ARCHIVED - Audit of the Treasury Board of Canada Secretariat Governance Framework

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3. Audit Results

Each area of focus was assessed against audit objectives and related audit criteria. The audit results are presented by area of focus (an overall rating for each audit objective and criterion is presented in Appendix 1).

Detailed audit results in support of this conclusion are presented by audit objective. 

Management office role

To deliver on the Government of Canada’s management agenda, the Secretariat promotes improved management performance as well as develops policies and sets priorities to support prudent and effective management across government.

We found that the governance structure strongly supports the Secretariat’s mandate and priorities relating to the management office role.

In our review of governance committee agendas, we found evidence of the management office role reflected in POC agendas. It represented 65 per cent (59 out of 91) of all items brought before the committee.

POC was successful in progressing key priorities such as policy suite renewal, the lessening of the web of rules and reporting burden, MAF improvements and public service renewal. Each of these priority areas has a direct impact on the strategic and day-to-day management priorities across all departments and agencies in the public sector. In addition, 75 per cent of the governance committee executives surveyed agreed that the governance structure supported the Secretariat’s mandate and priorities relating to the management office role. 

Budget office role

One of the Secretariat’s main functions is to manage and oversee government expenditures and recommend Treasury Board approval of government departments’ spending plans. The budget office role promotes good financial management practices across government to ensure that financial activities are carried out effectively and efficiently.

We found that the current governance structure supports, in most aspects, the Secretariat’s mandate relating to Treasury Board’s budget office role. POC was instrumental in progressing key policies and guidance in this area. For example, during the period under audit, POC reviewed and recommended for approval a number of initiatives, including renewal of the Office of the Comptroller General’s Financial Management Policy Suite.

In our review of governance committee agendas, we found that 30 per cent (27 out of 91) of all items brought before POC were related to Secretariat activities that support Treasury Board’s budget office role. In our survey of the governance committee executives, 70 per cent of respondents agreed that the priorities related to this area were supported by the governance framework. Executives who disagreed, however, indicated that the focus on the management office agenda crowded out budget office issues, which had an impact on strategic discussion in this area. EXCO members also shared this view. During our working session on governance, they identified a need for the Secretariat to take a more strategic approach to the management of priorities through improved overall committee strategic planning and individual committee management of agendas and forward agendas.

People management role

The Secretariat is responsible for supporting efforts across the federal public service to achieve strong leadership and a well-managed workforce and workplace.

The responsibilities for this function were split between the Secretariat and the Canada Public Service Agency (CPSA) prior to its integration into the Secretariat through the creation of the Office of the Chief Human Resources Officer (OCHRO) on March 2, 2009. OCHRO’s responsibilities include the business and policy functions of the former CPSA and the functions within the Secretariat dealing with pensions and benefits, labour relations and compensation. Given these responsibilities and its current engagement with renewal of the HR policy suite, integrating OCHRO into the Secretariat’s governance structure has been an important focus in recent months.

In assessing the extent to which the governance structure supports the people management role, the audit team reviewed the work of POC because of the formal support it provides to the people management role. For the period under audit, the governance structure was mostly effective in supporting the Secretariat’s mandate and priorities relating to the people management role. People management issues made up only 5 per cent (5 out of 91) of the items on POC’s agenda, which was partially due to the fact that for much of the period under audit, the former CPSA was responsible for key aspects of the government’s people management priorities. According to our survey of governance committee executives, which was concluded 4 months after the creation of OCHRO was announced, 42 per cent of respondents indicated that the Secretariat’s governance structure supported the people management role. The executives who disagreed felt that there was a greater degree of emphasis placed on issues related to the management office role than on those involving people management.

Results of the working session on governance confirmed that, while POC is the appropriate committee to deal with people management issues, there is a need for more strategic management of people management priorities through enhanced committee strategic planning and management of committee agendas and forward agendas.

Program Activity Architecture (PAA)

In early 2009, Secretariat senior officials reviewed the current PAA and its alignment with the governance structure. All sectors were involved in the endeavour, helping to shape and develop the revised PAA. Drafts of the revised PAA were presented to the various committees for comment. The revised PAA was approved by SEC and was subsequently presented to EXCO to ensure that all sectors were informed of the changes and final approval of the new PAA. The committee structure is aligned with the new PAA as follows:

• POC’s mandate supports the program activities of the Secretariat’s PAA related to the Treasury Board’s management office role, budget office role and people management role; and
• MIC’s mandate supports the internal services program activity and the MIC subcommittees support the PAA’s internal services subactivities. 

Based on analysis of the current committee structure against the new PAA, it was determined that the governance framework remains aligned with the PAA.

Detailed audit results in support of this conclusion are presented by audit objective. 

Strategic direction

The Secretariat’s strategic direction is established and clearly articulated in its Report on Plans and Priorities (RPP) and supported by the following key documents:

• Treasury Board of Canada Secretariat Human Resources Strategy 2008–11
• Government of Canada Management Agenda
• Towards Management Excellence – Treasury Board Secretariat Strategic Direction^[3]

The Secretariat’s strategic direction is well understood throughout the Secretariat:

• 83 per cent of the governance committee executives surveyed indicated that they were clear about the Secretariat’s strategic direction; and
• 72 per cent of employees indicated that they could clearly explain the Secretariat’s direction to others, according to the results of the 2008 Public Service Employee Survey.

Overall, the mechanisms used for putting the strategic direction into practice are effective. Further integration of business and HR planning, through implementation of the IBP, would enhance strategic alignment.

Integrated planning process

The Secretariat’s IBP, a tool meant to complement the RPP^[4] and consolidate all sectors’ objectives into one planning document, was still under development during the audit period. The implementation of an IBP is in line with best practices recommended by the Privy Council Office in its December 2008 Report of the Expert Panel on Integrated Business and Human Resources Planning in the Federal Public Service. The integrated planning cycle (illustrated in Appendix 3) demonstrates how the various components of business planning work in tandem.

Examination of the various components of the integrated planning cycle revealed the following: HR planning was integrated into the sectors’ business planning process; PMAs had clear linkages to the operational strategic goals articulated in the RPP, the Change Agenda, the EXCO Charter and the Management Agenda; and the sectors’ plans demonstrated linkages with the strategic direction.

In our review of HR planning, linkages between the sectors’ HR plans and the Secretariat’s HR priorities were found; however, these linkages could be strengthened with greater integration of the sectors’ business and HR plans into the overall strategic direction.

Champions

Champions are a key mechanism for promoting Secretariat-wide initiatives that are not necessarily part of the integrated planning process.

• 75 per cent of survey respondents recognized their benefit.
• Champions provide leadership on a number of initiatives, including the official languages action plan, the values and ethics initiative and the Economics and Social Sciences Classification Conversion Project. 
• The effectiveness of champions was demonstrated by the following:
  • Of the 17 champions, 10 presented at either SEC or EXCO;
  • 12 have an InfoSite presence (with varying degrees of information); and
  • All 17 used InfoSite to disseminate information to Secretariat employees. 

Based on analysis of the key implementation mechanisms, it was determined that these mechanisms are aligned with the strategic direction.

Overall, the processes used to ensure the proactive management of key strategic decisions are determined to be fully effective. Specifically, feedback from stakeholders, the use of accurate, timely and relevant information, and the ability to adapt to changes were considered in making this determination. Each is discussed below.  

Feedback from stakeholders

The following demonstrated senior management’s consideration of feedback from internal and external stakeholders:

• The Secretariat’s priorities were discussed at EXCO and EX staff retreats and at meetings of the main governance committees (SEC, MIC, POC and DCC).
• An external environmental scan, which studied local and global factors that could affect the Secretariat, was conducted as part of the integrated planning cycle.
• A Corporate Risk Profile, which provides key input for the planning cycle, was developed in collaboration with all sectors through the use of the Risk Coordinators’ Group.^[5]
• Risk mitigation strategies were tracked using the Quarterly Tracker and progress on mitigation measures was collected and reported on a quarterly basis. 
• Planning Net, a working group with representation from all sectors, was used to ensure the continuous communication of planning-related activities. 

Use of accurate, timely and relevant information

According to the results of the governance survey, 73 per cent of EXCO members and
57 per cent of non-EXCO members agreed that the information they received prior to committee meetings was accurate, timely and relevant to their decision-making needs. Analysis of survey comments and follow-up discussions with senior management indicate that communication, not the quality of the information received, is a concern. Communication is further discussed in section 3.3.1 of this report.

Ability to adapt to changes

A measure of adaptability is the extent to which issues are managed proactively. In this regard, 58 per cent of the governance committee executives surveyed agreed that key strategic issues, such as those articulated in the RPP and HR Strategy, were managed in a proactive manner. Further, to better support the Secretariat’s role in implementing Canada’s Economic Action Plan, a temporary committee of senior executives, chaired by the Associate Secretary, was formed to meet regularly and discuss emerging issues and priorities.

Detailed audit results in support of this conclusion are presented by audit objective. 

Overall communication of decisions and decision-making processes is strong at the EXCO level, though could be improved below the EXCO level.

Communication – EXCO

The governance framework supports effective communication of decisions and decision-making processes among EXCO members.

• 73 per cent of EXCO members surveyed felt that decisions were effectively communicated.
• EXCO members receive weekly debriefs of deputy minister–level committee deliberations and Secretariat governance committee decisions and issues. 

Communication – below the EXCO level

In contrast, communication of decisions below the EXCO level is not as effective.

• According to the results of the 2008 Public Service Employee Survey, 45 per cent of Secretariat employees agreed that communication effectively flowed from senior management.  
• 52 per cent of non-EXCO respondents to the governance survey felt that decisions were effectively communicated.

The key methods used for informing Secretariat employees of senior management decisions are:

• EXCO debriefs – Assistant secretaries disseminate information received at EXCO meetings to their direct reports at their respective management meetings, and the information is then filtered downward to staff; and
• Corporate communications – The Corporate Communications branch of the Strategic Communications and Ministerial Affairs Sector disseminates information through TBS In-Brief email announcements and postings on InfoSite, the Secretariat’s intranet site.

Dissemination of the information received through EXCO varies from sector to sector and is dependent on the individual EXCO member’s efforts to communicate the information to his or her respective staff. In addition, the terms of reference for EXCO includes a no substitute clause, which affects the dissemination of information when an EXCO member is unable to attend meetings.

Key decisions with Secretariat-wide impacts are usually communicated to employees through TBS In-Brief emails and postings on InfoSite. Several key governance committees, such as POC, MIC, CMC and MIC IM/IT, post their terms of reference, membership lists, agendas and records of discussion on InfoSite. The posting of records of discussion, however, is not always done in a timely manner. 

Clarity of roles and responsibilities

Overall, clear roles, responsibilities and procedures are established for the individual governance committees. Terms of reference exist for all committees; some of the committees post theirs on InfoSite. Authority for decision making is generally described in the terms of reference and is consistent with practices described in the records of discussion. The EXCO Charter clearly describes the committee’s principles and the behaviours expected of its members. EXCO members revalidated and re-signed their Charter in October 2009. 

The work performed by P&P’s Committee Secretariat has contributed to the overall clarity of roles, responsibilities and procedures. The Committee Secretariat produced Executive Committees – Summary of Protocols and Procedures, which contains clear and comprehensive administrative procedures, standard templates for agendas and presentation decks, and committees’ terms of reference.

Attention to the following could serve to further clarify roles, responsibilities and procedures:

• SEC’s function is not described on InfoSite, even though it is considered to be a key governance committee.
• The information found on InfoSite about POC’s and MIC’s responsibilities is inconsistent with documentation stored in the Records/Document/Information Management System (RDIMS).
• POC’s level of authority is unclear among some stakeholders.
• The process for reporting MIC subcommittee outcomes to MIC is not clear.

Overall, the decision-making process demonstrates due regard for efficiency, and the general perception among senior managers is that their time is used efficiently. More effective use of DCC and MIC subcommittees would enhance overall efficiency.

Use of senior management’s time

According to the governance survey, EXCO members allocated on average 20 hours per month to committees and non-EXCO members allocated 12 hours per month.

• 55 per cent of survey respondents felt that their time was used efficiently for committee work.
• 65 per cent of respondents agreed that they took the right amount of time to review and approve strategic decisions, while 20 per cent disagreed. The respondents who disagreed indicated that committees are challenged with time constraints, leaving insufficient time for discussion and review of certain agenda items. 

Efficiency of interrelationships between committees

In both survey responses and discussions with senior management, there was a general sense that DCC is not adequately leveraged. Senior management recognized the value that an effective and efficient DCC could bring to the governance framework, pointing out that DCC consultation generally resulted in more refined and better developed products. However, DCC advice is inconsistently incorporated into presentations that were subsequently tabled before assistant secretary–level committees. Moreover, issues raised at DCC meetings were inconsistently communicated to senior management. As a result, discussions did not leverage previous consultations, contributing to the inefficient use of executive management and directors’ time.

Assistant secretaries also indicated that the quantity of information received by POC could be reduced if the work performed by DCC were better leveraged, which would contribute to a more efficient use of POC members’ time.

In terms of other committees feeding into the senior-level governance structure, there was a general sense that the survey’s respondents are not fully aware of the mandate or role of these committees. For example, MIC subcommittees are seen to be relevant and to add value, although only 41 per cent of the governance survey respondents felt that they led to more effective and efficient MIC deliberations while 38 per cent did not know. While these results do not provide assurance regarding the efficient use of these committees, they indicate that further consideration in this area may be needed. 

Overall, the extent to which risk is appropriately considered in the strategic-level decision-making process is deemed somewhat effective. Opportunities for improvement exist, specifically regarding the integration and discussion of risk across the committees.

During our audit examination, we observed that the Secretariat was considering risk from three different perspectives: at the organization-wide level, at the sector-wide level and at the committee decision-making level. Consideration of risk at the transactional or operational level was not examined, as this was outside the audit’s scope.

Risk at the organization-wide and sector-wide levels

From an organization-wide perspective, the Secretariat has made progress with the development of the Corporate Risk Profile, which has evolved since its inception three years ago. Development of the Corporate Risk Profile involved input from all sectors through the Risk Coordinators’ Group and discussion at several governance committee meetings, including GCAC. The Quarterly Tracker has been used to track the progress of mitigation strategies against the risks identified in the Corporate Risk Profile. At the sector-wide level, risks and mitigation strategies were identified in the sectors’ business plans.

Risk at the committee level

From a committee-level perspective, the integration of risk into decision making is not consistently practiced across committees. POC is the only committee for which there is consistent evidence of risk’s integration into discussions. Some members of senior management singled out POC’s approach as a best practice, given the high calibre of presentations submitted for discussion. This view was supported by our review of POC presentation material, in which we observed risks and mitigation strategies outlined. The most recent POC template clearly requires that risk be identified for any policy renewal issue to be presented before POC.

Generally, no evidence of the integration of risk into decision making was found in our review of the records of discussion of the other committees. Our interviews with senior managers revealed that they perceive risk considerations to be implicit rather than explicit. The results of the governance survey support this perception: 33 per cent of respondents agreed that risk considerations were either formally or informally presented and/or discussed in the decision-making process (among the EXCO members surveyed, 33 per cent disagreed with this statement) and 22 per cent of respondents agreed that the Corporate Risk Profile was specifically considered when senior management made key strategic and operational decisions.

Detailed audit results in support of this conclusion are presented by audit objective. 

Effective oversight bodies are established (see Section 1.2 of this report) and accountability for decision making is communicated. However, more work is required to ensure that the processes and accountabilities of key governance committees such as SEC, EXCO and POC are clearly understood.

Establishment of oversight bodies

Our review of committee agendas and records of discussion showed evidence of regular meetings on topics both relevant to the Secretariat’s mandate and priorities and consistent with the committees’ respective mandates and terms of reference.

The senior committees, SEC and EXCO, were very much involved in the review and approval of day-to-day internal management issues related to the operation and management of the Secretariat as well as in areas that support the Secretariat’s mandate.

The following table shows the number^[6] of agenda items for the period under audit, which was between January 1, 2008 and June 30, 2009, categorized by each of the Treasury Board’s mandate areas and by the Secretariat’s internal management topics.

Agenda Items of the Secretariat’s Committees

Committee	Number of agenda items by mandate area			Number of internal management agenda items[7]
	Management office role	Budget office role	People management role
SEC	17	12	3	102
EXCO	4	1	3	95
MIC	0	1	0	53
MIC HR	1	0	0	49
MIC   Accommodations	0	0	0	8
MIC IM/IT	0	0	0	33
POC	59	27	5	17
CMC	0	0	0	44
SHRC	0	0	0	26
DCC	34	12	7	29
Total	115	53	18	456

Because PSAS and PDG were partially included in the audit’s scope, the agenda items of these program sector–specific committees were examined to find evidence of linkages with the main governance committees. Analysis of their agenda items demonstrated that linkages exist. Specifically, PSAS’s agenda contained 18 management office role items and 18 budget office role items, and PDG’s agenda contained 22 management office role items and 19 budget office role items. Thus, PSAS and PDG are active in providing input on topics that are relevant to the main governance committees. 

As GCAC–Stream 1 and the Evaluation Committee were also partially included in the audit’s scope, their agenda items were examined to determine whether linkages to the other governance committees exist. The results of this analysis are as follows:

GCAC–Stream 1 handled 34 agenda items during the audit period, not including agenda items related to the committee’s administration. Of the 34 agenda items, 5 had linkages to other governance committees. Specifically, 3 agenda items concerned the Secretariat’s Corporate Risk Profile, 1 dealt with Corporate Services transition, and 1 involved Canada’s Economic Action Plan.

The Evaluation Committee handled 21 agenda items, not including agenda items related to the committee’s administration. Of the 21 agenda items, there was 1 linkage to the other governance committees. Specifically, it involved the Secretariat’s Program Activity Architecture.

Effectiveness of oversight bodies

Overall, the results of our survey were positive with respect to senior management’s view of the governance structure and its effectiveness: 78 per cent of respondents felt that the Secretariat’s governance structure was effective, and 83 per cent thought that the committees added value to the overall governance process.

Communication of accountabilities

Information on the governance structure and the committees’ accountabilities is available to all Secretariat employees through InfoSite. The governance section of InfoSite contains comprehensive information on POC, MIC and CMC and provides varying degrees of information on EXCO and the MIC subcommittees. The fact that information on the governance structure is available was reflected in our survey results. All of the EXCO members and 76 per cent of the non-EXCO members surveyed indicated that they understood their accountabilities and responsibilities within the governance structure.  

We found that most governance committees track and monitor decisions by maintaining committee records of discussion and forward agendas.   

Committee records of discussion

All governance committees maintain records of discussion with the exception of SEC and EXCO, the two main decision-making bodies.

We found that while SEC’s discussions are not formally documented, its key decisions are verbally communicated at EXCO meetings. We also found that EXCO does not maintain records of discussion. While EXCO is mainly an information-sharing committee, it did, on occasion, make final decisions on issues referred to it by main governance committees such as POC, MIC and CMC. 

DCC did not maintain records of discussion during the period under audit. However, as a result of the POC Moving Forward self-assessment exercise, DCC now maintains records of discussion, which are expected to be posted on InfoSite.

Committee agendas and forward agendas

We found that committees use forward agendas to track and monitor items for future meetings; however, discussions with senior management revealed that forward agendas could be improved as useful tools for strategic planning and consultation.

Management’s assessment of committee decision-making processes

The Committee Secretariat’s ongoing analysis and assessment of committee processes, procedures and membership have contributed to the overall effectiveness of the governance structure. For example, in the fall of 2009, the Committee Secretariat developed the integrated committee planner, a tool to track agenda items as they progress through the various committees toward approval.

In addition, POC and MIC undertook self-assessment exercises in the past year, which focussed on improving decision-making processes and committee effectiveness. Incorporating self-assessments into the ongoing activities of all committees would enable continuous improvement of the governance framework.  

Overall Conclusion

The Assurance Statement presented at the outset of this report provides details regarding the audit methodology and the level of assurance for this conclusion.

Audit Recommendations

It is recommended that the Secretariat:

1. Implement mechanisms to further enhance governance committee planning, with emphasis on stakeholder engagement, forward agenda management and linkages among the various committees;

2. Improve overall communication of senior management decisions to Secretariat staff with emphasis on the following:
   • Improving Executive Committee (EXCO) members’ communication to staff of EXCO discussions and debriefs; and
   • Maintaining up-to-date records of discussion for the committees that currently have information posted on InfoSite;

3. Revisit the role of the Directors Coordinating Committee (DCC) and its relationship to the senior-level governance committees with a view to enhancing the efficiency, effectiveness and communication DCC outcomes; and

4. Continue the integration of risk management principles into the governance framework to ensure that risk is adequately considered in the decision-making process.

A management action plan has been developed by the Secretariat and is presented in Appendix 2. 

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