Update and Status of
Financial Management Transformation
in the Government of Canada
Doug Lloyd,
Financial System Authority
fmi*igf Alberta Chapter
June 19th, 2012
Efficient  Integrated  Accountable
Agenda
Where we are today
Financial Management Services
Financial System Authority (FSA) Initiatives
• Common FM-BP Initiative (FM-BP)
• Common Enterprise Data Initiative (CEDI)
• Common Financial Management System Configuration
(FM-SC)
The Convergence Path
Target Financial Management Environment for GC
2
Who is FSA?
OFFICE OF THE COMPTROLLER GENERAL
(Treasury Board Secretariat of Canada)
Comptroller General’s
Office
Financial Management
Sector
Internal Audit Sector
FSA is not
technology
focused
1.
FMS – Assistant
Comptroller General’s
Office
2.
Financial Management
Policy Directorate
3.
Financial System
Authority (FSA)
4.
Government Accounting
Policy and Reporting
5.
Capacity Building and
Community Development
6.
Financial Management
Strategies, Costing and
Charging
Acquired Services and
Assets Sector
FSA focus is on
functional
business
requirements
3
FSA Vision and Services
4
FSA Linkages in GC
Departmental Operations
GC-wide Direction
Departments
(DM/CFO,
Management)
Service Providers
Cluster Groups
Mazankowski Tellier
Report
Requirements,
Expertise
Reports to the
Prime Minister on
the Public Service
Services Sector
Finance Council
Recommendations
Strategic Direction
Fulfillment
Common
Processes
FSA Initiatives for GC
• FM-BP
• CEDI
• FM-SC
Policy Centres &
Central Agencies
Validation
Enablement
Policies,
Directives,
Standards,
Guidelines, Tools
Blue Ribbon Panel
Standardization
through
Collaboration
Annual Budgets
Horizontal Initiatives
CEDI
STSI
Grants &
Contributions
5
Where We Are Today
GC Financial Management Service
Delivery Transformation
GC Priorities
GC Financial Mgmt. Fiscal
Challenges
“Tradition of
Excellence”
Integration
Challenges
Administrative
Services Review
GC FM
Community
Public Service
Renewal
Financial System
Authority (FSA)
6
Objectives of the Policy and Directive on the
Stewardship of Financial Management
Systems (FMS)
• “Common business processes and common data ensuring
financial information is consistent and reliable”
• “Provide functional guidance for FMS. (Common Configuration - but
not the technology or software to be used)”
• “Interoperable financial systems. (Interoperable: able to work
efficiently and exchange information with other systems)”
•
“Clarify the roles and responsibilities for Deputy Ministers, Chief
Financial Officers and other key stakeholders”
Link to Policy = http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=17589
Link to Directive = http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=17590
7
Financial Management in the Government
of Canada
8
Where we are today
GC Priorities & Initiatives
Priorities
•Accountability
• Transparency
• Value-for-money
Initiatives
•Public Service Renewal
•FM Policy Renewal & MAF Alignment
•Administrative Services Review (ASR)
9
Financial Management in the Government
of Canada
• Tradition of excellence
– Continuous improvement
– High standards and ensuring public funds are used diligently
• Greater focus on stewardship
– DM approval and sign-off of departmental financial statements
– Policy on Internal Controls and formalization of CFO role
– Increased expectations of accounting and control functions
• Our business is evolving; increased demands to:
– Strengthen the financial management function
– Reinforce the principles of prudence and probity
– Improve the quality and timeliness of integrated financial information
– Provide accessible information to demonstrate strong financial
management of public resources
10
Financial Management Services
Financial Service Profiles
Service Levels
Costing, Pricing and Value
Policy
Common Enterprise
Data Initiative (CEDI)
Directive
Common Financial
Management
Business Process
Initiative (FM-BP)
Common Financial
Management
System
Configuration
Initiative (FM-SC)
The Convergence Path
PRESENT SITUATION
(2012-2013)
SAP
Financial Management
TRANSFORMATION
‘LENS’
POST-TRANSFORMATION
AND CONVERGENCE: (after
2014)
TBS
IC
HC
CEDI
(Common
Data)
Oracle
TC
CDFS
RG
FM-BSP
service
point
C
FM-BP
(Common
Processes)
FM-SC
(Common
Configuration)
SDA
Service Point
Project
G/X
SDA
Service
point
CHRT
FM-BSP
service
point
A
FM-BSP
service
point
B
Futur
e
FM-BSP
service
point
D
Futur
e
FM-BSP
Service Point
Project
FreeBalance
• 5 Departmental Financial Management Systems
• 30 – 40 configurations
• Over 100 departmental charts of accounts
• Differing services and standards
• 1 DFMS used at a variety of service points
• 1 standard configuration
• 1 departmental chart of accounts
• Common services and standards
12
Common FM-BP Initiative
Goal:
To develop an integrated framework of ‘should be’ common
processes that standardize and modernize the delivery of financial
management.
Deliverables:
• 20 TBS Guidelines
for GC departments
13
The Common FM-BP Initiative
Goal:
To develop an integrated framework of ‘should be’ common processes that
standardize and modernize the delivery of financial management
Approach:
OCG sponsored in collaboration with departments and agencies, financial
systems clusters, policy authorities and service providers
Deliverables:
• Guidelines which will provide:
Standardized process definitions
– System- independent, modular, interoperable
– Common to all departments and agencies
– Describes roles and responsibilities in detail
 “RACI” data analysis includes identification of:
– Responsible, Accountable, Consulted, and Informed resources; and
– Authoritative data sources
 Process Flows
– Flow diagrams
14
Build a Collaborative Community
15
GCs Common FM-BP models
Planning Budgeting & Forecasting
• Manage Planning & Budgeting
• Manage Forecasting & Budget Review
Revenue & Accounts Receivable
• Manage Revenue, Receivables &
Receipts
• Manage Interdepartmental Settlements
• Manage Collection of Overdue
Receivables
Expenditure & Accounts Payable
• Manage Procure to Payment
• Manage Travel
• Manage Other Payments
• Manage Distribution and Maintenance
of Acquisition Cards
HR/Finance Interactions
• Pay Administration
Materiel/Finance Interactions
• Manage Other Capital Assets
• Manage Real Property
• Manage Inventory
Transfer Payments
• Manage Grants & Contributions
Data
• Manage Vendor Master Data File
• Manage Delegation of Financial and
Spending Authorities
• Manage Departmental Chart of
Accounts
• Manage Customer Master Data File
Integration
• Manage Post-payment Verification
• Manage Financial Close
Models in bold italic are available now.
16
Sample Level 2 Process Flow
17
Sample Level 3 Process Flow
Comprehensive
Process Flow
Integrated view
across all FM-BP
processes
Linkages to process
description and RACI
Consideration of
controls
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Sample Level 3 Sub-Process Description
“(…)The vendor sends an invoice, which could be received by the program area
or in the accounts payable or finance department, depending on the
arrangements established in the contract.
Account verification provides the necessary evidence required to demonstrate
that the work has been performed, the goods supplied or the services rendered,
relevant contract or agreement terms and conditions have been met, the
transaction is accurate, and all authorities have been complied with[1]. Primary
responsibility for verifying individual accounts rests with managers (financial
management) who have the authority to confirm and certify entitlement
pursuant to S.34 of the FAA[2]. These steps rely upon the good/services receipt
process described in section 3.3.1, the approved contract (output from section
3.2.1) and the vendor invoice. All payments and settlements must be certified
pursuant to S.34 of the FAA. Credit memos are reviewed following the same
process to invoices received.
To ensure separation of duties, the transaction authority and the certification
authority (i.e. pursuant to S.34 FAA) should be assigned to separate
individuals[3]. If the process or other circumstances do not allow such
separation of duties, alternate control measures should be implemented.[4] (…)
Comprehensive
Process Description
[1] Directive on Account Verification, Section 3.3
[2] Directive on Account Verification, Section 6.2
[3] Directive on Delegation of Financial Authorities for Disbursements, Section
6.3
[4] Ibid.
Linkages to Process
Flow and RACI
Integrated view
across all FM-BP
processes
Reference to
applicable policy or
regulation
Identification of
Roles and
Responsibilities
Consideration of
controls
19
Common Enterprise Data Initiative
(CEDI)
Goal:
To establish a common financial language, provide governance and
standards for financial information and data, and facilitate the
delivery of policy instruments and repositories necessary to enable
interoperability among stakeholders.
Transaction data
Deliverables:
FY14-15+
•6 TBS Standards
•and several TBS Guidelines
Reference data
Other financial master data
Canadians
FY12-14
Re
lts
su
Pla
n
Standard on Customer Record
Standard on Vendor Record
FY10-11
Departments
Managers
Standard on Procurement Item
FY11-12
Parliament
Actual
Employees
Central Agencies
Guideline - Common Line Object Codes (Draft)
Standard - Dept Common Chart of Accounts (Draft)
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CEDI - Introduction and Context
What is Common Enterprise Data?
• Common Enterprise Data represents key data entities/elements
supporting an organization’s business
– e.g. for Financial Management business a key data entity =
Vendor code
• Common Enterprise Data characteristics are:
– Permanent or lasting nature
– Relatively static, not subject to frequent change
– Accessed / used by multiple business functions, business
processes and system applications
CEDI - Introduction and Context
Why Common Enterprise Data?
•Data intended as “common to the Enterprise” is not consistently managed
e.g.:
– is often “translated” (if the position number is 1900/01/01 this person
had an acting position)
– has imbedded meaning (if the first character of the employee code is a
“1” they live in Ontario) breaking the “information chain”, resulting in
misinterpretation, wasted effort and errors.
Information Chain
Data
Information
Knowledge
Common Enterprise Data
– Enables a successful “Information Chain”
– Is foundation needed to institute improved management of financial
data
– If managed as an Enterprise asset, it can be reused as intended
– Establishes consistency of data needed for interoperability and
horizontal analysis
CEDI – Approach
Meet CEDI’s objectives through a series of projects that
evolve into a Financial Data Management Program
Data Standards Framework
Sample Projects
Definitions
& Standards
Controls & Data
Management
Policy and
Directives
And
standards
Governance
Data Integration
Chart of
Accounts
Vendor & Customer
Record
Materiel
Record
Common Table
Values
Financial Management
Data Components
Other Master Data
GC Enterprise Data Architecture
Business Processes
Resource Management System (ERP)
Enterprise
Reporting and
Resource Management
Requirements
Proactive Disclosure
Horizontal Initiatives
Enterprise Perform.
Departmental Perform.
Operational Reporting
Public Enquiries
Parliamentary Reports
Planning/Budgeting
Contracting/Procurement
Resource Utilization
HR Financial
Performance/Outcomes
Corporate services
CEDI – Communication Principles
•
•
•
•
•
•
•
•
Avoid information “overload”
Provide clear and consistent messages
Repeat messages through various channels
Create demand for information about CEDI encouraging
stakeholder groups to seek information rather than OCG
pushing it at them. GCpedia
Tailor communications to audiences. Use communications
style and vocabulary appropriate to a particular audience
Manage expectations
Solicit, listen to, and respond to feedback from
stakeholder groups
Begin simple and expand in complexity as necessary
CEDI - Prioritize Stakeholder Groups
“Data
Providers”
Data Supply
• Departments and
Agencies Financial
Operations
• Program delivery in
departments
• PWGSC
• External
• Service Providers
“Information Consumers”
Information Demand
• Enterprise: Reporting /
Obligations
• Enterprise Analysis
• Finance Senior decision
makers
• I.T. Senior decision makers
• HR Senior decision makers
• MM Senior decision
makers
“Key Enablers”
• Policy Makers
• GC Internal Services
• Advisors to senior
decision makers
• Strategic Advisors
and Associated
Tactical Advisors:
Headquarters (HQ),
Working Groups,
Regional Councils /
Working Groups
CEDI Approach & Maturity
• CEDI establishes a framework for proactively managing financial
data and information as a strategic asset and enterprise enabler.
• Over time, CEDI supports the progression of the GC towards a
more mature capability for management of financial information.
Data Management Maturity Model
Value
Source: Enterprise Data Management Council
Resource Utilization
VALUE GAP
Initial
Reactive
Defined
Managed
Optimized
Level 1
Level 2
Level 3
Level 4
Level 5
Capability Maturity
26
Financial Management System
Configuration (FM-SC)
The purpose of the Financial Management System Configuration Initiative (FM-SC) is to
identify a set of departmental financial management system (DFMS) configuration
requirements for the Government of Canada (GC) within the context of its current
legislative and policy framework. The FM-SC is intended to apply to all departments and
agencies as defined in section 2 of the Financial Administration Act (FAA). The end result
of this initiative will be the Financial Management System Configuration Guideline.
Per the Directive on the Stewardship of FMS:
Role of the Chief Financial Officer
6.1.3 Implementing FMS cluster group system configurations and OCG-endorsed system functionality
as they are established or made available from time to time.
Role of the Chair of the FMS cluster group management board
6.4.1 The chair of the cluster group management board is responsible for evolving the cluster
configuration in alignment with the criteria established by the OCG for cluster configurations.
27
Common Financial Management System
Configuration (FM-SC)
Layout of Each Component
INTRODUCTION
 PURPOSE
 SCOPE
 PRINCIPLES
 APPROACH
COMPONENT DETAIL
 PROCESS REQUIREMENTS
 DATA REQUIREMENTS
 REPORTING REQUIREMENTS
 INTERFACE REQUIREMENTS
 INTEGRATION REQUIREMENTS
29
The Way Forward
Today:
We are converging, standardizing and making things more common for
everyone to use and re-use in the Government of Canada and other
jurisdictions
Tomorrow:
We envision managing the GC as a single enterprise with a variety of
financial management services using various delivery options. The
actual delivery model(s) have not been determined.
FSA is:
• Leveraging technology to collaborate and engage stakeholders
• Developing an FMS solution for Small Departments and Agencies
• Working on a catalogue of FM services
• Exploring how Cloud Computing could enable delivery of FM
• Dialoguing with US & International counterparts to share best practices
Financial Management
Service Framework
Financial Service Profiles
Service Levels &
Service Guarantees
Costing, Pricing and Value
Policy
Directive
Common Enterprise
Data Initiative (CEDI)
Common Financial
Management
Business Process
Initiative (FM-BP)
DATA
PROCESSES
Common Financial
Management
System
Configuration
Initiative (FM-SC)
CONFIGURATION
FM Transformation Timeline
April 1 2010
April 1, 2011
PSFMS
April 1 2012
April 1 2013
Implementation
Infinity and
beyond
Ongoing
FM-BP
Issue 1 Guideline
Issue 10
Guidelines
CEDI
Issue 1 Guideline
Issue 4 Standards
FM-SC
Issue 1 Guideline
Issue 10
Guidelines
Other Standards and Guidelines
Subsequent Phases
MAF
Ongoing
Cluster Plan Review
Phase 1
Financial Management Service Profiling
for GC
Service Profile
Process
Information
Configuration
33
FM Transformation Vision
•
•
•
Core configuration for small organizations, large complex organizations and configuration that
includes Grants & Contributions
Templates that are transferrable across the GC to be used by other groups of “DFMS clusters”
Complies with CIOBs standards on ERPs (i.e. SAP); common financial management business
processes, information and data.
Standard on ERP systems
Deficit Reduction Action Plan
FM TRANSFORMATION
Administrative Services Review (ASR)
STAKEHOLDERS
Large Complex
Organizations
OTHER
Small
Organizations
To Be Determined
FISI
PWGSC
•Chief Information
Officer Branch
•Office of the
Comptroller General
•Public Works
Government Services
Canada
FUTURE
Large Complex
&
(incl.
Grants &
Contributions)
FSA Strategic Roadmap to
“Finance in the Cloud”
Domain
BUSINESS
• Processes
• Goals & Objectives
• Outcomes
Finance /
Materiel
Interoperability
• OCG
• OCG
• FM-BP
• OCG
• OCG
• CEDI
• FM-SC
INFORMATION
• Flows
• Data Dictionary
APPLICATION
• Business
Functionality
• Workflow
• IT Foundation (S/W)
• OCG
• OCG
• CIOB
• CIOB
• IT
• CIOB
• CIOB
TECHNOLOGY
Current
Projects
35
Roadmap to “Finance in the Cloud”
Technology
(Gen’l)
Cluster
Central
Agencies
Dept’s
•
•
•
•
•
FSA
Vendor
Parliament
Other
Countries
•
•
•
•
•
Needs
Deficiencies
Success factors
What works well
Performance targets
• Analysis
• Rec’n on
improvements
• Roadmap Maintenance
•
•
•
•
•
Provinces
Private
Sector
Fin Prof’l
Bodies
Best Practices
Success Stories
What doesn’t work well
Options
Roadmaps
Rec’s to enhance
Business case(s)
Design
Arch. solution
Updated roadmap
Build
Enhanced
Model
Target
Model
Proposed
Existing
Model
Version 1
Updated
Model
Version 2
36
Why a Service Catalogue?
Purpose of a service catalogue:
The document that specifies the services, the costs and
associated service levels provided in an organization




Customers
Provides the one
source of information
for services
Clear service
acquisition process
Outlines service
standards and sets
expectations
Consistent levels of
service and cost
information

Communication
Tool




Organization
Transparent service
offering
De facto SLA
Allows processes to be
developed linking to
the services levels
Costs can be
established in support
of those services
Creates organizational
stability
37
Typical Structure
‘Must include’ sections of a service catalogue:
1) Service overview

Service name, description, features and functions, and availability
2) Description

Full outline of service, resources for additional support, and links
to FAQs and self help information
3) Acquisition process


Standard contacts for support staff, information on submitting
service requests
Includes how to use the service, key contacts, web logins
4) Service Levels

Service guarantees, recourse for service failure
5) Pricing


Cost of services, support charges, and other rate information
Options related to the service
38
Service Profile Categories for
FM Services
39
Example of FM Services in the area of
“Financial Operations”
Finance Service Category

Corporate Finance

Financial Operations
•
Transaction Processing
•
Financial Reporting
•
Asset Management

Financial Management
Services

Planning & Budgeting

Financial Systems
Related Services Category
Financial Operations includes the day-to-day activities required to support
the activities of the Department, including:
•Transaction Processing – includes accounts payable, accounts
receivable (where appropriate), expenses reimbursement, payroll
processing, journal voucher/budget transfer processing,
expenditure/purchasing card program management, interdepartmental
settlements (where appropriate), and grants & contributions disbursement
(where appropriate).
•Financial Reporting – includes preparation of mandatory financial
statements and financial reports for central agencies.
•Asset Management – entails financial stewardship over the Department’s
assets including monitoring of asset life and asset value.
40
Other Jurisdictions
USA:
- new approach for managing FM
- Unable to obtain a clean opinion
- Very interested in our progress
- Looking to innovate and standardise
- Exploring Cloud Computing for FM services
Canadian Provinces:
- Alberta, BC and Ontario have shared services delivery
in place
Other G7:
- Canada co-hosts International Colloquium with US
- Canada is considered a leader in FM (12 clean
opinions)
Discussion
and
Questions
42
Contact information:
Doug Lloyd – Executive Director, FSA
doug.lloyd@tbs-sct.gc.ca
613-952-3208
Marcel Boulianne – Communications Director, FSA
marcel.boulianne@tbs-sct.gc.ca
613-946-4512
FSA Website (for public):
http://www.tbs-sct.gc.ca/fm-gf/abu-ans/standard-eng.asp
GCpedia website (for GC only):
http://www.gcpedia.gc.ca/wiki/Fsa
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