Performance Measurement
May 7, 2012

Five steps for improving expenditure management

CGE Vol.14 No.2 February 2008

The passage of the Federal Accountability Act (FAA) is the federal government’s most recent effort to create a more accountable system of government in Ottawa. While there is still some debate about the effectiveness of the legislation, the FAA reflects a growing interest on the part of lawmakers to bring government more closely under the scrutiny of parliamentarians.

While campaigning for more accountability is good politics, it remains to be seen whether the creation of eight new parliamentary agencies (with their own separate budgets and reporting mechanisms) will result in more accountability. In fact, there is already some evidence that the weight of the new reporting requirements may swamp already overloaded members of parliament with more reports than they are capable of reading.

Regardless of the FAA’s particular features, experience demonstrates that the most effective accountability regime revolves around the way in which the legislatures scrutinize government expenditures. At the heart of the process is the need for the government to produce comprehensive information about spending intentions that can be examined, evaluated and approved by the legislature.

High quality and detailed information are the key elements for any reliable reporting system, but given the scale and complexity of the federal government, disaggregated data is crucial in holding ministers to account. The budget of $222 billion is spent in more than 200 departments and agencies, by 250,000 fulltime employees administering 400 programs through 1,600 points of service.

Over the past five years, Treasury Board Secretariat has been assembling the elements of a comprehensive expenditure management system. In essence, the expenditure cycle begins each year with a budget that is usually tabled about six weeks before the beginning of the April 1st fiscal year. The budget has two main functions. First, it identifies the broad spending priorities of the government and, second, it indicates how the government intends to collect and raise taxpayers’ money to finance these priorities. The Estimates provide more detail, describing the total voted and statutory expenditures of the government as well as those of individual departments and agencies. The Reports on Plans and Priorities (RPPs) describe the individual expenditure plans for each department and agency and the Departmental Performance Reports (DPRs) report on the achieved results against the planned performance expectations for the previous fiscal year. Each of the three levels adds more detail.

The final element in the expenditure management system is an annual report, now in its seventh year, that provides parliamentarians with an accounting of how well the country is performing in 13 crucial areas, and what the government’s contribution is to these results.

This year the report was released in December without any fanfare or advance notice. This is unfortunate for two reasons. First, accountability regimes depend on developing a public consensus on the effectiveness of government spending. Second, Canada’s performance in 2006 is worth bragging about. Of the 30 indicators used by the Treasury Board 16 show a marked improvement (e.g., employment, GDP), ten of the indicators show no change and four of the indicators suggest that Canada is doing less well than previously (innovation, air quality, greenhouse gas emissions, and biodiversity).

TBS has done a good job getting parliamentarians better informed. They have made many new improvements that allow parliamentarians and interested citizens to drill deep into the data to learn more about program spending and its effectiveness.

At this point, TBS has developed a very workable framework that needs to be field tested by parliamentarians. At the same time, there are a number of things that could be done to improve the likelihood that this elaborate reporting system will be used for its intended purposes.

First, the government should follow up on the observation by the current president of the Treasury Board, Vic Toews, that “the present culture of over-control does nothing to strengthen accountability.” Indeed, the “current web of rules serves only to confuse accountability and frustrate managers and recipients alike” and needs to be scaled back.

Second, extend the current paper burden exercise to parliament by looking at the volume of material and information and, more important, the way in which its data are packaged for parliamentarians.

Third, educate MPs on how to use the information that is provided to their offices and the role that members can play in holding the government to account that goes beyond the usual partisan attacks on the integrity of members.

Fourth, encourage parliamentary committees to schedule more time for the tabling of government estimates and the departmental reports.

Finally, provide MPs with more qualified staff who might become experts in government expenditures.


David Zussman holds the Jarislowsky Chair in Public Sector Management in the Graduate School of Public and International Affairs and the Telfer School of Management at the University of Ottawa (dzussman@uottawa.ca).

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