Archived [2008-06-25] - Foundation Framework for Treasury Board Policies

There are a variety of circumstances that lead to the creation of a Treasury Board management or administrative policy instrument. Similarly, policy instruments may serve one or more general purposes:

• Establish and strengthen a consistent management approach across government;
• Manage significant risks to the operations of all departments; and
• Reflect and put into action public service values such as probity, prudence, equity and transparency.

Collectively, Treasury Board's policy instruments convey an integrated approach to the discipline of public sector management. Policy instruments provide clear direction to departments on how to orient their activities toward the achievement of results, attract and retain qualified people, embed a citizen focus in the delivery of programs and services, be good stewards of public resources and assets, and assist ministers in their accountability to Parliament.

In providing this direction, policy instruments strike a balance that respects the individual authorities and responsibilities of ministers and deputies, ensures a minimum standard of management excellence is maintained in the government as a whole, and fosters a working environment that encourages departments to be responsive and innovative.

Treasury Board revises its policy instruments from time to time in consultation with departments. This ongoing effort takes into consideration the risks and benefits associated with a particular issue and a proposed course of action. One of the goals of this effort is to maintain a suite of policy instruments that adequately responds to the perceived risks of the time in a cost-effective manner. In order to promote a consistent and disciplined approach to rule making, policy centers are expected to follow the seven core principles set out in the Smart Rules Charter, appended as Annex A. Another Another goal is to continuously improve upon several recurring themes in public sector management: how to manage in a way that preserves public trust, enhances efficiency and effectiveness, and ensures transparency and accountability.

As stated above, ministers, deputy heads and Treasury Board each have a role in public sector management. However, Treasury Board's role is unique because, through mandatory policy instruments, it sets the parameters within which all ministers and deputy heads must exercise the various authorities assigned to their position. Therefore, mandatory policy instruments must clearly express each player's responsibilities and respect existing lines of accountability.

With this goal in mind, Treasury Board is guided by four principles of effective accountability when developing or updating policy instruments. First, the roles, responsibilities and performance expectations for all players are clearly described. Second, performance expectations are balanced with the capacity (skills and resources) of all players to deliver. Third, credible and timely information is reported to demonstrate policy compliance and good management performance. This information is also essential to the continuous improvement of public sector management. And finally, there is a process in place to oversee compliance and management performance and to administer consequences, good or bad, related to compliance and the performance achieved. In addition to influencing policy development, these four principles are essential to the application of policy instruments within departments, which is discussed later in this document.

Treasury Board issues a range of policy instruments that are designed to establish mandatory requirements (rules) or voluntary best practices. There are three types of mandatory instruments (policies, directives and standards) and two voluntary instruments (guidelines and tools). Table 1 provides further definition. The decision to put in place a mandatory versus a voluntary instrument depends on the issue being addressed, the management objective, and whether a lack of consistency across government has the potential to create inequities, inefficiencies or risks that would jeapordize the achievement of the policy objective.

Policies are directed at deputy heads and are designed to achieve certain high-level management objectives. Each policy describes specific and measurable results that help departments and Treasury Board to assess whether the policy objective has been achieved. Policies also set out specific requirements or actions that deputy heads must take to achieve the intended results and, ultimately, the policy objective. The other policy instruments are, for the most part, directedat managers and specialists in administrative functions (explain the how).

The scope of Treasury Board's policy instruments covers a range of administrative or program-related functions. The headings under which most policy instruments have been grouped reflect their historical importance, how the scope of administrative activities has evolved and adapted to address technological innovations, changes in management practice, and increasing expectations of Canadians. As stated previously, Treasury Board adapts its policies to the changing environment and so the scope and functional areas may change over time. Most of the policy instruments fall under one of these functional headings:

1. financial
2. people (human resources)
3. information management and information technology
4. assets and acquired services
5. service
6. compensation of employees
7. official languages

Each of these policy areas has a higher-level policy framework that outlines the rationale and principles upon which the policy instruments are based. There are also several policies in other functional areas that do not require a separate policy framework because this Foundation Framework and the policies themselves provide the underlying principles and rationale. These policies include the subjects of communications and federal identity, security, and learning.

Setting clear roles, responsibilities and performance expectations involves the following three steps:

• All managers and employees are trained and understand how policy instruments shape their respective duties and the operations of the entire department;
• The requirements set out in mandatory policy instruments are used in defining the responsibilities of deputy heads, managers and functional specialists, as deemed appropriate. In assigning responsibilities, deputy heads should strive to delegate decision-making authority to the most appropriate level to achieve results; and
• Similarly, objectives and expected results set out in mandatory policy instruments are used to establish reasonable performance expectations for individuals and organizational units.

In addition to the requirement to train employees, the following three general requirements help establish departmental capacity to deliver:

• Sufficient resources are allocated and used efficiently to apply Treasury Board policy instruments;
• Appropriate processes and systems are in place to organize and control activities; and
• Quality information on policy-related activities is collected and used to make decisions, monitor compliance with policy instrument requirements, evaluate results, continuously improve management practices, and provide a fair and reliable account through reports.

Reporting is one of the principle means through which departments fulfil their commitment to the public service value of transparency. Through reporting, a department's management successes and failures are opened to the scrutiny of Treasury Board, Parliament and the public. Reporting is also the means through which departments demonstrate compliance with policy and statute, allowing for appropriate monitoring and oversight.

Although policy reporting requirements and mechanisms may vary from policy to policy, it is essential that the principles of effective accountability set out in this Framework are upheld. Policy reporting is developed in consultation with departments with a view of ensuring that it efficiently meets the needs of decision-makers and supports accountable government. To this end, policy centers will adhere to the following principles when designing reporting requirements:

• Reporting requirements should respect the oversight responsibilities and accountabilities of deputy heads;
• Reporting requirements should have a clear purpose;
• Reporting requirements should seek timely and meaningful information to meet the purpose;
• Reporting requirements should be efficient – the cost to create and submit information should be minimal; and
• Reporting requirements should leverage existing data sources and should not duplicate other requirements.

5.4.1 Oversight

Departments and Treasury Board each have oversight responsibilities. Ministers and deputy heads oversee policy application within their departments, while Treasury Board, with the assistance of TBS oversees policy application government-wide. (Note that Treasury Board also has oversight responsibility for government expenditures, but that is not discussed in this document.)

Ministers and deputy heads need to be supported by sound management expertise and a strong system of controls in order to fulfill their oversight responsibility. Internal audit and program evaluation are examples of two key activities involved in oversight. Treasury Board has established policies that set minimum standards of conduct for these activities.

The other key oversight tool is the Management Accountability Framework, which describes the 10 general and interdependent management conditions that deputy heads are expected to create within their departments. The MAF is used to assess overall management performance. Performance against each of the MAF elements is assessed using indicators that are in part shaped by the most important and high-level requirements contained in Treasury Board policies. Integrating the MAF expectations and Treasury Board policy requirements in this fashion reinforces the fact that MAF and policies are complementary and mutually supporting – both are necessary in managing departments.

Should unresolved questions arise on the interpretation of a policy instrument, departments should contact TBS for an advance interpretation in order to clarify the matter. Should the issue remain unresolved, or a dispute should arise, the minister may seek a Treasury Board decision on the interpretation and application of the policy instrument.

The Treasury Board executes its oversight in a manner that respects the accountabilities for management that rest with ministers and deputies. The Treasury Board oversees policy compliance, maintenance of internal control systems and, based on a risk assessment, certain departmental transactions. In performing this oversight role, it relies on a number of sources, such as departmental audits, program evaluations, departmental performance reports, Treasury Board submissions, reports submitted to Treasury Board pursuant to policy requirements, reports from the Office of the Auditor General, the Public Accounts of Canada and on discussions with departmental officials at all levels. All this information is collected and reviewed by TBS and categorized against the 10 elements of the MAF. The information is then used to update policy instruments and as the basis for discussions with deputy heads regarding their management performance.

The Financial Administration Act (section 16.5) now sets out a mandatory process to follow whenever the appropriate minister for an organization listed in Parts I and II of Schedule VI of the FAA (the process does not apply to organizations listed in Part III of Schedule VI), and the accounting officer for the organization, are unable to agree on the interpretation or application of TB policies, directives or standards. In these instances, the accounting officer, with a copy to his or her minister, is required to write the Secretary of the Treasury Board to seek written guidance on the matter.

If the matter remains unresolved following receipt of written guidance from the Secretary of the Treasury Board, then the responsible minister is required to refer the matter to Treasury Board for a decision. The referral must take the form of a Treasury Board submission and be signed by the responsible minister. A copy of the decision of the Treasury Board will be provided to the Auditor General as a confidence of the Queen's Privy Council.

5.4.2 Consequences

The measures taken by a department to ensure application of Treasury Board policies will play an important role in determining the working relationship between individual departments and the Treasury Board. The level of oversight exercised by Treasury Board will be based largely on the department's own internal management and oversight regime and the actions taken within the department to deal with issues of non-compliance.

When cases of policy non-compliance arise, the root causes and circumstances that led to failure are rarely simple. There are often several related factors. Non-compliance can be due to lack of knowledge, gaps in oversight, difficulties in interpretation and application of policies and regulations and, in more rare instances, deliberate actions that must be addressed through disciplinary measures. The extent to which the actions or inactions of individuals or departments contributed to non-compliance makes the investigation process critical to deciding on remedial or disciplinary measures.

The Treasury Board's decision to take further action or to intervene in cases of non-compliance (i.e., negative consequences for departments) hinges on the degree of risk involved in the management problem at hand. Interventions take various forms, including informal follow-ups, requests for specific information or additional reports, external audits or other investigations, formal direction on specific preventative or corrective measures to be taken by the department, and withdrawal of authority.

Deputy heads are responsible for implementing appropriate responses and corrective measures in their department (including negative consequences for individuals). These measures should also decrease the likelihood of recurrence. In an effort to ensure some consistency in the government's approach to policy non-compliance, Treasury Board policies explain possible institutional, and in some cases, individual consequences.