journal Sharing Best Practices in Managing Public Sector Resources WINTER 2006

VOLUME 17, NUMBER 2

Public Sector Management Workshop 2006

The Leading Edge Delta Hotel & Convention Centre St. John’s, Newfoundland & Labrador June 4 – 6, 2006

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journal inside fmij Winter 2006

Volume 17, Number 2

The Financial Management Institute of Canada Managing Editor Claire Kennedy Assistant Managing Editor Carolyn McDonald Editorial Board aRKay Rocky Dwyer Sylvie Guertin-Pagé Bruce Hirst David Jones Claude Legault André Robert Martin Ruben Germain Tremblay Gilles Vézina Advisory Board Chairperson John Wiersema Advisory Board Members Jim McCarter Steve McLaughlin (Secretary) Pierre-André Paré Ron Smith Germain Tremblay Desktop Publisher Ian Culbert FMI Administrator Joanne Steadman The fmi journal is published three times a year by the Financial Management Institute of Canada. All rights reserved. Reproduction in whole, or in part, without written permission from the publisher is prohibited. Opinions expressed are not necessarily those of the Financial Management Institute of Canada. Publications Mail Agreement Number 40040265. Return undeliverable Canadian addresses to: Circulation Department Financial Management Institute of Canada P.O. Box 613, Station B, Ottawa, ON, K1P 5P7 Telephone: (613) 569-1158 Fax: (613) 569-4532 Email: [email protected] WWW English section: www.fmi.ca WWW French section: www.igf.ca WINTER 2006

Departments 2 Message from the President 5 From the Desk of the Managing Editor 6 FMI Board of Directors 2005-2006 8 fINANCIAL mUSINGS & iNSIGHTS 46 Chapter News 52 Public Sector Management Workshop 2006 Features 10 The “Little White Lie” of Government Procurement David Swift 12 Federal Government Management Reform Initiatives: Are They Needed? Alan Gilmore 15 Evaluation Framework for an Alternative Dispute Resolution (ADR) Program Tony Humphreys 20 If “Trust Leads to Loyalty” – What Leads to Trust? Rocky J. Dwyer 23 Ten Years at the Leading Edge of Government On-Line Kerry B. Smith 24 Streamlined Planning and Performance Measurement for Small Agencies Michael Kelly and Garry Sears 30 Supporting Improvements in the Quality of Financial Information Daniel Paquette 33 Does Your Organization Need Integrated Investment Planning? Hendrik Siré 36 Business Information Services for Management Decision-making Mark O’Connor 39 Chartered Public Finance Accountant – A New Accounting Designation Comes to Canada Stacy Van Humbeck 41 Financial Officer/Internal Auditor Recruitment and Development (FORD/IARD) Program 42 Insight into the Public Service Modernization Act (PSMA) Rules Are Out, Values Are In... Kinda! Gems from Jill LaRose Merit? George Da Pont’s Litmus Test George Da Pont 44 New Policy on Learning, Training & Development Wendy White-Cserepy Columns Personal Financial Planning 9 New Retirement Strategies for Canadians Over 45 From Behind the Green Eyeshade 50 Accounting as the 6th Estate? Bruce Manion For marketing opportunities, please contact Bruce Shorkey at (613) 829-9913 or [email protected] FMI JOURNAL

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president MESSAGE FROM

THE

ccountability, the buzz word of the year. Everyone from Judge Gomery, to politicians, to the media, to our next door neighbours are talking about it. But what does it really mean? I’m not the type to go look it up in the dictionary. I prefer to dissect it and give it a real practical definition. For me, there are two parts to accountability: ‘’account’‘ and ‘’ability’‘. As public sector resource managers or advisors we must ‘’account’‘ for our actions and decisions, but we must also possess the appropriate ‘’abilities’‘ required to fulfil our roles and responsibilities. Without these abilities we cannot be held to account very Jean Laporte effectively. The public and politicians want increased accountability. Therefore, let’s seize the opportunity. First, let’s Nomination of Roland Letarte as an Honorary Life Member increase our abilities through more training and proVolunteers are the life-blood of any organization such as the FMI. Without these fessional development. Once we have spruced up our volunteers, we would cease to exist. knowledge and skills then we can be held to account Over the years, in the FMI, one person has come to represent this spirit of volunto higher standards. Now is the time to make your teerism. That person is Roland Letarte sometimes known to his friends as Watson. pitch for more time and resources to be allocated to In 1988, Roland Letarte, along with Pierre André Paré, was responsible for the your professional development. Don’t miss the opporestablishment of the Québec chapter of the FMI. Under their guidance, the chaptunity, and remember that the FMI is one of the best ter has grown and prospered and is second only to the Ottawa chapter in size with sources in Canada for professional development. over 400 members. On a different note, half of my term as your Roland Letarte served as chapter National President has already gone by. However, I president in 1990/91 and 1991/92 am glad to report that significant progress has been and has remained on the board made on the three priorities I had defined for 2005since that time in the position of 2006. Significant improvements have been made in vice-president of public relations. the communications between the FMI National and This year marks his 18th year of the 12 regional chapters. For instance, chapter reprecontinuous service on their board. sentatives are now actively engaged in our working During his tenure on the groups. Secondly, the Board of directors has recently Québec board, he was active in a approved a new five year strategic plan that will serve wide variety of roles. He was a as a guide for our future activities. This plan will soon leader in the process of the incorbe posted on our web site. Finally, improvements to poration of the chapter and, in fact, our internal operations are also in progress and we are set the process in place for other exploring options for enhanced partnerships with chapters to follow across the counother organizations. I am now more confident than try. He also played a key role in the development and implementation ever that we will fully deliver on our ambitious agenRoland Letarte, left, receiving from Jean of the chapter’s unique and very Laporte, President of the FMI, the certificate da. effective “forfait” membership pro- naming him as an FMI honorary life member. As promised, we have also maintained the on-going gram. delivery of quality professional development activities The Québec chapter has hosted 2 Public Sector Management Workshops to and networking opportunities. Our PD Week 2005 is date with a third event in the planning stages. Roland has played a leading role the biggest success ever. The expanded number of in all of these events. He was the Co-chair of the first workshop, and was/is a key events, combined with a selection of top quality member of the Organizing Committee for the other two events. speakers, have attracted a record attendance. CongratRoland joined the national board of the FMI in 1990/91 and 1991/92 in his ulations once again to Mark Huard, Marcel Boulianne position as the president of the Québec chapter. He was then invited to join the and their team of volunteers for their outstanding executive of the board as a Liaison Director and has held that responsibility on work. The finishing touches are now being done on the national board to this day. This year represents 16th year of continuous servthe planning for the upcoming Public Sector Manice on the FMI national board. agement Workshop to be held on June 4-6, 2006 in Early records of the FMI are scanty in places, but it is probably accurate to say St. John’s, Newfoundland and Labrador. The organizthat this record of service is unparalleled in the history of our organization. ing committee has put together a top notch program. I hope to see many of you there for the workshop and ...continues on page 35 for our annual general meeting. 

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FMI JOURNAL

VOLUME 17, NO. 2

RFPs that deliver results! RFP SOLUTIONS – Procurement Strategies for Government, is an Ottawa-based firm of procurement, legal, accounting and engineering professionals. RFP SOLUTIONS works exclusively for government agencies, to help public sector managers reduce the risks, delays and complexities associated with the RFP process. RFP SOLUTIONS has contributed to numerous government RFPs in areas such as IM/IT professional services, communications, training, audit and evaluation, and consulting services. RFP SOLUTIONS’ clients include Canada Revenue Agency, Indian and Northern Affairs, RCMP, Auditor General, Health Canada, Foreign Affairs, Justice, Industry Canada, Canada Post Corporation and numerous other public sector organizations.

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journal The fmi journal is Canada’s leading magazine for public sector professionals involved in the field of public sector financial management. Its major articles, columns and news cover a broad range of government accounting, auditing, and financial management topics of concern to professionals. fmi journal readers hold influential positions in public accounting, and have responsibilities in a variety of areas: financial management, information systems, administration and human resource management to name a few. Its authors are individuals who hold senior or experienced positions within government and the private sector. These individuals share their experience and expertise in areas of concern to professional public sector accountants and managers with financial responsibilities. Virtually any topic of interest to the financially-oriented public sector executive may be found in the fmi journal. A non-profit organization, the FMI has opened 13 chapters across Canada in the past 40 years. Today, the fmi journal enjoys a readership of more than 2,000 professionals. The organization hosts two annual national conferences: PD Week based in Ottawa and held in late November, and the Public Sector Management Workshop which takes place in May at a different location each year.

Win a Trip to Winnipeg! The Alan G. Ross Award for Writing Excellence is awarded annually to the individual(s) who contribute the best article (feature or column) to the fmi journal during the year. The award is a plaque and a complimentary trip to the FMI’s annual Public Sector Management Workshop. If your article is printed in the Winter, Spring or Fall 2006 issue, you will become an eligible contestant for a trip to Winipeg in the Spring of 2007. The fmi journal editorial team look after, at a minimum, the subject areas following their names: aRKay - fINANClAL mUSlNGS & iNSlGHTS Rocky Dwyer - Liaison with Academic Institutions - (613) 996-4534 Sylvie Guertin-Pagé - Human Resource Management - (613) 994-7398 Bruce Hirst - Federal Financial Management - (613) 943-8763 David Jones - Office and Home of the Future - (613) 946-3083 André Robert - Audit Management - Internal - (613) 952-3141 Martin Ruben - Audit Management - External - (613) 995-3708 Germain Tremblay - Provincial Financial Management - (613) 996-8269 Gilles Vézina - Management Issues - (613) 952-1414 These editors welcome timely and relevant articles from you. Feature articles are generally 2500 to 4000 words. Other articles or input to a regular column are normally shorter (500 to 2500 words). Letters to the editor are also welcome. Please address your correspondence to any of the team members or to Claire Kennedy, Managing Editor: fmi journal Financial Management Institute P.O. Box 613, Station B Ottawa, Ontario K1P 5P7 If you wish to be considered as an editor of the journal, please write to the Managing Editor, and indicate your area of expertise and the type of articles or column to which you wish to coordinate or to which you would like to contribute on a reasonably continuing basis. The recommended form of input is in Microsoft Word or WordPerfect formats. It is preferable that the documents be in bilingual format. Graphics must be kept separate (not inserted into the text). Advise what software was used to produce the graphic. The author’s photo and short biography are also requested. The FMI can no longer supply quantities of additional copies to readers. Reprints, however, are available at a reasonable price. The minimum order is 50 copies. Subjects of Interest to Our Readership  Accountability   Asset Management   Audit Practices   Banking & Cash Management   Best Practices   Business Planning   Career Advice   Community Profiles   Electronic Commerce   Expenditure Management   Federal/Provincial/Municipal Reviews   Government Accounting Policy 

Human Resource Management Humour Information Management Planning & Resource Allocation Precis of Recent Government Leaders’ Publications or Speeches Public Service Renewal Revenue Management Salary Management Summary/Highlights of Conferences or Seminars Systems Technology Trends

managing editor FROM THE DESK OF

THE

here have been significant developments since the fall publication of the Journal. The federal election and the release of Justice Gomery’s reports created a lot of turmoil in the country. Themes such as transparency and accountability in the management of public funds continue to dominate the news. Our winter issue contains a range of articles on these themes, as well as an update on key initiatives in the public service. The management framework for public spending is regularly reviewed and improved. Alan Gilmore’s article on federal management reform puts all the efforts made over the past few years into perspective and raises the question of whether new controls are always the best solution … Decision-making is driven in large part by the quality of the financial information available to management at all organizational levels. Daniel Paquette provides an overview of the weaknesses identified in a number of internal financial control systems and the efforts required to promote improved financial information. We frequently hear stories about the challenges that face small organizations trying to implement evaluation frameworks that were developed for much larger ones. The article by Michael Kelly and Gary Sears outlines a simplified approach to performance evaluation and measurement that

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meets the criteria for a sound accountability mechanism tailored to suit a small organisation. Materiel management is a major concern to managers. In his article, David Swift challenges the traditional practice of comparing proposals in awarding contracts and suggests a much more flexible process. If your organization is considering a more integrated approach in its investment planning, you should read Hendrik Siré’s article on investment challenges, goals and achievements. Human resources management is complicated and conflict management is almost inevitable. Tony Humphreys shows clearly what is involved in evaluating an alternative dispute resolution method and shares best practices with us. Kerry Smith brings us up to date regarding the government’s on-line technology, and describes the remarkable progress made by Publiservice that aims to provide, on line, work tools and a wealth of information. There is a new accounting designation in Canada. Stacy Van Humbeck describes the new program and the pilot project that is currently under way. Our winter issue includes a number of other articles that will give you practical advice on resource management. Bruce Manion’s humorous touch will

Claire Kennedy

help you keep all these challenges in perspective! I would like to thank all the authors of the articles published in the Journal for their extraordinary work. They are practitioners who have taken the time to share their knowledge and experience with us so that we can all benefit. Kudos to all of you! The FMI is proud to offer programs aimed at promoting and sharing sound management practices in human resources, finances and materiel management. All of you who took part in the professional development week and all of the volunteers made the activity a great success. Hats off to the entire team! Put the 2006 workshop on financial management in the public sector on your calendar from June 4 to 6, 2006, in St. John’s. There will be a dynamic program and excellent speakers who will discuss the latest developments in current issues such as values and ethics, risk management and accountability. I look forward to seeing you in St. John’s! 

Annual General Meeting Official notice of the Annual General Meeting of FMI National to be held in St. John’s, Newfoundland & Labrador, on Monday, June 5, 2005 at 4:15 pm. WINTER 2006

FMI JOURNAL

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HEADER

FMI Board of Directors 2005-2006

Executive and Management Sub-Committee President Jean Laporte Vice President Peter Wolters Treasurer Duane Wilson Secretary Derwin Banks Past President Nicole Campeau

Phone (819) 994-8004 (506) 453-8187 (613) 990-2683 (902) 432-5139 (613) 943-2353

Fax (819) 997-2239 (506) 453-7154 (613) 990-9077 (902) 432-5586 (613) 992-8443

Email [email protected] [email protected] [email protected] [email protected] [email protected]

Administrator

Joanne Steadman

(613) 569-1158

(613) 569-4532

[email protected]

Hugo Pagé Claire Kennedy Carolyn McDonald Roland Letarte Mark Huard Marcel Boulianne Gary Snow Bryn Weadon

(613) 944-1644 (613) 992-6169 (613) 996-0429 (418) 622-5214 (613) 954-6226 (613) 715-5227 (709) 772-4683 (613) 992-6907

(613) 995-2116 (613) 947-3571 (613) 947-2860

[email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

Directors Liaison East Liaison West Professional Liaison and Communications Special Director, Corporate Renewal

Derwin Banks Ron Stoesz Kim Elliott Ron Smith

(902) 432-5139 (204) 983-2277 (613) 957-4202 (204) 269-5873

(902) 432-5586 (204) 984-4253 (613) 952-1782

[email protected] [email protected] [email protected] [email protected]

Chapter Presidents Alberta Capital (Ottawa) Fredericton Halifax Manitoba Montreal Prince Edward Island Québec Regina St. John’s Vancouver Victoria

Suzanne Kyle Karen Robertson Yvonne Samson Kathryn Burlton Cheryle Boutilier Mario B. Roy Al Green Serge Boisseau Mike Pestill Sonya Janes Arthur MacKenzie Gordon Gunn

(780) 412-5308 (613) 991-7895 (506) 453-2150 (902) 464-2000, x 2843 (204) 983-6276 (450) 645-0978 (902) 566-8752 (418) 648-2488 (306) 787-9219 (709) 772-4175 (604) 666-9450 (250) 480-3563

(780) 412-5378 (613) 991-7674 (506) 453-2900 (902) 464-2120 (204) 984-4253 (450) 645-0960 (902) 368-0411 (418) 648-4234 (306) 787-5830 (709) 772-8805 (604) 666-9723 (250) 480-3539

[email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

Marketing Coordinator

Bruce Shorkey

(613) 829-9913

Executive Marketing and Development Editor, fmi journal Assistant Editor, fmi journal Chapter Liaison PD Week 2005 Chairs PSMW 2006 Chairs

(613) 952-5810 (613) 759-6728 (709) 772-8805 (613) 992-9693

[email protected]

FMI Membership Have you renewed your membership? If you have not received your renewal information, contact your local Chapter. Do not delay! There is an exciting year planned. To be eligible for preferred member rates, your membership must be current. Remember the benefits FMI membership offers: • Networking opportunities with over 2,000 professionals in the finance field across Canada; • Professional development conferences, seminars, workshops at preferred rates; • Eligibility for awards and recognition; • Leadership participation in 12 FMI Chapters across Canada; • fmi journal; • And much, much more! 6

FMI JOURNAL

Contact your local Chapter President for information regarding mailing addresses and program activities. Alberta $30.70 Quebec $25.00 Fredericton $32.25 Prince Edward Island $25.00 Halifax $50.00 Regina $25.00 Manitoba $25.00 St. John’s $30.00 Montreal $30.00 Vancouver $30.00 Ottawa/Gatineau (Capital)$37.45 Victoria $25.00 …or send the completed application and payment to: FMI — P.O. Box 613, Station B Ottawa, Ontario, K1P 5P7 VOLUME 17, NO. 1

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fINANCIAL mUSINGS &

iNSIGHTS WRONG QUESTION: Watching a quiz show where contestants had to determine the question, given the answer. Wondered what it would be like if life worked that way. For instance, guy comes home late at night. Wife meets him at the door and says “Trixie”. He then says “Who is the woman I spent the evening with?” etc etc OVER THERE: Went to Toronto recently (Don’t ask why). Went up to the top of the CN (remember them) tower. Bunch of people there standing inline to use the pay-peruse binoculars . . . to look at the ground they just left. TIED DOWN: Was listening to some hillWilliam (politically correct) music recently (someone else had the remote) and kept hearing the words “shoo-fly”. Looked it up - it’s the lace part of footwear. PLEASANT AREN’T WE?: Customer and sales clerk having a disagreement. Eventually the customer said “Look, I’ll try being nicer if you’ll try being smarter.” FLY AWAY: Looked around the office the other day, at the people with whom we have to deal and wondered “What am I? Flypaper for freaks?” FLY BACK: We now understand why some folk do not like flying. The industry uses words like “terminal” and “non-stop” and so many items on board begin with the word “emergency”. PERFECT NONSENSE: Was trying to get away from the boss recently. So we told him that nobody’s perfect and he is a nobody, so therefore he is perfect. He liked that.

recently. Asked her what was wrong. She said she joined a gym and was told to wear loose-fitting clothes. She sobbed “If I had any I wouldn’t have joined.”

UNKINDEST CUT: Friend got a job at the circus circumcising elephants. He claims the pay isn’t great but the tips are enormous.

REBOOT: What this world needs is a lot of easy-to-reach CTRL-ALT-DEL buttons.

DIRT JOKE: Just bought an expensive vacuum cleaner - it sucks!

HEAR H ERE: Boss told me recently that I did not listen to him - at least I think that was what he said, not sure.

THIS’LL FRACTURE YOU: Fell. Hurt arm. Went to emergency, saw a doc. He remarked that a bone in our arm seemed to be affected. We asked if that was a humerus remark. He offered a shot of painkiller but we asked if it would be in vein.

THE FORCE BE WITH YOU: Read that magnetism is one of the 6 Fundamental Forces of the Universe, as is Gravity. Tried to figure out the other 4. Must be Duct Tape, Whining, Remote Control, and Force That Pulls Dogs Toward Groins Of Strangers.” TILL DEBT DO WE PART: Guy at work (newlywed) claimed that marriage was grand. Another (newly-split) said divorce was about 100 grand. TIME: They say time is a great healer but hey, look around, it is a lousy beautician. IF BROKE: Call it an out-of-money experience. LESS IS MORE: Overheard: “Yeah but my inferiority complex is not as good as yours.” TOO BAD THAT’S GOOD: In our office we have a perennial optimist and a dedicated pessimist. The optimist claimed that this was the best of all possible worlds. The pessimist feared it was true.

MUSICAL DIGEST: Ever hear that old song “Today I Passed You on the Street, and Your Heart Fell at My Feet?” Just found out it was written by a cannibal. POLITICAL CORRECTNESS ADVICE: Never ask if someone is Flemish, they might think you said “phlegmish” YOU CAN TAKE THE LAWYER OUT OF THE OFFICE, BUT . . .: He went South to get away and his first drink order was a Subpoena Colada. OXYMORON - COUNTRY MUSIC: Put a country CD on backwards t’other day the singer got his house back, his truck back, his wife back and his dog back! W: The pres was in his office when an aide ran in to tell him that there had been bombings in the London subway and the police had killed a Brazilian. W leaned over to another aide and asked “How many is a Brazilian?”

TALL TALE: Recent news item claimed that 7 Foot Doctors opened a clinic. Guess they’ll need bigger furniture.

QUIT YOUR CARBING: Our secretary (somewhat largish) seemed depressed

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FMI JOURNAL

VOLUME 17, NO. 2

PERSONAL FINANCIAL PLANNING

New Retirement Strategies for Canadians Over 45

f you’re a Canadian investor over 45, the annual retirement savings mantra of “the earlier you start saving, the better your retirement” is getting increasingly tired. Most of you have been focusing on other priorities, including looking after children and developing your careers, to say nothing of mortgages and enjoying your lifestyle. So, if you haven’t saved much for retirement and you’re over 45 - don’t panic. You’ve got time, opportunities and free access to professional advice to help you make the most of the next phase of your life.

Retire Your Way Quick Facts from the 2005 BMO Financial Group and Ipsos-Reid New Retirement Study

Reality Check By 50, many are approaching their peak earning potential. Couple this with a dwindling mortgage, kids that are increasingly selfsufficient and years of accumulated RRSP room, and the potential to build a reasonable RRSP portfolio by age 65 becomes entirely realistic. If you’re like a growing number of 45-plus Canadians, you may also have cut your ties to traditional definitions of retirement, focusing instead on fulfilling a variety of professional, entrepreneurial and volunteer initiatives well after your 65th birthday.

• When pre-retirees are asked about their working expectations post-retirement, 13% say they plan to spend ‘a great deal of time’ working for an employer and 45% say ‘some time’

I

“Many people in their 50s are in a much better position to play ‘catch-up’ when it comes to retirement saving,” says Julie Sheen, Vice President, BMO Term Investments. “With the help of an investment professional, they can build a strategy that first capitalizes on the years of unfulfilled RRSP contributions and the associated tax benefits, and then leverages their peak earnings and savings potential to help create a fulfilling and diverse 60-plus lifestyle.” With the help of an investment professional at your local bank branch, investors can get advice and develop a plan that optimizes their RRSP contributions and helps someone 50 or older to build a viable long-term plan…all at no cost. 

• When asked about the term ‘retirement,’ 84% of retirees and 89% of pre-retirees agree that the word retirement should be redefined because it sure doesn’t mean today what it meant years ago

• What motivates those who are currently retired but still working? The most important reasons cited are: – “To be mentally active” (58%) – “To earn money” (49%) – “Keep in touch with people” (49%) – “Enjoy working” (43%) – “To be physically active” (39%). • Among pre-retirees who are seriously contemplating working post-retirement, key reasons include: – “To be mentally active” (71%) – “Keep in touch with people” (63%) – “To earn money” (61%) – “To be physically active” (56%) – ‘To keep from being bored” (49%) – “Enjoy working” (48%)

Information provided by BMO Retail Investments. For more information visit your nearest BMO Bank of Montreal branch or log on to www.bmo.com/investments

WINTER 2006

FMI JOURNAL

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The “Little White Lie” of Government Procurement: Comparing bidder proposals during an RFP bid evaluation why many government managers do it, why no one should, and what to do about it David Swift hich tie looks better with this shirt? Which political party or candidate will I support in the election? Which long distance savings plan should I sign-up for? The act of relative comparison is embedded within a decision-making process that we engage in countless times each day. By definition, to “compare” is to examine, in order to take note of the similarities or differences which may exist between any number of competing ideas or offerings. For many of us, comparative decisionmaking is an almost instinctive thought process aimed at maximizing our benefits and minimizing our risks, usually involving numerous trade-off considerations, probabilities and other related factors. Irrespective of whether the available options may be few or many, the implications serious or benign, or the decisionmaking process instantaneous or protracted, the act of comparative decision-making is for most a very natural thought process in keeping with well established patterns. When faced with making a decision from amongst any number of competing alternatives, a thoughtful person will compare the relative similarities and differences which exist for the purpose of selecting the option which offers them “the most for the least”. In other words, they will to some extent compare each of the available options before making their decision, ultimately selecting the option which, in their view, delivers the greatest overall benefit as offset by its inherent costs and/or risks. The literature on decision theory abounds, with countless examples as to how comparative analysis techniques are used to facilitate good decision-making in numerous walks of life. Various decision-making models such as decision-trees, paired-comparison analysis, Pareto analysis, cost-bene-

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fit analysis and several others are widely utilized in the fields of medicine, government, commerce, banking, academia and throughout all areas of society. In each instance, these models are used in an effort by both individuals and organizations to make better decisions. A laudable objective, to be sure. So then, if comparative decision-making is such a well established and effective process, why has it been explicitly prohibited within the government procurement process? In a recent determination issued by the Canadian International Trade Tribunal (CITT), the practice by public officials of directly comparing technical (i.e. nonfinancial) elements within one bidder’s proposal to technical elements within another proposal, for the purpose of deriving a score, was cited as a breach of the government’s obligations under the trade agreements (see CITT File # PR-2004-054). The underlying principles in the CITT’s determination were that each technical proposal must be evaluated individually and separately from all other technical proposals, and that all proposals be evaluated in accordance with only the specific evaluation procedures and/or criteria as set out in the Request-for-Proposal (RFP). In other words, no comparison allowed. Why the need for such a limited decision-making methodology? Where was this principle first established, and why is it that government procurement decisions are subject to what some would surely describe as an overly rigid, if not counter-intuitive, decision-making process? A better understanding of these principles and their underlying rationale are, to a certain extent, found within two (2) of the trade agreements, specifically the Agreement on Internal Trade (AIT) and the North American Free Trade Agreement (NAFTA).

David Swift David T. Swift is the Managing Director of RFP Solutions - Procurement Strategies for Government, an Ottawa-based firm of procurement, legal, accounting and engineering professionals. RFP SOLUTIONS works exclusively for government agencies, to help managers reduce the risks, delays and complexities associated with the RFP process. The firm works with government managers to develop effective and compliant RFP’s and to conduct fair and consistent bid evaluations for RFP’s relating to a wide spectrum of requirements. David can be reached by telephone at (613) 728-1335 ext. 235, or by e-mail at [email protected]

Article 506(6) of the AIT states, in part: “The tender documents shall clearly identify the requirements of the procurement, the criteria that will be used in the evaluation of bids and the methods of weighting and evaluating the criteria.” Article 1015(4) (d) of NAFTA provides the following: “awards shall be made in accordance with the criteria and essential requirements specified in the tender documentation”. In attempting to interpret these trade agreement provisions and provide greater guidance to federal contracting authorities, the Treasury Board Contracting Policy (Section 10.7.27) advises that: “Contracting authorities should be aware of successful legal challenges to the contractor selection process. The issue arises from the manner in which evaluation factors are to be used to determine the successful bid. The courts have ruled that the factors and their weighting must be established beforehand and adhered to strictly. The principle of applying bid criteria or requirements equally to all bidders is part of Canadian contract law and is applicable to both the public as well as the private sectors. Fairness to all prospective contractors and transparency in the award process are imperative.” Public sector contracting authorities at every level of government are by now well aware of the need for fairness, consistency and transparency throughout each of the stages of a procurement process; there is nothing particularly new about this. VOLUME 17, NO. 2

THE “LITTLE WHITE LIE” OF GOVERNMENT PROCUREMENT

So why then is the relative comparison of one technical proposal to another considered to be a breach of fairness provisions contained within the trade agreements? To better understand this apparent contradiction, we must return to the world of decision theory alluded to earlier. Decision theorists have long recognized that cognitive biases can and do creep into our decision making processes, ultimately calling into question the correctness of the decisions we make. Sometimes referred to as “logical fallacies”, some of the more common cognitive biases which afflict human decision-making include: • “Selective Search for Evidence” - the tendency to be willing to gather facts that support certain conclusions, but disregard other facts that support different conclusions; • “Selective Perception” – the screening-out of information that we do not think is salient; • “Inconsistency” – the unwillingness to apply the same decision criteria in similar situations; • “Anchoring” – decisions being unduly influenced by initial information that shapes our view of subsequent information; and • “Recency” – the tendency to place more attention on more recent information, and to either ignore or forget more distant information. Long recognizing the prevalence of these and other weaknesses in the decision-making process over the years, legal scholars, policy makers and others have attempted to place limits on the latitude and methods of decision-makers, in order to better ensure the compliance of their decisions within a framework of broader objectives. As each of the above cognitive biases has a high probability of creeping into a decision-making process based on relative comparison, a conscious effort has been made to mitigate the risk of making an incorrect decision in this manner through the insistence that procurement decisions be based solely on the compliance of the proposal with the stated RFP selection criteria, and nothing else.

WINTER 2006

To better illustrate this point, just think for a moment about how difficult it would be to maintain near-perfect consistency in comparing upwards of 20 different proposals, each one to each and every one of the others? How much easier would it be to maintain consistency (and in so doing, mitigate the risk of cognitive bias - not to mention potential lawsuits and CITT challenges) if each of the 20 proposals was evaluated exclusively against the published RFP criteria, and nothing else? While it may seem counter-intuitive to the decision-maker (and it very often does), such rigidity certainly does increase the odds of maintaining consistency - which is, after all, one of the primary objectives of public procurement. So how do public officials reconcile the limitations of this edict with the need to make good decisions during the proposal evaluation stage of an RFP process? What tools or methods can they use to make sound and defensible contractor selection decisions, while suppressing their most basic and intuitive of decision-making skills? When assisting in the bid evaluation phase of an RFP process, RFP Solutions and others employ a methodology referred to as the “Negative Orientation”. This methodology works under the assumption that bidders begin the evaluation process fully compliant with all of the mandatory criteria, and having scored full points on each of the point-rated criteria. Working within this framework, government evaluation committee members are then instructed to identify and document the reasons why one or more mandatory criteria were either met or not met, by highlighting the specific evidence of compliance which was either located within the proposal, or which the committee felt was missing from the bidder’s proposal. If deemed necessary, requests for clarification can also be sent to bidders, placing the onus on them to precisely clarify the specific location(s) within their proposal where the evidence of compliance with the criteria may be found. For those proposals which fully addressed the mandatory requirements, the same process is used to then evaluate the point-

rated requirements vis-à-vis each proposal, paying careful attention to consistently documenting the references within each proposal where the specific evidence of compliance was either found, or not found. In keeping with this methodology, points are then withheld in areas where specific evidence of compliance was deemed by the committee to be missing within the proposal, and awarded against those evaluation factors where the evidence of compliance was deemed to have been properly presented. In contrast to more “positively oriented” methodologies which document the rationale for a bidder passing a mandatory criterion, or for awarding points in response to the proposal elements which impressed the selection committee, the Negative Orientation methodology has repeatedly proven itself to be more capable of consistent application. In addition, it has also proven to be better suited to producing a more defensible written report of outcomes, a tool which becomes an invaluable resource if and when an unsuccessful bidder requests a formal debriefing, or submits a bid challenge to the CITT. Despite the existence of methodologies such as the Negative Orientation, and the procurement policies prohibiting proposal comparison, many public officials still find it difficult to suppress the natural instinct of engaging in relative comparison during a bid evaluation exercise. And therein lies the “little white lie” of government procurement; many seemingly objective and rational procurement decisions have been (and no doubt continue to be) made to a certain extent on the basis of relative proposal comparison. While it is difficult for individuals to set aside these tendencies, it is perhaps even more difficult for many to admit that they may, on occasion, be subject to one or more cognitive biases in their decision-making process. As a very wise person once said: “To be aware of a single shortcoming within oneself, is more useful than to be aware of a thousand in someone else”. To learn more about the Negative Orientation and the Proposal Evaluation process, please visit www.rfpsolutions.ca 

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Federal Government Management Reform Initiatives: Are They Needed? Alan Gilmore uring the past two years there has been a flurry of new management initiatives in the federal government. The objective is to create more accountability and scrutiny so the mistakes that beset governments in the past will be reduced. It’s hard to argue with such good intentions. But not everyone thinks the measures were necessary. A reasonable observer of the federal administration might, justifiably, conclude that the rules and policies already in place should have prevented the mismanagement of funds in the sponsorship program. Thus, there are concerns that the new administrative rules will just tie the system into bigger knots, making it even more difficult to get things done. And, given the history of flawed and discarded management initiatives in the federal government, it would be hard to criticize public servants if they saw the latest initiatives as the flavour of the month and expected that on-going pressures to get things done will, over time, generate ways to bypass the initiatives. The Financial Administration Act (FAA) is the bedrock for the financial and administrative control in the Canadian government. It charges ministers, deputy ministers and their delegates with responsibilities to protect the public purse. The FAA establishes the Treasury Board to oversee federal spending. The Board is composed of at least six ministers, including its President and the Minister of Finance. The FAA gives the Board specific authority to issue directions related to the management and control of funds. According to the Treasury Board Secretariat, there are now more than 400 Treasury Board policies, directives, and guidelines. Most of these have been issued pursuant to the FAA. The FAA also authorizes the passing of regulations. There are currently 13 regulations that apply government-wide, for example, the Government

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Contract Regulations. The FAA also sets rules for collecting, managing and spending public funds as well as requirements for departments and agencies to establish internal control over their funds. Deputy Heads must establish controls and records on financial commitments. Only ministers or their delegates can request a payment be made, and they must certify that the work has been performed, the goods received, or the services rendered before that payment is issued. According to the Treasury Board Secretariat, public servants also are “responsible at all times for conforming to established standards of conduct, implicit or explicit” in such documents as the Values and Ethics Code for the Public Service, the Policy on the Internal Disclosure of Information Concerning Wrongdoing in the Workplace, and the Policy on Losses of Money and Offenses and Other Illegal Acts Against the Crown (my emphasis). Ministers and Governor-in Council appointees must respect the Conflict of Interest and Post-employment Code for Public Office Holders. In addition, the 11 Chapters of the Public Works and Government Services (PWGSC) Supply Manual contain detailed policies for departmental purchasing and references to relevant government laws and conditions. These policies and other Acts, such as the Access to Information and Privacy Acts, establish a reasonably comprehensive management framework with an array of detailed obligations. They make departments responsible for managing expenditures and allocated assets; achieving objectives, and implementing management systems to ensure that they met their duties and obligations, and monitored their performances. Reasonable observers might conclude that simply following the existing rules would have prevented the sponsorship program mismanagement.

Alan Gilmore Alan Gilmore, Ph.D. is a former senior principal in the Office of the Auditor General of Canada. He has extensive experience reviewing values and ethics initiatives, and governance and regulatory frameworks. He was responsible for the Auditor General’s recent reports to Parliament on the Costs of Implementing the Canadian Firearms Program and Accountability and Ethics in Government. He is professor in Public Affairs Ethics in the Faculty of Philosophy at Saint Paul University, Ottawa, and he is an Associate with the strategic policy and management consulting firm Sussex Circle.

The need for more government-wide policies could also be questioned on the basis that the sponsorship program mess is unique. Since it is not representative of how government programs are run or ministers or public servants conduct themselves it should not be allowed to tar and envelop the entire system. Examination of most government programs would not find – as the Gomery Commission has – a pattern of: • insufficient oversight at the senior levels of the public service which allowed program managers to circumvent proper contracting procedures and reporting lines; • a veil of secrecy surrounding the administration of the Sponsorship Program and an absence of transparency in the contracting process; • reluctance, for fear of reprisal, by virtually all public servants to oppose the will of a manager who was circumventing established policies and who had access to senior political officials; and • a complex web of financial transactions among Public Works and Government Services Canada (PWGSC), Crown Corporations and communication agencies, involving kickbacks and illegal contributions to a political party in the context of the Sponsorship Program; While it’s true that this pattern isn’t repVOLUME 17, NO. 2

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resentative, this doesn’t mean that serious mismanagement is absent in other programs. The Annual Auditor General reports annually identify instances of significant mismanagement. For example, the Auditor General has reported: • Serious problems with the government’s Work Force Adjustment Policy. Between July 1986 and December 1991 payments in lieu of continued employment, separation benefits and waivers cost more than $325 million. The typical payment was about $30,000. The audit of payments made between April 1990 and December 1991 showed that 35 percent were unjustified and 29 percent were questionable. Questionable payments involved cases where Policy wasn’t followed. The Treasury Board Secretariat responded that managers believed and a strong case could be made that even though payments weren’t made in accordance with the Policy they were “justified” because they “saved taxpayers money, renewed their workforce, or resolved difficult personnel situations.” (Chapter 7, 1992 Report of the Auditor General) • The Department of Fisheries and Oceans in 1987 circumvented a Treasury Board Decision and approved a $600,000 contract with the New Brunswick Department of Fisheries for services to a Marine Service Centre on Grand Manan Island, New Brunswick; and in 1995 and 1997 Revenue Canada awarded a duty free shop licence in a manner that undermined the transparency and credibility of the award process. (Chapter 3, 1988 and Chapter 36, 1997 Reports of the Auditor General) • In 1994, Public Works awarded an advertising contract for Tourism Canada worth $65.7 million, without calling for tenders. (Chapter 4, 2003 Report of the Auditor General) • Between 1987 and 1998, audits of grant and contribution programs had produced an embarrassing list of observations: poor compliance with program authorities, poorly designed programs, instances of poor controls, and sub par measurement and reporting of performance. For example, in 1998, 30 percent or $9 million in expenditures under the Department of Heritage Multiculturalism program had not been assessed and approved with due diligence. It wasn’t until 2001 that the Department was found to be making progress to rectify the situation. However, the Auditor General now found a similar lack of due diligence in the Department’s Support for the Official Languages Communities program. (Chapter 5, 2001 Report of the Auditor General) • Audits of sole-source contracts worth $16 million in five departments for professional services found many examples of inadequate due diligence. The nature and scope of the work required were underestimated, and the contracts didn’t always clearly specify what contractors were to deliver. It often appeared that the contractors decided what was needed, how much effort it would take and at what point the job would be considered completed. The justifications for over two thirds of the sole-source contracts did not meet the criteria set out in the Government Contracts Regulations that permit sole-sourcing a contract. Breaking the basic rules in letting sole-source contracts seemed to be widespread. “Getting on with the job” was sufficient justification for deciding largely to ignore the rules” WINTER 2006

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and disregarding Treasury Board regulations and policies appeared to “involve no significant consequences for either the managers responsible or their departments.” (Chapter 26, 1998 Report of the Auditor General) The basic rules are pretty clear. It’s not the absence of regulations, rules and policies that are the problem, but rather that they are often not respected. Why is this the case? One situation where we have enough information to give us some insights is the controversy over mismanagement by Human Resources Development Canada (HRDC) of its grants and contributions program. Chapter 11 of the October 2000 Auditor General reports indicated HRDC’s management practices had worsened in the 1990’s. HRDC’s own audits of four programs revealed “widespread deficiencies in the management control frameworks” including “breaches of authority, payments made improperly, very limited monitoring of finances and activities, and approvals not based on established practices.” On the surface, these findings appear to confirm that the source of the problem was, indeed, weak and inadequate financial controls. But was it? A closer look reveals that the real source of the problem was major cross-currents in government policy. These events are for the most part summarized in the Auditor General’s April and November 2000 reports. HRDC “went through several management changes followed by cutbacks and downsizing as part of Program Review” with the 1994-95 Program Review resulting in HRDC reducing its annual work force by 5,000 and its operational spending by $200 million. As part of the cutbacks the Department greatly reduced its verification of payments and operational reviews, and internal audit resources were reduced to 33 full-time staff in 1999-2000 from 54 fulltime staff in 1994-95. During more or less the same time frame, HRDC focused on improving service to Canadians as part of a government-wide Treasury Board Secretariat initiative. Its praised “Breaking Barriers” initiative emphasized cutting red tape, refocused its service delivery system and culture to empower local offices, and cut management

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layers. Many middle managers retired as part of Program Review and in response to workforce adjustment incentives. The result was a loss of corporate memory, experience and capacity – especially at the local level – exactly where decision-making authority was going to be centered. Only one person was left between the director of a local Human Resource Centre and the Deputy Minister. Directors of each the 100 HRDC Human Resource Centres were given full autonomy to provide the best service to clients and front-line staff were given authority to deal with clients at the first point of contact. This was the environment in which the grants and contributions programs that caused so much grief were introduced. It was an environment that emphasized service and cutting red tape rather than adherence to key controls. It left relatively junior and inexperienced local staff with the responsibility for dealing with senior officials of companies and organizations who wanted funding for projects, and with parliamentarians who, as part of the program, were involved in the decision making process. The lesson of the HRDC situation is not that there was an absence of controls…. but rather a culture had been fostered whose message was that adherence to basic financial and management controls was not a priority, getting money to clients was. Some HRDC officials in charge at the time have come to view the ensuing controversy as “a perfect storm” where they were caught in waves of criticism for managing in a manner that they had come to believe was proper and effective, and endorsed by central agencies. These officials found out in a hard and less than fair way that the bottom line for managing public funds is adherence to basic regulations and rules that protect the public purse rather than quickly delivering funds to companies and organizations. What conclusions can we reach? First, there was and is an extensive financial and management control framework in the federal government that should have prevented mismanagement in the sponsorship program. Second, there have been numerous instances over the years, in a variety of programs, where key regulations, rules and

policies have not been followed or have been circumvented. In at least one major case this was because of clear messages that other priorities were more important. Efforts to increase accountability and transparency are always welcomed in a democracy and the new initiatives may be worthwhile in their own right. However, a reasonable person could make a good case that more controls aren’t needed and could question the value they could add. Creating a layer of new rules won’t improve the situation if the underlying causes are not addressed. Without such action the new policies will inevitability be by-passed or disregarded as public servants get conflicting messages and are under pressure to get the job done. Fundamentally, the problem isn’t a lack of controls, or the need for new controls. It’s a decline – at all government levels – in respect for the basic controls. Compounding the problem is a willingness to accept an increasing range of justifications for not adhering to the fundamental principles. Ministers and senior managers need to acknowledge that the existing financial and management control framework is, too often, ignored, and that whatever the justification, in too many instances public business is being conducted in a manner that circumvents or disregards fundamental principles of control over the public purse. Developing an array of new financial and management controls and policies is one response. A more cost-effective and transparent way would have been to directly address one of the primary sources of the problem. Make it absolutely clear to ministers and senior public servants that the proper conduct of the public’s business is the priority. And that lack of respect for basic controls will mean that those directly responsible and on whose watch it occurred will receive clear and immediate sanctions, including requiring ministers to resign under a re-invigorated and meaningful principle of ministerial responsibility. Maintaining this policy on a sustained basis would support the vast majority of public servants who want to conduct public business properly and it would solve many of the problems in government administration. 

VOLUME 17, NO. 2

Evaluation Framework for an Alternative Dispute Resolution (ADR) Program Tony Humphreys ublic and private sector organizations of all sizes are realizing increasingly the importance of managing conflict, both within and outside the workplace. Workplace conflict may involve disputes between co-workers, supervisors and employees, or with others external to the immediate organization, and can have a profoundly negative impact on those involved and the organization. Employees suffer and organizations pay the price in a number of ways, including, for example, reduced employee morale, motivation and productivity, increased absenteeism and unexpected attrition. Outside the workplace, disputes between individuals, companies or other entities may end up in court, where the cost and time to resolve them place a major burden on all parties. Often a solution that satisfies all parties fails to materialize.

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The Nature of Conflict Management As noted by Ury (1988) and further explained by Costantino & Merchant, 1996 “…conflict is a growth industry - in our communities, in our businesses and non-profit organizations, in our government agencies, and among all of these. We are living today in times of intense change, and change naturally creates conflict. We cannot choose to eliminate this conflict nor should we - but we can choose how we handle conflict.” Disagreements or misunderstandings, whether major or minor, real or perceived, can quickly spin out of control. As a result, workplace conflicts which occur either in the public or private sector domain may prove to be beyond the ability of individuals or supervisors to resolve. Informal methods fail as those involved become firmly entrenched in their positions. Such conflicts are often managed through structured “rights-based” mechanisms of recourse and redress such as formal complaints and WINTER 2006

grievances. Hence, this can lead to lengthy investigations and delays, considerable financial costs to the organization, outcomes that fail to fully satisfy complainants, and potentially a poisoned work environment. The need for rights-based approaches to managing conflict will always exist. However, in recent years, there has been a growth in the area of “interest-based” options or what is now commonly referred to as “Alternative Dispute Resolution” (ADR). The ADR approach considers the needs and desires of the disputants rather than adopting adversarial positions during a conflict, and offers an alternative to rightsbased approaches. The objective of ADR is to avert as much conflict as possible, and where it does occur, to resolve the conflict informally at the lowest possible level. Thus, conflict may be resolved by the parties themselves or through the intervention of supervisors or “third-party neutrals” (e.g., trained mediators) to help them understand their respective interests and develop workable solutions. ADR within Organizations The success achieved by an increasing number of public and private sector organizations has enabled the ADR process to move beyond the novelty stage to where it is recognized as an effective conflict management tool. However, introducing an ADR program successfully takes more than just good intentions. A successful ADR program requires senior management commitment, organizational due diligence, and effective project management at all stages, including an emphasis on performance measurement. Hence, an ADR program design team must establish a framework and standards for the conduct of ADR interventions and in-house training. An additional organizational task is the integration of the ADR program with other exist-

Tony Humphreys Tony Humphreys is a Principal with Chief Review Services, Department of National Defence. He previously served 36 years in the Canadian Forces, retiring as a Colonel in the Aerospace Engineering branch. In addition to program evaluation, during his career Tony has worked in a variety of positions in engineering and maintenance, project management, training, flight safety and quality assurance.

ing conflict management mechanisms (such as the existing grievance system, ombudsman, harassment policy, etc.) to ensure consistency and eliminate duplication. While an ADR program may be managed centrally, the design concept should be tested at a number of representative pilot locations utilizing in-house and/or contracted mediators. Based on the results achieved at such pilot locations, confirmation of program benefits, and resolution of identified program challenges, a full organizational roll-out of an ADR program can then proceed. The Role of Program Evaluation in ADR Programs When assessing the full impact and organizational benefits of an ADR program, an evaluation framework is one tool to help measure success. In preparing an evaluation framework, it is important to recognize conflict management as a system (Costantino & Merchant, 1996), of which ADR is a sub-system. As such, the ADR program affects other systems within the organization (e.g., human resources, operations), and has a number of system characteristics such as a mission and objectives, boundaries (e.g., legal, human rights), inputs (e.g., disputes, resources), outputs (e.g., resolved disputes, trained mediators), outcomes (e.g., increased productivity, healthier work environment), and a stakeholder feedback loop (an essential feature for performance FMI JOURNAL

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measurement and continuous improvement). As noted by Costantino and Merchant (1996, p.168) with specific reference to ADR, “evaluation is the means by which the system clarifies its goals and measures progress toward the achievement of those goals.” In keeping with this notion, program evaluators can contribute constructively to the actual design of an ADR program, as well as the preparation of program staff for ongoing monitoring, and later by undertaking an evaluation of the effectiveness and efficiency of the program as part of the continuous improvement process. Thus, an evaluation framework offers a useful tool for assessing actual program performance (i.e., whether goals are being achieved), as well as program management (i.e., whether it is administered effectively) and service delivery. Evaluating Program Performance An initial evaluation of existing conflict management system performance should ideally occur before the commencement of an ADR program, and again a few years later, once the ADR program has been fully implemented. Having a clear appreciation for the status quo establishes an all-important baseline for comparison purposes and enables staff and sponsors to develop an ADR program business case for senior management consideration. Evaluation of program performance includes an assessment of both effectiveness and efficiency. In the ADR context, effectiveness relates to outcomes (e.g., conflicts actually being resolved), the durability of outcomes (i.e., how long they stay resolved), as well as the overall effect on the work environment and the level of organizational stress. Efficiency relates to the impact of ADR interventions on the cost and time to resolve disputes (as compared to existing rights-based mechanisms). Both quantitative and qualitative evaluation methods have a place in the initial effort to establish a baseline against which the new ADR program can be evaluated For example, what is the present cost to the organization of conflict and managing that conflict? This includes understanding current statistics (e.g., the number and types of disputes and complaints, and the cost of investigating and resolving them). Measur16

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ing instruments also exist that attempt to put a monetary value on workplace conflict by costing less tangible factors such as wasted time, loss of skilled employees and reduced job motivation (e.g., Dana, 1998). Although it may be difficult to accurately cost all factors, this fact should not diminish the need to develop the best baseline possible. In addition to the above-noted issues, a well-developed evaluation should include stakeholder interviews, surveys, focus groups and other qualitative methods to help bridge any statistical gaps and permit an assessment of satisfaction with the results obtained and the processes in place. Satisfaction levels will also be reflected in the amount of new ADR “business” generated through word of mouth, the number of referrals by “repeat customers”, and generally with an increased recognition and awareness of workplace conflict and how to manage it. By way of example of how ADR programs may be evaluated, in 2004 the Judicial Council of California published an impact study of five Early Mediation Pilot Programs, which included trial rate, disposition time, satisfaction with the process, overall costs and workload. The assessed areas were measured quantitatively and then compared to non-program results to confirm the level of success achieved. Costs at one site were 60% lower through ADR, while trial rates (i.e., the proportion of cases going to trial) at two sites were reduced by 24% and 30% respectively. While this example is court-based rather than workplace-based, it illustrates how evaluation can provide important data for decisionmaking regarding the future of ADR programs. Evaluating Program Management and Service Delivery As well as ADR program performance, it is important to evaluate program management and service delivery. These include such elements as the accountability framework, policies, guidelines and standards, resources (i.e., funding, staff, facilities), communications, and training. Since ADR methodologies are largely skills-based, program integrity and quality must be established through the selection, training and employment of suitable third-party neutrals

who may be either internal or external to the organization. When disputants do not consider the available parties to be credible, the ADR program can quickly be put at risk. Success of the ADR program requires all contributing elements to be well understood and managed. Preparing the Evaluation Framework As noted, an evaluation framework is useful for both the introductory phase of the new program and as a ready reference for long-term sustainment. The framework provides program staff with an integrated picture of the program. In so doing, results achieved during the pilot project may be presented in the context of overall project design, which helps in results-monitoring and diagnostic efforts. Hence, an evaluation framework may include various program components such as program design, pilot project design, and pilot project performance. Differentiating between pilot project design and performance facilitates evaluation efforts by isolating design elements (e.g., location and accessibility of a dispute resolution centre) from how successful the ADR service actually was in resolving disputes. Evaluating performance is clearly beneficial beyond the pilot project in that it provides a template for a later summative evaluation of the program. ADR Program Logic Model Within an ADR evaluation framework, a logic model typically links program activities to intended outcomes. Figure 1 is a simplified logic model that highlights two program elements: ADR education and training, and ADR services. Such a visual depiction, when presented to program staff, can further support efforts to develop policies and procedures, access mechanisms, service and training standards, communications and continuous improvement strategies, and other fundamental program requirements. Evaluation Issues Generally speaking, an evaluation framework should address critical program design issues, which may vary somewhat depending on the nature of the organization. An ADR program evaluation framework may include a number of elements, including the following: VOLUME 17, NO. 2

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Objective Objective

Activity Activity

Outputs Outputs

To improve conflictmanagement management within the the To improve conflict within organization through the creationthe of acreation multi-option, organization through of amultiaccess, integrated conflict management system multi-option, multi-access, integrated conflict management system

ADR Education Education ADR & & Training Training

ADR ADR Service Service Delivery Delivery

••Raised Raised awareness awareness of ADRof ADR benefits benefits ••Raised Raised awareness of awareness of services services available available ••Trained Trained third-party third-party neutrals neutrals

••ADR ADR interventions interventions ••Advice Advice counseling and and counseling ••Referrals Referrals to other to other redress redress mechanisms mechanisms •

Outcomes Outcomes Short-term Short-term

••Requests Requests for further infor• Requests for ADR services for further information and advice mationforand advice • Resolved or prevented •Requests training ••Requests Requests for training workplace conflicts for ADR services •Resolved or prevented workplace conflicts

Medium-term Medium-term

Long-term Long-term

••Increased Increased requests forservices requests for ADR ADRsatisfaction services •Client ••Reduced Clientworkplace satisfaction conflict

• Reduced workplace conflict

••Healthier Healthier environworkwork environment ment productivity •Increased ••Cost Increased savings productivity

• Cost savings • Culture change

•Culture change

Figure 1.

Simplified ADR Program Logic Model

a.

Case for action (i.e., establishment of the need), b. Clarification of ADR program aim and objectives, c. Accountability framework, d. Education and training, e. Communications, f. External best practices and lessons learned, g. Pilot project design, and h. Pilot project performance. Each of these will be considered individually. Case for Action Evaluating system design requires confirming the need to take action. Is the requirement for an ADR program still relevant? If the organization already has a variety of conflict management mechanisms (e.g., an effective grievance process, ombudsman), is establishment of a structured ADR program still required? If there WINTER 2006

is no obvious need (e.g., the organization is very small or there is little history of conflict), a decision may be made not to introduce a formal ADR program, or to introduce a scaled-down version based on ADR principles. Clarification of the ADR Program Aim and Objectives It is important for all stakeholders to have a common understanding of the objectives of the ADR program. Similarly, having the ADR program as part of an integrated conflict management system suggests the need to establish formal linkages with other workplace dispute mechanisms to minimize duplication and overlaps that would reduce the effectiveness and efficiency of the entire system. Examining these issues provides an opportunity for the evaluator to determine if the ADR program provides a unique response to client demands for service and problem resolu-

tion, and whether assistance is provided by the most appropriate source of expertise. Accountability Framework During the design phase, an ADR program manager is typically responsible to program sponsors and/or a steering committee, and is generally assigned resources both in terms of staff and a budget. If there is a formal pilot project, site managers will rely heavily on program staff for support (e.g., guidelines and advice, resources, migration of best practices, communications, and “marketing”). The key to managing program results is measuring against milestones and deliverables in accordance with the program plan. The program manager is responsible for monitoring adherence to the plan so as to ensure all activities are both on schedule and on budget. In areas where control is deemed to be at risk, action can then be taken. For an ADR program to be both sustainable and administered effectively, ongoing care and nurturing are required, including an effective management framework, with clear terms of reference, reporting relationships, policies and procedures. Education and Training An ADR program typically requires standards for education and training to ensure a consistent level of quality. As well as quality, training may be evaluated for availability, affordability and convenience. Larger organizations may decide to develop a centrally managed internal training capability, with a longer-term goal of exporting the delivery of at least ADR awareness training to the regional or local level in the future. Training may be tiered, and include a short ADR awareness course for general consumption, a longer interest-based negotiation course, and a comprehensive mediation course. Regardless of how ADR training is to be delivered, a needs analysis of skills and training should be conducted as an essential initial step. In addition, a policy should be developed regarding equivalencies and grandfathering of those who have received (or may receive in the future) relevant training externally. Communications Since many employees may initially have little experience with interest-based FMI JOURNAL

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approaches to resolving workplace conflict, communications with all stakeholders is considered to be a critical component to ensure understanding and support. To be sustainable, stakeholders must understand what ADR is, when it may or may not be the most appropriate mechanism available, how to access services and how it is linked to other programs. It is also essential for senior managers to visibly champion the ADR program and communicate their support to all employees. External Best Practices and Lessons Learned Learning from the experiences of other organizations that have already implemented ADR programs can contribute significantly to program effectiveness and efficiency. Since others have discovered through their own research and practice what works and what doesn’t, the extent to which program management staff have capitalised on the experience of ADR programs elsewhere should be assessed. Pilot Project Design For many organizations, a pilot project is a key ADR program activity, whether limited or complex in scope. Its purpose is to raise awareness of ADR, to demonstrate its benefits, and to identify issues requiring attention prior to full organizational implementation. Effective design of the pilot project is the foundation for success. Although flexibility in approach is clearly a desirable feature, it is important that pilot sites all reflect the overall vision, aim and objectives of the ADR program and not deviate in a way that might unintentionally discredit the program or put it at risk. Central features for an evaluation of a pilot project are: • Pilot Project Scope and Objectives: A well developed understanding of the scope and objectives and what constitutes program success or failure enables a rigorous review. For example, will the scope include performing workplace health assessments upon request, or be restricted primarily to mediation? If linkages with other dispute mechanisms are to be assessed, this should be conveyed to pilot site staff. While each pilot site will generate quantitative and qualitative results, it is essential that program management staff establish the criteria for success and 18

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how the results will be presented to senior management when seeking a decision on full program implementation. • Selection of Pilot Sites: Selected sites should ideally reflect all organizational sectors and sub-cultures, geographical areas, and demographics. The number of sites is also a factor to consider. For example, too few sites may not be adequately representative to provide meaningful data. On the other hand, too many sites can lead to control problems and program resources stretched to the limit. • Support and Resources: It is essential for management to provide essential support via augmented program resources (i.e., staff, funding and facilities) as required. Local managers have an important advocacy role in promoting and supporting ADR services. However, in order to gain such support, managers need to fully understand the program objectives and the associated benefits. This task should fall initially to the program manager, assisted by local pilot site staff, and should involve stakeholder engagement with on-site leaders and other key parties on an ongoing basis. Furthermore, an adequate resource base during implementation is critical to site success, including a sufficient number of trained and credible mediators, working in a location that contributes to success rather than hindering it. For example, dispute resolution centres should be located wherever possible in “neutral” locations so as not to discourage potential clients. Pilot Project Performance Assuming the groundwork has been laid for pilot project success, the next step is to assess how well ADR services are utilised and contribute to program objectives. Since each locale will have unique characteristics, some flexibility in approach to accommodate local factors would be appropriate rather than imposing a rigid template. However, flexibility must be applied cautiously in order maintain program integrity. Additionally, program management staff must assist in the resolution of emerging issues that may undermine pilot site performance and thus put program success at risk. From an evaluation perspective, this would suggest collecting the following information:

• Conflict Management Baseline Statistics: As noted earlier, service delivery may be evaluated both quantitatively and qualitatively. A start-point is an understanding of the current situation through baseline statistics (e.g., number of grievances, average process time). It is important that all sites collect the same statistics in order that future comparisons can be made. • ADR Performance Statistics: Since pilot sites seek initially to raise local awareness of ADR services provided, it would be appropriate to collect statistics that support awareness analysis (e.g., number of inquiries, number of ADR courses or briefings presented, number of attendees). Performance measures for ADR service delivery should also be developed and statistics collected (e.g., the number and type of ADR cases, “success” rate, return referrals, etc.). Again, in order to compare results for overall evaluation purposes, it is important for sites to maintain similar performance statistics for a meaningful period. • Qualitative Feedback: Determining how local stakeholders (clients, supervisors and management at all levels, unions, etc.) actually feel about the ADR services provided and their level of satisfaction with the results is central to any evaluation review. This can be accomplished through survey questionnaires, interviews and focus groups. These methodologies also provide an opportunity to further explore the influence of organizational culture on the acceptance of interest-based approaches to conflict resolution as a contrast to rights-based mechanisms. • “Business Case” Analysis: In this era of constrained resources, senior management will appreciate evidence that investing in ADR makes good business sense in terms of cost avoidance (i.e., time, effort and dollars saved) and in contributing to a healthier workplace (e.g., reduced stress as measured by higher productivity, less absenteeism, etc.). Presenting a compelling business case, rather than relying on less tangible benefits will help ensure continued senior management support for full implementation, as well as the necessary resources for ADR program sustainment. VOLUME 17, NO. 2

EVALUATION FRAMEWORK FOR AN ADR PROGRAM Evaluation Issues Case for Action

Evaluation Questions Based on quantitative and qualitative evidence, is the establishment of a formal, structured ADR program across the organization still relevant to meet the needs of stakeholders?

Data Sources • relevant reports • policy documents • program documentation • stakeholder opinion • business plans

Methodologies • statistical analysis • business case analysis • documentation analysis • stakeholder interviews • surveys • focus groups • steering group engagement

Clarification of the ADR Program Aim and Objectives

1. Do stakeholders (e.g., program staff, sponsors, all levels of management and supervision, unions, etc.) have a common and consistent understanding of the aim and objectives of the ADR program?

• • • •

• stakeholder interviews • documentation analysis • steering group engagement

business plans relevant reports policy documents stakeholder opinion

2. Have integration requirements relating to other recourse and redress mechanisms within the organization been identified, and are steps being taken to integrate all into an effective, efficient conflict management system?

Figure 2.

Evaluation Issues, Data Sources and Methodologies

• Migration of Best Practices and Lessons Learned: As each pilot site is unique, there will be a number of best practices and lessons learned that should be shared with other pilot sites. A process should be developed to ensure that this contributes to the efficiency and overall success at pilot sites. This could be accomplished through conference calls, periodic meetings and visits to pilot sites by program management staff. Performance Management Chart The preceding issues may be effectively depicted in a performance management chart such as Figure 2, which for illustrative purposes lists only two evaluation issues. It summarizes significant questions to be answered and information sources for the benefit of ADR program management staff and program evaluators, and should be updated as required to reflect major changes affecting the program. Concluding Comments The process of developing an evaluation framework as presented in this paper is intended both to assist in the ongoing strategic planning and management of an Alternative Dispute Resolution program as well as to prepare for a future program evaluation. As such, an evaluation would help major stakeholders to confirm ADR pro-

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gram relevance and enable the assessment of effectiveness and efficiency in achieving intended outcomes. As noted, ADR continues to be a growth industry and many organizations are investing in ADR programs. As with all major new initiatives, ADR requires visible senior management support, adequate resources and effective program management to succeed. Evaluation is a critical component for the successful introduction and sustainment of an ADR program and should be built into the design of the ADR program and the pilot project as early as possible. Also, familiarization training in ADR for program evaluators is essential to enhance their understanding of the methodologies and concepts involved.  References Administrative Conference of the United States, Dispute Systems Design Working Group (1993, November). Handbook on ADR program evaluation. Administrative Conference of the United States, Resource Papers in Administrative Law (1992, February). Implementing the ADR Act: Guidance for agency dispute resolution specialists. Canadian Centre for Occupational Health & Safety, Workers’ Compensation Appeal Tribunal alternative dispute resolution regulations N.S. Reg. 105/98. Costantino, C.A., & Merchant, C.S. (1996). Designing conflict management systems: A guide to creating productive and healthy organizations. San Francisco, CA: Jossey-Bass. Dana, D. (1998). Managing differences: How to build better relationships at work and Home. Prairie Village, KS: MTI Publications.

Federal Deposit Insurance Corporation (1997). Report of the alternative dispute resolution program evaluation project. Fisher, R., & Ury, W.L. (1981). Getting to yes: Negotiating agreement without giving in. New York, NY: Penguin Books. Hébert, L.C. (1999). Establishing and evaluating a workplace mediation pilot project: An Ohio case study. Ohio State Journal on Dispute Resolution, 14(2). Humphreys, A.P. (2001, May 21). Evaluation framework for an alternative dispute resolution (ADR) program. Paper presented at the Canadian Evaluation Society Conference, Banff, AB. Judicial Council of California, Administrative Office of the Courts (2004, February 27). Evaluation of the early mediation pilot programs. McDermott, E.P., Obar, R., Jose, A., & Bowers, M. (2000, September 20). An evaluation of the Equal Employment Opportunity Commission mediation program – EEOC order no. 9/0900/7632/2. Moore, C. (1994). The mediation process: Practical strategies for resolving conflict. San Francisco, CA: Jossey-Bass. Public Service Commission Advisory Council’s Working Group on Recourse (2001, March 26). Recourse in the Public Service of Canada. A proposal to the Public Service Commission Advisory Council. Public Service Human Resources Management Agency of Canada (2004, August 12). Informal conflict management system (ICMS) resource guide. h t t p : / / w w w. h r m a - a g r h . g c . c a / h r m m mgrh/icms/icms01_e.asp. Slaikeu, K.A., & Hasson, R.H. (1998). Controlling the costs of conflict: How to design a system for your organization. San Francisco, CA: Jossey-Bass. Ury, W.L., Brett, J.M., & Goldberg, S.B. (1988). Getting disputes resolved: Designing systems to cut the cost of conflict. San Francisco, CA: Jossey-Bass. US Department of Justice (undated). Federal ADR Program Manager’s Resource Manual. US Federal ADR Council (2000, October 4). ADR Program Evaluation Recommendations.

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If “Trust Leads to Loyalty” – What Leads to Trust? Rocky J. Dwyer

Trust – A Fundamental Notion The importance of trust has been widely identified as a key component and catalyst for relationship development. Yet, the concept of trust from both a theoretical and managerial perspective has been a source of confusion and misconception. Thus, this article examines trust from a variety of perspectives and suggests simple common principles that can be implemented at the organizational level to achieve organizational success. Since the beginning of time, trust has been widely recognized as a very important facilitator of relationships not only within but also between organizations. Trust within a process makes cooperative endeavours happen, as well as influencing the interaction between individuals (McKnight & Chervany, 1996). Mishra and Mishra (1994) suggests that trust becomes even more central and critical during periods of uncertainty due to organizational crises; and thus it can be a critical requirement in today’s workplace. Trust is one of those fundamental notions that most individuals find difficult to explain or precisely define (Misztal, 1996). For the purposes of this paper, we shall define trust as: a relationship between one or more persons which has elements of openness and honesty and a willingness to accept other[s] based on the opinion that the other party is both capable, and dependable. How Do Organizations Violate Trust? Within the context of an organization, trust is generally earned slowly as a result of consistent behavior based on personal respect and genuine concern for the well being of all organizational members. A successful organization is built on a foundation that includes lateral; vertical and, external trust (McKnight, Cummings and Chervany, 1995). Organizational consultants have noted 20

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the recent emphasis on trust has been prompted by the following events: • 2003 Report of the Auditor General of Canada, which recommended the RCMP, investigate how $1.6 million in federal government advertising contracts were handed out to a Montreal ad agency. • Disclosure by Nortel Networks that it had inaccurately reported financial results. • The Radwanski (Privacy Commissioner of Canada) Scandal, that came to symbolize breaches of law, mismanagement and abdication of managerial responsibilities at the most senior levels within a Canadian federal government department. • The 2004 resignation of former Canada Post Chairman and CEO Andre Ouellette, amid questions over $2 million in unaccounted-for expenses over eight years. • The Gomery Report which exposed a tale of untruth and willful deception regarding Canada’s sponsorship program. Finally, looking more directly at trust, Davis & Landa (1999) cited one study (The Day America Told the Truth), which noted that 68 percent of employees did not trust their supervisors. Building and Maintaining Trust Neither people nor organizations can demand trust; it must be earned and developed. To build and maintain trust in an organization, it is a necessity to assess the organization’s current level of trust by completing a benchmarking exercise. The process of conducting a benchmarking exercise sends a powerful message to both internal and external constituents and stakeholders alike; and the results provide a roadmap for organizational reform and subsequent action.

Rocky J. Dwyer Rocky J. Dwyer is a Principal with Chief Review Services, Department of National Defence. In addition, he is a MBA faculty member with the Centre of Innovative Management at Athabasca University (Alberta); and an adjunct faculty member at St. Paul University (Ottawa). He has been associated with numerous other private, public sector not-for-profit organizations in examining, validating and consultant capacities, and has presented papers and research findings at conferences and symposiums in Canada, the United States, South America and the Russian Federation.

Who-What-Why The success of benchmarking depends on the organization’s leadership! In fact, it is imperative for organizational leadership to foster a common understanding of what benchmarking means and its implications for the organization. Furthermore, the organization’s senior management cadre must ensure: • involvement and engagement of staff in a free and open exchange on the subject of benchmarking; and agreement on what employees can do, costs and expected benefits, and what executive decisions are needed; • instilling the concept of benchmarking ‘trust’ in the organizations planning, performance processes and management practices; • allocating the necessary financial and human resources to develop and train employees in the benchmarking exercise; • identifying a champion from the ranks of the senior management cadre to manage the initial efforts of the organization in implementing benchmarking; and • assessing how to promote the trust benchmarking initiative throughout the organization in a practical way. Step 1 - Getting Started Generally speaking, most benchmarking models are divided into four phases: planning, data collection, analysis, and action. VOLUME 17, NO. 2

IF “TRUST LEADS TO LOYALTY” – WHAT LEADS TO TRUST?

Under the planning phase the objectives of the study should be aligned with the overall mission and goals of the organization. It is important to clearly define which aspects of the processes are most crucial to your success; and identify where you can realistically make a change. Finally, the scope of the benchmarking study should reflect the objectives and resources of the organization. Most organizations utilize an external facilitator to gel this process. The facilitator, with stakeholder involvement, also develops and refines a flow chart, which depicts the sequence of discrete activities in the process and establishes process measures. Finally, the stakeholder group should be utilized to identify potential partners for the benchmarking exercise. Step 2 - Background Research and Data Collection The second step is to undertake background research related to the concept of trust, followed by in-house surveys with organizational employees, focus groups, or case studies within the organization. For example, the following chart (adapted from Likert, 1967), illustrates the relationships between the variables involved in building and maintaining trust.

tions allowing comparison of qualitative and quantitative data necessary for the third step of the benchmarking model-Analysis. Step 3 - Analysis and The Issue of Ethics The sharing of information is an important aspect of benchmarking, and thus benchmarking exercises must be conducted with the highest ethical standards to maintain trust and confidence between you and your benchmarking partners. Hence, there are several ethical and legal concepts that should always be considered during the benchmarking exercise. • ensure transferred information remains confidential between the organization conducting the benchmarking study and the individual benchmarking partner; • organizations requesting process information should be willing to provide similar information to their benchmarking partner; • information that will be used to support a position in another forum should not be requested; • organizational secrets or proprietary data should not be requested; • information should not be gathered under false pretenses, so to avoid misrepresentation; and • benchmarking partners should be guaranteed anonymity if so desired.

Shared Values Causal Variables

Personal • integrity • honesty • competence • loyalty • openness • fairness Job / Relational • meaningful work • participation • open communication • autonomy • feedback

Intervening Variables• trust • loyalty • commitment End-Result Variables • increased productivity • high employee morale • reduced absenteeism, and turnover • innovation • long-run stability

Hence, mapping the various relationships can supplement survey, focus group, and case study data from both organizaWINTER 2006

Step 4 - Action Planning to Build Organizational Success The final step in the benchmarking exercise is action-implementing specific actions that enable the transition from the current to the modified process. A detailed plan is essential for successfully implementing the process of change. By taking the necessary time to utilize progress tracking, the organization can identify problems that may arise during the implementation of the process improvements. Making the Case for Benchmarking Trust Trust between individuals and a group is a highly important element in the long-run stability of the organization, and the well being of its members (Cook and Wall, 1990). High levels of trust within the organization permits an organization to switch its focus on the long-term (Sonnenburg, 1994) and significant levels of trust:

• • • • • •

reduce friction among employees; bond people together; increase productivity; stimulate growth; improve employee morale; reduce employee turnover and absenteeism and • creates an environment where innovation can flourish. Empowering employees for example, may have a short-term risk but may lead to: • innovation, • improved quality of service, • increased worker responsibility and competence, • improved morale, and • reduced absenteeism and illness all of which are essential for an organization’s long-term growth and survival (Peters 1994; Sonnenburg, 1994) Moreover, trust is an essential component of effective change management (Covey, 1994; Fink, 1992; Kotter and Schlesinger, 1979; Mishra and Mishra, 1994). When distrust exists within an organization between the persons initiating change and the employees, change will be resisted as both its reasons and implications are not clearly understood (Kotter and Schlesinger, 1979). In fact, trust is an essential ingredient in any effective downsizing program (Mishra and Mishra, 1994). Without trust, change occurs with an environment of secrecy and self-protection (Fink, 1992). When management shares information openly and honestly during change, employees fully understand both the internal and external factors influencing the decision that has been reached (Marlowe, 1992). In this instance, employees will find it easier to remain committed to the goals of the organization even in times of crises (Fink, 1992). Sometimes, the worst crisis can become an opportunity to make creative and often long overdue changes (Fink, 1992). When the employer-employee relationship is based on trust, management can effectively include employees in deciding on such matters as how to minimize costs, and how to make better use of existing resources (Fink, 1992). Again, the total organization remains committed to the goals of the organization rather than to the competing goals of different individuals and groups.

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IF “TRUST LEADS TO LOYALTY” – WHAT LEADS TO TRUST?

Trust Principles Although trust is complex both in its composition and in terms of the number of bases on which it rests, the following principles when institutionalized within an organization should enable the organization to enhance both levels of trust and organizational success: Exhibit behaviour which is predictably competent, honest, and benevolent Since trust is based primarily on perceptions of trustworthiness, considerable attention needs to be paid to presenting oneself in ways that are consistent with trusting beliefs. Perception management alone, however, is not likely to work over time because experience with an individual gives others a history of how well one’s actions match one’s self-presentation. Develop positive relationships to enable others to feel comfortable and secure. Feelings are hard to separate from each other; hence an individual who likes a superior is more likely to also feel secure in the belief that the individual is benevolent toward them. Therefore, individuals should devote time to develop an appropriate measure of positive, personal relationships with others so that others can feel comfortable, confident and secure. Exhibit behaviour which shows trust and decrease control measures One can develop a good relationship with another person by gradually increasing trusting behaviour, while at the same time decreasing control measures directed at the other person. Decreasing controls includes moving from a formal relationship to a more personal informal relationship. This indicates to the other person that they are accepted, that they can be trusted, and therefore can have positive effects on the trusted person’s self-esteem. As well, being controlled is very de-motivating because it feels demeaning (Fink, 1992).

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Understand the relationship between trust and power Within the organizational hierarchy, individuals have positional power, however, it should be recognized that others have power over such individuals by extending such individual’s trust. In a dominating situation, an employee will feel insecure around the supervisor. Therefore, in such cases, the employee may withhold or distort information given to the supervisor. Additionally, they may also accept less influence from the supervisor. This will typically lead to the supervisor’s use of control mechanisms, leading to a downward spiral of distrust (Zand, 1972). Consider the individual’s personal attributes When dealing with an individual, it is necessary to consider the other individual’s personal attributes. Additional steps may need to be taken to overcome tendencies such as cynicism by developing personal relationship with such individuals and by communicating very clearly the positive intent behind changes, directions, etc. Ensure changes, roles and responsibilities are well defined Individuals responsible for change should ensure that organizational changes, roles and responsibilities are clearly defined and known at all levels in the organization. Additionally, major changes like downsizing and restructuring should be handled carefully so that individuals should remain to feel at ease and secure in the organization’s environment. Get off on the right foot, take small steps first To get off on the right foot, individuals should begin each new work relationship by choosing to trust first. In other words, take small steps first with individuals to signal a desire to have a trusting relationship. Building and maintaining trust with an organization is not a simple or rapid process. It requires a commitment to creat-

ing and sustaining a culture that is focussed and respectful of employees. Conclusion Despite, the lack of consensus on the meaning or the concept of ‘trust’, there is a consensus among theorists, management consultants and organizations that trust is necessary to achieve organizational excellence and is an essential element of organizational success.  References Abdul-Rahman, A. and Hailes, S. (2000), “Supporting Trust in Virtual Communities” in Proceedings Hawaii International Conference on System Sciences 33, Maui, Hawaii, 4-7 January 2000. (Copyright 2000 IEEE) Cook, J. and Wall, T. (1990), “A New Work attitude measures of trust, organizational commitment and personal need nonfulfillment”, Journal of Occupational Psychology. Vol. 53. pp. 39-52. Covey, S., (1990), The Seven Habits of Highly Effective People, Simon and Schuster, New York. Davis, T. and Landa, M. J. (1999), “The Trust Deficit”, Canadian Management. Vol. 24, No. 1, Spring Fink, S. (1992), High Commitment Workplaces, Quorum Books, New York. Kotter, J. P. and Schlesinger, L. A. (1979), “A Choosing Strategies for Change”, Harvard Business Review. March-April. pp. 106-114. Likert, R. (1967), The Human Organization: Its Management and Value, McGraw-Hill, New York. Marlowe, M. (1992), “Inspiring Trust”, Executive Excellence, Vol. 9 No 12, pp. 12-13. McKnight, D. H., and Chervany, N. L. (1996), “The Meanings of Trust”, paper produced by the Carlson School of Management, University of Minnesota. McKnight, D. H., Cummings, L. L., and Chervany, N. L. (1995), “Trust Formation in New Organizational Relationships”, in Proceedings, Information and Decision Sciences Workshop, University of Minnesota. McGregor, D. (1967), The Professional Manager, McGraw-Hill, New York. Mishra, A. K. (1996), “A Organizational responses to crisis: The centrality of trust” in R. M. Krammer and T. R. Tyler, Eds. Trust in organizations: Frontiers of Theory and Research, Sage, Thousand Oaks, CA. pp.261-287. Mishra, A. K. and Mishra, K. E. (1994), “A Trust in Employee-Employer Relationships: A Survey”, Public Personnel Management, Vol. 19 No. 4, pp. 443-463. Misztal, B. (1996), Trust in Modern Societies, Policy Press, Cambridge, MA Zand, D. E. (1972) “A Trust and Managerial Problem Solving”, Administrative Science Quarterly, Vol. 17, pp. 229-239.

VOLUME 17, NO. 2

Ten Years at the Leading Edge of Government On-Line Kerry B. Smith ovember 15, 2005 marked the 10th anniversary of the establishment of Publiservice, an extranet, which began as a Web site and has grown to become a multi-faceted Web portal serving the Public Service of Canada. The Government of Canada first began the electronic dissemination of information in 1990 through the Senior Executive Network. This service was subscription-based and was available only to Government of Canada senior executives. A few years later, World Wide Web technology and the availability of the Government Enterprise Network (GENet), an interdepartmental network, presented the opportunity to offer a more widely accessible information resource. As a result, Publiservice was launched as a comprehensive electronic information source and indispensable working tool for all Government of Canada employees. As the portal evolves, Publiservice incorporates Government of Canada Web site design principles that conform to the Federal Identity Program (FIP) standards, Common Look and Feel (CLF) Metadata standards, accessibility requirements and design standards. Publiservice’s goal is to assist users in meeting their information or service enquiries within two mouse clicks. The Publiservice team’s efforts are motivated by the mandate to provide online work tools and resources that make work easier, more efficient and, as a result, more cost effective. As of 2004-2005, savings to government resulting from use of tools and resources on the portal are well in excess of $160M and 1.3M hours of work. Publiservice clients appreciate the team’s efforts and products. The ease of communicating with Publiservice is one of its hallmarks. “We learned early on that without client feedback, we would not be able to reach our goals and stay relevant,” said Judy David, manager of Publiservice. “So, we put a client support unit in place dedicated to providing assistance by replying to e-

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mails and answering phone calls from 6 am to 6 pm EST Monday to Friday.” This success has not always been easy. There have been times when the Publiservice team tried to meet expectations with too few hands at the keyboards. High performance brings even higher expectations for what comes next. Recent hirings have begun to match those demands, and Publiservice is now ready to work with new partners on the development of new, shared online work tools and services.

Central to Publiservice’s success is its partnership model for development. Another lesson learned is that without champions and partners, the site just would not be relevant. “Successful partnerships with our stakeholder groups, particularly representatives from functional communities, have enabled us to deliver comprehensive work tools and resources tailored to each community’s needs,” said Ms. David. “Our partners have made a world of difference in enabling us to fulfill our mandate.” The partnership process begins with Publiservice identifying champions who will lead efforts to identify requirements of their functional community online. Through the work of these champions, an advisory committee is established, followed by a more formal working group to shape the expectations for a centralized online product or service. A sample of the types of online tools and

Kerry B. Smith Kerry B. Smith provides writing, editing and research services for the Publiservice Web site and work unit. He has supervised writers and provided communications services and advice for federal and provincial government departments.

resources already on the portal includes public service staffing notices, employee benefits information, government directories and forms, daily news releases, and much more. Each of these tools incorporates the most up-to-date acts and regulations. Tools under development include a boardroom finder tool, new employee orientation guides and a staffing letter builder tool. In parallel with service and work tool development, training takes place to ensure that members of the functional community are well prepared to take advantage of the new feature. The training team uses an online co-browsing feature to provide at-adistance client support and training to employees in the regions. “I am proud of the work of the Publiservice team,” said Dave Thompson, Director of Canada Online Services. “It is clear to me that their partnerships have resulted in the successful development of great online tools and resources for stakeholders, and have brought functional communities together to achieve great things that could not have otherwise been achieved. They have improved the efficiency, accuracy and timeliness of service delivery within government.” Publiservice is always looking for new functional community partners. The client support line, in the National Capital Region (613) 946-0046 and toll-free 1866-946-0046 is there to receive your call Monday to Friday, 6 am to 6 pm Eastern Standard Time. Their e-mail is always available at [email protected].  FMI JOURNAL

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Streamlined Planning and Performance Measurement for Small Agencies Michael Kelly and Garry Sears he push for greater accountability is having major implications on all federal government organizations, but particularly on smaller agencies.1 The executive team of these organizations finds that much of their time is being devoted to a myriad of accountability-related activities being led by the central agencies, including: conducting assessments against the Management Accountability Framework (MAF); responding to the new Internal Audit Policy; developing and refining the Program Activity Architecture (PAA); implementing integrated HR and business planning; implementing the new staffing regime; assessing information security; and, implementing shared services. All of these administrative activities are leaving little time for management to attend to its core business. We find that in working with these smaller agencies, managers are looking for ways to streamline their key management practices of planning and performance measurement.

T

The small agency community There are some 65 agencies across the federal government, ranging in size from a dozen or so employees to a several hundred. These agencies perform a variety of functions that are critical to the public, including court/tribunal administration, regulatory and investigative activities, oversight activities, research funding, to name a few. From a government-wide central agency perspective, the number of small agencies poses a particular challenge in ensuring that they are all conforming to government rules. Until recently, agencies have tended to operate fairly independently – “under the radar screen”. However, this has changed in the past couple of years due to the increased focus on accountability and stewardship, and the realization that agencies are as vulnerable as the larger departments to mismanagement – with equally damaging 24

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impacts on the government’s reputation for trust and good management. Stewardship can be a challenge where Governor-inCouncil appointees and employees come to the agency from outside the public service, and thus are less familiar with government rules. The result is that small agencies are being asked by the centre to meet many of the same accountability and reporting requirements of the large departments (e.g., Management Accountability Framework, financial accountability) – yet with relatively fewer corporate resources. This is forcing them to develop, in particular, more efficient and useful planning and reporting systems. At the same time, small agencies have in recent years become much more of a cohesive force and gained credibility in the eyes of the central agencies. Smaller agencies are working successfully together within the federal community through such organizations as the Small Agencies Administrators’ Network (SAAN) and the Small Agencies Finance Action Group (SAFAG). These agencies are also working much more closely with other agencies in their respective communities (e.g., court administration, administrative tribunals). As a result, they are able to benefit more readily by benchmarking and adopting the best of the management practices of other organizations. This creates the situation where small agencies can actually play a leadership role in introducing new government-wide initiatives as they become faster and more agile in doing so. An example of this would be in performance measurement where some agencies have been very pro-active, and have developed useful performance measurement frameworks and systems. However, the reality today is that many agencies do not have the management infrastructure that is typical of the larger departments. One way that agencies compensate for this is by an a streamlined yet

Michael Kelly and Garry Sears Michael Kelly and Garry Sears are co-founders of Kelly Sears Consulting Group. Both were long-time partners with KPMG, and specialize in helping federal government managers to implement improved management practices, particularly in the areas of planning and performance measurement. Michael developed the Modern Management Capacity Check methodology in partnership with Treasury Board Secretariat in the late 1990s. Recently, they have developed the MAF Performance CheckTM to help organizations assess their conformance with this initiative.

serious approach to planning and performance measurement whereby they examine and re-set priorities on a yearly basis, plan their key projects, keep all employees focused on a common agenda, develop a simple yet robust performance measurement framework, and at the same time meet central agency expectations. Characteristics of Agencies that Excel at Planning and Performance Measurement The planning and performance measurement approach must reflect the realities of the small agency environment. Small agencies in the federal government share many similar characteristics to “small businesses”—they are often focused on the delivery of a single service or small set of programs, have a well defined mandate (prescribed through legislation), are very operationally oriented, tend to be entrepreneurial in their thinking, have a preference for action rather than analysis, are highly skeptical of those who think they know what is best for their agency, and are very committed to the success of their organization. So what does this mean for their planning and performance measurement processes? Our experience has shown that the following characteristics of small agencies can actually help them in being effective planners: • Greater stability provides a sustained focus. Although some agencies have grown dramatically in size in recent years, the workforce at a number of agencies is relatively stable from year to year. There is a lot more stability in the management team. This enables the agency to maintain greater continuity in their plans from year to year, to take projects off their agenda as they are completed, to challenge managers when projects never get off the table, and then to focus on key projects each year instead of trying to do everything. This consistency from year to year is critical to a successful planning VOLUME 17, NO. 2

STREAMLINED PLANNING AND PERFORMANCE MEASUREMENT FOR SMALL AGENCIES

process, and gives managers the satisfaction of seeing projects done. Period! • Hands-on involvement of the agency head in the planning process adds huge credibility. Agencies are highly influenced by the style of the agency head—if they attach a lot of importance to planning, then this sends a strong message across the organization. (Unfortunately, the opposite also holds true). Positive and pro-active management in an agency also has much more leverage as this is felt directly across the agency much more quickly and directly. Although this is stating the obvious, planning is definitely more effective in those agencies where the agency head (the “chair”) is actively involved in the process and plays a strong leadership role. • The operational nature of agency activities makes planning much more real and tangible. The program activities of the agencies have well defined outputs. Policy and program development are much less of a concern. Agency plans can be translated into tangible targets and milestones that can be tracked in a mean-

ingful way. This implies a more narrow focus in terms of environmental scanning than one would find in the larger departments. Also, there is much less of a distinction between strategic and business planning than in a larger department, to the point where a combined strategic/business plan is sufficient for most agencies, particularly where they have a very operational focus and therefore do not need to revisit their overall strategies from year to year. • Managers can be held accountable. The small size of the agencies brings distinct advantages to planning. There is more direct accountability of managers within the smaller agencies, if things go well or not. • A more integrated process. The planning process can be much simpler. It is easier to achieve integration of all the elements of the cycle. It is easier to involve the whole management team (10-15 managers) in the development of the overall agency business plan. • Ability to demonstrate results. One can see the tangible results of the planning

and performance measurement activities in the small agencies. Projects are completed from year to year whereas the beginning and end of projects in larger departments can take years and is not as well defined. It is often easier to measure performance (e.g., timeliness, quality, client satisfaction) because of the operational nature of many of the activities carried out in many agencies. • Increased focus and agility. Contrary to larger departments with many programs, it is possible to have 15 or so overall performance indicators to monitor performance; to update the yearly risk profile as part of a yearly planning session (in hours rather than months); to carry out one to three audits each year that can have direct benefits on implementing process improvements; and to integrate HR and business planning in a meaningful way. The challenges Many of the advantages of the small agencies also pose particular risks, for example: • Inconsistent focus on management by agency senior managers. In some agen-

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cies, senior managers have extensive management experience, and take a very pro-active role in the management of the agencies. In others, senior managers are very highly qualified in their particular specialty area and are very senior and capable people, but do not have the same interest in “management”, are highly sceptical of central agency initiatives, and tend to delegate management responsibilities to the corporate services organization. This sends a negative message to managers and employees, and puts undue responsibility on the corporate services manager. • Widely disparate management practices from agency to agency. Our experience has been that the overall management approaches (and related practices) vary considerably from agency to agency. A number of small agencies have had a well defined planning cycle in place for a number of years. At the other extreme, some agencies have only recently established an executive committee or management team, and do little in the way of formal planning. Some agencies include only the executive committee in their strategic and business planning, whereas others include managers at all levels of the organization. Sometimes, the chair leads the planning, whereas in other agencies, it is the executive director. Some agencies do not have a strategic or business plan, and rely on the Report on Plans and Pri26

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orities (RPP) as their planning tool. Some agencies conduct two or three audits each year without fail based on a well defined audit program; other agencies do not conduct any audits at all, and do not see the need. These differences in management practices are certainly due in part to the circumstances of each agency. Having said this, one cannot help but wonder if these variations in approach are driven by management style and may not be the most effective from a government-wide accountability perspective. • Governor in Council appointees. The responsibility of Governor in Council appointees (GICs) for the management of the organization is not always clear, particularly in the case of part-time chairs. Similarly, GICs are often part of the delivery process (e.g., members rendering decisions in an administrative tribunal), but do not have the same accountability for achieving results as do managers in the public service. The process for reappointing members can also have a major impact on the stability of the management of the agency, and reappointment delays can have a direct impact on the performance of the agency. The presence of both members and employees also complicates the management of the agency by necessitating separate planning committees comprised of the GICs and the management team (for example, each group might have a sepa-

rate annual retreat or quarterly planning meeting). The relationship between public servants and GICs needs to be managed carefully as unreasonable expectations of each other, and lack of communications, can be a recipe for disaster. Some agencies have addressed this challenge successfully by involving senior members (GICs) and senior managers in their respective planning processes, and by doing planning on a joint basis. The election platform of the new Conservative government calls for a new Public Appointments Commission. • Responsibility for management is not always clear in small agencies. The existence of both a Chair and an Executive Director in an agency can create confusion as to who is accountable for the management of the agency. This inevitably has repercussions with respect to the planning and performance measurement. For example, in some agencies, the Chair clearly plays the lead for management matters, whereas in other agencies, the Executive Director assumes the lead and the Chair may not even be involved in the management team, never mind planning and performance measurement. In some agencies, both the Chair and the Executive Director are involved and share responsibilities. The circumstances and legislative framework differ widely between agencies, however this lack of clarity can hinder the introVOLUME 17, NO. 2

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duction of management practices (e.g., regular management meetings, annual planning retreat), which are common in the large departments. • The need to maintain agency independence. Although difficult to define, the need for independence is critical to the credibility of many small agencies. This is a constant risk for small agencies where there is often a misunderstanding of their role. The agency will rightfully insist upon the independence of the regulatory, oversight or judiciary elements of its business. For example, establishing appropriate funding levels can affect agency independence. Security of information can affect the extent to which the agency can be transparent in its external accountability reports such as the Departmental Performance Report (DPR). Even selecting the appropriate reporting relationship to a minister can be sensitive. This need for independence is not helped by turnover in the staff of the central agencies that interface with the small agencies and who do not remain in position long enough to develop an intimate knowledge of the sensitivities associated with each agency. • Lack of in-house planning and performance measurement capacity. Small agencies typically cannot afford an inhouse planning and performance measurement capacity, as they do not require full-time support. Consequently, they are WINTER 2006

more reliant on external support from consultants. As agencies have limited resources at their disposal, the dollar amounts of the contracts tend to be small. However, the advice provided is often of a strategic nature and therefore requires senior advisors. Despite the smaller dollar value of the contracts, achieving stability in the consultants used can be a challenge in that consultant activities are often viewed by the contracting community as “projects,” when in fact the planning and performance measurement activities repeat from year to year. All to say that the agencies need more flexibility to be able to obtain external planning and performance measurement support so that there is more stability from year to year in the consultants that they use, and the people providing this support can become intimately familiar with the business of the organization in a manner similar to in-house corporate planning and performance measurement groups in the larger departments. This would suggest the need for more long term (e.g., multiyear) service agreements or arrangements to be put in place where agencies could have access to senior professionals who are familiar with the agency organizations and have an interest in working with the small agency community (much in the way that the large accounting and professional service organizations have groups that serve exclusively the small business

community). • Only “one-deep”. The small agencies are much more vulnerable to losing their corporate knowledge if there is suddenly a high turnover rate. Poor management can have much more devastating consequences for a small agency, as the examples are well known. A sudden departure can also have major negative impacts on service delivery; in some cases, it can take an agency several years to rebuild its expertise in a particular area and to regain the confidence of its clients. This simply reinforces the need for small agencies to plan their strategies to retain corporate knowledge, whether this is through better people management, succession planning, orientation and training of staff, development of information systems to retain corporate knowledge, or simply documenting policies and processes. All these initiatives require a sustained multi-year planning focus and ongoing performance measurement to ensure that they are being successfully implemented. As managers’ time in small agencies is used up addressing short-term urgencies, these long-term projects are inevitably given less priority and often simply never get done (compared to large departments where specialists devote their time exclusively on these longer term projects). A Proposed Integrated Planning and Reporting Cycle An integrated planning and performance measurement cycle would typically include strategic and business planning, performance reporting, the preparation of the Report on Plans and Priorities (RPP) and Departmental Performance Report (DPR), a yearly update of the agency risk profile, a yearly assessment of their management practices based on MAF, and a yearly update of their audit program. HR, asset and business planning should be done on an integrated basis, although the actual mechanics of how to do this are still being developed in most agencies. Also, many agencies have an annual report that tends to report more specifically to interested stakeholders on the business of the agency, and differs from an accountability report such as the DPR where the agency reports on the results it has achieved. All these elements FMI JOURNAL

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are closely linked, and need to be woven together as part of an integrated process. • Strategic and business planning. Our experience is that typically an agency needs to conduct an environmental scan, note best practices in other similar agencies, identify changes in stakeholder expectations, update its priorities, and develop each year an integrated plan with a dozen or so organization-wide projects. The responsibilities for carrying out these projects need to be clearly identified by assigning lead responsibility for each project to one member of the executive committee. Too often, there is a tendency to assign agency-wide projects to the corporate services manager, thus reinforcing the view that management is a corporate responsibility and not the responsibility of all managers. Summary work plans should also be prepared for each project to ensure that managers and staff have a common understanding and agreement on the scope of each project. In the larger agencies, sectors/branches will have their own individual plans that are aligned with these agency-wide projects. The resulting agency-wide plan then serves as the basis for preparing the Report on Plans and Priorities (RPP), thus eliminating the need for call letters to managers and adding to the credibility of the RPP as a document that reflects the realities of the priorities of the agency. • Performance measurement. Some agencies have recently developed simple yet useful performance measurement frameworks for the organization, which consist of a small number of corporate objectives (results), a set of key enablers, and a set of no more than 15 key performance indicators. Performance results are assessed during semi-annual management retreats. In many cases, it is more realistic to review the performance of the agency one or twice during the year, as opposed to doing so on an ongoing basis (with the exception of ongoing operational measures, such as throughput time). Typical results and indicators include service quality, client satisfaction, timely processing, client access to information and services, “people” indicators, and sound management (based on the MAF elements and indicators). The performance information is used to identify gaps in 28

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performance and to identify/confirm those areas where improvements are required. The information from these performance reports is also used to prepare the annual Departmental Performance Report (DPR). A common dilemma in small agencies is the extent to which formal client satisfaction surveys should be carried out, particularly where the agency carries out a regulatory, oversight or judicial function. Again, practices vary widely between agencies, with some agencies conducting regular client surveys (in the case of a tribunal, focusing on assessing processes, not the results of case decisions), and others refusing to conduct client surveys for reasons of independence. • Risk management. A number of agencies now regularly update their corporate risk profile on an annual basis as part of the strategic planning retreat. Our experience in working with the small agencies is that risks do change from year to year, and the simple exercise of updating the risks has helped agencies to focus on those areas where they need to focus their efforts. Agencies generally follow common risk profiling methods, i.e., identifying the impact and likelihood of each risk, whether the risk is increasing, decreasing, or stable, any mitigation gaps that may exist, and the relative priorities of the risks. Some agencies have aligned their risk profiles with the Management Accountability Framework (MAF). • Internal audit. A number of agencies do two or three audits per year, and have used the results of these audits to drive improvements to their service delivery and management practices. These audits have had the greatest impact where they have focused on operational matters (e.g., security, elements of service delivery). Because the agencies do not have the internal audit resources, the audits are generally carried out by external resources. The agencies will prepare an

audit plan and program similar to what a large department would do, and some agencies have acquired external support to help develop and manage the audit program (as opposed to conducting the audits). The OCG has a much discussed initiative to increase federal government capacity to conduct audits on behalf of the agencies. This is timely as a number of small agencies do not do any audits. Also, there is some confusion between the need for financial compliance audits and more operational value for money audits. • Management Accountability Framework (MAF). Small agencies generally have been enthusiastic about implementing modern comptrollership/modern management practices, although this has received little acknowledgement due to the profile of recent government scandals. Some agencies have recently begun to carry out a yearly assessment of their management practices based on the MAF. Consultants have developed tools to help streamline the MAF assessment process as this can be a major challenge for small agencies given the wide scope of MAF indicators. Treasury Board Secretariat has recently reduced the scope of MAF indicators to be assessed by small agencies, but this can still be a daunting task for small agency managers who are not fully familiar with the requirements of the MAF. In working with agencies, we have developed a tool called the MAF Performance Check™ to help simplify and systematize the process.2 The implications for the way ahead The common theme is increased sensitivity to the particular needs of small agencies: • Central agencies need to develop government-wide policies, guidelines and toolkits around the needs of the small agencies, as opposed to simply starting with guidelines for the larger departments, and trying to adapt or apply a subset of them or a condensed version (a VOLUME 17, NO. 2

STREAMLINED PLANNING AND PERFORMANCE MEASUREMENT FOR SMALL AGENCIES

current example being the use of 25 out of the full list of 41 MAF indicators). The challenge is to translate governmentwide policies that are developed for large departments into something more practical and succinct for agencies. Examples include preparing a one-page list of the corporate risks rather than an elaborate integrated risk framework; developing a simple corporate performance measurement framework as opposed to an elaborate performance measurement system; preparing a simple planning guide as opposed to detailed RPP/DPR external reporting guidelines. Managers in the small agencies are spending too much time adapting elaborate management frameworks that are appropriate for large departments to their relatively straightforward needs. • Senior managers within agencies need to take greater ownership for implementing new management initiatives within their agencies, as opposed to simply relying on corporate staff to meet the central agency requirements. Goals for implementing management initiatives can be incorporated into the executive performance management agreements. The management accountabilities of GICs (e.g., chairs) and managers (e.g., executive directors) also need to be clarified. • Provide agencies with tools and templates, in areas such as performance

measurement. For example, tribunals could be provided with a template for their performance measurement framework, while having the flexibility to customize it to their specific circumstances. Agencies can do this by continuing to share best practices. However, central agencies could facilitate this process by developing standard templates in cooperation with the agencies. • Need more stability in new management approaches that are sponsored the central agency level. There needs to be greater recognition of the time required to implement management improvements in small agencies. Although this can be a frustration for larger departments as well, the tendency of central agencies to start and then drop new management initiatives (e.g., integrated risk management) cannot help but reinforce the skepticism of the managers in the smaller agencies. • Share best practices at the national and international levels. Further benchmarking with similar agencies at the international or provincial level would be beneficial. It is not feasible for each agency to do its own benchmarking. Some pooling of resources, or support from the central agencies, would be helpful in this regard. • Need to take a more integrated management approach government-wide.

Whereas the larger departments (perhaps unreasonably so) can live with the disconnects between management approaches government-wide, these are much more obvious at the level of the small agencies. An example is the apparent disconnect between MAF and the Program Activity Architecture (PAA) and MRRS in terms of overall performance reporting. In conclusion Small agencies have made great strides in planning and performance measurement, and in some cases, are leading the way within the federal community by making the process much more real and tangible, ensuring continuity from year to year, involving managers and staff at all levels of the organization, integrating the various elements of the process, demonstrating results, and holding managers accountable for achieving results. The small agency community should continue to share best practices so that all agencies can have access to better tools to help them be more effective in their planning and performance measurement.  References 1. Defined by the Small Agency Administrators’ Network as organizations with fewer than 1,000 FTEs. 2. Further information on the MAF Performance CheckTM can be found at www.kscg.ca.

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Supporting Improvements in the Quality of Financial Information Daniel Paquette

or the last four years, the Office of the Auditor General of Canada has published a series of chapters in the Auditor General’s Reports discussing various matters related to departments’ and agencies’ use of financial information for financial decision making. The first of these chapters was in the December 2002 Report; followed by a chapter in March 2004 and another in February 2005. The next chapter will be published in late spring, in the Auditor General’s 2006 Status Report. All of these chapters have been derived from the audit of the summary financial statements of the Government of Canada. That is, the main source of audit evidence and information for these chapters comes from the financial attest audit the Office does for the Public Accounts of Canada. These chapters have also been published during interesting times for those in the financial management community in government. Many changes aimed at strengthening public sector management have recently been introduced, others are under way, and even more are contemplated. These changes include such things as the re-establishment of the Office of the Comptroller General, the appointment of CharlesAntoine St-Jean as Comptroller General, announcements related to the position of departmental comptrollers and the professionalizing of internal audit, and the government’s intentions to produce audited financial statements for departments and agencies. The Office of the Auditor General has been supportive of these initiatives to strengthen comptrollership and oversight of financial results. But it takes more than statements of intentions to change. As with any major change, leadership, a “raison d’être,” and sustained momentum are essential.

F

Why are these chapters important? First, financial information is an integral part of the government’s activities, and this information must therefore be of the high30

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est quality. Second, improving financial information has been one of the government’s more recent initiatives. For example, the government has spent considerable time and effort introducing the concept of accrual accounting at the departmental level. This type of financial information is considered more complete financial information for decision making. Finally, the quality of financial information is dependent upon the presence of good internal financial controls that, in turn, contribute to the soundness of actions taken by management. In other words, managers use internal financial controls to manage informational risks and achieve their objectives. But, as already noted, achieving any of this could not reasonably be expected without strong financial staff, examining and overseeing the results. For that reason, three main themes have been established for the chapters and this article: the quality of internal financial control systems, people, and financial information. The status of internal financial control systems For the past few years, the Office of the Auditor General has been completing a series of controls assessments in departments and agencies and monitoring progress. The objective was to determine whether these systems helped ensure the quality of financial information for financial reporting and, ultimately, for financial decision making. Unfortunately, in some departments the audit work continued to find the same weaknesses that were found when the assessments were started in 2001. In some departments and agencies there is still work to be done to address the weaknesses identified in their internal financial control systems. Consequently, the chapters conclude that departments and agencies have been slow at improving their internal financial

Daniel Paquette Daniel Paquette is a director with the Office of the Auditor General of Canada responsible for the audit of the Public Accounts of Canada. He is also responsible for directing the performance audits relating to the Public Accounts and oversight of the Office’s planning for audits of departmental financial statements. Previously, he was responsible for the audit of large crown corporations, implementation of new audit tools and methodology, and quality assurance of financial audits.

control systems, which has increased the risk of error in the financial information used for decision making. To clarify the nature of the control weaknesses identified, they have been regrouped into five principal categories: electronic security controls, monitoring controls, control features optimization, processing controls, and selected authorities’ controls. The table below is an overview of these weaknesses without attribution to any department or agency. When the chapter first reported these control weaknesses, it noted that most of the weaknesses could be resolved within a reasonable period of time. Thus, it was expected that the audit work would find that more progress had been achieved. However, certain entities have failed to give priority to addressing these weaknesses. It was also reported that certain departments and agencies that successfully addressed some of the identified weaknesses did so by improving some of their quality assurance functions that review selected transactions to ensure accuracy and compliance with significant authorities. The question of people and leadership Simply talking about information and controls isn’t enough. Someone must champion the cause. Consequently, leadership and direction from central agencies and by departments and agencies themselves is essential. In fact, the chapters have reported VOLUME 17, NO. 2

SUPPORTING IMPROVEMENTS IN THE QUALITY OF FINANCIAL INFORMATION

Common weaknesses found in many internal financial control systems that need particular attention Financial systems and processes Electronic security controls

Weaknesses • User access rights and privileges reflect incompatible duties. • Super user accounts are not sufficiently controlled. • Users have wider system access than required. • Significant numbers of generic user IDs. • Best practices for key security parameters are not being enforced.

Explanation and implications Electronic security controls are used to control user access rights and privileges within an electronic financial information system. Lapses in or inadequate electronic security controls could lead to unauthorized access, which can then allow for accidental or intentional corruption or loss of information. This can also result in the compromising of the integrity of system tables and structures or in the production of erroneous reports by the systems.

Monitoring controls

• Security administration function does not follow best practices. • Reconciliation of accounts is not being done on a timely basis. • Review of clearing and suspense accounts is not timely. • Policies and procedures for monitoring accounts are not always in place—for example, review of unusual or high-risk transactions and review of key performance measures such as “receivables aging.”

The security administration function is shared among many users and is not controlled. There are no formal policies and best practices in place, leaving this position at risk. Monitoring controls engage senior management in analyzing the reasonableness of financial information. Differences identified or matters observed must not only be highlighted but also investigated and analyzed, and corrective action taken. A lack of monitoring controls allows errors to go unnoticed, thereby compromising data accuracy and validity as well as increasing the risk of loss and/or corruption of data.

Control features optimization

• Many controls features inherent in the new financial systems are not being used.

Processing controls

• Segregation of duties is inadequate. • Documentation on policies and procedures is not being prepared/reviewed. • Quality assurance of the account verification process is limited.

Many new financial systems have control features directly integrated within various modules and these controls help improve the accuracy of financial information. Not taking full advantage of these financial control features results in lost opportunity to increase efficiency and effectiveness of the operations. Options not optimized include functionalities to ensure each payment is matched to a requisition and evidence of receipt of goods/services and report generation. Not using built-in controls could reduce the consistency of the application of the controls. Also, new financial systems are often used to simply compile results produced from existing systems. In some cases, two or more systems are operating where integration may be possible. This approach adds to the complexity and cost of maintaining financial information. There is also additional room for error if separate systems are maintained. Modern control frameworks should allow for proper integration of processing controls within an overall control framework. Processing controls, however, are less systematic and less comprehensive in their application than electronic controls, but nevertheless help improve the quality of financial information. The absence of strong processing controls such as quality assurance reviews increases the risk that data values will remain unchecked, be omitted, or result in duplicate information or other errors.

Selected authorities controls

• Payments are being certified without consideration of all key financial authorities such as ensuring the existence of proper documentation of having received the goods.



that having individuals at the executive table with a background and training in financial matters, including accounting, will help meet this goal to strengthen comptrollership and oversight of financial information, and champion the cause. The Office of the Comptroller General’s initiaWINTER 2006

Section 34 of the Financial Administration Act requires that proper authorization be obtained and that goods or services be received before any payment is made. Section 33 of the Act requires that proper authorization be obtained prior to any requisition for a payment out of the Consolidated Revenue Fund and the subsequent charge against appropriations. Without proper controls, the government does not have assurance that payments are made only for goods or services that have been received.

tives will hopefully address these issues. In particular, it is stated in the chapters that to support the progress being made in this area the Comptroller General should continue to fully explain the significance of the announcements regarding the role of departmental comptrollers, their accredita-

tion, and their reporting relationship within the department or agency and to the Comptroller General’s Office. In this regard, it is understood that consultations with the senior financial community are ongoing and that significant community- and capacitybuilding initiatives are beginning. FMI JOURNAL

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The use of financial information for decision making The Office of the Auditor General has been, and will continue to be, very supportive of the government’s decision to move to the accrual basis of preparing financial information. It is believed that accrual-based financial information provides better information about the full cost of programs, helps improve accounting for the stewardship of assets, and assists managers in understanding the full extent of their short- and long-term financial obligations. However, the introduction of improved financial information in departments and agencies was never intended solely for the purpose of preparing year-end financial results and the summary financial statements of the Government of Canada. Although such information has been incorporated in the preparation of the government-wide budget and periodic monitoring of government-wide results, it was expected that departments and agencies would have integrated such information into their normal decision-making processes and interim financial reporting activities. In other words, it was expected that accrual financial information would be used by departments and agencies throughout the year.

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As part of the audit work that was done for the chapters, there were discussions about the role of accrual financial information with certain senior financial officials in departments and agencies. Based on those discussions and other audit work, it was concluded that those departments and agencies use accrual financial information mostly at year-end, when preparing financial information for inclusion in the summary financial statements of the government. Furthermore, senior financial officials in those departments and agencies supported the assessment that without a consistent use of accrual financial information throughout all aspects of government financial operations (i.e. budgeting, appropriations and reporting), there is little need for this type of information other than as part of the year-end summary financial statement reporting process. More work is still needed Although the government continues to make progress in advancing the preparation and use of financial information in departments and agencies and in improving the quality of the systems supporting that information, it is disappointing that more work is still needed to resolve several out-

standing issues. The government’s challenge is to ensure that all departments and agencies focus on the different types of control weaknesses and determine how to effectively implement the changes in their management processes so their financial information is improved. The spring chapter to be tabled as part of the Auditor General’s 2006 Status Report will provide more information on these matters and the ongoing assessment of the progress being made by the government and individual departments and agencies. The financial management community should also get actively involved and consider the need for plans in their respective departments that look at the following questions. Are their proper systems for financial control and sufficient resources available for preparing and reporting financial information? If not, what needs to be done? How can one improve the quality and use of the accrual financial information to aid decision making? Hopefully, if everyone directs attention to these issues, the quality of financial information used in government will significantly improve. 

VOLUME 17, NO. 2

Does Your Organization Need Integrated Investment Planning? Hendrik Siré

oes your public sector organization need integrated investment planning? Public sector organizations facing major asset-related challenges and asset management capacity issues can move toward integrated investment planning and asset management as a way to reduce risks and costs and increase the favorable impacts of the investment dollar, thereby generally assuring greater value-for-money.

D

Challenges The motivating impulse for integrated investment planning comes from lucid observations about assets all too common for many public sector asset-owning institutions. Briefly put, by and large assets represent the last hold-out of the unhappily remembered periods of severe budgetary restrictions: with few exceptions, the capital assets of many public sector institutions – the vehicles, the vessels, the aircraft, the equipment, the IM/IT assets, and the real property — are becoming significantly older, many are in deteriorating condition, and they are increasingly unsuitable to meet evolving requirements. Thus, a share of the asset base – varying from organization to organization and difficult to quantify — is no longer essential. Unfortunately, this remarkable state of the asset base is coupled with the equally troubling state of asset management. Simply put, too many public sector institutions lack effective capacity to manage assets well throughout their life cycle and, hardpressed through budgeting processes and limitations, have no other option but to systematically and chronically under-fund their assets year after year. This situation has reached the point where some organizations no longer have the capability and resources to put in place sound preventive maintenance programs, with cascading effects on costs, risks and complexities over time. WINTER 2006

What is more, pressing asset-related decisions are being postponed in part due to higher priorities on the agendas of governments, and in part due to the sensitive nature of some asset-related options, notably rationalization, closures and sales to private sector service providers. Disposals of non-essential assets are being postponed due to a myriad of complex public policy issues. Sadly, the ground-level effect of these postponements is spending funds to make less suitable assets safe and compliant for the short-term, and escalating transformation costs in the future. Definition Of course, investment planning has been around as a dimension of asset management capacity for some time. Investment planning is the process by which data is gathered and analyzed, options are identified and carefully considered, people are engaged, consulted and involved, and decisions are taken with respect to the evolution of portfolios of assets. The investment planning function was set up in public sector organizations at a time when assets were less complex and had on the whole longer service lives, when programs and services were more distinct from each other and less subject to change, and when resource constraints were less critical than they are today. To boot, organizations could afford to remain project-focused, without examining larger portfolio-based questions. At that time, many public sector organizations allowed their investment and asset budgets to be scattered in the O & M budgets of numerous responsibility centres, with few if any controls to prevent funds from being siphoned away for other purposes. However, in the difficult context of today, it has become critical to take a fresh look and once again to get the investment planning function right for facing emerging

Hendrik Siré Hendrik Siré, MA, MBA, CMA, CMC, is a Partner with Goss Gilroy Inc., Management Consultants. Mr. Siré provides consulting services to federal government departments and agencies in the areas of asset strategies, frameworks, policies and governance, longterm asset and investment planning, business case preparation and time value of money analysis. Mr. Siré has assisted seven federal institutions prepare long-term capital or investment plans. Fully bilingual, he is an experienced facilitator and trainer, developing and delivering workshops and training sessions to a variety of audiences. Prior to joining Goss Gilroy, he held positions in Sypher:Mueller International, Ports Canada and the Canadian International Development Agency.

challenges. Today, this function provides the essential platform from which public sector organizations can begin to resolve meaningfully their many asset-related issues. Some would point to the increasingly enabling and integrative role of IM/IT assets within public sector institutions, with their short service lives and high refresh rates, as also having a determining effect on expectations and requirements for investment planning. Others would point to the role of public sector accrual accounting in Canada, in giving a profile to the capital assets being held by public sector organizations, and in measuring the extent to which these assets are being evergreened, namely replaced and upgraded appropriately. Objectives The objective of integrated investment planning is to create and maintain asset portfolios that have highly favorable characteristics. Stated simply, assets should be essential, responsive and strategically aligned, affordable and productive, safe and compliant, supportive of the environment and sustainable development, and show respect for heritage values, particularly in the case of real property. FMI JOURNAL

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DOES YOUR ORGANIZATION NEED INTEGRATED INVESTMENT PLANNING?

To achieve asset portfolios with these characteristics, integrated investment planning provides a series of principles, concepts, tools and functions that once executed and implemented will increase the likelihood of these favorable characteristics being achieved. Core to integrated investment planning are the following fundamental expectations: • Look at all assets of the organization from a common all-of-entity perspective; • Treat the investment and asset dollar differently from the salary and O & M dollar, taking into account the scope and multi-year effects of assets; • Accept that, more and more, optimal asset solutions require a “wall to wall” allof -entity perspective, for synergies and economies of scale to be achieved. • Consider alternatives to asset ownership by the organization, including sharing, partnering, networking and contracting for services; • Recognize the strategic component of all asset acquisitions, no matter how small the assets involved are; • Link asset acquisitions to organizational outputs and outcomes and to approved strategic, business and corporate plans; • Know what you have across the board, its condition, suitability and risks; • Treat all investment proposals by a common set of rules and processes, and ensure corporate oversight; • Risk analyze and prioritize investments above a certain size, risk and complexity at an all-of-entity level; and • Ensure a corporate capacity to allocate funds to assets in an optimal manner. Making It Happen Integrated investment planning has several component parts that are highly interdependent. • Information systems must appropriately provide information asset-by-asset. It is essential that this information be accurate, relevant, complete, consistent, timely, accessible and sharable. Increasingly, consideration must be given to integrated asset information, combining baseline planning with life cycle management information. Physical inspections must be done with a frequency sufficient for senior management to express its continuing confidence in the database as a use34

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ful corporate tool. • Condition assessment must be systematic and consistent. Asset age is too often the facile proxy for condition. A common nomenclature must be developed at an all-of-entity level, providing a common meaning of such terms as “poor” “satisfactory” “good” and “excellent”, preferably across all asset categories. • Needs and options analysis must be recognized as complex, typically under-supported functions, and appropriate frameworks, templates, and resources allocated to ensure the most cost-effective definition of asset needs and options for accessing assets as public sector programs evolve. • Portfolio, site and asset planning have major roles in investment planning and require that the appropriate policies, strategies and capacity be in place. Public sector must demonstrate a strong ability to analyse functional, operational and financial data and information in an integrated manner – at a portfolio and strategic level, and not just at a transactional level — in order to reach defensible conclusions about the future of a portfolio, asset or site. • The investment proposal (or business case) is in many respects the workhorse of integrated investment planning, for the investment proposal brings together all relevant information in a reliable way and is in effect an information, decisionmaking, accountability and evaluation document rolled into one. Public sector institutions must have in place credible common templates and processes for the effective treatment of investment proposals. • Priority- and risk-ranking frameworks and templates are required to provide transparency in the allocation of funding to capital projects, and to ensure that that the organization is engaged in creating a balanced investment program capable of withstanding close scrutiny. • Governance is measured by senior management involvement in investment decision-making, by the clear delineation of custodian, user, and service provider roles within the organization, by the quality of the organizational policy suite governing investment planning and assets, and by a entity-wide delegation of authority

matrix related to investment planning and decision-making. • The Work Plan is the bridge between the intentions of senior management and the day-by-day implementation of new investment planning deliverables, strategies, processes, and governance. Organizations must consider a project-based approach, perhaps with a project charter and even with a detailed work breakdown structure. For many government organizations, the move to integrated investment planning represents a major change in business models and “ways of doing business”. Change will likely require several years and resistance to change from time to time is likely. Impacts and Effects Public sector organizations embarking on the implementation of integrated investment planning will begin to see results fairly quickly. Over the shorter term, senior management sees the holistic multi-year investment program, sometimes for the first time, and begins to take better decisions around organizational priorities and timing. Senior management appreciates that better information is available on capital projects through the refined business case template. Capital project priority ranking and peer review of project scores help organizations to ensure the investment dollar is being put to highest and best use, and that funds are not being spent to shore up assets that will be disposed of anyways. Over the longer term, the organization begins to see a dramatic shift in its investment program, away from “putting out fires” to true prevention and protection of asset service life. Funds are increasingly allocated in an optimal manner between repair, minor capital, recapitalization and the transformational investments that public sector institutions are increasingly requiring. And the asset portfolio is increasingly responsive to and aligned with evolving organizational and program priorities in service to Canadians. Assets begin to play once again their enabling role. Conclusions So, does your public sector organization need integrated investment planning? Hopefully this article has demonstrated VOLUME 17, NO. 2

DOES YOUR ORGANIZATION NEED INTEGRATED INVESTMENT PLANNING?

that many sound initiatives, fully in line with the current direction of governments in Canada, can be placed under the banner of integrated investment planning. For many public sector institutions, integrated investment planning is demonstrative of rigorous stewardship and becomes an essential component of their management accountability framework. To be sure, integrated investment planning represents an implementation challenge and requires leadership and commitment, wisdom and prescience, trust and teamwork, as well as effort and good communications to put in place. 

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In his role as a Liaison Director, Roland has worked closely with many of the regional chapters and has given freely of his time, his advice, his wisdom and his experience as these chapters have grown and developed. As an active member of the national board, Roland has always been at the forefront whenever a new project or process has been brought to the board. He is usually one of the first to offer his services as a volunteer or participant and always contributes to discussions on almost any issue. Personally, at all of the FMI functions, he has demonstrated a “joie de vivre” and strength of character and leadership that has added to the quality of the events. At PSMW functions, his singing prowess is almost legendary. On behalf of the National Board of the FMI it is our pleasure to present our friend and colleague, Roland Letarte, with this certificate naming him as an honorary life member of the FMI.  WINTER 2006

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Business Information Services for Management Decision-making Mark O’Connor eXtensible Business Reporting Language (XBRL) is beginning to take hold as a foundation for automated processes promising to reduce preparation timelines, improve consistency and allow for easy re-use in downstream analysis and benchmark comparisons. Organizations around the world have shown that XBRL can help to reap the benefits of standards and the application of common definitions for enhanced financial and performance reporting. Government may be the largest potential benefactor in using XBRL rganizations will often admit that the spreadsheet is the tool of choice when financial reporting for management decision making and external reporting is performed. Although a vast majority of organizations have implemented ERPs such as SAP and Oracle, many still load reporting information into spreadsheets, often through re-keying, in preparation for publication and distribution. Some refer to this as Spreadsheet Hell. Although Internal Control Certification rules have not yet directly had an impact on Canadian government bodies (e.g.; rules like Sarbanes-Oxley for US companies, Bill 198 for Ontario publicly traded companies and the Office of Management and Budget circular A-123 for the US government administration) consensus is that fully controlled automated processes for enterprise external reporting is strongly favored – being cost and risk beneficial. There is a need to reduce the chance for embarrassing spreadsheet cell transformation incidents resulting in statement revision. Failure to automate adds risk and necessitates more detailed documentation and extensive testing each year to provide the assurance for certification by the organization’s CFO and CEOs. Government of Canada Initiatives of Common Administrative Shared Services (CASS) and plans to issue separate audited Financial Statements for each individual Department of the Government of Canada will focus the need for reliable automated reporting processes and standards. In addition to the need to standardize and share process components to reduce reoccurring costs to support certifications, accountants have also realized that: • They want to find ways of accelerating report preparation processes without sac-

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rificing quality; and • Users of Government financial and performance information need to easily reuse financial statement contents in their models and analysis. XBRL is part of the automated solution. The idea behind XBRL (eXtensible Business Reporting Language) is simple. Instead of business report expressed as a block of text in print or as an Internet page, the information is structured behind the scenes with standardized tags, which bracket the numbers to identify, associate and describe each individual item of data. These tags are associated and linked to an accepted reporting structure. Providing the foundation for “apples to apples” comparisons. Using commonly agreed to tags to place the information correctly within a variety of reporting frameworks, data becomes directly accessible by automated processes. Therefore, whether an individual is working on an interdepartmental report or an end-ofyear financial report, the same pool of information is used as a common source for many uses. The information is re-useable, structured and clearly defined as to its meaning, source and relationship to associated information. Because of the common use of structures with accepted meanings to accounts and data it is ideal for use in benchmarking and comparative analysis. Drill down effectiveness XBRL tags provide a way to ensure that information remains consistent and clear. Because information is not re-keyed or transformed out of context for a final report or for analysis, it is easier to provide accurate and detailed information by simply examining the relevant tagged information. With appropriate formatting, and as the

Mark O’Connor Mark O’Connor, CMA ([email protected]) specializes in information services delivery and business reporting strategies. His practice includes helping organizations develop business requirements and strategies, processes, workflows, operational and financial controls. Mark is a managing director of Ottawa-based Multi-Access Systems Ltd and is a member of the International XBRL GL working group.

organization’s use of tagging structure becomes more sophisticated, companies will be able to use XBRL to drill down through their data to better understand how the business is performing. XBRL provides the foundation that will accelerate the adoption and effective use of concepts like business intelligence, electronic data interchange and integrated enterprise information. The Information Supply Chain XBRL is rapidly emerging as a global standard for the business information supply chain that will provide drill-down and drill-up capability, combined with audit trails for business reports, transactional information and related details. At each step in the business process, XBRL electronic documents can be promptly validated through automated verification processes. There is great potential for saving time and resources. The use of XBRL in the supply chain should mean that detailed data would be available from each step of the process – from the moment a business transaction begins to the time that the summary financial statements of the organization are released. An open standard XBRL (see www.XBRL.org) is a free and public standard with agreed to tags and structures that can be used to benchmark, compare, and quickly perform business and economic analyses of industries, government VOLUME 17, NO. 2

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and company reports. If an organization needs to add new tags to improve clarity it can be done without compromise by extending the structure in agreed to ways. This is where the eXtensible part of the XBRL name comes from. In addition XBRL is eXtensible Markup Language (XML) based. Taxonomies - what are they? Taxonomies are structured groups of information definitions that represent information found in a variety of business reports, and the relationships between the items found in those business reports. XBRL taxonomies can be used to define and consistently apply definition tags to items of financial and performance data such as “Accumulated Deficit”, “Full Time Equivalent” and “Location”. XBRL International, the world-wide standards organization headquartered in New York, establish XBRL technical specifications for taxonomies, provide standard setting services and lead the developments of build taxonomies that are shareable world-wide. Based upon these International XBRL technical specifications XBRL member jurisdictions develop, agreed to and seek XBRL international approval to published taxonomies for open use. XBRL taxonomies have been developed for use business reporting within financial and industry sectors and governments. Taxonomies are based upon 2 categories; summary statements and detailed transactional information. Examples include: 1. Summary financial statements used for

financial reporting such as Balance Sheet, Income Statement with the associated Management Discussion and Analysis. • Country’s with XBRL International status (acknowledged or approved) include; Canada, China, Germany, Korea, New Zealand, United Kingdom, United States and countries using the International Financial Reporting Standard (IFRS). • Industry specific XBRL taxonomy extensions are rapidly growing and include; Banking, Insurance, and Investment Management. 2. The XBRL-GL taxonomy, a special taxonomy has been created by XBRL International to support collation of detailed data and internal reporting within organizations. XBRL-GL is particularly powerful in a governmental or large organizational setting to help collect detailed transactions including financial transactions as well as unit and statistical performance and results related information. Detailed information can be associated with summary reports to provide transactional and approval details for drill down analysis, audit trails and budget planning and tracking. Within the XBRL-GL taxonomy specialized approved optional extensions have been developed by international governmental tax authorities for use in taxation audit files. The XBRL International organization has been a catalyst in developing a world-

wide standard for published summary financial statements and has been very successful in bringing together stakeholders with interests in establishing a common structure for financial statement disclosure. XBRL is working in conjunction with accounting standards bodies to further develop taxonomies (e.g.; AICPA in the US and CICA in Canada), Security Exchanges, (e.g.; SEC) governments regulating financial institutions (e.g. the US Federal Deposit Insurance Corporation and the Bank of Japan) and companies providing financial statement publication services (e.g. EDGAR Online). An interesting by-product of the XBRL taxonomy world-wide collaboration has been a shift in country’s accounting strategies willingness to explore IFRS as a common shared set of generally accepted accounting principals. Some are claiming that the recent announcement of a future Canadian accounting standards move to IFRS was facilitated by the increased interest and communications of XBRL collaboration. What the early adopters are saying XBRL is starting to transform business reporting and greatly improve process control, consistency, information clarity, transparency, and the timeliness of reporting. Symposiums of enthusiastic XBRL supporters are frequent and have provided opportunities to showcase and discuss innovations. Some amazing achievements include the following: • The Federal Deposit Insurance Corpora-

Strategic financial management Performance management Activity Based Costing Activity Based Planning and Budgeting 69 Vaudreuil Gatineau, Quebec PART OF J8X 2B9 Tel: (819) 595-9144 Fax: (819) 595-9725 Michael Tinkler: [email protected] Daniel Dubé: [email protected]

WINTER 2006

THE TEAM – PART OF THE SOLUTION

Ottawa – Montreal – Toronto FMI JOURNAL

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tion (FDIC) presented their XBRL-based process for collecting quarterly financial information from some 9,000 financial institutions. These financial institutions will no longer need to prepare five separate reports for five different regulators – only one XBRL report, and the XBRL Web submissions are validated immediately. FDIC is projecting savings of $27 million with reduced time to report from 75 days to less than 2 days. Just in - first quarter use of XBRL for at the FDIC has been a resounding success. The Netherlands’ government, in partnership with industry, has developed XBRL taxonomy foundations for transactions between government and its citizens. Politicians have been enthusiastic supporters of XBRL, having led, mandated and financed the initiatives for the Netherlands’ e-government strategies. The Bank of Spain has developed an XBRL-based Financial Information Exchange System to support XBRLbased regulatory reporting of the public financial statements by credit institutions to the Central Bank of Spain. A number of countries’ stock exchanges, including Korea and Japan, have been implementing XBRL for statement disclosure. The Korean Stock Exchange is offering XBRL-based financial statements in a multitude of languages. A statement submitted in one language is instantly made available in all the supported languages. The SEC has instituted a voluntary program for companies filing financial statements to submit their statements in the XBRL format. This is the first step towards what is expected to be a required filing step. Edgar Online, which provides business and financial information on global companies to financial, corporate and advisory professionals, has converted existing SEC financial statement data into XBRL formats, and then made it available to research analysts, investors, regulators and corporate officers to gain insight into market conditions directly from corporate filings. Edgar is offering a benchmarking application using this XBRL information to their clients providing comparative performance analysis of all North America listed company’s financial statements Wacoal, a Japanese manufacturer of FMI JOURNAL

apparel with 36 subsidiaries worldwide uses XBRL-GL (detailed journal taxonomy) to facilitate the exchange of information among the many disparate systems on various computer platforms maintained by these subsidiaries. Manual rekeying and replacement of all these systems were not viable options. XBRL GL was used to add flexibility, significantly reduce implementation time, and improve data quality and consistency. Applicability of XBRL to Government Business information services; particularly the collection and publication of reports, are still largely manually intensive processes within departmental and central agency organizations. While numerous software tools are used in collection and publication processes, there is minimal integration and little opportunity for information consumers to re-using information without rekeying. In addition there are increasing pressures supported by private sector comparisons and other events to improvement in financial reporting transparency, focus on more timely publication of results and include more nonfinancial performance and results all while improving or at least maintaining information quality. While private sector organizations have different complexities and have different governance issues there are still similar significant opportunities to dramatically improve timeliness, reduce management risk and increase productivity by further automating processes and using XBRL. World-wide best practices in using automated processes with XBRL are now becoming better known. Potential areas in government for systems that use XBRL include: • The exchange of summary or detailed information between departments and between departments and central agencies. • Exchange of information and process between levels of government at summary and detailed levels. • Publication and tabling of Departmental and Enterprise Reports with formats that facilitate re-use for modeling and analysis. • The assembly, audit and publication of Audited Departmental Financial Statements. • Budget and Estimates strategy, creation, review, approval and publication • Public Accounts assembly, review, audit,

approval and distribution • Horizontal and special studies of government revenue and expenditures • Canadian banking supervision, regulatory exchange and review and reporting. Basel II compliance. • Availability of detailed information to support management decision-making and audit trail within Departments and Central agencies. For example, the ability to quickly understand what is included in an element of a management report by drilling down into the details behind summary figures. • Reliable exchange between organizations and governments or governments to governments of compliance and authorized certifications (i.e.; in e-commerce terms; G2B or G2G or B2B). Financial, banking, taxation and other inspection government organizations would be able to verify, match and evaluate for more efficient and proactive monitoring and timely action. How to Prepare your Organization for XBRL To learn more about XBRL review the Canadian and International XBRL sites at XBRL.CA and XBRL.ORG. More information on how the XBRL non-profit organizations are governed and organized is outlined. XBRL is a global organization designed for member collaboration therefore it uses email and conference calls and regular conferences to communicate adoption and development of standards. Companies and individuals can join to understand XBRL in more depth and perhaps to be part of this exciting development. There is a need for involvement of government business and technical leadership in tailoring XBRL taxonomies and common shared processes for government to ensure that government can reap the benefits of data and process standards. When you are involved in Request for Proposal development or review for the acquisition of ERPs or Business Intelligence/data warehousing make sure you specify that the software must at least import or export “XBRL Instance Documents”. In this way you will be able to make use of XBRL in future initiatives and you will help others who follow your leadership to be able to better interface corporate reporting information. 

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Chartered Public Finance Accountant – A New Accounting Designation Comes to Canada Stacy Van Humbeck ertified Management Accountants of Canada (CMA Canada) and the United Kingdom’s Chartered Institute of Public Finance and Accountancy (CIPFA) publicly announced on October 18, 2005, the introduction of a new dual professional accounting designation: Certified Management Accountant (CMA) and Chartered Public Finance Accountant (CPFA). Supported by the Comptroller General of Canada, the designation will enhance career development of public service managers and financial officers and improve public service financial management and leadership. In light of the federal government’s focus on improving public sector management, this initiative is very timely!

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The New Program The joint accreditation program is a twoyear program, administered by CMA Canada, in public sector financial management and strategic leadership. Four courses, Canadianized versions of CIPFA courses, will be added to the CMA Strategic Leadership Program to obtain the CPFA designation. The courses, designed with a Canadian public sector financial management perspective are: Governance and Public Policy; Financial and Performance Reporting; Public Finance; and Audit and Assurance. A one year program also be available for already accredited CMAs. The Chartered Institute of Public Finance and Accountancy (CIPFA) is one of the leading professional accountancy bodies in the UK, and the only accounting body that is focused specifically on the public sector. Similar to the Canadian accounting organizations, CIPFA is responsible for the education and training of professional accountants, and for their regulation through the setting and monitoring of professional standards. CIPFA has responsibility for setting accounting standards for local governments, the key public service organizations, in the United Kingdom. CIPFA members work in the public service bodies, in the national audit agencies and major WINTER 2006

accountancy firms in the UK. Representing more than 45,000 members around the world, CMA Canada grants a professional designation in management accounting and is responsible for standards-setting, accreditation and the continuing professional development of CMAs. CMA Canada is a world leader in developing strategic financial management professionals with an emphasis on value creation and leadership skills. CMA Canada has long proposed a new comptrollership model for the federal government. After discussions and following the signing of a Mutual Recognition Agreement, both CMA Canada and CIPFA decided to develop a public service qualification for the Canadian market which combines technical expertise with strategic leadership in financial management. The dual designation recognizes the best of both organizations: CMA’s strong brand in Canada and CIPFA’s public sector expertise. The Office of the Comptroller General’s involvement CMA Canada consulted extensively with Charles-Antoine St-Jean, Comptroller General of Canada and his staff during program development to ensure the program meets the needs of the Canadian federal public service. The Financial Management Capacity Building and Community Development Division worked with CMA Canada and the authors for the Canadian course content to coordinate the review of the syllabus for each course by government subject matter experts. Pilot Project with Government of Canada CMAs The Office of the Comptroller General and CMA Canada are further collaborating by offering a pilot program to federal government financial officers.

Stacy Van Humbeck Stacy Van Humbeck is the Senior Director, Financial Management Capacity Building and Community Development, Office of the Comptroller General, Treasury Board Secretariat of Canada. Ms Van Humbeck holds a Bachelor of Commerce, Honours and is a Certified Management Accountant. With over 25 years experience in the federal government financial management community, Ms Van Humbeck has worked at a number of departments and central agencies including, Employment and Immigration Canada, Transport Canada, Treasury Board Secretariat, Agriculture and Agri-Food Canada and the Office of the Comptroller General. As Senior Director, Financial Management Capacity Building and Community Development, Ms Van Humbeck is responsible for the development of the federal financial management community.

CMA Canada felt the best way to ensure that the adequacy of the Canadian content was through a pilot project. The Office of the Comptroller General agreed to identify government financial officers who already were accredited CMAs to participate in the pilot program. Assistant Comptroller General, Capacity Building and Community Development canvassed the Senior FullTime Financial Officers (SFFO) for pilot participants. In order to make the pilot successful, a commitment was required from both the candidate and their manager sponsor – in most cases the SFFO. Twenty-five financial officers who possess CMA designation are participating in the pilot program. Participants come from nine departments, with Agriculture and AgriFood Canada, Canada Revenue Agency, Public Works and Government Services Canada, and the Department of National Defence all sending multiple representatives. Announcement of the pilot program elicited inquiries from other accredited accountants who were interested to participate in the pilot program which is running from September 2005 to April 2006. The CMA/CPFA program is an extension of the CMA program, and currently restricted to FMI JOURNAL

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CMAs. The first course, Governance and Public Policy course, was offered in a three weekend classroom format during October and November. The course included 20 study modules, and participants were evaluated based on a 3000 word essay. Participants are taking The Public Finance course through distance learning and will complete a two and a half hour examination in February . The winter semester (February – April) will include the Financial and Performance Reporting and Audit and Assurance courses. Financial and Performance Reporting will be delivered in the classroom while Audit and Assurance will be a distance learning course. The courses will be offered concurrently. Participants have found the pilot program challenging. Similar to any professional accreditation development programs, the course workload is demanding. Participants have also found walking the proverbial tight rope of work and learning an interesting challenge. The pilot project environment has presented other familiar challenges, including timing and delivery issues with course material, changing deadlines and providing ongoing feedback. But as you can see for the various comments in the sidebars, the participants believe the benefits outweigh the challenges. Conclusion It is expected that the CMA/CPFA program will be available starting in September 2006 for both CMA students and accredited CMAs. This initiative with the CMA Canada is likely the first of many initiatives that will see the Office of the Comptroller General working with the various professional accounting organizations to ensure their programs meet the needs of the federal financial management community. The CMA/CPFA program is a great start! The Financial Management-Capacity Building and Community Development Division will keep you up to date on new initiatives! 

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Quotes from some of the pilot participants “As a CMA who have been working for the Federal government for a little over 5 years, I had always searched for something that could improve my knowledge in public sector and I couldn’t find any until this one. This CMA-CIPFA program is exactly what I was looking for. It focuses on the public sector for the public sector finance professionals. The public policy course really helps me appreciate the challenging role of public sector management much more. I believe that this is the first step into the right direction for us all.” Huy Quoc Nguyen, CMA “As a candidate in the CMA/CIPFA pilot program, I am experiencing the ‘variance analysis’ concept in a live way. Participation in this pilot program has brought forward planning expectations that have significantly changed since its beginnings. The reality of the pilot: a 25% variance. Three courses are now scheduled in the time frame originally forecast for two, during the busiest time of the year for financial management professionals. Somehow, all will be managed ... new material, 2 exams and one more paper … or so I think! “ Janet Mrenica, CMA, MA “Based on my experience of the first and part of the second of four courses, I can make the following observations: • the material has not only been effectively modified to reflect the Canadian context but it is also well written, by which I mean succinct and easy to read; • given that the target audience of the program is someone at the beginning of their career, the material has proven to be valuable for more experienced people in that it broadens and deepens one’s understanding of public sector challenges; and • as one would expect in a pilot, there have been glitches such as having a room next to a construction site, equipment malfunctions, last minute changes in schedule, and ‘tight’ delivery times on the course material, but these have been outweighed by the positive attitude of the program coordinator, instructors and guest lecturers. “ Steve Cole, CMA “This has been an experience very different from a degree or doing another designation as we are all learning a brand new curriculum in a brand new program. At the same time we are being involved in an initiative that will affect the whole community. Being part of this exciting change helps rationalize the amount of work that we as students are dedicating to the courses as we all have very busy day jobs in the finance community.” Andrew Francis, CMA “The CMA/CPFA dual designation program is tailor made for the public sector and will provide our financial professionals with one of the UK’s more recognized accounting designations. From my perspective, graduates of this dual designation program will have gained a valuable perspective on how their expertise ties into the management of the public sector and this will improve the quality of their analysis and advice in the federal government. “ Charles-Antoine St-Jean, CA Comptroller General of Canada “I have enjoyed the Governance and Public Policy course. More specifically the discussions were very opened, enthusiastic, and enlightening. The participants from the various departments promoted valuable exchange regarding policy issues. The discussions further encouraged participant’s role on issues within the organization in a positive way As for the program, keeping up with the timelines and format has been challenging. This is to be expected. It is a pilot program in development after all. I found the instructors/lecturers very professional and supportive”. Linda Haaland BA CMA

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Financial Officer/Internal Auditor Recruitment and Development (FORD/IARD) Program n December 9, 2005 over 350 members of the financial management and internal audit communities gathered at the Ottawa Congress Centre to celebrate the hard work and accomplishments of the new graduates of the Financial Officer/Internal Auditor Recruitment and Development (FORD/IARD) program, as well as alumni of the program who completed a professional accounting designation in 2005, and the recipients of the Government of Canada Financial Management Certificate. The FORD/IARD program is a valuable part of the Capacity Building and Community Development Sector of the Office of the Comptroller General. Since 1979, it has attracted some 1500 university graduates and become recognized across the federal public service as an excellent model for recruitment and development. Its success speaks to the talents and dedication of its participants, as well as to the support provided by managers in the financial and

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internal audit communities across government. Another element in the program’s success is its ability to adapt and respond to changing government priorities. Continued adaptability will be essential during this time of profound change and new challenges for the financial management and internal audit communities. For example, the revised Policy on Internal Audit has recently been approved, and the CFO model is under discussion. The need for certified professionals will only continue to grow as the Office of the Comptroller General implements further initiatives to strengthen financial management and internal audit. Keeping this need in mind, the Capacity Building and Community Development Sector recently re-evaluated the FORD/IARD program eligibility requirements. This led to a decision to revise the education requirements in order to attract candidates who are committed to working

part-time towards a professional accounting designation. Approximately 60% of all financial officers and internal auditors recruited under the FORD/IARD program already have or are in the process of obtaining professional accreditation in accounting or internal audit, and the new education requirements are expected to raise that number even higher. As the financial management and internal audit functions take on greater importance and visibility, professional accreditation, continuous learning, and recruitment will continue to play an important role in ensuring that these communities are well equipped to meet new challenges. Thus, the future looks bright for the FORD/IARD program and its graduates. Together, they provide invaluable support to the Office of the Comptroller General as it moves forward to strengthen financial management and internal audit. 

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Insight into the Public Service Modernization Act (PSMA) We are on the threshold of a new era in human resources management with the Coming into Force of the Public Service Employment Act (PSEA) on December 31st, 2005. It marked the final component of the Public Service Modernization Act (PSMA), the most significant reform of human resources management in more than 35years. To make the most of the new legislation, it’s important that we, as financial professionals, understand some of the fundamental changes it brings. Employees stand to benefit from a new

staffing regime that promotes flexibility, access, fairness and transparency, while ensuring that the values of merit and nonpartisanship remain at the heart of the system. Managers at all levels will find they have greater responsibility for recruiting highly qualified individuals when and where they’re needed. It also means that departments and agencies will be able to make their staffing systems more responsive to current and future needs. Now that the torch has been passed to departments and agencies to design new staffing systems, we’re hearing questions

like: “With all this talk of fairness and flexibility, does it mean we’re throwing out the rule book?” “Can we appoint anyone we want?” “How far can we take it?” If you’d like more information on the PSEA and PSMA, visit the PSMA/PSEA Communications Resource Centre at: http://www.hrma-agrh.gc.ca/hrmmmgrh/psma-lmfp/centre/comm_e.asp as well as the Public Service Modernization Portal: http://publiservice.psmodmodfp.gc.ca/index_e.asp. 

Rules Are Out, Values Are In... Kinda! Gems from Jill LaRose hese days, with the ongoing implementation of the new Public Service Employment Act, we often hear these words: ‘Rules are out, values are in!’ Well, let me set the record straight on this rules and values thing. Quite frankly, these words are simply not true.” “There still will be rules that will guide our human resources management and staffing activities. They are not going to disappear altogether. It’s not going to be a big free-for-all where you just say: ‘Okay, no rules, do what you want, and just apply your values, whatever those may be.’ Absolutely not.” “The big change is that rather than having this one set of centrally developed and imposed rules – binders full of them – that everybody has to apply regardless of their organizational business needs or circumstances, organizations will determining their own ways of operating within a core set of values and a much-reduced set rules.” “The Public Service Commission, for example, is establishing some high level policies, but it’s more about principles than

“T

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rules. Each organization will then looks at what makes sense for them and develop their own approaches for rules to guide their actions. In the current legislation, there is a requirement to hold an internal competition or look internally for people before you can go to external recruitment. That’s the legal requirement. Under the new legislation, that requirement to look internally before externally is no longer there.” “However, we are a career public service and we do want to offer Canadians the opportunity to come work in the public service, to learn, to develop and to have some career advancement opportunities. That’s a good thing. We do want to develop people and we want them to be good public servants and learn about being a good public servant, whatever their professional area. That takes time.” “Therefore, there is a value placed on providing career development and advancement opportunities to our current employees. However, different organizations will consider a different balance between providing opportunities externally and inter-

Jill LaRose Jill LaRose, Associate VP of the Public Service Human Resources Agency of Canada (PSHRMAC), has been one of the driving forces behind the PSMA. Here, she sets the record straight on the rules and values equation.

nally based on their own needs. One department may well decide, even though there is no legal obligation to consider internal before external, that they want to do that because it’s an important value to their organization and they want to encourage that. Therefore, that may be their policy.” “The organization may then say to their managers, ‘Ok, that’s our policy’. However, you’re on the ground, you’re the manager and you know the particular circumstances you’re dealing with. You may have held a competition last month internally and not found anybody. We’re not going to impose another internal competition requirement on you. Use your judgment.” “That’s where the values and the flexibilVOLUME 17, NO. 2

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ity come in. That’s the different balance between rules and values. It’s not one or the other; it’s a different balance. We have rules because we have legislation. Legislation is rules, as you know. Moreover, there are still some legislative obligations that have to be applied.”

“There is a view out there in some quarters that rules are gone and that managers can do what they want”, concludes Mrs. LaRose. “That simply is not the case. There will be fewer rules and they will be more reasonable. There will be opportunities to adapt the rules to organizational circum-

stances and the organization, hopefully, will be more reliant on managers using their judgement, as when to apply some of the rules and when to relax them when it is appropriate.” 

Merit? George Da Pont’s Litmus Test George Da Pont espite the fact that a lot of managers say they hate rules, at the same time they want to know what the rules are, says George Da Pont, former Assistant Deputy Minister, Human Resources and Corporate Services, Fisheries and Oceans Canada, one of the many champions of the human resources management modernization initiative in the Public Service. “I’ve felt this way as a manager”, says this career public servant and long time manager. “There’s sort of a disconnect between the two things, but I think it’s human nature. I’ve talked to a lot of managers in my career and believe me, that’s what I hear. Everybody wants to know where the lines are.” With the new Public Service Employment Act, these lines are a lot more grey because there isn’t going to be a rulebook and managers will be able to do things that they were not able to even think about doing before. “What really matters in all of this is that I will have to be able to justify my decision in a public way and explain why I came to that conclusion,” says Mr. Da Pont. “My litmus test would be the following: if you feel comfortable in meeting your staff,

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explaining why you made a decision and why you chose whoever you chose, that’s an indication that you’ve applied things properly.” “On the other hand, if you feel that you couldn’t stand in front of your staff and explain your decision, then you haven’t been paying attention. In that case, the risks are pretty simple. You might find yourself open to a charge of abuse of authority or some type of bureaucratic patronage. So, if I hire an individual because I’ve worked with him in three different jobs and I like him, it’s not going to pass that scrutiny if that’s my only reason.” “The key to me is this: can you sit down and justify in a public form why you made the decision you did. If you feel you can do that, I don’t think there’s much risk.” But what if the person you know meets the merit criteria? “It’s a completely different scenario,” says Mr. Da Pont. “Of course, you can pick someone that you’ve worked with…if they meet the merit criteria. It’s a pretty important nuance, isn’t it?” “The issue or where you draw the line comes down to this: are you hiring the individual because he or she meets what you

George Da Pont George Da Pont, Acting Commissioner of the Canadian Coast Guard is another one of the many champions of HR modernization. Here, the former Assistant Deputy Minister, Human Resources and Corporate Services at Fisheries and Oceans Canada, offers insight into the new definition of merit - one of the most talked-about elements of the PSEA.

need in the job, has the competencies and has the assets you need or because you know the person. Well, if you know that he or she has those assets and you can demonstrate they have them, I don’t see that as a problem.” “On the other hand, if you’ve established what you need in the job and you hire someone because you think, well, I know him or her and I’m confident they’ll grow into the job. I would say that’s a stretch and a different story.” “A lot of this,” concludes Mr. Da Pont, “is common sense.” 

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New Policy on Learning, Training & Development Wendy White-Cserepy

earning, training, leadership and professional development are key to a strong federal public service. The acquisition of skills and knowledge and the development of managerial and leadership know-how are critical for the effective management of the Public Service – the foundation of a responsive, accountable and innovative government. With the new Policy on Learning, Training and Development (visit: http://publiservice.hrmaagrh.gc.ca/leadership/lddl/policy_ltd/index_e.asp) a comprehensive approach to learning for employees at all levels came into effect January 1st, 2006. It applies to departments and agencies for which Treasury Board is the employer – the Core Public Administration. Separate employers may participate on a cost recovery basis. Implementation will be phased in throughout 2006, supported by the development of knowledge standards, directives and guidelines. This article focuses on the Required Training component of the Policy.

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Development of the Policy With greater emphasis being placed on accountability over the past few years, it was evident that the Public Service had to look at how to best ensure that employees at all levels are equipped to handle the responsibilities of their jobs. Research showed that efforts to ensure that learning, training and development take place in a timely manner did not always meet with success. Orientation of new employees, for example, was dependent on the hiring department and managers may have been assuming signing authority prior to having the knowledge of what such authority entailed. Consistency of training was also identified as a key concern. While many departments 44

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have excellent training programs/courses, the content is often department specific. It became evident that corporate level training was needed to ensure that the same knowledge is transferred to employees, regardless of where they are employed in Canada. Learning in the Public Service The new Policy on Learning, Training and Development includes three pillars: • individual capacities to do the job, to be ready for the next job, and to lead change; • organizational leadership for transformation inside the Public Service and in all aspects of service to Canadians; and • innovation to keep the Public Service at the leading edge of public sector management. The policy supports employees at all levels by providing for learning plans as well as learning and training opportunities designed to foster excellence and a worldclass workforce serving the needs of Canadians of today and for future generations. This policy focuses on the specific needs of three different groups of public servants: 1. New employees, who are the future of the Public Service and who must begin careers right with a clear understanding of the special role and expectations of a federal public servant. Starting in 2006, new employees will attend a corporate orientation program designed to convey not just an introduction to government, but also the values and ethics of public service. 2. Managers at all levels – including supervisors, managers and executives – who bear particular responsibilities for organizational leadership and for important authorities granted to them for the management of finances, human resources, materiel and information.

Wendy White-Cserepy Wendy White-Cserepy is a Policy Analyst with the Public Service Learning Policy Directorate of The Leadership Network at the Public Service Human Resources Management Agency of Canada. Mrs White-Cserepy has gained experience as a public servant at two levels of government: federal and territorial. She moved to Ottawa from Yellowknife in January 2004. Since joining the Learning Policy Directorate, she has led the Public Service Orientation initiative through national consultations and an interdepartmental working group which provided the architecture for the model adopted under the new learning strategy.

3.

Specialists in the fields of procurement, materiel management and real property, information management, finance, internal audit, and human resources, on whom an effective Public Service depends so much to achieve the balance of efficient program delivery and compliance. Specialized training programs to support professional development and certification are being developed and implemented.

Partnership with the Canada School of Public Service The Canada School of Public Service (CSPS) has been selected as the service provider for the implementation of the policy. Courses and programs will meet the Employer’s Knowledge Standards and be available across Canada in both official languages. The CSPS has received funding for the design, delivery and evaluation of the required training components of the policy including the Public Service Orientation program, the Authority Delegation Training for all levels of management and the validation instrument for existing managers and executives. It has also received funding for three years to support course development and delivery for the procurement, materiel management and real property community as well as the information management community. Affordability There will not be tuition fees, since the CSPS has been funded to design, deliver and update the courses,. However, departments will be required to cover for travel and accommodation costs, if necessary. It must be noted that departments will still have internal training and development programs. These programs will be able to focus on job-related knowledge, skill and competencies rather than on the corporate VOLUME 17, NO. 2

NEW POLICY ON LEARNING, TRAINING & DEVELOPMENT

elements. Consequences Approval of this Policy also includes consequences for public service employees who do not comply with the Policy. For example, new managers and executives appointed after January 1, 2006, may only receive delegations of authority once they have successfully complete training; existing managers and executives must validate their knowledge of legal responsibilities relating to the management of finance, HR, procurement and information in order to maintain their delegated authorities. The validation instrument for existing managers and executives is an online selfassessment tool which will be available free of charge on the Canada School of Public Service (CSPS) Campusdirect in April 2006. In addition, online self-study modules aligned with the Management Accountabil-

ity Framework (MAF) are available on Campusdirect, to address key stewardship responsibilities in the four domains listed above. These will soon be available free of charge an can be found at: http://www.campusdirect.gc.ca/d/dc_e.asp#2. Existing managers and executives are encouraged to validate their knowledge of legal responsibilities prior to December 31, 2006. In order to ensure that managers at all levels support their employees under this new policy, their performance evaluation will take into consideration the proportion of their employees who complete the required training within the specified time frames. What Does this Mean for Financial and Internal Audit Specialists? The financial and internal audit func-

tional communities are working on the design of a comprehensive training program for their specialists. As work progresses, more details will be provided on course content, certification and delivery strategies. Service providers will be selected by the functional communities and may include the CSPS or others. In conclusion, the Policy on Learning, Training and Development provides for individual learning, organizational leadership and innovation, which is necessary for the Public Service to thrive in the coming years. The new Policy on Learning, Training and Development is part of the Treasury Board Portfolio’s Policy Renewal Initiative aimed at clarifying the responsibilities and accountabilities of the public service with respect to management policies. The Policy Renewal Initiative is a key enabler of the government’s commitment to continuously

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CHAPTER NEWS

news HALIFAX CHAPTER

The Halifax Chapter is having a very successful year with two excellent PD sessions held to date during 2005/06. With membership at a record level last June it was possible to add three additional executive positions for the current year. New executive members Lori Currie, Stuart Jamieson and Greg Penney joined forces with returning members Kathryn Burlton, Kevin Malloy, Fred Donaldson, Phillip Green and Jim Wentzell to map out a top notch program for the current year.

Objectives of the Executive this year are to revise the Chapter’s constitution & bylaws and to become incorporated under the Societies Act of Nova Scotia. The executive continues to seek partnerships and will be reaching out to other organizations in the province to make training opportunities available to members of all government and related organizations. The Chapter held its 1st training session on Oct 19th. The topic was “PrivacyWhat’s the Big Deal?” There were two excellent speakers for this session. The first speaker was Bob Doherty who is with the N.S. Department of Justice. He has been the Freedom of Information and Protection

FMI Halifax Executive planning for 2005-06. Seated from left to right: Stuart Jamieson, Kevin Malloy, Greg Penney, Lori Currie, Kathryn Burlton and Phillip Green

Members Angela Poole NS Dept of Finance & Dwight Bonang, NS Dept of Health , with guest speakers Bob Doherty, FOIPOP Coordinator, Province of Nova Scotia & Kevin Malloy, Assistant Deputy Minister Service Nova Scotia and Municipal Relations and FMI President Kathryn Burlton. 46

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of Privacy Coordinator for the Nova Scotia Government since 1996. He was followed by Kevin Malloy, CA, Assistant Deputy Minister of Service Nova Scotia and Municipal Relations and former Controller for the Province of Nova Scotia. The presentations focused on access and privacy issues & the Financial Manager in the public sector and explored how FOIPOP legislation applied. The discussion included: How access and privacy legislation affects financial managers; what access issues there are in the area of financial management; what is protected as personal information and how the information is accessed. Both presenters spoke to the big question: Why worry about privacy? The session concluded with participants breaking into groups to review actual case studies. The Chapter held its 2nd training session and annual Christmas Wine and Cheese Party on December 7th. The session focused on “Succession Planning- Don’t be Caught Unprepared!” The speaker for this session was Dr. Jeff Young, a Professor in the Department of Business and Tourism at Mount Saint Vincent University, where he teaches courses on management and organizations. He is also an Adjunct Professor in the Executive MBA Program at the Sobey School of Business, Saint Mary’s University. Dr Young very effectively presented his information on Succession utilizing a classroom like atmosphere with interaction throughout the morning by all participants. The discussion focused on: What is Succession Planning and Management? Why is it important? What are the costs and benefits? Included was a discussion of strategic issues such as barriers to Succession Planning; recruitment and selection and employee development Four more training sessions are scheduled by the Chapter for the remainder of the year. On Feb 1st the PD session “Personal and Professional Development” will be held. On March 1st, a full day seminar will be held on “Leadership”. Four speakers are lined up for this session including a presentation on “Women in Government.” We will be having a special PD session in April as we host Michael Eastman, the Executive Director of the Canadian Comprehensive Auditing Foundation, on his VOLUME 17, NO. 2

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Dr Jeff Young (centre), receiving a gift from the Halifax Chapter following his presentation on Succession Planning. Shown with Dr Young is Patsy Snow (left), Halifax Regional School Board and Valerie Gautier (right), Chignecto Regional School Board.

tour of the Atlantic chapters. The final PD session for the year will be held on June 14th and is titled “Privatization of Public Services.” Chapter President Kathryn Burlton represented the Chapter at the Professional Development (PD) Week which was held in Ottawa in November. With the Public Sector Management Workshop (PSMW) being held in June in the Atlantic Provinces (St John, NF) it is expected that a number of our executive and membership will be attending.

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QUEBEC CITY CHAPTER

Spotlight on major government projects Future prospects for services in Quebec! On November 30, 2005, more than 360 members and participants of the Quebec branch of the Financial Management Institute of Canada (FMI) met at the Quebec City Hilton for a themed half-day session organized in cooperation with the Groupe d’action en gestion financière (GAGF). The theme for the half-day was an update on the major government projects - Services Québec and the Centre de services partagés, and their impact on the advent of e-government. Once again, the excellent speakers and relevant themes played a major role in ensuring that the meeting was a success. WINTER 2006

The first section shed light on the launch of Services Québec. At the outset, Andrée Blanchet, Vice President, corporate services and development, Services Québec, presented the strategic development vision for the new organization and its mission: to offer citizens and businesses throughout Québec a single window for simplified access to public services. The repatriation of some interdepartmental services was the starting point for Services Québec: the service providing information about government programs and services was inherited from Communication Québec, the service for changing addresses by Internet and in person (SAAQ, RRQ, Revenue Québec, RAMQ, DGE, MESS), and the govern-

ment services portal for citizens and businesses. In addition to these already established interdepartmental services, Services Québec’s offer of services will grow as administrative agreements are signed with the other departments and organizations. Services Québec could certainly draw inspiration from the achievements of Service New Brunswick (SNB), which Jacques Dubé, President and CEO, came to tell us about. Launched in the early 1990s with 45 services, today the SNB is a unique gateway to more than 300 provincial and municipal services such as vehicle registration and driver’s licenses, hunting and fishing licenses, changes of address, requests for health insurance and certain municipal payment. In addition to the 45 initial services assigned to it automatically under its enabling legislation, SNB had to convince the other administrations to allow it to deliver some of their front-line services. The results of the initiative in New Brunswick have been conclusive. In 2002, SNB generated savings of $58 million in terms of productivity for the citizens of New Brunswick and $71 million for companies; $6.3 million in cost avoidance and $5 million in overall savings in processing and labour for the municipalities. How could such a level of success be achieved? Mr. Dubé describes some of the factors that were critical to the organization’s success: • action rather than discussion was the order of the day • services were selected strategically • focus on the provision of services to citizens, and carry out administrative services afterward

Andrée Blanchet and Jacques Dubé FMI JOURNAL

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CHAPTER NEWS

Éric Lacroix, facilitator, André Trudeau and Maurice Charlebois

• listen to what the two types of clients are saying: – those who receive services (citizens and companies) – those for whom services are provided (ministries, municipalities, and so on) • help the government provide services at the rate companies work • do not reinvent the wheel. The second section involved shared services centres - that is, the concentration of non-strategic administrative services in a central unit. Hydro-Québec became involved with shared services in 2002, according to Maurice Charlebois, Executive Vice President, Human Resources and Shared Services. The Centre sets up business partnerships with Hydro-Québec divisions to deliver high-quality products and services, at the best possible cost and to the satisfaction of its clients. In fact, HydroQuébec’s shared services centre is the endresult of an extensive project that began in 1997, when Hydro-Québec was required to separate its production and transportation functions. Then, in 2000, the SAP enterprise resource planning software was implemented. Hydro-Québec is no exception in its emphasis on shared services, as a number of other dynamic producers in North America also use shared services. Today, the shared services centre provides voluntary services in 11 areas of expertise, and generates revenue of $753 million through 17 client-supplier agreements. It provides 75 products or services to its 48

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Raymonde St-Germain and Pierre Roy, Honorary President of this themed half-day

22,500 clients and has 3,047 employees. Like SNB, results were not long in coming: the Centre has increased the overall satisfaction of its clients and its generated net cost savings in the order of 3% between 2002 and 2005. On the basis of Hydro-Québec’s experience, Maurice Charlebois identified key elements in the implementation strategy for a centre of this kind: • calculate the cost price accurately for adequate billing • prepare relevant management information for clients • manage the change • ongoing enhancements • position the service and develop a clientoriented approach. Hydro-Québec could certainly provide inspiration for the new Québec government shared services centre (CSPQ) headed by André Trudeau, who came to speak about progress with this project which has been under way since May 2005. While it is too early for a progress report, the action plan has been implemented. The SAGIR project, which involves the gradual implementation of an integrated management system, will be the technological backbone for the CSPQ’s provision of service. The Centre’s top priorities for action include completing the Service québécois d’authentification gouvernementale (ClicSéQur) (the government authentication service); examining the various governments’ technological parameters: mail optimization, electronic agendas, and office suites, as well

as setting up integrated management for PCs and network management, and so on. So there is still a great deal of work to be done by the new organization. During the lunch, Raymonde Saint-Germain, government services deputy minister, gave a speech illustrating the impact of the Services Québec projects and the CSPQ on the rollout of online government. She pointed out that, despite all efforts, goodwill and breakthroughs, Quebec still does not have a real online government, although it does have online departments and clusters of online services. Against this backdrop, Services Québec and the CSPQ are establishing greater consistency that will make it possible to align strategies more closely with the substantial investments required for Quebec to have an online government. “It is a dream that is about to become true, and I hope it will come true within the next 10 years,” she said. For additional information, the speakers’ presentations and the speech by Ms. SaintGermain are available on the IGF-Québec Web site at: http://www.igfquebec.com/ Nouveautes.html Eric Lacroix, director of strategic oversight and investigations, Centre francophone d’informatisation des organisations (CEFRIO) Louise Rheault, director, IGF-Québec, and chair of the half-day organizing committee.

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CHAPTER NEWS

Ivan Blake from TBS speaking to our December event.

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VANCOUVER CHAPTER

The Vancouver Chapter is experiencing another very successful year. Our kickoff event followed by our Annual General Meeting (AGM) was well attended. The event was entitled “Breaking All the Leadership Laws” and featured a presentation by Superintendent Ward Clapham of the Richmond Detachment of Royal Canadian Mounted Police (RCMP). Ward is a dynamic presenter and many of the ideas he spoke about could be brought back with us in leading our own organizations. One of the examples of innovative policing used by the Richmond Detachment is having officers give out tickets to young people for doing the right things. With these tickets, the young person would receive a coupon, which could be cashed in for free access to a community centre, free pizza or a host of other things. Positive reinforcement of youth by the law enforcement community has worked well in building up trust and provided a link between the two groups. Sometimes approaching things from a fresh point of view can turn ideas on their heads and lead to something new and valuable. Looking for methods for positive relationWINTER 2006

Arthur MacKenzie. left, then speaker Ward Clapham from the RCMP, and on the right Bob Gautama from CMA BC our co-sponsor of the event.

ship building is something we can all learn from. Ward also showed us how he effectively changed the culture of his organization to carry out his vision even though an RCMP detachment can be a very structured environment. At the AGM, the Vancouver Chapter President, Arthur MacKenzie, presented the year-end report and Hardeep Kainth, Vancouver Chapter Treasurer, presented the 2004/05 financial report. From the information presented it was clear that is has been another successful year. Three new Board members were elected to replace those finishing their terms each serving a two-year term. Arthur thanked past and current Board Members on their volunteer roles in the Chapter and their contribution to the success of the Vancouver Chapter. The membership of the Vancouver Chapter continues to be robust and as in the past, it is almost exclusively made up of federal government employees. We currently have 183 members; this is a record for the chapter. Our second event held in November featured 2 speakers from PWGSC. Peter Elias, Director Client Services and Training spoke on the new Expense Management Tool as part of the Shared Travel Services Initiative (STSI) and Bonnie MacKenzie, Regional Director General, Pacific Region, spoke on

The Way Forward: Transforming Common Service Delivery through Strategic Renewal. Both topics are of relevance to our community and were very informative. The December event was a presentation by Ivan Blake, Executive Director, Treasury Board Secretariat. His presentation was on the Management Accountability Framework and the Modernization of Management Agenda in the Government of Canada. This was a fascinating presentation, partly for the interesting content but also partly for the brilliant way Ivan was able to weave his knowledge of his topic and his passion as a sommelier together into one presentation. Everyone left knowing more about both by the time he was finished. We have some interesting events coming up for the remainder of the year. In January we will have a presentation on Federal Government’s Modern Management Agenda and Vision and Initiatives for the Financial Community, presented by Ann Marie Sahagian, Assistant Comptroller General, Community Development Treasury Board of Canada Secretariat. In February we are having a Professional Development day which will include presentations on Public Sector Accountability, Knowledge Management and Change and Transition Management. ...continues, page 51 FMI JOURNAL

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FROM BEHIND THE GREEN EYESHADE

Accounting as the 6th Estate? Bruce Manion

Happy 2006! Pop-quiz: ‘What is the oldest profession?’ Turns out, the answer is an interesting one. It really depends who answers the question. Stand-up comedians have a wellknown answer and there are many variations on the theme all the way from doctors, to lawyers, to politicians. As always, I will state now my complete lack of scientific or empirical knowledge to answer this very basic question. I do however note that rarely does anyone offer up the answer that accountancy is the oldest profession. It could be a universal truth that accountancy can only ever be considered as the second oldest profession as there would almost always, by definition, need to be some sort of profession making money before someone else could count it. I have also never heard of anyone ever answering this question with a reference to reporters. Would that be possible? To delve further into the question, let us go back in time. (For you TV-types, this is where the screen usually goes all blurry and there is some chime-like music that denotes mental drifting). Imagine the scene many thousands of years ago with a bunch of CroMagnon folks (no relation thank you very much) sitting around the fire and talking about their day’s activities. One group is talking about gathering fruits and berries, another is talking about hunting wholly mammoths while staying out the reach of the saber-tooth tigers, and a third group is talking about the boredom of everyday camp life. Might be the makings of a few oldest professions here but nothing too sexy I can assure you. Turns out though that one of the Cro’s really can spin a mean yarn about past hunts where things didn’t always go so well and folks wound up getting squashed by the mammoths or chomped by the tigers. Okay, sometimes the hunters won 50

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out and fed the tribe for a month on mammoth burgers. That latter was all well and good but folks really liked the bad stuff. Now this was actually beneficial for the tribe as individuals were entertained by these stories and it produced a certain sense of identity and attachment to the group. Not bad if you’re the tribe leader eh? Even better if you’re the storyteller and if you gain personal status that might even lead to getting out of the chores, especially the potentially man-eating ones. Strangely, the stories don’t even have to be too true if you are entertaining enough. So what does this have to do with accounting and a 6th Estate? Not much for now, but patience, all will be revealed within the next 1100 words or so. Accounting essentially has two origins. The first origin of accounting is in service of ancient rulers who regulated all economic activities and imposed taxes to provide very basic services and raise armies to fight wars. Yes, the first accountants were, for all intents and purposes, taxmen. The second origin of accounting comes much later with the advent of private companies where the managers and owners (investors) were not one and the same. Accountants had to be around to tell the owners or potential owners that everything was okie dokie with the company. As a result, accounting was always based on telling the truth or a reasonable facsimile thereof. The truth can sometimes be a relative concept so rules were derived to ensure that everyone was on the same page. This situation has progressed significantly over the past few centuries as companies grew in size and complexity and with the advent of modern systems to help track the ever-increasing number of financial or other economic transactions that dictate an entity’s financial situation and health. The basic construct has not changed that significantly over time and the overall tenets of

Bruce Manion Mr. Manion was born in Ottawa, Ontario in 1959 and graduated form the University of Ottawa with a Bachelor of Commerce degree. He was accepted into the Society of Management Accountants of Ontario in 1986. In April 2004, Bruce has been appointed Assistant Deputy Minister, Planning and Corporate Affairs Sector at PCH. His main objective is to promote Excellence in management at PCH.

GAAP (Generally Accepted Accounting Principles) have not really changed over the years. Of all of these tenets, I would like to focus your on conservatism. This is my favourite as it requires all of us green eyeshade types to ensure that we stick to the facts and not be prone to hyperbola when describing the state of the financial position of an entity. The catch here is that we cannot overstate financial realities in an overly positive tone that might overstate the results and lead the reader of financial statements to false (overly optimistic) conclusions. For the purists among us, this is a gross over-simplification I know but it supports my line of thinking (or rambling). Having digested this a bit and being fairly sure that we as accountants will not be able to claim the prize for oldest profession, lets get back to my Cro-Magnons. The storyteller in my little scenario could easily compare to the storytellers of today. By this I could mean authors and poets, playwrights, and media folks. I will not spend any more time on the first groups as they have license to make up stories to entertain, beguile and provoke our imagination. It is the last group that I wish to look a little more closely at. Media folks have a dual role of informing as well as shaping public views or launching public debate on issues of interest. This ultimately can influence public or corporate policy and decision-making. Accountants also tell a story using financial statements and related analyses. These ‘stories’ influence corporate management’s decisionmaking and the decisions of bankers, govVOLUME 17, NO. 2

FROM BEHIND THE GREEN EYESHADE

ernments, investors and investment analysts in relation to the appeal or lack of appeal for investing in or financially supporting a given entity. Here is where this either all comes together for you or you start thinking that I am a blithering idiot. What if accountants were no longer required to be conservative? What if they could glean only a small amount of facts on an organization and provide assertions as to their soundness? What if accountants didn’t need to be ‘conservative’ and could offer up their opinions on financial realities based on partial facts, hearsay, or soundbites? Some of you may be thinking to yourselves ‘Isn’t that what they did at Enron, Worldcom and Nortel?’ Really. Imagine what things would be like? Would you feel comfortable investing your pension fund savings in that reality? Of course you wouldn’t and neither would I. However, don’t we do something very akin to that whenever we rely on the media for our facts and, worse yet, our pre-conceived opinions? I recently commented to a prominent reporter and national columnist that I deplored the press and live media’s habit of

‘spinning’ stories based on snippets of fact and a lot of conjecture. I pointed out to him that this was even more deplorable when it impacted public thinking and opinions, particularly on matters of social relevance or importance. He agreed and also expressed his frustration with soundbite and headline chasers. He also added that ‘What can you do?…It sells newspapers.’ Of late, I have read several articles where strong claim was made that the biggest news story coming out of the recent federal campaign was the advent and impact of Weblogs or ‘blogs’ in disseminating information and influencing public opinion. For those of you who don’t know about blogs, let me give you a crash course. These are internet sites with interesting names (they remind me a lot of the old C.B. handles of the 1970’s) where you can read or hear all sorts of information about any hot topic. The ‘blogs’ sometime pick up mainstream media pieces but also quote unknown sources or tipsters with interesting tidbits. They also allow for anyone with a comment to wade in with usually pretty visceral assessments or judgments about the stories, or more unfortunately, the people men-

tioned in them. In many cases, the publishers of the blogs, the authors of the stories and the writers of comments are anonymous are go by some nom de plume with varying degrees of propriety of decorum. And these ‘bloggistas’ serve in many cases as primary info sources and opinion leaders for voters? Whoa! How do any of us sleep at night? So all is not rosy in how we get our insights. I have a pretty radical solution. Lets require that journalists and media folk take on the same amount of rigour, discipline and ‘conservatism’ as accountants. It might not be sexy, but it sure would be more accurate. Freedom of the press, absolutely…accuracy of the press, even better! Maybe I am just pulling your leg with this accountant’s view of the 5th Estate. Maybe if we put accountancy as the 6th Estate, it might influence its neighbour by sheer proximity. Worth considering. Maybe I just come from a really long line of accountants and I’m simply jealous of my distant storytelling cousins for getting out of all of the prehistoric dirty work. Have a great year! 

Vancouver Chapter News, from page 49....

ing PSMW 2006 conference in St. John’s, Newfoundland! The Vancouver Chapter Board of Directors for 2005/06 is as follows: • Arthur MacKenzie, Canada Revenue Agency, President • Sundeep Cheema, Royal Canadian Mounted Police, Vice-President • Thomas Kwan, Citizenship & Immigration, Secretary • Hardeep Kainth, Canada Revenue Agency, Treasurer • Karen Lee, Royal Canadian Mounted Police, Co-Director of Communications

• Mona Luke, Department of Justice, CoDirector of Communications • Karen Hall, Royal Canadian Mounted Police, Co-Director Membership • Steven Moore, Environment Canada, Co-Director Membership • Sarah Tobun, Environment Canada, CoDirector Programs • Connie Ng, Health Canada, Co-Director Programs • Rosalinda Lattanzio, Immigration & Refugee Board, Director At Large

One of Vancouver Chapter’s goals has been to strengthen our relationship with the local accounting organizations. We continue to forge close relationships with both the Certified General Accountants (CGA) and Certified Management Accounts (CMA) organizations. We continue to search out opportunities to form links with other financial groups in the Lower Mainland. The Vancouver Chapter is looking forward to seeing many of you at the upcomWINTER 2006

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FINANCIAL MANAGEMENT INSTITUTE OF CANADA

Public Sector Management Workshop 2006 “The Leading Edge” Delta Hotel & Convention Centre – St. John’s, Newfoundland & Labrador June 4 – 6, 2006 Streams of concurrent sessions each day under the following themes: DAY 1: A: Governance & Risk Management, B: Shared Services, C: Values, Ethics & Accountability DAY 2: D: Spotlight on Newfoundland & Labrador, E: Service Delivery Models, F: Current Issues Please note that this is a preliminary schedule and is subject to change

Sunday, June 4, 2006 5:00 – 8:00 pm

Registration

6:30 – 9:00 pm

Reception and welcome PSMW 2006 Honourary Co-Chairs, Terry Hearn and Terry Paddon (light refreshments will be served)

1:30 pm

B: Shared Services and the BC Provincial Experience, Liz Gilliland, former ADM Citizen Services, Gov’t of BC, presently on secondment to the University of Victoria

Monday, June 5, 2006 7:30 am

Registration and Sponsors Area open (Continental breakfast)

8:30 am

Opening remarks PSMW 2006 Co-Chairs, Bryn Weadon and Gary Snow FMI President Jean Laporte

Concurrent sessions A: Performance Reporting, John Noseworthy, CA, Auditor General of Newfoundland and Labrador

C: Prospects for Improved Accountability, Peter Aucoin, PhD, Professor of Public Administration, Dalhousie University 2:30 pm

Coffee and Networking in Sponsors’ Area

3:00 pm

9:00 am

Keynote Address Charles-Antoine St-Jean C.A., Comptroller General of Canada

10:15 am

Coffee and Networking in Sponsors’ Area

Concurrent Sessions A: Governance Revolution in the Public Sector, Derek Sturge, FCMA, FCA, Firm Director, CFO and Governance Services, Deloitte & Touche LLP & Keith Davis, CA Senior Manager, Enterprise Risk, Deloitte & Touche LLP

10:45 am

Concurrent sessions A: Mitigating the Risk of Fraud and Misappropriation of Funds, Victor Duret, CA*IFA, Partner, KPMG LLP.

B: Designing Effective Business Processes for Shared Services, Ken Jones, CA, Partner & National Leader, Shared Services, Price Waterhouse Cooper LLP.

B: Departmental Shared Services – a debrief, Larry J Taylor, PhD, Manager, Performance and Service Improvement, Shared Services Office, NRCan

C: Managers-Leaders in the 21st Century: Challenged, Centered and Creative, Elizabeth M. Davis, RSM

12:00 pm

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4:15 pm

FMI Annual General Meeting

C: Values and Ethics , Keith Hillier, ADM Corporate Services Branch, Veterans Affairs Canada

6:00 pm

Pre-dinner reception

Lunch

7:00 pm

Dinner & Dance

VOLUME 17, NO. 2

Tuesday, June 6, 2006 7:30 am

Registration and Sponsors Area open (Continental breakfast)

8:30 am

Opening Remarks PSMW 2006 Co-Chairs, Bryn Weadon and Gary Snow

8:45 am

Keynote Address General Rick Hillier, Chief of Defence Staff, Canadian Forces.

9:45 am

Concurrent session D: NL Hydro, it’s not just about Water Anymore, Ed Martin, President and CEO of Newfoundland & Labrador Hydro. E: Public Service without Borders, Janine Halliday, Manager – Citizen Service Centre, Access St. John’s, City of St. John’s, Cathy Rex, Manager Information Services, IS Division, City of St. John’s F: Role of Educational Institutions in Leadership Development, Axel Miesen PhD, President and Vice-Chancellor, Memorial University of Newfoundland

10:45 am

Coffee and Networking in Sponsors’ Area

11:15 am

Concurrent Sessions D: Irish Prospecting, the NL-EIRE connection, David Stewart, PhD, Vector Aerospace Chair of Irish Business Studies, Memorial University of Newfoundland E: Financing Service Improvements While Maintaining Excellent Customer Service, Mike McKendy, Vice-President Operations, Service New Brunswick Sponsor’s Presentation – Room 3

12:15 pm

Lunch – Special Guest - Honourable Loyola Sullivan, Minister of Finance, Government of Newfoundland and Labrador

2:00 pm

Concurrent Sessions D: Basket Case or Goldmine? The Value of Newfoundland and Labrador to Canada, John Fitzgerald, PhD F: Capacity Building in the Finance & Audit Areas, Ann Marie Sahagian, Assistant Comptroller General Sponsor’s Presentation – Room 3

3:00 pm

Coffee and Networking in Sponsors’ Area

3:30 pm

Plenary Session – Release those Endorphins speaker to be confirmed

WINTER 2006

PSMW 2006 Registration Information On-Line registration (www.fmi.ca/psmw/registration) will begin on Monday March 13, 2006. To be eligible for the FMI members’ discounts, individuals must have their 2005-06 membership paid before March 13, 2006. Registration fees: Early Registration (before 5 pm, EST, Friday April 7 2006) • FMI Members - $425 • Non-members - $475 After April 7, 2006 • FMI Members - $475 • Non-members - $525 Registration is for the full two-day conference. Registration for one day will not be accepted. On-Line Registration Deadline: Wednesday, May 17, 2006. Registration after this date will be accepted at the conference registration desk at the Delta Hotel starting on June 4th. GST: Registration fees paid for by a provincial government are GST exempt. Most federal government departments and agencies are NOT GST exempt. Substitutions: Registered delegates may be substituted with an individual from the same organization. Requests for substitutions or registration modifications must be made by e-mail (national@ fmi.ca) before 5 p.m., Wednesday, May 17, 2006. Cancellations: Notice of cancellation must be received via e-mail at [email protected] or fax at 613-569-4532, attention Joanne Steadman, no later than Friday April 28, 2006. There will be no refunds of registration fees for notices of cancellation received after this date. Hotel information: The Delta St. John’s Hotel, located at 120 New Gower Street, is the host hotel for PSMW 2006. The Delta is offering a PSMW rate of $174 per night for a standard room (either single or double occupancy) for room nights from June 1st to June 8th. To book your hotel: • Call the hotel at (709) 739-6404 or toll free at 1-888-793-3582 and reference both conference code PSMW 2006 and the room booking code GCSNOW; and • Please make all room reservations by phone because the Delta cannot include online room bookings in the PSMW conference room block. Information about the Delta can be obtained through the link provided at ( www.fmi.ca/psmw ). Airlines to St. Johns: St. John’s is served by Air Canada, CanJet and WestJet “Come for the Program - Stay for the Experience”: For those who plan to arrive early or stay on after the conference to experience St. John’s and surrounding area, check the website www.fmi.ca/psmw/ for possible activities. For further information, please contact the FMI by phone at (613) 569-1158 or by e-mail at ([email protected]). FMI JOURNAL

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