ARCHIVED - Audit of the Treasury Board of Canada Secretariat Governance Framework

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Appendix 1: Audit Criteria

This appendix presents the objectives and associated criteria applied in the audit of the Secretariat’s governance framework.

The following 4-scale rating system was developed to communicate the audit team’s opinion of the relative significance of each finding and to facilitate the prioritization of potential corrective actions.

4-scale rating system

Rating	Description
1 – Fully effective	No action was required; all elements were working as intended.
2 – Mostly effective	Mostly working as intended; more work was required in some areas.
3 – Somewhat effective	Some elements were in place; however, key deficiencies existed.
4 – Not effective	Significant management attention was needed to improve practices.

Area of Focus No. 1: Does the governance framework support the execution of the Secretariat’s core mandate and priorities?

Audit Objective	Audit Criteria	Rating
1.1 To assess the extent to which the governance framework supports the Secretariat’s mandate and priorities as they relate to Treasury Board’s management office role, budget office role and people management role.	The governance structure supports the Secretariat's mandate relating to the management office role.	1 – Fully effective
	The governance structure supports the Secretariat's mandate relating to the budget office role.	2 – Mostly effective
	The governance structure supports the Secretariat’s mandate relating to the people management role.	2 – Mostly effective
	The governance framework is aligned with the PAA.	1 – Fully effective

Area of Focus No. 2: Does the governance framework support and facilitate strategic direction setting?

Audit Objective	Audit Criteria	Rating
2.1 To assess the extent to which the overall strategic direction is developed and articulated and is well understood throughout the Secretariat.	Strategic direction and objectives are established.	1 – Fully effective
	All key functions are involved in the establishment of strategic objectives.	1 – Fully effective
	Strategic direction is effectively communicated.	1 – Fully effective
	Governance processes have a strategic focus.	2 – Mostly effective
2.2 To assess the extent to which key implementation mechanisms such as business plans, HR plans, executive PMAs and the use of champions are aligned with the Secretariat's strategic direction.	The organization has in place operational plans and objectives aimed at achieving its strategic direction.	2 – Mostly effective
	HR planning is aligned with strategic and business planning.	2 – Mostly effective
	PMAs formally define responsibilities and performance expectations and link to operational and strategic goals.	1 – Fully effective
	Champions promote their respective programs, consult employees on implementation issues and report periodically to EXCO.	1 – Fully effective
2.3 To assess the extent to which strategic decisions are proactively managed.	Feedback from stakeholders drives strategic planning.	1 – Fully effective
	Strategic planning gives due consideration to factors such as the external environment, risks, stakeholders, available resources, organizational strengths and weaknesses, and potential impacts.	1 – Fully effective
	Strategic decisions are based on accurate, timely and relevant information.	1 – Fully effective

Area of Focus No. 3: Does the governance framework facilitate transparent, effective and efficient decision making?

Audit Objective	Audit Criteria	Rating
3.1 To assess the extent to which decisions are made in a transparent manner and are well understood by senior management and Secretariat employees.	Decisions are effectively communicated to staff.	3 – Somewhat effective
3.2 To assess the extent to which there are clear roles, responsibilities and procedures for making decisions and exercising authorities?	There are clear roles, responsibilities and procedures for making decisions and exercising authorities.	2 – Mostly effective
3.3 To assess the extent to which the decision-making process demonstrates due regard for efficiency.	The decision-making process demonstrates due regard for efficiency.	2 – Mostly effective
3.4 To assess the extent to which risk is appropriately considered in the strategic-level decision-making process.	Risk considerations serve to support business decisions.	3 – Somewhat effective

Area of Focus No. 4: Does the governance framework support accountability and continuous improvement?

Audit Objective	Audit Criteria	Rating
4.1 To assess the extent to which a governance structure is established and supports accountability.[8]	Effective oversight bodies are established.	1 – Fully effective
	Authority, responsibility and accountability are clearly communicated.	2 – Mostly effective
4.2 To assess the extent to which decisions are tracked and monitored.[9]	Decisions are tracked and monitored.	2 – Mostly effective
4.3 To assess the extent to which the process for decision making is periodically assessed and improved.[10]	The process for decision making is periodically assessed and improved.	1 – Fully effective
	Committees should assess their performance and the adequacy and appropriateness of their governance processes (charter, forward agenda/ calendar, governance structure/activities).	2 – Mostly effective
	External and internal environments are monitored to determine whether there is a need to re-evaluate the organization’s objectives, policies and control environment.	1 – Fully effective

Appendix 2: Management Action Plan

Recommendation 1:

Implement mechanisms to further enhance governance committee planning, with emphasis on stakeholder engagement, forward agenda management and linkages among the various committees.

Priority Ranking: High

Agree. Management recognizes the importance of a proactive and strategic approach to committee agenda management, meaningful involvement of key stakeholders, and effective horizontal/vertical linkages among committees.

As part of ongoing management and continuous improvement, the following actions have already been completed:

• Strengthen the approach to forward agenda development and tracking by:

  • Creating a new tracker organized by Secretariat roles and showing the linkages between the governance committees and Strategic Forward Agenda items; and

  • Ensuring that items destined for POC/MIC/CMC* are reviewed by DCC or relevant MIC subcommittee.

• Circulate forward agenda at every meeting and schedule periodic (2–3 times per year) discussions of the POC/MIC/CMC forward agendas.

Management Action	Completion Date	Office of Primary Interest (OPI)
The following actions will be completed in response to the audit findings: Revise committee terms of reference to clearly articulate roles and responsibilities, strengthen the linkages among the various committees (e.g. DCC and POC), and incorporate annual self-assessments. Committee terms of reference will be posted on InfoSite.	March 2010	P&P
Engage Planning Net in bimonthly updates/review of forward agenda items.	December 2009	P&P

* Acronyms are defined in Appendix 4: List of Acronyms.

Recommendation 2:

Improve overall communication of senior management decisions to Secretariat staff with emphasis on the following:

• Improving Executive Committee (EXCO) members' communication to staff of EXCO discussions and debriefs; and

• Maintaining up-to-date records of discussion for the committees that currently have information posted on InfoSite.

Priority Ranking: High

Agree. The decision-making process and integration of information are enhanced through improved communication and timely dissemination of outcomes throughout the organization.

As part of ongoing management and continuous improvement, the following action has already been completed:

• Ensure that committee members understand the importance of their responsibility to debrief their respective organizations, consistent with the values and practices in the EXCO charter.

Management Action	Completion Date	Office of Primary Interest (OPI)
The following action will be completed in response to the audit findings: Ensure timely posting of records of discussion on InfoSite.	March 2010	P&P/SCMA

Recommendation 3:

Revisit the role of the Directors Coordinating Committee (DCC) and its relationship to the senior-level governance committees with a view to enhancing efficiency, effectiveness and communication of DCC outcomes.

Priority Ranking: Medium

Agree. An enhanced role and mandate for DCC will strengthen governance and decision making at the Secretariat.

As part of ongoing management and continuous improvement, the following actions have already been completed:

• Produce an "Outcomes of Discussion" document following each DCC meeting, include it in briefing material for MIC, POC and CMC, and make it available on InfoSite.

• Ensure that items tabled for POC/MIC/CMC discussion reflect DCC advice and direction.

Management Action	Completion Date	Office of Primary Interest (OPI)
The following actions will be completed in response to the audit findings: Revise DCC's terms of reference to clarify its role in performing a challenge function, and revisit DCC membership with assistant secretaries.	March 2010	P&P

Recommendation 4:

Continue the integration of risk management principles into the governance framework to ensure that risk is adequately considered in the decision-making process.

Priority Ranking: Medium

Agree. The Secretary has identified the need to increase the use of risk-based approaches in all Secretariat work as one of two of the Secretariat's priorities for 2009–10 and 2010–11.

As part of ongoing management and continuous improvement, the following actions have already been completed:

• Continue to promote early consideration of risk in governance and integrated business planning through the annual Corporate Risk Profile process.

• Introduce EXCO week-ahead meetings to provide a forum to discuss short-term priorities, issues and operational risks.

• Integrate risk mitigation strategies into the Quarterly Tracker.

Management Action	Completion Date	Office of Primary Interest (OPI)
The following actions will be completed in response to the audit findings: Develop a summary sheet template for all DCC presentations to systematically consider risks, identify links to Secretariat priorities and clarify desired outcomes of presentations. This will promote consideration of risk throughout the governance structure.	March 2010	P&P
Bring forward discussions to MIC on areas of risk identified in the Corporate Risk Profile.	March 2010	P&P

Appendix 3: The Secretariat’s Integrated Planning Cycle

Diagram 2: Text version

Diagram 2: Display full size graphic

Source: Priorities and Planning, Presentation to MIC, October 2009

Appendix 4: List of Acronyms

CMC

– Change Management Committee

CPSA

– Canada Public Service Agency

CSS

– Corporate Services Sector

DCC

– Directors Coordinating Committee

DPR

– Departmental Performance Report

EXCO

– Executive Committee

GCAC

– Government of Canada Audit Committee

HR

– Human Resources

IBP

– Integrated Business Plan

IIA

– Institute of Internal Auditors

MAF

– Management Accountability Framework

MIC

– Management Infrastructure Committee

MIC IM/IT

– Management Infrastructure Committee Information Management and Information Technology

OCEG

– Open Compliance and Ethics Group 

OCHRO

– Office of the Chief Human Resources Officer

P&P

– Priorities and Planning Sector

PAA

– Program Activity Architecture

PDG

– Program Sector Director Generals

PMA

– Performance Management Agreement

POC

– Policy and Oversight Committee

PSAS

– Program Sector Assistant Secretaries

RDIMS

– Records/Document/Information Management System

RPP

– Report on Plans and Priorities

SCMA

– Strategic Communications and Ministerial Affairs

SEC

– Senior Executive Committee

Secretariat

– Treasury Board of Canada Secretariat

SHRC

– Senior Human Resources Committee

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1. IIA, The Role of Auditing in Public Sector Governance, 2006, p.3

2. As of December 14, 2009, another member external to the Secretariat joined the Government of Canada Audit Committee.

3. This document describes the Secretariat’s Change Agenda, which sets out the principles for achieving the Secretariat’s strategic direction.

4.While the RPP articulates the Secretariat’s strategic outcome and associated objectives and plans, it is not meant to be a direct roll-up of all sectors’ plans. The RPP’s intent is to highlight the Secretariat’s priorities and focus on the plans that support these priorities. 

5. The Risk Coordinators’ Group is a forum for engaging sectors in the integrated risk management process, specifically in the Corporate Risk Profile development process and for communicating information to management.

6. Agenda items were counted by the number of times they were presented at a committee. For example, an agenda topic presented at a committee three times would be shown as three agenda items in the table. 

7. Examples of agenda items that relate to the management of internal issues include the Report on Plans and Priorities, the Departmental Performance Report, MAF, internal HR management, talent management, IM/IT management and ongoing day-to-day operations.

8. The Preliminary Survey Memorandum stated, “The governance structure enables the Secretariat to identify the cause of problems, determine corrective actions as needed, and follow up to determine whether those actions were implemented effectively.” The audit objective was subsequently modified to clarify the objective’s focus on structure and accountability and to remove the reference to continuous improvement, which is already addressed in the third objective. 

9. The Preliminary Survey Memorandum stated, “Processes for decision making are monitored, feedback is obtained, and processes are assessed for improvement.” The audit objective was modified to better distinguish the second objective from the third.

10. The Preliminary Survey Memorandum stated, “Committees reflect on their performance in relation to established objectives and set a course for the future.” The audit objective was modified to clarify the focus on continuous improvement, and the audit objective has been reclassified as an audit criterion under the revised audit objective. 

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