CCA Covers Federal Review Processes

CCA Bul­letin 17/09

June 11 , 2009

 

 

Just the Facts

The recent announce­ment of strate­gic reviews includ­ing the CBC, the National Film Board and the Canada Coun­cil for the Arts has trig­gered some under­stand­able con­cerns within the arts and cul­ture sec­tor.  To help under­stand this process and its pos­si­ble con­se­quences, this bul­letin will aim to clar­ify the types of expen­di­ture review processes under­way across the full range of fed­eral depart­ments and agen­cies. If there is any ques­tion about how care­fully gov­ern­ment spend­ing is mon­i­tored, the review process out­lined in this back­grounder should allay any fears of abuse or lack of accountability!

The Expen­di­ture Man­age­ment Infor­ma­tion System

The Expen­di­ture Man­age­ment Sys­tem was first intro­duced by the Lib­eral gov­ern­ment of Prime Min­is­ter Jean Chré­tien in the 1990s as a good man­age­ment tool. This annual process requires every depart­ment and agency to iden­tify areas of lower pri­or­ity which can then be allo­cated to higher ones. The funds iden­ti­fied can be real­lo­cated within the depart­ment or agency in ques­tion or, in the­ory at least, be sent back to Trea­sury Board for other gov­ern­men­tal priorities.

The ratio­nale for the Expen­di­ture Man­age­ment Infor­ma­tion Sys­tem (EMIS) is described by the Trea­sury Board.

“The core mech­a­nism is the Bud­get plan­ning process. Min­is­ters and Cab­i­net com­mit­tees play inte­gral roles in this process. Min­is­ters have oppor­tu­ni­ties to bring their pri­or­i­ties for­ward in con­sul­ta­tion with their col­leagues. They will iden­tify sig­nif­i­cant new spend­ing ini­tia­tives, which gen­er­ally reflect major pol­icy themes, and fund these ini­tia­tives at Bud­get time through con­cur­rent reduc­tions to, or the elim­i­na­tion of, lower pri­or­ity pro­grams. Cab­i­net will drive an inte­grated Bud­get process, draw­ing on the advice and rec­om­men­da­tions of the key stake­hold­ers who include Mem­bers of Par­lia­ment and the public. (…)

There will be no cen­tral pol­icy reserves to fund new ini­tia­tives. Depart­ments will have to oper­ate within their exist­ing resource lev­els. The fund­ing of new pri­or­ity ini­tia­tives through real­lo­ca­tions from pro­grams con­sid­ered a low pri­or­ity will have to take place dur­ing Bud­get preparations.”

The Strate­gic Review of Expenditures

A fur­ther process referred to as a Strate­gic Review of expen­di­tures has been intro­duced by the present gov­ern­ment in 2007. The Strate­gic Review process is described in terms remark­ably sim­i­lar to the EMIS:

“Strate­gic reviews are assess­ments of all direct pro­gram spend­ing to ensure pro­grams are man­aged effec­tively and effi­ciently. These reviews sup­port a more rig­or­ous results-based approach to man­ag­ing tax­payer dol­lars respon­si­bly and deliv­er­ing effec­tive and effi­cient pro­grams that can bet­ter meet the pri­or­i­ties of Canadians.

As part of the strate­gic review process, depart­ments will review their direct pro­gram spend­ing and the oper­at­ing costs of their major statu­tory pro­grams on a four-year cycle to assess how and whether these programs:

Through the strate­gic review process, depart­ments will also deter­mine whether there are any lower pri­or­ity, lower per­form­ing pro­grams for pos­si­ble real­lo­ca­tion of fund­ing to higher pri­or­ity, higher per­form­ing pro­grams within the depart­ment or government.”

The main dif­fer­ence with EMIS resides in the fre­quency and the trans­parency. The Strate­gic Review hap­pens on a four-year cycle and has a tar­get fig­ure of 5% of the bud­gets for real­lo­ca­tion to higher pri­or­i­ties, within the Depart­ment or agency or else, to other gov­ern­ment pri­or­i­ties. A list of depart­ments and agen­cies is selected for inclu­sion in the strate­gic review exer­cise for each year. The results of strate­gic review process are reflected in the next fed­eral bud­get and the Main Estimates.

This new review has been char­ac­ter­ized as part of the fed­eral bud­get process and there­fore pro­tected from pub­lic dis­clo­sure as to how the deci­sions to real­lo­cate or elim­i­nate pro­grams or areas of activ­ity are iden­ti­fied. This was the case the mem­bers of the Stand­ing Com­mit­tee on Her­itage dis­cov­ered when they asked for the ratio­nale behind the spate of cul­tural pro­gram cuts announced last sum­mer at the Depart­ment of Cana­dian Her­itage and at the Depart­ment of For­eign Affairs. In the case of Her­itage, the money has stayed within the Depart­ment but has been moved from arts and cul­ture pro­grams to other pri­or­i­ties, namely Offi­cial Lan­guages, the per­ma­nent increase of $30 mil­lion to the base bud­get of the Canada Coun­cil and the Olympic Torch relay. The secrecy sur­round­ing the Strate­gic Review has given rise to the sus­pi­cion that this is a polit­i­cally dri­ven exer­cise rather than a pure “value for money” process.

As men­tioned above, the CBC, the National Film Board and the Canada Coun­cil for the Arts are sched­uled to be part of the 2010 exer­cise, cur­rently under­way, a fact that has raised con­cerns within the arts and cul­ture sec­tor as each orga­ni­za­tion risks los­ing respec­tively $50 mil­lion and $9 mil­lion to its Par­lia­men­tary appro­pri­a­tions. It will be the Cabinet’s deci­sion when it deals with next year’s bud­get whether those agen­cies can keep the funds and redi­rect them to higher pri­or­i­ties or new activ­i­ties. The Stand­ing Com­mit­tee on Cana­dian Her­itage has rec­om­mended that the cul­tural pro­grams and ser­vices be exempted from the strate­gic review process; how­ever, there has been no indi­ca­tion that this is likely to happen.

Pro­gram Eval­u­a­tion Process

Each spend­ing pro­gram within the fed­eral gov­ern­ment under­goes a num­ber of eval­u­a­tions at var­i­ous stages of its devel­op­ment and renewal. Typ­i­cally spend­ing pro­grams are approved for a four or five year period fol­low­ing the prepa­ra­tion of a for­ma­tive eval­u­a­tion which estab­lishes why the pro­gram is needed, its expected out­comes, terms and con­di­tions and other such considerations.

Once the pro­gram is approved by Trea­sury Board and Cab­i­net, the respon­si­ble depart­ment or agency must con­duct a sum­ma­tive eval­u­a­tion before seek­ing a renewal or exten­sion of the pro­gram. The pur­pose of this eval­u­a­tion is to deter­mine how effec­tive the pro­gram has been in meet­ing its objec­tives and to iden­tify any adjust­ments that will improve the effi­cacy of the pro­gram in meet­ing its goals and in serv­ing the tar­get clientele.

The deci­sion to renew or extend a pro­gram is made by the Trea­sury Board and Cab­i­net Com­mit­tee respon­si­ble for the nature of the pro­gram in question.

Reviews by the Audi­tor General

Some of these reviews are ongo­ing, such as the annual review by the Audi­tor Gen­eral of Canada, and peri­odic spe­cial audits which delve more deeply into the man­age­ment prac­tices and expen­di­tures of the Crown Cor­po­ra­tion in ques­tion. Spe­cial audits hap­pen at least every five years, or can be con­ducted more fre­quently should the Office of the Audi­tor Gen­eral deem the need for a more rig­or­ous exam­i­na­tion of the activ­i­ties of a depart­ment or agency. The Canada Coun­cil under­went a spe­cial audit last year: the con­clu­sions were over­whelm­ingly favorable.

The Audi­tor Gen­eral can also under­take per­for­mance audits of gov­ern­ment depart­ments and agen­cies. These are defined as follows:

“A per­for­mance audit is a sys­tem­atic, pur­pose­ful, orga­nized and objec­tive exam­i­na­tion of gov­ern­ment activ­i­ties. It pro­vides Par­lia­ment with an assess­ment on the per­for­mance of these activ­i­ties; with infor­ma­tion, obser­va­tions and rec­om­men­da­tions designed to pro­mote account­able gov­ern­ment, an eth­i­cal and effec­tive pub­lic ser­vice, good gov­er­nance, sus­tain­able devel­op­ment and the pro­tec­tion of Canada’s legacy and heritage.

Its scope includes the exam­i­na­tion of econ­omy, effi­ciency, cost-effectiveness and envi­ron­men­tal effects of gov­ern­ment activ­i­ties; pro­ce­dures to mea­sure effec­tive­ness; account­abil­ity rela­tion­ships; pro­tec­tion of pub­lic assets; and com­pli­ance with author­i­ties. The sub­ject of the audit can be a gov­ern­ment entity or activ­ity (busi­ness line), a sec­toral activ­ity, or a government-wide func­tional area.”

The results of reviews by the Audi­tor Gen­eral are made pub­lic and are often the focus of dis­cus­sions at var­i­ous Stand­ing Com­mit­tees of the House where MPs can ask ques­tions about the find­ings con­tained in the report.