Canadian Government Executive - Volume 24 - Issue 07

10 / Canadian Government Executive // February/March 2019 the need for ‘black books,’ the scourge of ‘good’ information. Black books are infor- mal accounting and reporting records, maintained by operational managers who cannot otherwise easily get this informa- tion from the ERP system. Black books are not integrated with the official depart- mental system of record, nor maintained using any set of rules that ensure accuracy and consistency. A single source, secure and centralized, online report repository such as GCDOCS, SharePoint or RDIMS provides easy access to historical information when responding to ad hoc requests for information (senior management, parliamentary questions, regulatory bodies or internal audit). When standardized reports are used across government, managers and finance officers moving between departments can more rapidly and efficiently understand their new organization’s finances and im- mediately start making expenditure deci- sions. New employees as well as finance contractors on-boarding at contract-start will more rapidly understand the dynam- ics of the organization and begin to con- tribute to their projects. Consistency of data among different historical periods enables accurate com- parisons to identify what is changing and why. Trends can be extrapolated to an- swer such questions as: “Where will we be at period-end if the velocity of spend- ing shown in the report continues? Can we forecast a usable surplus or a deficit (deficits are contrary to the FAA)?” The point being that potential disasters can be averted or at least mitigated. Data provides objective support for decisions going forward. It also provides hindsight support for reviews of results especially when at negative variance with the plan. Good data reduces biases and suppositions of senior managers; James Barksdale, former CEO of Netscape, fa- mously said, “If we have data, let’s look at data. If all we have is opinions, let’s go with mine.” Report production and delivery by the ERP/BI systems is efficient and economi- cal, occurring at off-peak times, freeing up more expensive human time. Managers can do more with less. Automation reduces the possibility of er- rors inherent in manual systems, perform- ing multiple tasks simultaneously and costing less. Online database and search engines re- duce time spent looking for information. It’s long been recognized that per trans- action costs with computers are signifi- cantly lower than with humans. However, automation requires capital investment. Costs shift from salary and operations and maintenance budgets to capital budgets that can be written off over multiple years. Additionally, routine evaluation of peri- od-end reports increases possibility of de- tection of fraud and errors. High quality data is maintained through rigorously applied transaction processing rules and period-end adjustments. These become automatic and familiar for trained clerical staff, increasing efficiency and productivity and reducing errors. Clerical staff and supervisors are trained to rigor- ously follow these rules. Standard period- end adjustments are made by the finance function to ensure data is comparable and consistent. Automated reporting improves monitor- ing and control. Managers can routinely and easily view the financial positions of their organization. Monitoring is facili- tated by using exception reporting where reports are system generated when vari- ances exceed stated values. Good reporting contributes to internal control processes. The Office of the Audi- tor General’s (OAG) report, March 2004, Chapter 6, Managing Government In- formation: Using Financial Information notes: “Integrated and comprehensive in- FINANCIAL For every new planned activity, the final planning question is “How will we report on this activity?” Benefits of a Modern Reporting System Comprehensive portfolios of internal fi- nancial and statistical reports provide operational managers with objective and holistic views of their business, better un- derstanding of business dynamics and the significant costs of resources used. The dis- ruption of demands for ad hoc reporting is reduced. System automation of report produc- tion and delivery saves time, money and disruption, and in the year 2019 makes ab- solute sense. Managers have confidence in the infor- mation they are routinely receiving and are familiar with. Decision making is fast- er and more agile since the manager has a familiar, full, complete and consistent picture of their business. Data contained in the reports is supple- mented with embedded written analysis, evaluation and recommendations by Fi- nancial Management Advisors – turning data into insights. This enables operation- al managers to focus their energy, talent and specialized subject matter expertise on evaluating and expanding on the rec- ommendations and implementing action. Operational managers have in-depth education and experience in their tech- nical specialization. However, typically these same managers, responsible and ac- countable for millions of dollars of annual budget, may have little or no experience in managing organizations, especially when it relates to financial management activities such as are usefully defined in the old Poli- cy on Internal Control (2009) as “…planning, budgeting, accounting, reporting, control and oversight, analysis, decision support and advice, and financial systems.” Reports showing variances to plans/ budgets provide early warning of future problems and will direct management’s attention to areas requiring remedial and proactive action, as well as provide satis- faction and confidence that plans are be- ing executed as expected. The ERP system is the “official depart- mental system of record.” A corollary of this is that subunits ensure that all trans- actions are processed in the ERP in a time- ly manner and in accordance with transac- tion processing rules. Comprehensive reports developed with input from operational managers obviate