk-based internal audit plan;
  • A draft risk-based internal control framework for financial management including a multi-year monitoring plan, which is being applied and is subject to further review;
  • Training programs and regular communication to employees on core areas of financial and contracting management;
  • A regularly updated delegated authorities matrix; and
  • Secure financial and contracting IT processing systems to achieve enhanced security, data integrity, and efficiency and effectiveness of transactions.

3. Assessment of the Treasury Board of Canada Secretariat system of ICFR

3.1 Assessment approach

In support of the Policy on Internal Control, an effective system of ICFR has the objective to provide reasonable assurance that:

  • Transactions are appropriately authorized;
  • Financial records are properly maintained;
  • Assets are safeguarded; and
  • Applicable laws, regulations and policies are followed.

Over time, this includes assessment of the design and operating effectiveness of the departmental system of ICFR leading to ensuring the ongoing monitoring and continuous improvement of its departmental system of ICFR.

Design effectiveness

means to ensure that key control points are identified, documented and in place, and that they are aligned with the risks (i.e., controls are balanced with and proportionate to the risks they aim to mitigate) and that any remediation is addressed. This includes the mapping of key processes and IT systems to the main accounts.

Operating effectiveness

means that the application of key controls has been tested over a defined period and that any required remediation is addressed. Such testing covers all departmental control levels, which include corporate or entity, general computer and business process controls.

In the third fiscal year since the introduction of the Policy on Internal Control, the Secretariat continued to improve its approach to assessing internal controls. As the Secretariat follows a risk-based approach to assessing internal controls over financial reporting, it continued to look at the largest programs impacting the financial statements.

As part of its annual assessment, the Secretariat completed the following:

  • Reviewed existing documentation from internal sources and external sources (e.g., other departments, insurance companies) as part of the ongoing assessment of evolving internal controls design;
  • Conducted meetings internally with key program managers to discuss internal controls and also met with external stakeholders (e.g., other departments, insurance companies);
  • Completed more detailed design effectiveness testing for the PSPP, the PSHCP, the Disability Insurance Plan (DI) and the CPP/QPP payments, and made recommendations to strengthen certain internal controls in these plans. The PSHCP (net of recoveries of $171.8 million) and DI plans represent $984.6 million or 46 per cent of the government-wide funds and public service employer payments ($2.127 billion). The PSPP and CPP/QPP payments are recovered from other departments and represent $3.4 billion on a gross expenditure basis (amounts are expensed and then recovered); and
  • Continued the mapping of the key internal controls for the PSDCP.

The Secretariat also took into account information from relevant audits and assessments including the following internal audit reports (which are hyperlinked):

3.2 Assessment scope

The business processes within the Secretariat are grouped into two categories: 1) those that concern the Secretariat as a department and 2) those that concern the Secretariat in its role of managing government-wide funds and public service employer payments.

Business processes for the Secretariat as a department are as follows:

  • Operating Expenses including Procurement
  • Payroll and Benefits
  • General Computer Controls
  • Financial Reporting and Closing Cycle
  • Budgeting and Forecasting

Business processes for the Secretariat as the manager for government-wide funds and public service employer payments are as follows:

  • Pension Payments
  • Insurance Benefit Plans
  • Employee Benefit Plan Recoveries
  • Parking Revenue

In 2010–11, the Secretariat focused on business processes associated with its role as the manager of government-wide funds and public service employer payments. The assessments of the design effectiveness of internal controls for the PSPP, the PSHCP and the DI began during 2010–11 and were completed during 2011–12. The design effectiveness assessment involved identifying the specific risks, the related internal controls as well as whether the controls were effective at mitigating the specified risks.

4. Assessment results

In assessing its key controls, the Secretariat assessed design effectiveness for its government-wide pension and employee benefit plans and conducted operational effectiveness testing for departmental business processes.

4.1 Design effectiveness of key controls

The Secretariat conducted in-depth design effectiveness testing on the PSPP, the PSHCP and the DI. The Secretariat identified those controls that were effectively designed and those that were missing or required improvement. The Secretariat began implementation of the corrections, and this will be continued into 2012–13. As a result of these assessments, the Secretariat identified the need for remediation in the following areas:

Governance and Oversight:

  • Clarification of the governance structures and management oversight around the DI.
  • Clarification of the role of the Secretariat in regards to its oversight and financial advisory roles as related to the PSPP.

Information and Communication:

  • Enhanced communication and information sharing internal to the Secretariat between the Financial Management Directorate and the Pension and Benefits Sector to ensure a common understanding of roles and to improve financial management oversight.

Financial Analysis:

  • Improved financial analysis as part of the quarterly review process for the DI.

Documentation of Controls and Evidence of Controls:

  • Enhanced review of charges incurred through interdepartmental transfers from PWGSC.
  • Improved verification of the accuracy of payments made to the plan administrator related to the DI.
  • Improved implementation of recommendations arising from the internal audit report and also for external audits/reviews related to the DI.

Accounting:

  • Review of accounting treatments for various elements of the PSHCP and the DI in the departmental financial statements.

4.2 Operating effectiveness of key controls

In 2011–12, the Secretariat conducted operating effectiveness testing on regular and priority payments for departmental goods and services transactions. The assessment covered a one-year period from November 1, 2010, to October 31, 2011. A representative sample of transactions was reviewed to determine if the key control activities were operating effectively. The assessment identified that the majority of controls were operating effectively. There were two controls that required remediation, and the responsible organizational unit made the required changes.

5. Action plan

Efforts in fiscal year 2012 focused on the various pension and insurance benefit programs operated and administered by the Secretariat. This emphasis will continue through 2012–13 and 2013–14 due to the complexity and number of insurance plans involved. In addition, the Secretariat will continue to expand the operating effectiveness testing of internal controls.

5.1 Progress in 2011–12

During 2011–12, the Secretariat continued to make significant progress in assessing and improving its controls. Below is a summary of the main progress made by the Secretariat:

Overall, the Secretariat completed the following activities that were planned in the 2010–11 Annex for ICFR:

  • Initiated the planning for an internal audit of the process for settling interdepartmental charges, which will be completed in 2012–13.
  • Introduced a draft of a comprehensive Risk-Based Internal Control Framework and a three-year internal control monitoring plan, which will be updated annually.
  • Developed a draft Financial Management Framework, which seeks to formalize an approach that is, for the most part, already in place.
  • Acquired Caseware IDEA software, which assisted the Secretariat to conduct testing of operating effectiveness and which will assist in monitoring activities scheduled in the multi-year monitoring plan.

In addition, the Secretariat completed the following activity, which had not been planned:

  • Implemented corrective action to strengthen the information technology system controls based on observations made by the Office of the Auditor General during the 2010–11 Public Accounts audit.

As a department, the Secretariat completed the following as planned:

  • Increased the level of business process mapping by detailing the procurement to payment process and the payroll and benefits process. These mapping processes will identify the key controls that will be tested as part of the multi-year monitoring program. In addition, the mapping provides opportunities for identifying areas to improve efficiencies.
  • Created new general ledger expenditure object coding to provide more detailed information for departmental management and Parliament. In addition, completed work on the development of an expenditure code dictionary to assist users in selecting the proper code. A communication strategy has been launched to advise administrative assistants and fund centre managers about the dictionary.
  • Developed draft acquisition card management procedures that will address roles and responsibilities around acquisition card management. The procedures will also form the basis for training sessions to employees and follow up monitoring.

As the manager of government-wide funds and public service employer payments, the Secretariat reviewed the processes and control activities for the following programs:

  • As planned, the Secretariat completed the internal control assessments, developed recommendations for, and began the implementation of, corrective action for the PSPP, the PSHCP and the DI.
  • As planned, the Secretariat completed an internal audit of the management control framework for the PSPP, and a management action plan was developed and actions were initiated to address the recommendations.
  • As planned, the Secretariat advanced the mapping and assessment of the internal controls around the PSDCP and, as part of this process, implemented some additional internal controls.
  • Completed the mapping and internal controls assessment around the CPP and QPP contributions, and initiated the mapping of the internal controls for the provincial payroll taxes and Employment Insurance premiums.
  • Developed a framework for the insurance benefit plans that highlights forecast assumptions, sensitivity analyses and roles and responsibilities of various stakeholders in developing the framework. The framework supports the funding requirements for the insurance benefit plans and will be provided to the Expenditure Management Sector and the Department of Finance Canada.

5.2. Future years

In 2011–12, the Secretariat's focus was on the various government-wide pension and insurance benefit plans operated by the Secretariat. This will remain its primary focus over the next three years as the internal controls are assessed, strengthened and tested for operational effectiveness.

By end of 2012–13:

Overall, the Secretariat plans to:

  • Complete the internal audit of the interdepartmental settlements process.
  • Finalize the comprehensive risk-based internal control framework and three-year internal control monitoring plan and promulgate them throughout the Secretariat.
  • Finalize the Financial Management Framework and promulgate it throughout the Secretariat.
  • Expand its internal control monitoring by increasing the use of its data analysis software.

As a department, the Secretariat plans to:

  • Complete a test of operating effectiveness on travel, hospitality and acquisition card charges.
  • Complete the final validation of the Procure to Pay business process and the Payroll and Benefits process in preparation for operational effectiveness testing in 2013–14.

As the manager of government-wide funds and public service employer payments, the Secretariat plans to:

  • Complete the mapping and assessment of the internal controls around provincial payroll taxes, Employment Insurance processes and the PSDCP.
  • Continue with the implementation of the design effectiveness recommendations around the PSPP and the DI.
  • Validate observations and related recommendations concerning the design effectiveness testing of the PSHCP with key stakeholders.
  • Initiate the mapping and assessment of internal controls around the PDSP and the Service Income Security Insurance Plan.
  • Initiate the mapping and assessment of internal controls around asset management including the capitalization, depreciation and amortization of assets.
  • Initiate the internal audit of the Secretariat's Management Control Framework of the PSHCP.
By end of 2013–14

Overall, the Secretariat plans to:

  • Complete the audit of the Secretariat's Management Control Framework of the PSHCP.
  • Initiate an internal audit of IT Security, which will be completed in 2014–15.

As a department, the Secretariat plans to:

  • Conduct operational effectiveness testing on the Procure to Pay and Payroll and Benefits processes.

As the manager of government-wide funds and public service employer payments, the Secretariat plans to:

  • Complete the mapping and assessment of internal controls around the PDSP and the Service Income Security Insurance Plan.
  • Complete the mapping and assessment of the internal controls around the Québec Parental Insurance Plan and the provincial health plans.
  • Initiate the mapping and assessment of the internal controls around the Public Service Management Insurance Plan.
  • Initiate the mapping and assessment of the internal controls around the Supplementary Death Benefit Plan.


Footnotes

Return to footnote reference [1]  For a definition of “deputy head” see the Public Service Employment Act, subsection 2(1).

Return to footnote reference [2]  As of April 1, 2012, refinements to the Policy on Management, Resources and Results Structures took effect. As a result, the title “Performance Activity Architecture” was changed to “Performance Alignment Architecture.”

Return to footnote reference [3]  Further information regarding Votes 5, 10, 25, 30 and 33 can be found in the 2012–13 Estimates.

Return to footnote reference [4]  This refers to the 16 Government of Canada outcome areas in the whole-of-government framework.

Return to footnote reference [5]  Further information regarding Votes 5, 10, 25, 30 and 33 can be found in the 2012–13 Estimates.

Return to footnote reference [6]  The word “departments” is used as defined in the Financial Administration Act.

Return to footnote reference [7]  Once this policy is approved, it will apply to all departments listed in Schedules I, I.1 and II of the Financial Administration Act, with the exception of the Canada Revenue Agency. It also applies to a Commission established pursuant to the Inquiries Act that is designated as a department for the purposes of the Financial Administration Act through an order-in-council.

Return to footnote reference [8]  Further information regarding Votes 5, 10, 25, 30 and 33 can be found in the 2012–13 Estimates.