Transcript Document

Management, Resources and Results
Structure (MRRS) Policy: Its critical role
in expenditure management
Presentation to Financial Management Institute
Rohit Samaroo, Acting Senior Director, Results Management Strategies Division
November 25, 2008
Outline
•
Historical Context
•
Expenditure Management System (EMS) Renewal
•
MRRS – Progress and Challenges
•
Observations and next steps
2
Mid-to late 1990’s: Canada achieved an enviable fiscal
position (1-2)
• In 1993-94, Canada was dealing with a large fiscal deficit
• Program Review (1994-95) solved the fiscal crisis through major
expenditure cuts

1995 Budget announced $16.9B in savings over 3 years, further $2B in savings
announced in 1996 Budget
• Overall spending fell by 10% from 1995 to1999, capital spending fell by 35%
 By 1997-98 the surplus was $3.5B - and the budget has been in surplus
since
3
Mid-to late 1990’s: Canada achieved an enviable fiscal
position (2-2)
• Program Review left a few issues:
–
Reduced capacity in important oversight areas: audit, evaluation, financial
management
–
Cabinet time focused almost exclusively on new spending

By late 1990s, budget surpluses led to new spending without any systematic
assessment of direct program spending and whether reallocation was needed

Continued use of ad hoc restraint exercises to control spending as need arises, eg:
• Expenditure Review Committee
• Expenditure and Management Reviews
4
The Expenditure Management System became the focus of
an OAG audit
•
Auditor General Report pointed out a number of significant areas for
improvements:
– Spending on existing and new programs were being approved on two separate
tracks making comparisons between existing and new spending difficult
– EMS was not fully integrated with program results.
• The current EMS does not require that departments submit data to demonstrate that
they have used their funding effectively
• And recommended…
– regular expenditure reviews of reference levels to ensure that existing programs
are relevant and represent value-for-money,
– access to and use of performance information in the spending decision process,
– adequate systems and procedures for central agencies to assess new spending
proposals and relate them to existing programs
5
Budget 2006 set framework for the implementation of
EMS renewal
•
The budget articulated a set of criteria for management and oversight
of federal programs:
– Government programs need to focus on results and value for money
– Government programs must be consistent with federal responsibilities
– Government programs that no longer serve the purpose for which they were
created need to be eliminated
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Expenditure Management System
Renewal
7
EMS Renewal – Overarching Objectives
•
Approved by the government in June 2007
•
Management Excellence – Allocation and Operational Efficiency
-
•
Meet government priorities
Ensure value for money in government spending
Deliver high-performing programs and services to Canadians
Fiscal Credibility – Aggregate Fiscal Discipline
–
Control of overall growth of program spending
8
Three Pillars Supporting EMS Renewal
1. Up-front Discipline
New Spending
 Critical information for Cabinet decisions
2. Strategic Reviews
Existing Spending
 Ongoing advice to Cabinet to align spending to government priorities and
ensure performance and value for money
3. Managing for Results
All Spending
 Measuring and benchmarking our programs to demonstrate results for
Canadians
9
1. Up-Front Discipline (new spending)
•
Refers to how new spending proposals are approved
•
Emphasizes a more disciplined approach to managing new
spending by ensuring all new proposals have:
–
Clear measures of success
–
Solid information about how a proposal fits with existing spending




What results are being achieved in related areas?
How does the new proposal relate to existing spending?
Are there opportunities for realignment?
Provide reallocation options for funding
More upfront discipline on spending means more up-front work by
analysts at the Memorandum to Cabinet (MC) stage
10
2. Strategic Reviews – Review of the effectiveness of all
existing program spending
•
Strategic Reviews:
–
–
Comprehensive review of each department’s programs
Ensure all programs are:





Aligned to government priorities
Are clearly within federal responsibilities
Relevant
Effective and efficient
Managed well
–
Are considered by Cabinet as part of Budget preparation
–
Identify the lowest-performing 5 per cent of programs and reallocate that
funding to higher priorities
–
Involve external expert advice on each Review to ensure consistency and
objectivity
TBS: renewed focus on program performance and advice to TB on
integrated budget decision-making on new and existing spending
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3. Managing for Results (all spending)
•
All departments must strive for excellence in the management of all of their
programs and spending in order to concrete results for Canadians
•
This means all programs must:
–
Have clear expected results and measures of success
–
Have full program costs
–
Be formally assessed and evaluated on a regular basis
–
Report on results expected and achieved
–
Use performance measures and evaluations to adjust resources and
strategies based on insights gained
–
Develop a culture of focussing on results
Requires focus on program performance, relevance and efficiency, not
just dollars spent
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Management, Resources and Results
Structure (MRRS)
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MRRS is the foundation of the renewed EMS
•
Represents a common approach to the collection, management,
and reporting of performance information
– Establishes an inventory of all federal programs
– Links resources to results for each program - planned and actual
– Establishes the same structure for both internal decision-making and
external reporting and accountability
– Demonstration of how programs align to each other (relationships);
– Full program costing; and
– eventually,…permits efficient communication between departments,
central agencies & Parliament through the use of the common systems
and evidence
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All information is based on similar program structures –
the PAA
Program Activity Architecture
+
Financial and non-financial information
Program Activity Architecture
Parliamentary Vote
Control Level –
unchanged
Department
Strategic Outcome(s)
Accountable Level to TB
& Parliament –
unchanged
Program Activity(ies)
Sub – Program Activity(ies)
Program Information
levels – much more
detail
Sub - Sub – Program Activity(ies)
 Planned and
Actual Results-all
programs
 Planned & Actual
Financial
information
 Governance
Structuredecision making
around program
results info
IT Support: Expenditure Management Information System
Required for
all
elements and
all levels
of the PAA
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Well structured information helps communication and
decision-making …
DEPARTMENTS
More logical and
consistent basis
for interaction
Management Tool
Reflects full mapping of programs
Better alignment of resources & priorities
More evidence-based reporting
Improve program performance
TBS
Informed decisions on
investment choices based
on priorities and
value for money
Common basis
for planning
and reporting
inside and
outside
PARLIAMENT
MRRS
Reporting Tool
Stronger accountability
for spending and results
Policy Objective:
Budget
Plan
Finance
PCO
Development of a common,
government-wide approach to the
collection, management, and reporting
of financial and non-financial
performance information - to provide
an integrated and modern
expenditures management framework
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Implementation of MRRS consists of five steps
1.
Departments develop fully articulated structures for their Program
Activity Architectures (PAA)
(December 2006 to May 2007)
2.
Departments identify/define Performance Measurement Frameworks
& Governance Structures for their entire PAAs
(June 2007 - Fall 2007)
3.
Departments create, capture and use MRRS information
systematically
(Jan. 2008 and onwards)
4.
TBS develops and rolls out a system to capture the standardized
departmental performance information
( 2009 and onwards)
5.
Embed MRRS information in all expenditure management processes
( 2009 and onwards)
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Step 1: Launched December 06 – Fully articulated PAAs
•
98 departments and agencies modified their PAAs as part of Step 1
•
Step 1 has generated an inventory of the majority of government
programs (approximately 2500 programs)
•
TBS continues to work with departments to further refine their Strategic
Outcomes and PAAs
•
Stability is an issue: For 2009-10 change process:
– 46 departments and agencies came forward with proposed changes to their
Strategic Outcomes and/or PAAs
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Step 2: Launched June 07 – Development of Performance
Measurement Frameworks (PMF)
• PMFs set out the Strategic Outcome(s) and expected results and
outputs associated with PAA programs, including:
–
–
–
–
–
•
Performance indicators
Data sources
Frequency of data collection
Target(s)
Planned program spending
All departments now have PMFs, however quality varies
substantially
• Currently in Step 3
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PMF Quality to date shows the need to improve
Number of Departments
PMF Scores for PMF of Record
20
18
16
14
12
10
8
6
4
2
0
0.0-0.4
0.5-0.9
1.0-1.4
1.5-1.9
2.0-2.4
2.5-2.9
3.0-3.4
3.5-3.9
Scores
PMF Four Point Scale: 1= Poor ( major adjustment required), 2= Weak ( needs substantial improvement), 3 = Satisfactory,
(requires some improvement), 4= Very Good (may require some refinement)
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MRRS has become the the foundation of the renewed
EMS
DPR/RPP
Reporting
Regulatory
Policy
Policy on
Financial
Coding
Horizontal
Management
Strategic
Reviews
MRRS
TPP Policy
MCs to Cabinet
TB Submissions
for funding
Service Policy
Evaluation
Policy
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Internal Services
•
We need to be able to capture the true cost for internal services
•
The Profile of GC Internal Services established standard categories
for internal services within PAAs
•
Developed with a Senior Financial Officer working group
•
Consists of 1 Program Activity, 3 Sub-Activity and 11 Sub-Sub-A
categories for Internal Services
•
Different reporting requirements established for different size
organizations
– Micro, small and large
22
Revised Profile of GC Internal Services and associated
PAA levels
PAA Levels
Program Activity
Sub-Activity
Internal Services
•
Governance & Management Support
– Management & Oversight
– Communications
– Legal
•
Resource Management Services
– Human Resource Management
– Financial Management
– Information Management
– Information Technology
– Travel and Other Administrative Services
•
Asset Management Services
– Real Property
– Materiel
– Acquisition
Sub-Sub Activity
Sub-Sub Activity
Sub-Sub Activity
Sub-Activity
Sub-Sub Activity
Sub-Sub Activity
Sub-Sub Activity
Sub-Sub Activity
Sub-Sub Activity
Sub-Activity
Sub-Sub Activity
Sub-Sub Activity
Sub-Sub Activity
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MRRS: Status and some key observations
•
MRRS has become critical to departmental management
•
The federal government has the best inventory of programs it has ever had
•
MRRS is increasingly enabling the operationalisation of EMS renewal in:
•
•
–
Upfront discipline – review of MCs
–
Strategic Reviews and
–
Managing for results, however…
Challenges still exist
–
Substantial level of effort and capacity is still required to improve PMF quality
–
Aligning financial systems to capture relevant planned and actual expenditures for each
program still to be done in all departments
–
Fundamental cultural change requiring persistence, patience and commitment
–
Ultimately, an iterative process
In general, however, significant progress has been made
24
Moving Forward…
•
Step up the implementation of Step 3: Departments create,capture and
use MRRS information systematically
•
Strengthen the review of MCs in context of on-going spending
•
Significantly strengthen the quality of departmental PMFs
•
Ensure data collection and use of performance information in
departments
•
Embed performance information in all EMS processes (e.g.
Memorandums to Cabinet, Treasury Board Submissions, Strategic
Reviews, program renewals)
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Contact us
• For more information or assistance on MRRS, do not hesitate to
contact:
– Rohit Samaroo, A/Senior Director, Results Management Strategies at
(613) 957-7053, or
– By sending an e-mail to [email protected]
• MRRS website at: http://publiservice.tbssct.gc.ca/pubs_pol/dcgpubs/mrrsp-psgrr/siglist_e.asp
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