Rescinded [2017-04-01] - Policy on the Stewardship of Financial Management Systems
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Supporting tools
Directive:
Guidelines:
- Common Financial Management Business Process 1.1 – Manage Planning And Budgeting, Guideline on
- Common Financial Management Business Process 3.1 - Manage Procure to Payment, Guideline on
- Common Financial Management Business Process 3.2 – Manage Travel, Guideline on
- Common Financial Management Business Process 3.3 - Manage Other Payments, Guideline on
- Common Financial Management Business Process 4.1 - Manage Other Capital Assets, Guideline on
Standard:
Hierarchy
Archives
This policy is replaced by:
This policy replaces:
- Financial Systems and Controls [2010-01-01]
- Stewardship of Financial Management Systems, Policy on the [2012-04-01]
1. Effective date
1.1 This policy takes effect on January 1, 2010.
2. Application
2.1 This policy applies to departments as defined in section 2 of the Financial Administration Act. Throughout this policy, the terms "government-wide"and "across government" refer to these departments.
2.2 Section 6.2.2, and those portions of section 7.2 that provide for the Comptroller General to monitor compliance with this policy within departments and/or request departments take corrective action, do not apply with respect to the Office of the Auditor General, the Office of the Privacy Commissioner, the Office of the Information Commissioner, the Office of the Chief Electoral Officer, the Office of the Commissioner of Lobbying, the Office of the Commissioner of Official Languages and the Office of the Public Sector Integrity Commissioner. The deputy heads of these organizations are solely responsible for monitoring and ensuring compliance with this policy within their organizations, as well as for responding to cases of non-compliance in accordance with any Treasury Board instruments that address the management of compliance.
3. Context
3.1 This policy sets out responsibilities for deputy heads as they relate to financial management systems (FMS). These responsibilities are in support of legal requirements set out in various Acts of Parliament, including the Financial Administration Act and, more specifically, the accountabilities of accounting officers set out in section 16.4. of that Act.
3.2 FMS are essential to the management of government operations. These systems are designed to ensure strong financial management and internal controls of public resources, reinforce the principles of probity and prudence, and contribute to better decision making (within each department and government-wide), greater efficiency and improved service delivery to Canadians. Direction and leadership in the areas of FMS and the related business processes and data enable and facilitate the achievement of these results.
3.3 The Office of the Comptroller General (OCG) provides government-wide functional direction for the stewardship of FMS and assists in the evaluation and approval of strategic investment plans for FMS.
3.4 Responsibilities for the stewardship of FMS vary because these systems include departmental financial and materiel management systems (DFMS), departmental program systems and central systems, all of which encompass a wide range of business processes, procedures, controls, and data and software applications. Together they enable the recording, processing and reporting of all financial events that form the accounts of the Government of Canada (including the Public Accounts of Canada and Annual Financial Report of the Government of Canada).
3.5 FMS process and collect data on a wide range of government transactions and generate decision-making information in support of programs and policies across government. Standardization, by establishing a common set of rules in place of many, reduces the plethora of different systems, business processes and data that undermine the quality and cost of decision-making information. As government-wide standardization is increased, efficiency, integrity and interoperability are improved.
3.6 DFMS cluster groups play an important role in ensuring standardization by acting as a centre of expertise and central coordinating body for the development and management of more common DFMS across government. The chairs of the DFMS cluster group management boards inform the CFOs of the departments within the cluster group regarding compliance with this policy and any subordinate policy instruments. The chairs of the management board also ensure that annual business plans for the cluster group are developed and evolve the cluster configuration in alignment with the criteria established by the OCG for cluster configurations supported by appropriate controls.
3.7 This policy builds on the Treasury Board's key principles and approved direction for the Shared Systems Initiative and it is to be read in conjunction with the Policy on Financial Management Governance and the Policy on the Management of Information Technology.
3.8 This policy is issued under the authority of section 7 of the Financial Administration Act.
3.9 The Treasury Board has delegated authority to the President of the Treasury Board to issue, amend or rescind directives and subordinate policy instruments in support of this policy and to approve any exceptions to these subordinate policy instruments.
4. Definitions
Definitions are included in the Appendix.
5. Policy statement
5.1 Objective
- The objective of this policy is to ensure that financial management systems (FMS) deliver more accurate, reliable, accessible and timely financial information.
- This is achieved by setting out the responsibilities of deputy heads as they relate to financial management systems (FMS).
5.2 Expected results
The expected results of this policy are the following:
- 5.2.1 Effective and interoperable FMS;
- 5.2.2 Improved government-wide reporting and stewardship of financial information;
- 5.2.3 Improved quality of financial information and related non-financial information for decision making and service delivery; and
- 5.2.4 Improved effectiveness and timeliness in the way that the roles, responsibilities and accountabilities with respect to FMS are exercised.
6. Policy requirements
6.1 Deputy Head
The deputy head is responsible for the following:
- 6.1.1 Providing leadership and strategic direction for their FMS, business processes and data;
- 6.1.2 Ensuring prudent investments are made in FMS that meet operational requirements and that are aligned with the strategic direction for FMS across government, in compliance with Treasury Board directions;
- 6.1.3 Allocating appropriate resources to ensure a timely implementation of standardized configurations of DFMS, common financial management business processes and common enterprise data requirements as defined by the Office of the Comptroller General; and,
- 6.1.4 Assigning a departmental representative to the relevant DFMS cluster group, where they will actively participate to ensure that departmental business needs are considered in that forum while adhering to OCG direction for FMS.
6.2 Monitoring and reporting
6.2.1 Deputy Head
The deputy head is responsible for the following:
- Monitoring compliance with this policy and its subordinate policy instruments through periodic audits, reviews and other assessments to ensure their effective implementation and taking corrective action when needed; and
- Providing reports or information as requested by the Office of the Comptroller General or Treasury Board Secretariat.
6.2.2 TBS (Office of the Comptroller General)
The Comptroller General is responsible for the following:
- Monitoring compliance with this policy in a variety of ways including but not limited to assessments under the Management Accountability Framework and examinations of Treasury Board submissions, results of audits and evaluations, and reports and special studies by Parliament or its agents;
- Recommending that corrective action be taken when a department has not complied with the requirements of this policy;
- Establishing a framework for the review of this policy and its subordinate policy instruments and ensuring that a review is initiated within five years of the effective date of this policy; and
- Working with applicable authorities in evaluating and approving strategic investment plans.
7. Consequences
7.1 The deputy head is responsible for investigating and acting promptly when significant issues arise regarding possible non-compliance with this policy. The deputy head is also responsible for ensuring that appropriate remedial action is taken within his or her department to address these issues.
7.2 If the Comptroller General determines that a department may not have complied with any of the requirements of this policy or subordinate policy instruments, the Comptroller General may request that the deputy head:
- 7.2.1 Conduct an audit or review to assess whether requirements of this policy or its subordinate policy instruments have been met. The cost of such an audit or review will be paid from the department's reference level; and
- 7.2.2 Take corrective action and report back on the results achieved.
7.3 If the Office of the Comptroller General determines that a department has complied with the requirements of this policy and subordinate policy instruments, the Comptroller General may reduce the number or scope of audits or reviews.
8. Roles and responsibilities of government organizations
This section identifies organizations that have a role in support of this policy. In and of itself, this section does not confer an authority.
8.1 Treasury Board Secretariat
The Treasury Board Secretariat (TBS) is responsible for supporting the Treasury Board in the general management of the Government of Canada and the various initiatives, programs and activities that cut across all departments and organizational entities as reported in the Main Estimates. TBS is also responsible for the comptrollership function of the Government of Canada.
8.1.1 Within the area of FMS, the Office of the Comptroller General provides functional leadership in determining business process and data requirements by:
- Supporting Treasury Board in issuing appropriate policy instruments as and when required to define government-wide data and standardized business processes;
- Ensuring sound governance of FMS by establishing government-wide governing structures as required and by designating representatives from the Office of the Comptroller General as members within the DFMS cluster group governance structures; and,
- Reviewing plans for investments for FMS and establishing criteria and approving DFMS cluster group annual plans.
Other TBS organizations with significant FMS-related responsibilities include the following:
- 8.1.2 Chief Information Officer Branch, which provides functional leadership on the Information Management and Information Technology (IM/IT) support required to meet the requirements of the OCG and other policy centres.
- 8.1.3 The Government Operations Sector (GOS), which supports Treasury Board with policy responsibilities for governance and Crown corporations, as well as assets and acquired services, in addition to program sector responsibilities for departments, agencies, Crown corporations, agents of Parliament and parliamentary entities. GOS, along with other sectors within TBS, brings all transformative initiatives to Treasury Board and continues to play a significant role in the implementation of the Federal Accountability Act and Action Plan.
- 8.1.4 The Expenditure Management Sector (EMS), which provides a central focus for the functions that support and strengthen the role of TBS in the government's expenditure management system with the collection and reporting of aggregate information held in FMS on program expenditures in order to assess program outcomes through the Program Alignment Architecture (PAA).
8.2 Department of Finance
The Department of Finance, in collaboration with the Canada Revenue Agency (CRA) and the Receiver General for Canada, is a key stakeholder in the collection and reporting of aggregate information held in FMS on economic, fiscal and taxation data and in the resulting issuance of financial statements in the Government of Canada.
8.3 Department of Public Works and Government Services
The mandate of the Department of Public Works and Government Services is to be a common service agency for the Government of Canada's various departments, agencies and boards.
8.3.1 Receiver General for Canada (RG)—The RG is responsible for the operations of the federal treasury, including issuing payments and collecting revenue for all government departments, maintaining the Accounts of Canada, preparing the Public Accounts and producing the government's Monthly Statement of Financial Operations. These activities ensure the government's financial stability and public confidence through accurate and timely issuance of payments to Canadians and reporting of the government's financial activities. The RG is also responsible for the collection and reporting of aggregate information in FMS on the financial transactions of the Government of Canada.
8.3.2 Common and Shared Services—With respect to the shared services agenda, PWGSC delivers common, central and shared services to federal departments in support of government operations and manages major shared service initiatives. PWGSC is a key stakeholder in the collection and reporting of financial data related to travel, assets, real property and the procurement of goods and services from FMS.
8.4 Statistics Canada
Statistics Canada is a key stakeholder in the collection and reporting of aggregate information from central systems at the RG by following the TBS-approved data structure and the reporting of information on Government of Canada expenditures so that the effect on the Canadian economy can be assessed.
9. Applicable References
9.1 Legislation
9.2 Policy Instruments
- Accounting Standards (TBAS) Policies and Publications, Treasury Board
- Information or Technology Standards (TBITS), Treasury Board
- Common Services Policy
- Directive on Electronic Authentication and Authorization of Financial Transactions
- Enhanced Management Framework
- Financial Management, Policy Framework for
- Framework for the Management of Risk
- Management Accountability Framework
- Policy Framework for Information and Technology
- Policy on Access to Information
- Policy on Evaluation
- Policy on Financial Management Governance
- Policy on Government Security
- Policy on Information Management
- Policy on Internal Audit
- Policy on Internal Control
- Policy on Investment Planning – Assets and Acquired Services
- Policy on Management of Information Technology
- Policy on Management, Resources and Results Structures
- Policy on Privacy Protection
- Standard on Enterprise Resource Planning Systems
9.3 Other References
10. Enquiries
Please direct enquiries about this policy to your department's headquarters. For interpretation of this policy, departmental headquarters should contact:
Financial Systems Authority
Office of the Comptroller General of Canada
Treasury Board Secretariat
300 Laurier Avenue West
Ottawa ON K1A 0R5
Email: fin-www@tbs-sct.gc.ca
Telephone: 613-957-7233
Appendix—Definitions
- Business process (Processus opérationnel)
- Is a collection of interrelated tasks and key controls operating together to achieve a desired result. Business processes shall include, but are not limited to, the financial management activities of planning, budgeting, accounting, reporting, financial control, oversight, analysis decision-making support and advice.
- Central systems (Systèmes centraux)
- For the purpose of this policy, are financial management systems (FMS) used by the central agencies and the Receiver General for Canada to provide selected services that are required to ensure the delivery of fundamental management services to all departments and agencies; these include the Receiver General's central suite of systems as well as other TBS systems for budgeting, expenditure management and reporting.
- Departmental financial and materiel management system (DFMS) (Système ministériel de gestion financière et materiel (SMGFM))
- Is a financial management system (FMS) whose primary objectives are to demonstrate compliance by the government with the financial authorities granted by Parliament, comply with the government's accounting policies, inform the public through departmental financial statements, provide financial and materiel information for management and control, provide information for economic analysis and policy formulation, meet central agency reporting requirements and provide a basis for audit.
- Financial and materiel management systems (DFMS) cluster group (Regroupement d'usagers du système de gestion des finances et du matériel - SMGFM)
- is a collective of departments working together to promote and implement business-driven and standardized solutions for interoperable financial and materiel management in the Government of Canada.
- DFMS cluster configuration (Configuration du regroupement d'usagers du SMGFM)
- Are specific system settings or any custom programming delivered by the cluster to departments satisfying generic business requirements.
- Financial event (Activité financière)
- Is any activity that has financial consequences for the Government of Canada.
- Financial information (Information financière)
- Is any data or information used in understanding, managing and reporting on the monetary aspects of any activity. Financial information is not limited to accounting data, but includes aggregated information and knowledge developed and used to understand, manage and report on the monetary aspects of any activity.
- Financial management systems (FMS) (Systèmes de gestion financière (SGF))
- Is any combination of business processes (end-to-end, automated and manual), procedures, controls, data and software applications, all of which are categorized as either a departmental financial and materiel management system (DFMS) or program system or central system that produces financial information and related non-financial information.
Financial management systems are used for any of the following:- Collecting, processing, maintaining, transmitting and reporting data about financial events and to maintain accountability for the related assets, liabilities and equity;
- Supporting financial management, planning, budgeting and decision-making activities;
- Accumulating and reporting cost information; or
- Supporting the preparation of internal and external reports, such as departmental financial statements and input to the Public Accounts of Canada.
- Program systems (Systèmes de programme)
- For the purpose of this policy, are financial management systems (FMS) that support programs and provide operational functionality by feeding into or taking information from departmental financial and materiel management systems (DFMS) or central financial management systems that report or provide financial information significant to the financial management and/or the general management of departments or agencies on a consolidated or non-consolidated basis.
- Related non-financial data (Données non financières connexes)
- Are data that have no direct financial connotation but rather quantitative or statistical facts about a business entity or financial event. They are composed of individual elements that must be collected and classified to derive related non-financial information. Examples of non-financial data include the classification of employees and the type of training.
- Related non-financial information (Information non financière connexe)
- Is any data or information contributing to the understanding, management and reporting on of financial information.
- Software application (Application logicielle)
- Is a computer program that handles a specific working task, such as word processing, spreadsheet calculations or database management, or that performs one or more specialized functions, such as financial management, materiel management, contract management or asset management.