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2012 Financial Management in the Government of Canada

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  1. 2012 Financial Management in the Government of Canada Winnipeg & Regina FMI Chapter October 24th and 25th 2012 Presented by: the Office of the Comptroller General, Financial Management Sector, Capacity Building and Community Development Team

  2. Welcome • Introduction of the Office of the Comptroller General, Financial Management Sector • Juliet Woodfield, Senior Director, Capacity Building and Community Development (CBCD) Team

  3. Agenda – Financial Challenges • Current Environmental Overview • Financial Officer Training • Successful interviewing, resume preparation, and networking

  4. Current Environmental Overview

  5. Overview • Financial Management Environment & Context • Developments in Financial Management • Developments in Financial Reporting • Financial Management Transformation Initiatives

  6. The Financial Management Environment 237.1 B revenues 369,000 FTEs 5 DFMS* in use >1 M payments per working day 88.2% expenditures managed through SAP* 132 Departments & Agencies 90% FTEs in departments using SAP* 239.6 B expenses Sources of Data: 2010-2011 Public Accounts 2012-2013 Departmental RPPs Association of Canadian Financial Officers Administrative Systems Inventory 2011-2012 * With HRSDC as an SAP user

  7. Return to Balanced Budgets Canada expects a full recovery from the 2006 Financial Crisis by 2014/2015 7 Source: http://www.budget.gc.ca/2012/plan/chap1-eng.html#a10

  8. Canada’s Fiscal Outlook • Projected Total Government Net Debt, 2016 8 Source: http://www.budget.gc.ca/2012/plan/chap6-eng.html

  9. Current Environmental Context • Economic Recovery & Jobs • Cost Containment & Productivity • Standardized Business Processes & Service Consolidation • Supporting Enterprise-Level Decision Making

  10. Developments in Financial Management • Internal Controls • Cost Containment • Attestation • Community Succession Planning, Talent management • E-Invoicing and Payment and Direct Deposit - Accomplishments and forward planning

  11. Internal Controls • Financial Management Policy Suite in place • Foundation of sound financial management - Effective Internal Controls • Internal controls are integral to cost containment measures and reliability of financial information and reporting • Policy requires annual risk-based assessment of effectiveness of internal controls over financial reporting which is not yet requiring public attestations on effectiveness per Sarbanes–Oxley • Good progress is being made as demonstrated in the annual published departmental reports on results and action plans

  12. Cost Containment • Continued incentives to contain/reduce costs • Focus on productivity enhancements to systems, processes, data and performance management through, for example: • FM transformation will lead to efficiency gains in business processes and streamlining of service delivery hubs • Rigorous financial information to underpin decisions on proposals – CFO attestation • Measuring performance of grants and contributions and user fees

  13. Attestation • Establishing a framework for consistent CFO due diligence on the financial aspects of Cabinet proposals • Six core financial management assertions and a CFO Representation Letter on conclusions and observations for each plus an overarching conclusion • Critical to meet heightened expectations of ministerial decision makers and to ensure rigour of financial information

  14. Community-Succession Planning, Talent management • The Chief Financial Officer (CFO) position in the federal government of Canada: • exists in over 100 departments and agencies; • is a key role to the financial functioning of the federal government; • has been identified as being at risk due to changing demographic factors; and • requires incumbents to have an advanced level of both leadership and business skills. • The Office of the Comptroller General has launched a CFO Talent Management initiative in the summer of 2012 with the objective of ensuring an adequate supply of qualified individuals in the community who are ready to assume the CFO role.

  15. E-Invoicing and Payment and Direct Deposit - Accomplishments and Challenges • Task Force for the Payments System Review Set-up by Minister of Finance in June 2010: • Compelling need for a payments system overhaul • Implementation of electronic invoicing and payments for all government suppliers and benefits recipients • Accomplishments: • Coding structures defined, procurement items being defined • E-invoicing data sets being reviewed with RG • Challenges: • Integration, training and complying with legislation such as FAA sect 32,33 and 34

  16. Community-Succession Planning, Talent management • The CFO Talent Management Process has three key elements: • CFO community data collection: • Data collected through the Chief Human Resources Officer’s Executive talent management system will be used to build a CFO community profile. • CFO community analysis: • The CFO Community profile will help to identify potential CFO candidates and succession gaps. • CFO community development: • Results of the CFO community analysis will identify professional development needs as well as required key competencies for the CFO community.

  17. Developments in Financial Reporting • Quarterly financial reports (QFR’s) • Accounting Standards

  18. Quarterly financial reports (QFR’s) • First QFR’s prepared by departments and Crown corporations in June 2011 • QFR’s provide more timely, in year financial information at the organization level than had been previously available • QFR’s contain: • Departmental expenditures compared against the authorities • Comparative financial information for the preceding fiscal year • A narrative section • Increasingly will be used to report on the impact of Budget decisions

  19. Accounting Standards • Employee termination benefits (Budget 2012 measures) • IFRS/PSAS conversion for certain government entities • Newly introduced concept of Net debt in departmental financial statements • New accounting standards: • Financial Instruments • Liabilities for contaminated sites • Government Transfers • Tax Revenue • Financial Statement Presentation

  20. Financial Management Transformation Initiatives • Convergence of Financial Systems and Processes • Canada is converging their remaining 5 departmental financial management systems into one standard configuration; • Governance structures and times lines are now being developed for the government moving forwards; • Consolidation of Financial Services • Strategic information for decision making is of better quality and faster to produce (e.g. CEDI, OpenGov, etc.) • Improved stewardship of scarce resources • Better and more efficient containment costs and financial management resources (People, processes and information)

  21. Management Accountability Framework (MAF) • MAF is an assessment of departmental performance in a number of key management areas including financial management. • Three main objectives • Clarify management expectations for deputy heads; • Develop a comprehensive and integrated Treasury Board perspective on management issues and challenges; and • Determine enterprise-wide trends and systemic issues.

  22. ...using a four point “Maturity Model” scale Strong • Continuous learning and improvement to achieve highest standards • Sets best practices • Derives greatest value from its management • Is a leader and an example to others In most areas of management, focus is on growing capability and improved practice Acceptable* • Robust corporate engagement • Sound management infrastructure in place • Compliant with TB policies • Demonstrated accountability Opportunity for Improvement • Aware of its deficiencies and taking steps to redress • Plans/activities may be underway and accountabilities may be assigned • Corporate engagement not yet sustained Attention Required *represents TBP expectation/requirement of all organizations • Little corporate attention • Gathers little information regarding its conditions • Little effort to understand vulnerability • Little done about key issues In areas where new TB policies are being phased in (e.g. audit, evaluation), focus is on progress towards full implementation

  23. Convergence of Financial Systems and Processes • Canada is converging their remaining 5 departmental financial management systems into one standard configuration • SAP is the system of choice (ERP Standard) • Many concepts of operations are being reviewed – departmental clustering, outsourcing functions, hybrid solutions, shared services solutions, etc • Legislative frameworks already exist to allow this to happen • Governance structures and timelines are now being developed for the government moving forward • Convergence will not be organic – we will accelerate

  24. Consolidation of Financial Services? Enterprise • Differing concepts of operations can be contemplated • Administrative service delivery is improved and made more efficient • Strategic information for decision making is of better quality and faster to produce (e.g. CEDI, OpenGov, etc.) Departments and Agencies • Better information and analysis tools for organisations • Improved stewardship of scarce resources • Better and more efficient containment costs and financial management resources (People, processes and information)

  25. So what does this all mean to the financial officer community?

  26. Accounting Profession – Landscape across Canada • The unification initiative is progressing quickly at the national and provincial levels • Some parties have left discussions • A three-way unification completed in Quebec • Proposals between CAs and Certified Management Accountants (CMAs) reached in many provinces except: • Alberta, where CMAs are poised to unify with the Certified General Accountants (CGAs), and • Ontario, where only the ICAO is supporting joining CPA Canada

  27. CA-CMA-CGA unification information • A Framework For Uniting The Canadian Accounting Profession • Professional Environment: Canadian and International • Four Unification objectives translated in benefits for members • Next Steps Unification Framework: • Canadian accounting profession is provincially regulated • Any decisions regarding merger proposals would be made provincially • Unification status interactive map: http://cpacanada.ca

  28. Canadian CPA Certification Program • Program Design • CPA Competencies • Program Details • Education • Examinations • Practical experience • Transition

  29. CPA Professional Education ProgramAnticipated Key Target Dates Fall 2013: • CPA Professional Education Program will be available Fall 2014: • Final full offering of the CA UFE Fall 2015: • The first CPA Common Final Examination will be written

  30. CPA Impact on Recruiting and Development in the Government of Canada • OCG is actively following the merger discussions. • OCG will be reviewing the implications of the CPA merger and professional program on the financial officer community and the current recruitment and development programs.

  31. Financial Officer Training

  32. Managing your career during challenging times

  33. Financial Officer Career Management Tool Kit

  34. Financial Officer Career Management Tool Kit • FI to CFO Career Path • Competencies • FI core curriculum • Financial Management Community Strategic Plan • Current Environment of Fiscal Restraint

  35. Financial Officer Training– FI to CFO Career Path • Developed by the DCFO Council to help Financial officers and financial executives map out their career objectives and goals against pre-determined criteria • Focus is on reaching a CFO position but can also be used for other specialized career paths within finance • Works on two dimensions: the number of levels before obtaining a CFO position and the specific requirements of each of these levels. • OCG working with FM community on revitalizing the FI to CFO Career Path (two distinct paths that interconnect). Will take into consideration requirements of CFO Talent Management Initiative. • New career path will include a “Welcome to the FM Community” page for each level in the career path (FI and EX) and will be housed on FM community GCPedia page: http://www.gcpedia.gc.ca/wiki/Financial_management_community

  36. Financial Officer Training – FI Competencies • Competencies are defined by the Public Service Commission as being “the characteristics of an individual which underlie performance or behaviour at work”. • In order to remain relevant, competencies must evolve with the role or job.

  37. Financial Officer Training – FI Competencies Benefits to using competencies:

  38. Financial Officer Training – FI Competencies FI Competency profiles Behavioural (includes the 7 key leadership competencies) • Oral and written communications • Risk Management • Negotiation • Values and Ethics • Strategic Thinking: Analysis and Ideas • Engagement • Management Excellence: Action, People, Finance Functional (based on four FM functional areas) • accounting and reporting • planning and resource management • Financial policy, • Financial Systems

  39. Financial Officer Training – FI Competencies • The FI Competency Profiles and the Employee guide on Competency-based Management have been approved by the Comptroller General • Guidelines and a Managers guide on Competency-based Management are being developed (anticipated completion date September 2012) • All competency documents will be posted on the FM community GCpedia site at: http://www.gcpedia.gc.ca/wiki/Financial_management_community • Training will be provided for managers in October 2012 and for employees in January 2013

  40. Financial Officer Training – FI Core Curriculum • Developed in conjunction with the Canada School of Public Service • Consists of courses and training events that address the knowledge and skills required of all financial professionals to meet their legal responsibilities

  41. STRATEGIC ASSESSMENT FUNCTIONAL ASSESSMENT BASIC ASSESSMENT PROFESSIONAL DEVELOPMENT FOR FINANCIAL MANAGEMENT SPECIALISTS FI-01 CFO BASIC FUNCTIONAL STRATEGIC DEVELOPMENTAL CORE New for 2012/13 – csps now accepting registrations

  42. Financial Officer Training – FI Core Curriculum 2012-2013 New Activities: • Strategic Series – Schedule of events: • Expectation seminar (Oct 19) • Strategic Relationships for Finance Managers (Dec 3) • Two minute briefings (Dec 14) • Managing sensitive conversations (Jan 15) • Seizing opportunities in a change environment (Jan 25) • Management and Leadership: Master both! – full day event (Feb 15)

  43. Financial Officer Training – FI Core Curriculum 2012-2013 New Activities: • New courses update: • Risk Management for the Finance Professional – Course content under development • Introduction to Revenue and Funding Arrangements – Course Training Plan (CTP) to be approved

  44. Financial Officer Training –FM Community Strategic Plan • The 5 year strategic plan will be developed to incorporate the needs and priorities of the financial officer community • FM Community Survey Questionnaire is under development and will seek input on demographics, mobility and learning and professional development priorities. Anticipated release date – late October, 2012. All FIs and EXs will be invited to participate • Focus groups or workshops will be conducted late fall 2012 to identify the community’s maturity against its proposed “ideal’ state and to develop key HR strategies and activities for the next 5 years

  45. Financial Officer Training – Current Environment of Fiscal Restraint Training and Career Development • New and creative strategies required; increased emphasis on collaboration and in-house opportunities • Emphasizes the importance of learning plans • The responsibility for professional development is shared by both the employee and management

  46. Successful Interviewing, Resume Preparation and Networking

  47. Managing your career • Preparation – useful questions • Competition process • Resume preparation • Interviewing • Networking

  48. Career Planning - Useful Questions Questions that can help you chart the right course: • Who are you? • What are you looking for in an organization or job? • What is important to you? • What are you looking for? • How do you learn best? • What tools do you have at your disposal? (competency profiles, manager/peer feedback, evaluations, self-assessments, learning curriculum, career path, personal learning plan)?

  49. Staffing Process Poster & SoMC (Publiservice) Application Part 1 (application form, covering letter, resumé, other documents) Part 2 Screening Preparation (should start at time of application) Written ExamInterview Part 3 Closing the Process (Post-Mortem & Recourse) Black = employer Blue = prospective candidate

  50. Poster - Actual job opportunity advertisement - Includes some of the information detailed on the Statement of Merit Criteria - Provides other information such as: • Area of selection – who and where* • Closing date* • General inquiries information (contact person) • Where and how to submit your application • Other information/requirements about the process: • Documents required and format* • Tools that may be used to assess candidates • Results expected (job offers, pool of candidates, etc.) • Any other important information for the candidates It isimportant to submit all documents in the format requested and within the timeline indicated as failure to do so would affect your eligibility into the process * Part of selection criteria