Thank you for that, Mr. Chairman, and for the opportunity to appear before the committee.
It's my first appearance in its new constitution, so congratulations to you all. I'm sure I'll be back a few times.
Given your interest, I will give a brief overview of the roles and responsibilities of the Treasury Board Secretariat. But given your expressed interest in the expenditure management system, especially the estimates and supply processes, the public accounts audit, and financial management, my colleagues, Jim Ralston, the Comptroller General, and Bill Matthews, the assistant secretary of expenditure management at the Treasury Board Secretariat, will be picking up on my presentation to talk about their areas of responsibility.
I will start by setting out the functions of the Treasury Board and its secretariat.
The Treasury Board is a committee of cabinet which was established in 1867 and given statutory powers in 1869. It sets the government's administrative and management policies; authorizes and reports on expenditures and sets program and other authorities; and establishes the workplace and workforce policies for the government, including the terms and conditions of employment for the core public administration. It is in essence the government's management board, the budget office, and the people management office. Given the committee's mandate and interests, I will focus my remarks on the management board and budget office roles.
The secretariat is the departmental arm of the Treasury Board. It supports the board in fulfilling its mandate by performing an enabling function, as we call it; a challenge and oversight role; and a leadership role in driving and promoting management excellence. By working with senior officials in departments and agencies and with various communities of practice, as we call them, such as deputy heads, financial officers, information officers, and heads of human resources, it enables organizations to develop the tools, the capacity, and the processes they need to fulfill their management responsibilities.
In driving and modelling management excellence, we support effective management of people and the development of leadership practices. In exercising our challenge and oversight role, we review and assess requests for expenditure and other authorities that are brought to the Treasury Board. We assess government-wide expenditures against priorities, and we provide Treasury Board ministers with our recommendations and advice. We aim to ensure that government is well managed and accountable and that resources are allocated to achieve results.
With regard to the management board function, there has been a significant shift in the way in which the Treasury Board Secretariat exercises its roles and responsibilities. We have moved away from the prescription of centrally-driven and detailed rules, policies and directives, to principles-based frameworks and policies, focused on the appropriate allocation of resources (human, financial, and material) to achieve planned results, with the concomitant reporting mechanisms. The accountability for implementation, compliance and reporting rests with each organization and its deputy head.
The secretariat uses a variety of tools to assess an organization's management capacity, the most comprehensive of which is the management accountability framework, or MAF. Through this process organizations self-assess, or report, against 14 areas of management; and secretariat officials play a challenge role and rate the organizations against their expected performance. These areas of management cover the most important elements of financial, human resources, and material management, but they also include management of information technology and security, for example, as well as values and ethics.
The MAF's objectives are to clarify management expectations of deputy heads and support an ongoing discussion on management priorities and best practices; to provide a comprehensive perspective on the state of management practices and challenges in the federal government; and to identify government-wide trends in order to help deputy heads set priorities and resolve core issues.
For example, as you will hear from the Comptroller General with regard to internal audit, our audit policy requires that organizations have an internal audit function, with appropriate professional certification, that reports directly to the deputy head to establish its independence from the daily operations of the organization; an organization must also establish an audit committee made up in large part of people independent from the public service. Beyond using the MAF to assess whether these elements are in place, the OCG also assesses, for example, whether the organization's audit plan offers sufficient coverage and is aligned with its stated risks.
In taking a more risk-informed approach to our policies and compliance requirements, we've also been consciously reducing the reporting burden on organizations. For example, we have significantly streamlined many of our policy reporting requirements by combining them in large part with the annual assessment of organizations through the management accountability framework.
We are also increasingly moving to electronic and web-based reporting and publications—as evidenced by the new quarterly financial statements and detailed tables in the Public Accounts. Our minister is strongly encouraging us to reduce the paper burden on organizations and parliamentarians, and we will be piloting the move away from paper tabling to electronic or virtual tabling. With regard to our budget office role, we have also made significant changes—focusing on the allocation of resources to the government's priorities, and reporting on expenditures against performance and results.
Organizations are required to have a resource management and program activity reporting framework against which resources are attributed and indicators measure performance. These are the elements that members of Parliament will see in organizations' reports on plans and priorities, and which are set out every year in the performance reports on how we achieve those results.
More recently, as I just mentioned, organizations have also been required to post on the web their quarterly financial statements outlining actual expenditures against planned expenditures, and to set out any significant risks or issues that could effect their plans. The first quarterly financial statements were posted on each organization's website on August 31, and the next posting will be at the end of November.
We are one of the few countries in the world with such a comprehensive and public results-based reporting system.
In keeping with our budget office role, and with our goal to align resources to priorities, over the past four years, the secretariat has overseen the strategic review process, during which organizations’ program expenditures were reviewed to reallocate funds from low to higher priorities and to reduce overall program expenditures. Starting in 2007 and concluding in 2010, 98% of the government’s program expenditures have been reviewed, and ongoing savings of $2.8 billion have been achieved. This year, we will be reviewing all direct program expenditures with a goal of achieving savings of at least $4 billion by 2014, as part of the government’s deficit reduction action plan.
Mr. Chair, we've seen the changes and evolution in the enabling, leadership, and challenge roles played by the secretariat, as reflected in the way the Office of the Auditor General sets its priorities in auditing organizations and in its appreciation of the government-wide responsibilities of the secretariat. We've been pleased to note the OAG's increasing openness to relying on the work of internal audit in organizations, in recognizing the roles and responsibilities of deputy heads in the management and oversight of their organizations, and in the secretariat's movement away from prescription to more results-based and risk-informed management policies and directives.
All in all, Mr. Chair, we are seeing, and have seen, significant improvements in the management of public resources.
My colleagues will further elaborate on how the secretariat supports organizations in Parliament with regard to expenditure management and internal audit.
This concludes my remarks and I will ask Bill Matthews to continue with his presentation on the estimates process.