Resource Management Course: An Introduction to Managing Financial, Human, Materiel and Information Resources

1. Resource Manager’s Course Department of National Defence

2. Module 1Introduction Getting to Know Each Other Expectations Overview of Resource Management Course Objectives Relationship to Resource Manager’s Guide Course Outline and Schedule

3. Overview ofResource Management • Course provides a framework for management of resources from perspective of resource manager • Resources considered are: • Financial • People • Materiel • Information

4. Overview ofResource Management Strategic Direction Planning Control Resource Manager Resourcing Execution

5. Course Objectives • Provide overview of Modern Comptrollership and resource management framework • Provide help in understanding management of financial, human, materiel and information resources • Prepare participants to meet their responsibilities as Resource Managers

6. Resource Manager’s Guide • This course covers the contents of the Resource Manager’s Guide • For more detail on resource management, please consult the guide • Guide provides linkages to internet sites and publications which provide even greater detail

7. Module 2 Managing Financial Resources

8. Financial Management Financial Authority & Delegation Financial Control Expenditure Management Financial Reporting

9. Financial Authority & Delegation Financial Authority & Delegation Financial Control Expenditure Management Financial Reporting

10. DND Financial StructureUnder the FAA • The Financial Administration Act (FAA) assigns responsibility and accountability to the Deputy Minister for financial matters • The DM is accountable to the Minister who in turn is accountable to Parliament and Treasury Board for sound financial management

11. DND Financial StructureUnder the FAA • The DM has appointed ADM (Fin CS) as the Senior Financial Officer (SFO) • DG Finance is designated as the Senior Full-time Financial Officer (SFFO) and Departmental Comptroller • Other responsibilities and delegations are set out in the Delegation of Signing Authorities (i.e. contracting authorities from PWGSC, classification and staffing authorities)

12. Department Level Resource Management Structures • VCDS is the Departmental Strategic Resource Manager and receives direction and advice from two Departmental Committees: • Defence Management Committee (DMC) co-chaired by DM and CDS • Program Management Board (PMB) chaired by VCDS

13. Defence ManagementCommittee (DMC) • DMC considers all resource matters affecting the strategic direction of Defence such as: • Defence Planning Guidance (DPG) • Aspects of overall resource management framework • Mid-year and end-year corporate performance results

14. Program ManagementBoard (PMB) • PMB provides resource management oversight and considers matter such as: • structure or resource options for inclusion in the Defence Plan • in-year resource management issues and performance management • Long Term Capital Plan and major projects • Financial Status Reports • Resource matters arising from changes in policy/direction • not funded and not forecasted tasking

15. Funds Centre Hierarchy • Funds Centre • organizational units receiving budget (money) • arranged in hierarchy reflecting the organizational budget allocation process as depicted in the Business Plan • Funds Centre identifies responsibility for budgets, revenues and expenditures • there is ONE funds centre hierarchy for the entire department and for all funds

16. Funds Centre Hierarchy • Cost Centre • primary cost collectors within Financial Management Accounting System (FMAS) • permits managers to plan, forecast, and monitor revenues and expenditures at lowest level • cost centres have no budgets (money) and are given spending authority or commitment budget by their superior Funds Centre

17. Funds Centre Hierarchy Level 0 Funds Centre NDHQ DB Level 1 Funds Centre CLS Level 2 Funds Centre HQ LFWA Level 3 Funds Centre Garrison Edmonton Level 4 Cost Centre Supply (Cost Centre Group) Cost Centre - Admin Cost Centre - Warehouse Cost Centre - Receiving

18. Financial Controls Financial Authority & Delegation Financial Control Expenditure Management Financial Reporting

19. Financial Controls • Effective management: • depends on managers who understand their responsibilities; and • are able and willing to use the tools and processes to achieve their goals. • The Control Framework is therefore people-oriented and based on Modern Comptrollership: • Leadership • Motivated People • Shared Values and Ethics • Integrated Performance Information • Mature Risk Management • Rigorous Stewardship • Clear Accountability

20. Control Framework Integrated Information • Key planning information • Performance measures • Monitoring • Open reporting Leadership & Motivated People • Vision, Goals • Priorities • Communication • Work environment • Trust • Support Shared Values & Ethics and Accountability • Values • Delegation • Accountability • Transparency • Support Resource Manager Stewardship & Risk Mgt • Understanding Financial Implications • Option analysis • Risk reduction

21. Expenditure Management Financial Authority & Delegation Financial Control Expenditure Management Financial Reporting

22. ExpenditureManagement Process Commitment of funds Expenditure Initiation Availability of Funds Section 32 FAA Reconcile Financial Reports Contract With Supplier For Goods/Services Payment of Invoice Section 33 FAA Account Verification Section 34 FAA Receive Goods and Services Initiates invoice payment

23. Initiate Expenditure • Authority to make decisions to obtain goods or services that will result in expenditure of public funds • i.e. hire staff, authorize travel, buy goods • Objective is to give Resource Managers early control and primary responsibility over their funds

24. FAA Section 32Availability of Funds • RM can not initiate an expense unless there is a free balance of appropriate funds (i.e. SWE, OT, O&M, Cap,etc.) • The RM is confirming the availability of funds for the contract in signing Sect 32 • Authority for Section 32 is identified in “Delegation of Authority for Financial Administration in DND” • In establishing a commitment, this sets funds aside and reduces the free balance

25. FAA Section 32Availability of Funds • Control of commitments. • (1) No contract or other arrangement providing for a payment shall be entered into with respect to any program for which there is an appropriation by Parliament or an item included in estimates then before the House of Commons to which the payment will be charged unless there is a sufficient unencumbered balance available out of the appropriation or item to discharge any debt that, under the contract or other arrangement, will be incurred during the fiscal year in which the contract or other arrangement is entered into. • Record of commitments. • (2) The deputy head or other person charged with the administration of a program for which there is an appropriation by Parliament or an item included in estimates then before the House of Commons shall, as the Treasury Board may prescribe, establish procedures and maintain records respecting the control of financial commitments chargeable to each appropriation or item.

26. FAA Section 34 Account Verification • No payment shall be made unless RM certifies that: • goods or services received IAW contract • price is IAW contract • any payment in advance of completion is IAW contract and is reasonable • supplier is entitled to the payment • Must be certified/signed by authorized individual

27. FAA Section 34 Account Verification • Payment for work, goods or services. • (1) No payment shall be made in respect of any part of the public service of Canada unless, in addition to any other voucher or certificate that is required, the deputy of the appropriate Minister, or another person authorised by that Minister, certifies. • (a) in the case of a payment for the performance of work, the supply of goods or the rendering of services, • (i) that the work has been performed, the goods supplied or the service rendered, as the case may be, and that the price charged is according to the contract, or if not specified by the contract, is reasonable, • (ii) where, pursuant to the contract, a payment is to be made before the completion of the work, delivery of the goods or rendering of the service, as the case may be, that the payment is according to the contract, or. • (iii) where, in accordance with the policies and procedures prescribed under subsection (2), payment is to be made in advance of verification, that the claim for payment is reasonable; or. • (b) in the case of any other payment, that the payee is eligible for or entitled to the payment.

28. FAA Section 33 Payment of Invoice • Finance Officers, after verifying transactional compliance with sections 32 and 34 will authorize a payment under section 33 • Must be certified by authorized individual • Not to redo verification done by manager • Ensure that proper financial control framework is in place and working e.g. random sampling and review of invoices

29. FAA Section 33 Payment of Invoice • Requisitions. • (1) No charge shall be made against an appropriation except on the requisition of the appropriate Minister of the department for which the appropriation was made or of a person authorised in writing by that Minister. • Form. • (2) Every requisition for a payment out of the Consolidated Revenue Fund shall be in such form, accompanied by such documents and certified in such manner as the Treasury Board may prescribe by regulation. • When requisition not to be made. • (3) No requisition shall be made pursuant to subsection (1) for a payment that: • (a) would not be a lawful charge against the appropriation; • (b) would result in an expenditure in excess of the appropriation; or. • (c) would reduce the balance available in the appropriation so that it would not be sufficient to meet the commitments charged against it.

30. Payables At Year’s End- PAYE • All goods or services received on or before March 31 must be charged to budget of that year; and • If goods received but payment not made by the 3rd week in April (cut-off date), then value of goods and services must be recorded in FMAS under PAYE as charges to the old year; • If goods or services contracted but not received before March 31, then value of goods or services must be charged to the new year

31. Carry Forward • A RM may request carry forward of any funds in the Fall Review. Seek advice from Comptroller. Decision on approval is in first quarter of next FY • Up to 2 % of an original operating budget may be carried forward to the next year. However criteria may change from year to year • Any one above you in your chain of command may use the carry-forward for higher priorities

32. Financial Reporting Financial Authority & Delegation Financial Control Expenditure Management Financial Reporting

33. Level 2 Funds Center Manager Level 3 Funds Center Manager Level 4 Funds Center Manager Plan Variance Report - PVR Presentation CO_4200

34. On the SAP R/3 screen, choose the menu path: Information systems / General report selection. Click next to see the menu path.

35. This takes you to the Application Tree Report Selection General screen. Click next to continue.

36. On this screen, the National Defence Report List contains key reports available.  Clicking on the + (plus) sign immediately to the left of the Budgeting and Reporting node will expand the report sub-tree. For now, click next to continue.

37. On the Budgeting and Reporting node, 7 key reports are listed: • FCtr to CCG to CCtr Mapping for Funds Centre to Cost Centre to Internal Order Mapping. This shows your exact position in the hierarchy and the funds centres and/or cost centres for which you are responsible. In addition, you are able to view internal orders (IOs) that automatically default to your cost centres. It also has the option to show planning for the IOs which automatically default the cost centre. • Funds Ctr to WBS Elmnt Mapping. This reportshows your exact position in the hierarchy and the funds centres and/or WBS elements for which you are responsible. • Cost Centre Planning Report for Cost Centre/Internal Order Planning. This shows your planned costs by planning version for cost centres and cost centre groups in your hierarchy. Click next to continue.

38. PVR - Cost Centre Selection. This report shows your planned costs versus your actual, parked and committed funds. You will be able to view your free balance as well as your total commitment budget. Selection by cost centre or cost centre group is available. • PVR - WBS Element Selection. This report shows your planned costs versus your actual, parked and committed funds. You will be able to view your free balance as well as your total commitment budget. Selection by Project, WBS Element Group or WBS Element is available. • Commitment Details Report for Commitment Details. This report lists Funds Reservation, Funds Pre-Commitment, Funds Commitment, Purchase Requisition and Purchase Order documents, sorted by Fund and Funds center. Click next to continue.

39. PAYE/RAYE Tracking Report for Payables At Year End and Receivables At Year End. This report is currently used to show your payables at year end (PAYE). Click next to continue.

40. Clicking on the + (plus) sign immediately to the left of the PVR - Cost Centre Selection will expand the report sub-tree to the PVR - Plan Variance Report. For now, click next to continue.

41. Double clicking on PVR - Plan Variance Report - Cost Centre Selection will take you to the PVR - Plan Variance Report - Cost Centre Selection screen. For now, click next to continue.

42. The selection screen has four sections: a section on funds centre information, a section on cost centre information, a section on fiscal year and fund information and a section on commitments and line items information. At the FMAS Level 2 Funds Centre Manager level, 2 items of information need to be entered: • the required funds centre; • the type of funds you need to view to monitor planned, committed and actual costs against your funds centre: local and corporate funds, corporate funds only, local funds only. Click next to continue.

43. Funds Center - A funds centre (FC) is an organizational unit with an assigned Commitment and/or Payment Budget. It follows the business planning (BP) organizational hierarchy. Funds centres identify who is responsible for budget, revenues and expenditures. They are arranged in a hierarchy reflecting the budget distribution process. Use the pick list procedure or type the funds centre in manually. In this example, 0152AA has been input. Click next to continue.

44. This box enables you to display the postings to the subordinate funds centres as well. Clicking this box will include postings to the subordinate funds centres. In this example, the box is selected by default. Click next to continue.

45. Cost centre - A Cost Centre identifies the entity in the organization that consumes financial resources. Cost Centres are "collectors" that permit managers to plan, forecast and monitor expenditures within DND. Cost Centre Group - An organizational unit for grouping together several cost centres. In this example, no cost centre is required. Click next to continue.

46. Fiscal Year - The Fiscal Year (FY) for DND is 01 Apr - 31 Mar for that particular year (i.e. FY 2001, runs from Apr 1, 2000 to Mar 31, 2001). This information defaults from FMAS and may be changed as required. Use the pick list procedure or type the fiscal year in manually. In this example, 2001 defaults. Click next to continue.

47. Period - This is the month from which you want your report to start and in which you want your report to end. The normal entry is period 1 to 12. This information defaults from FMAS and may be changed as required. Use the pick list procedure or type the fiscal year in manually. In this example, periods 1 and 12 default. Click next to continue.

48. Fund - A fund is a source of funding or spending authorities such as Vote 1,5 or 10 that identifies where the money came from. A fund is not arranged in a hierarchy. There are several types of funds within FMAS including local (L), corporate (C), statutory (S), and balance sheet (B). Depending on your requirements, you can select the radio button to include both local and corporate funds in the report, only corporate funds or only local funds. In this example, the Local and Corporate Funds radio button was selected. Click next to continue.

49. Select the Show Precommitment and Fund Reservation box to include pre-commitment and fund reservation information in the report. Select the Line items displayed for selected column only box to filter the line items of the selected column in the report. Clicking the Execute icon will take you to the second PVR - Plan Variance Report - Cost Centre Selection screen. Click next to continue.

50. This second screen provides a breakdown by funds and plan versions of planned costs, invoices payments transfers, parked documents, commitment, pre-commitment, fund reservation, total commitment budget, total payment budget. Corporate fund designations start with a 'C' while local funds start with an 'L'. Click next to continue.