Senior Financial Officers Conference

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Notes for an Address by

Ronald Bilodeau
Associate Secretary to the Cabinet and 
Deputy Clerk of the Privy Council

Cornwall, Ontario
November 17, 2000

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Introduction

  • Ladies and gentlemen it is a pleasure to be with you this morning.
  • I know that the Clerk of the Privy Council had wanted to be here himself, but unfortunately his schedule would not permit him to attend.
  • He does send his regrets.
  • Financial management is always a challenge but clearly the last few months have been a challenging time for those in financial management.
  • It is very positive to hold a meeting like this to discuss the issues and areas that you have a common interest in.
  • This year, the administrative problems brought to light by the Human Resources Development Canada audit have had a direct impact on each and every one of our departments and agencies.
  • The audit raised many questions and we have all had to take a closer look at the way that we do business.
  • But even without the Human Resources Development Canada audit, several of the financial management issues should be on the front of the agenda.
  • Modern comptrollership is the foundation of our new management model, a model that should integrate human and financial resources.
  • I would like to address four issues that are being debated presently and that I am sure you will have talked about one way or another during this session and that your staff would have talked about at the Full-Time Financial Officers Conference a few weeks ago.
  1. The first is how best to strike a balance between "service" and "control."
  2. The second issue is whether modern comptrollership does the job for us in its present form.
  3. The third is do we have a suitable policy framework to manage risk taking.
  4. The fourth is human resources and people issues.

I.  Striking a Balance between Service and Control

  • Let us start with the balance between service and control: Canadians are paying closer and closer attention to the how and why of government spending.
  • Debate continues in society and in political circles concerning the level of government spending. It is a legitimate debate.
  • No matter what the established level of spending, financial administration has always been the subject of debate, but for some time now, levels and types of spending have provoked even more intense discussion.
  • As senior officials in the public service, it is your responsibility to ensure that the funds made available to your departments are well managed and produce results.
  • This work is essential to maintain public confidence in the government.
  • When we look at government spending on programs and services we need to keep many things in mind.
  • We need to ensure that spending is for properly authorized purposes and is legal. This is basic.
  • We need valid estimates of costs and time-frames for cash-flow and financial requirements.
  • We need to choose the right form of spending (is it through a grant, a contribution, or a contract, or is it for a partnership or for an internal operating budget).
  • We need to ensure that the programs or services being offered are sufficiently developed and will have a positive impact. Spending before we are ready can be a problem.
  • Canadians have a right to expect programs to be delivered in an efficient, cost-effective and reliable manner.
  • The Government of Canada should be known and respected for the level of client satisfaction it provides and for efficiency of operation.
  • As we strive to provide efficient service and to satisfy clients we cannot lose sight of the need for fairness, equity and impartiality. The clearer we are up front on how we will spend, the greater is the chance of avoiding error or inefficiency later.
  • We need to ensure that we have the right systems - and people - in place to guarantee clear accountability, due diligence and sound stewardship.
  • The issue for us is whether we believe our present system is tilted toward service to such an extent that this makes a genuine and essential level of control difficult to apply. Do we face the risk, as a senior deputy said recently, of going back to Pre-Glassco days with ex-ante controls?
  • I would like to hear your views on these topics.

II.  Modern Comptrollership

  • The second issue is whether modern comptrollership does the job for us in its present form.
  • As senior financial officers, you face this issue in your work on a regular basis.
  • You are the experts. No spending can occur without your formal approval.
  • We keep hearing that we have to continue to move away from rigid control structures to a more flexible system that will allow for better client-service and efficiency and, at the same time, and usually from the same people, we hear that improving financial management is a priority.
  • The efforts to modernize comptrollership are based on the idea that integrated resource management - human and financial - is required so that taxpayers dollars are administered responsibly.
  • It is also about improving our ability to make decisions - putting the right information and tools into our staff's hands and accounting for results to the public.
  • Obviously, modern comptrollership is an important undertaking that requires effort across a broad spectrum.
  • One question I have is whether the tool box to manage our finances is full enough to do the job? Do we have the right tools for this modern day? Do we have the right people and, dare I ask, do we have enough people?
  • For 35 years, successive reports and commissions have been telling us that our accounting practices are not as effective as they should be.
  • Financial systems have not linked to operational, financial and human resources data in such a way that program and other costs can be determined.
  • Do we know enough about our costs of doing business. Can we compare our costs between departments or with outside organizations?
  • Our financial management must be supported by high quality performance information, effective control systems and risk management framework and sound values and ethics.
  • The government is moving from cash-oriented to accrual-oriented accounting. By doing so, financial information will more accurately reflect costs of programs, the value of the government's assets.
  • It will improve our ability to compare costs with results. This is an important and fundamental step forward.
  • Also, I ask if we use the audit function appropriately? Are we able to implement audit reports in a timely fashion? Is there enough discussion at management tables?
  • Should the Comptroller General propose a tighter, less episodic framework for auditing our books? I understand Rick Neville talked to you yesterday about an active monitoring action plan.

III.  A Suitable Policy Framework to Manage Risk Taking

  • My third issue is do we have a suitable policy framework to manage risk taking.
  • All governments are pressing ahead on developing new frameworks that are encouraging people to manage risk rather than avoid it.
  • The Public Service of Canada is addressing these issues but:
  • Is the culture of the Public Service still too risk-averse?
  • I would argue that we need to debate this further.
  • Innovation is the key to success in the knowledge economy and the Public Service must remain a relevant part of that economy.
  • With limited resources at our disposal we need to encourage people to try new approaches, to get more results for the financial effort made.
  • That being said, people are not going to go out on a limb without a safety net.
  • Again, we are talking about a need for balancing the competing demands for both results and prudent management.
  • Ideally, government needs to adopt a new perspective on departmental accountability which would factor in an element of risk taking.
  • Over time, the rules should allow for a more flexible system, insofar as managing risk. But is the pace toward managed risk taking quick enough or do you think it is too quick?
  • A system that places greater value on innovation, while at the same time letting front line staff in the departments have a bigger say in day-to-day operations is required.
  • One that would clearly put more risk-management responsibility into your hands.
  • We need to empower the front line staff to allow them to serve the public with a sufficient level of financial decision-making authority at their disposal.
  • There will be mistakes unavoidably. We need to support our people when their decisions are challenged or when results are not as expected.
  • Fortunately, technology should facilitate delegation and monitoring.
  • Achieving our goals requires people to think in a new way and use new systems and technologies more efficiently.
  • This is what E-Government is all about.
  • E-Government is more than just putting information and services on-line.
  • E-Government will have a real impact on how we work with clients, stakeholders and citizens.
  • E-Government will facilitate management, including financial management, in real time with full information.
  • E-Government will speed-up decision-making and challenge classic forms of pyramidal decision structures.
  • As you can see, we will have to face lots of challenges.
  • Although we spend a great deal of time talking about policies and program technology, we understand that people are and must continue to be the foundation of any constructive progress in this area.
  • Good human resources management is instrumental to success in managing finances.

IV.  Human Resources and People Issues

  • That brings me to the fourth and final issue I would like to address: that of human resources and the people issues in general.
  • I know that thanks to your support, several measures are being taken to help in the development of a community of financial management officers.
  • Given the priority of this issue, the Clerk of the Privy Council set up three Deputy Minister committees to look into the possibilities open to us.
  • Financial managers, like other managers, need a recruiting program for succession planning, support for learning, and an inviting work environment for employees.
  • But to really help our people, we need to change our way of thinking.
  • We need to show some imagination in determining what we really want to accomplish and what we will need to succeed in this regard.
  • We need to find new ideas to help us balance work and family.
  • I understand that the human resources issue was dealt with in some detail at the Senior Full-Time Financial Officers Conference a few weeks ago. I am told that some very healthy discussion took place on issues such as the Universal Classification System and recruitment.
  • And I encourage all of you to continue to advance the envelope of recruitment, retention and learning and development.
  • Recruitment and retention for your community is a big challenge and you have to think about what can you do now and put an action plan in place.
  • At the same time, we have a tremendous opportunity to improve representativeness of our financial community and enhance diversity.
  • I would welcome your views on these human resources challenges.

Conclusion

  • The changes that I have spoken about are not going to happen overnight. But changes are going to take place, whether we like it or not.
  • We need to recognize and embrace this and address the challenges ahead as a community not as a collection of individual departments or branches.
  • The goodwill and progress we have seen in the modern comptrollership pilot projects have been really encouraging.
  • We must build on this. We must press ahead with reform.
  • There is enthusiasm out there and we need to capitalize on it.
  • As senior executives, we will be looking to you for guidance and leadership.
  • Looking around this room, I am confident that we are in good hands.
  • Thank you.