We are living in a period of rapid change and limited resources that has compelled governments around the world to pursue ambitious strategies to enhance the efficiency and effectiveness of their operations as part of wider efforts to contain costs and restore public finances. Interest in public sector value-for-money remains high, and it is clear that comptrollership will continue to play a leading role in transforming government. Not to mention saving taxpayer dollars.
It’s worth noting that, not so long ago, comptrollership in the government – much like in the private sector – was viewed primarily as an administrative function. It was concerned with recording and reporting financial transactions, and ensuring expenditures were properly authorized. But that has all changed.
A number of initiatives over the past decade or so have elevated the comptrollership function to the point where it is now recognized for its strategic value in all aspects of public sector management. This not only includes efficient resource allocation, but also effective decision-making, performance measurement and the achievement of results.
Indeed, the expertise of public servants who work in the three main areas of comptrollership in the federal government – financial management, acquired services and assets, and internal audit – is being sought out more and more, particularly during this period of transition and transformation.
For example, comptrollership has been helping to transform the delivery of services and administrative support in the back office of the government. The Clerk of the Privy Council recently called on the public service to drive innovation and get better value-for-money by pooling efforts and resources across departments. The Office of the Comptroller General and the Chief Information Officer Branch have risen to this challenge with an ambitious plan to adopt a new financial applications services model based on a common financial management platform for the government of Canada.
Today, there are over 800 systems in government that support financial and materiel management processes, which is clearly too many for an enterprise of 130 or so departments and agencies.
That is why we will use a clustered approach where a small number of departments will host everyone else. While this will represent a culture change for many departments that are used to owning and operating their own systems, in this environment of limited resources it is the best and most sustainable option available.
The cluster concept could be extended in the future. For example, we could seek to consolidate the delivery of financial services, such as accounting operations, across the government. The idea would be to use service hubs that would enable efficiencies and savings – much like what is happening with email, data centres and telecommunications networks as a result of the creation of Shared Services Canada in 2011, which serves over 40 departments.
We are in the early stages of such transformations. But once they are complete, they will provide increasingly accurate and timely information for reporting and decision-making, which is something the government has identified as a priority. They will also enhance our capacity for government-wide financial analysis and oversight, as well as embed standardized business processes and systems that can permit the implementation of more efficient service delivery strategies.
There are other examples of how comptrollership has been changing. Take the role of chief financial officers. Thanks to policy changes, they now report directly to their deputy heads and provide them with objective advice and department-wide perspectives on all business matters. This represents a significant change in their roles – one that mirrors the evolution of the CFO’s role in the private sector – and it has not been surprising to see them play such a prominent role in the government’s plan to return to a balanced budget.
To further support the expanding role of CFOs, my organization is currently developing guidance on due diligence with respect to Memoranda to Cabinet and Treasury Board submissions. The guideline will provide a common approach and framework for CFOs across the government – one that fosters stronger proposals that include a focus on efficiencies and value for money.
The role of internal audit has also been evolving in this period of restraint. To be sure, the primary role of internal auditors remains the provision of independent assurance regarding governance, risk management and control processes. However, these days the auditing community is also examining the efficiency and effectiveness of operational systems and process. This will help the government identify areas for cost savings and ensure that controls are commensurate with the risks. In this way, internal audit can reduce the overall cost of controls, while improving the robustness and responsiveness of the control environment.
These audit activities seek to increase and strengthen stewardship, accountability, risk management, governance and internal controls within departments and agencies across the federal government.
In the past few years, my organization has also overseen policy changes that have put departments and agencies in a better position to deliver their programs and services in a way that supports value-for-money, is appropriate to the risk involved, and demonstrates sound stewardship.
For example, the oversight of departmental projects is now based on an organization’s capacity to manage projects, such as building construction or development of IT systems. This represents a departure from our old way of doing things when central oversight was exclusively determined by more arbitrary dollar-based thresholds.
In adopting a risk-based approach, we need to gain a clear understanding of departments’ capacity to manage projects. Treasury Board now assigns a level of authority based on a review of investment plans and the assessed risk of projects. The advantage is that departmental projects are only subject to Treasury Board oversight when warranted. The Board is able to focus scarce time on the scrutiny of higher-risk, more complex projects, resulting in more efficient allocation of time and effort by everyone involved.
Clearly, comptrollership has evolved considerably in the past few years and will continue to do so. Today’s difficult economic situation has brought its value into sharper focus and shown how comptrollership can be a tool for government to meet its most pressing priorities around public sector management. That said, we can expect public servants working in comptrollership to continue to play a leadership role by enabling their organizations to adapt, innovate, focus and get results, which is the way it should be.
James Ralston is the Comptroller General of Canada.
