Jim Hadjiyianni, Senior Manager, BPS Supply Chain Secretariat

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Broader Public Sector Accountability Act, 2010
Presentation to
Financial Management Institute of Canada
Ontario Chapter
Ministry of Finance
Ministry of Government Services
May 18, 2011
Agenda
The presentation will focus on:
•
Context for the legislation
•
Key elements of the Broader Public Sector Accountability Act
•
Overview of the BPS Procurement Directive
•
Overview of the BPS Expenses Directive
•
Implementation Support
•
Questions
2
Current Environment
•
Fiscal pressures affecting both the government and broader public sector
organizations
•
Increased scrutiny regarding how public funds are spent
•
Increased focus on the accountability of organizations entrusted with the expenditure
of public funds
•
On October 20, 2010, the Auditor General released The Special Report on
Consultant Use in Selected Health Organizations. The focus was on the hiring and
management of consultants at the Ministry of Health and Long-Term Care, as well as
at selected hospitals and Local Health Integration Networks (LHINs).
3
Broader Public Sector Accountability Act (BPSAA)
The Broader Public Sector Accountability Act, 2010:
•
Bans the practice of hiring external lobbyists using public funds
•
Establishes new procurement and expense claim rules for designated broader
public sector (BPS) organizations
•
Allows the making of procurement and expense claim guidelines for BPS
organizations who receive less than $10M
•
For hospitals and LHINs adds reporting and accountability measures related to
compliance
•
Brings hospitals under freedom of information legislation (FIPPA)
4
Directives: Application and Compliance
Application
• The directives apply to all designated BPS organizations under the Broader Public Sector
Accountability Act, 2010 defined as follows:
- every hospital
- every school board
- every university in Ontario and every college of applied arts and technology and post-secondary institution in
Ontario whether or not affiliated with a university, the enrolments of which are counted for purposes of
calculating annual operating grants and entitlements
- every approved agency designated as a children’s aid society under subsection 15 (2) of Part I of the Child
and Family Services Act
- every community care access corporation
- every corporation controlled by one or more designated broader public sector organizations that exists solely
or primarily for the purpose of purchasing goods or services for the designated broader public sector
organization or organizations
- every publicly funded organization that received public funds of 10 million dollars or more in the previous
fiscal year of the Government of Ontario
Compliance
• The Act requires all designated BPS organizations to implement the requirements under the
directives.
5
BPS Procurement Directive – Principles
• The Broader Public Sector (BPS) Procurement Directive (Directive) replaces the
Supply Chain Guideline issued by the Ministry of Finance in 2009.
Principles:
Accountability
Organizations must be accountable for the results of their procurement
decisions and the appropriateness of the processes.
Transparency
Organizations must be transparent to all stakeholders. Wherever
possible, stakeholders must have equal access to information on
procurement opportunities, processes and results.
Value for Money
Organizations must maximize the value they receive from the use of
public funds. A value-for-money approach aims to deliver goods and
services at the optimum total lifecycle cost.
Quality Service Delivery
Front-line services provided by Organizations, such as teaching and
patient care, must receive the right product, at the right time, in the right
place.
Process Standardization
Standardized processes remove inefficiencies and create a level
playing field.
6
Overview – BPS Procurement Directive
• The Broader Public Sector Accountability Act, 2010 provides the authority for
the Management Board of Cabinet to issue directives governing the
procurement of goods and services by designated broader public sector
organizations.
• The Broader Public Sector (BPS) Procurement Directive:
- provides consistent procurement practices for designated BPS
organizations
- establishes that publicly funded goods and services are acquired by
BPS organizations through a process that is open, fair, and transparent
- establishes accountability through each stage of the procurement
process
- maximizes the value that BPS organizations receive from the use of
public funds
• The BPS Procurement Directive substantially aligns with:
- Provincial Trade Agreements
- Management Board of Cabinet (MBC) Procurement Directive
7
BPS Procurement Directive – Requirements
Requirements:
•
•
The Procurement Directive has the following requirements:
-
A Supply Chain Code of Ethics
-
Procurement Policies and Procedures (25 Mandatory requirements)
The BPS Procurement Directive builds on the 2009 Supply Chain Guideline by
introducing mandatory requirements related to:
-
the approval authority framework related to consulting services
-
competitive acquisition of consulting services regardless of dollar value
-
effective management of BPS contracts
8
Consultant – Definitions in the BPSAA
Term
Definition
Consultant
A person or entity that under an agreement, other than an
employment agreement, provides expert or strategic advice and
related services for consideration and decision-making.
Consulting Services
The provision of expertise or strategic advice that is presented for
consideration and decision-making.
9
Goods, Non-Consulting Services and Construction
Approval Authority Schedule
• Organizations must establish an approval authority schedule
(AAS) for procurement of goods, non-consulting services and
construction
• The AAS must be approved by the board of directors of the
Organization or its equivalent.
Required Competitive Procurement Thresholds
Goods, Non-Consulting Services and Construction
Total Procurement Value
$100,000 or more
Means of Procurement
Open competitive process
10
Consulting Services
Approval Authority Schedule
•
For invitational competitive and open competitive procurements, follow the approval
authority schedule for goods and non-consulting services
•
Prior to commencement, any procurement of consulting services must be approved in
accordance with the Procurement Approval Authority Schedule for Consulting Services as
described in the Directive.
•
For non-competitive procurements, the BPS Procurement Directive includes a mandatory
approval authority framework related to consulting services as outlined below:
Procurement
Method
Non-competitive*
Procurement Value
Approval Authority
$0 up to but not
including $1,000,000
President, CEO or equivalent
$1,000,000 or more
Board of Directors or equivalent
*Exemption-based only
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Consulting Services
Required Competitive Procurement Thresholds
Consulting Services
Total Procurement Value
Means of Procurement
$0 up to but not including
$100,000
Invitational (minimum of
three suppliers are invited to submit
a bid) or open competitive process
$100,000 or more
Open competitive process
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Contract Management
• Procurements and the resulting contracts must be managed
responsibly and effectively.
– Payments in accordance with provisions of contracts
– Recovering overpayments
– Assignments properly documented
– Assess and manage supplier performance
– Dispute resolution process
– For services: clear term of references, expenses claims and
rules compliant with the BPS Expenses Directive,
reimbursement for expenses only if specified in the contract
13
Broader Public Sector Expenses Directive
14
BPS Expenses Directive - Purpose
• The BPS Expenses Directive improves accountability and transparency
in the BPS by:
– requiring designated BPS organizations to establish expense rules
where expenses are reimbursed from public funds, and
– setting out requirements for what needs to be included in each
organization’s expense rules.
15
BPS Expenses Directive – Application
• The directive applies to any person in a designated BPS organization making
an expense claim, including:
- appointees,
- board members,
- elected officials (e.g. school trustees),
- employees, and
- consultants and contractors engaged by the organization providing
consulting or other services.
• The directive serves as a guideline to all other publicly funded organizations
as defined under the Broader Public Sector Accountability Act.
• The directive does not prevail over a collective agreement.
16
BPS Expenses Directive - Requirements
The directive sets out 8 requirements that must be included in the expense rules for an
organization.
1. An accountability framework
2. Prohibition on reimbursement of meal and hospitality expenses for consultants and other
contractors
3. Rules specific to serving alcohol
4. Rules for hospitality events where hospitality is defined as the provision of food, beverage,
accommodation, transportation and other amenities paid out of public funds to people who are
not engaged to work for:
• designated BPS organizations (i.e. those covered by the directive), or
• any of the Ontario government ministries, agencies and public entities covered by the
OPS Travel, Meal and Hospitality Expenses Directive.
5. Good record keeping practices
6. Rules for individuals making claims (e.g. all appropriate approvals should be obtained before
incurring the expense, original itemized receipts are required, etc.)
7. Rules for individuals approving claims (e.g. cannot approve their own claims, provide approval
only for expenses incurred in the performance of organization business, etc.)
8. Posting the rules on the organization’s public website
17
BPS Expenses Directive - Requirements
• Guidance on the development of expense rules is provided through an
appendix.
• To promote alignment with rules for government ministries, the information
in the appendix reflects the general requirements of the Ontario Public
Service (OPS) Travel, Meal and Hospitality Expenses Directive.
• This alignment will serve to provide the public with a consistent expectation
of behaviour not only across the OPS but also the BPS.
18
Additional Accountability Measures
Proposed Broader Public Sector Perquisites Directive
% Executive Office Reduction
19
Context - BPSAA Amendments
•
On December 14, 2010, the Minister of Finance announced that the
government would introduce measures to eliminate unnecessary perks
in the public and broader public sector.
•
Amendments to the Broader Public Sector Accountability Act, 2010
(BPSAA), part of the budget bill, received Royal Assent on May 12,
2011. These amendments authorize Management Board of Cabinet
(MBC) to issue directives on perquisites. This complements the existing
MBC authority in the BPSAA to issue directives on expenses and
procurement.
•
A Perquisites Directive for the OPS will become effective on June 1,
2011.
20
What are the BPSAA amendments?
•
The amendments to the BPSAA authorize Management Board of Cabinet (MBC) to issue
directives on perquisites.
•
A directive would cover the designated BPS organizations, including:
-
Hospitals
School Boards
Colleges
Universities
Community Care Access Centres
Children’s Aid Societies
- all organizations which received more than $10 million in funding
from the Ontario government in the previous fiscal year
•
A directive would cover all persons in these organizations including:
-
•
appointees,
board members,
elected officials (e.g. school trustees), and
employees.
A directive would require these designated broader public sector organizations to establish rules
on perquisites, and would set out what is an allowable perk and what is not.
21
What is a Perquisite and What is Not?
•
Perquisites, or perks, refer to a privilege:
- that is provided to an individual or to a group of individuals,
- that provides a personal benefit, and
- that is not generally available to all employees.
•
Perks are items that are provided by the employer, or reimbursed by the employer. They are
not items paid by an individual, for example, a discounted rate provided to businesses by a
gym, or discounted parking provided to tenants in an office building.
•
Perks are not allowable if they are not business related requirements for the effective
performance of an individual’s job.
•
The following items would not be considered perks:
- provisions of collective agreements
- insured benefits
- items generally available on a non-discriminatory basis for all or most employees (e.g. an employee
assistance program, pension plans)
- health and safety requirements (e.g. provision of work boots)
- employment accommodations made for human rights and/or accessibility considerations (e.g. special
workstations, work hours, religious holidays)
- expenses covered under an organization’s existing expense rules on travel, meals, and hospitality
(established in accordance with the BPS Expenses Directive)
22
Implementation
Effective date - TBD
The effective date of a BPS Perquisites Directive would
be the date the new perquisites part of the BPSAA
would be proclaimed. The directive will be released
prior to the effective date to allow BPS organizations
time to develop rules and come into compliance.
23
10% Reduction Requirement
• Executive offices in certain BPS organizations are required to
reduce office costs by 10 per cent over two years (by March 31,
2013).
• These organizations are being asked to reduce a minimum of 5 per
cent in the first year, and 5 per cent in the second year of the
restraint period.
• This initiative will help the BPS to free up valuable resources to
reinvest within their organizations.
24
10 % Reduction - Application
• The proposed restraint would require certain organizations to
reduce the cost of executive offices by 10 per cent over two years.
• These organizations include:
–
–
–
–
–
–
–
Hospitals,
Local Health Integration Networks (LHINs),
Boards as defined in the Education Act,
Universities,
Colleges,
Community Care Access Corporations, and the
Agencies as designated in the Public Sector Expenses Review Act, 2009.
25
10% Reduction - Application and Scope
What is Senior Management?
• An Executive Office is the office of:
– The Chief Executive Officer (CEO) and/or
Chief Operating Officer (COO);
– Every member of senior management that
reports directly to the CEO/COO.
• The baseline for reduction is the
organization’s budget of their executive offices
for the last fiscal year.
• All costs of executive offices in the
organizations identified are included.
– E.g. office space/supplies, number of staff,
salaries and wages, conferences and travel
expenses can contribute to the 10 per cent
restraint over the next two years.
All executive offices will be required to reduce
office costs, including any member of the
senior management, that reports to the head of
the organization. The offices of other levels of
management that report directly to the
CEO/COO would not be included in this
restraint initiative.
For example, a CEO may have both vice
presidents and directors that report to her
office. The senior positions would be executive
offices, the directors may not be. Alternatively,
in a smaller organization an executive director
may only have directors reporting to her, and
those directors would not necessarily be
executive offices. Each organization knows
best its structure and the positions/titles that
are part of the executive offices. In general
terms, an executive office is responsible for
delivering major programs or setting the
strategic direction of the organization. Each
organization needs to determine the positions
and offices that are considered their executive
offices.
26
10% Reduction - Compliance
• All organizations covered by this restraint will have the requirement written
as a commitment in their accountability agreements e.g. Transfer Payment
Agreements, Memoranda of Understanding.
• Each year a compliance report, signed by the highest ranking executive of
each organization, will be required to indicate they have complied with the
reduction.
• The compliance report will require organizations to provide the baseline
amount and the amount that has been reduced.
27
Compliance and Reporting
Implementation Support
Broader Public Sector Accountability Act Requirements
28
Compliance & Reporting – BPSAA Requirements
• Compliance and enforcement provisions are included in the BPSAA.
- All designated BPS organizations are required to comply with the directives issued under the
Act.
- The requirements of the Act are deemed to be part of any funding agreement.
- Any provision in an agreement that conflicts with the requirements of the Act is not valid,
regardless of when the agreement came into force.
• Of the designated BPS organizations, only hospitals are required to prepare
attestations regarding their compliance with specific aspects of the legislation.
- Hospitals will also provide an annual report to LHINs on consultant use.
- The report will include information on the consultant firm engaged, the project, value and
amount paid out and the selection process.
• Other designated broader public sector organizations are currently not required to
report. However, the legislation provides the power to make regulations requiring
these organizations to provide attestations of compliance with the requirements of the
Act.
• Ministries may choose to provide policy direction on reporting.
29
Implementation Support
Online support for implementing the BPS Procurement Directive and the BPS
Expenses Directive - Ministry of Finance website includes:
• directives in English and French
• Webinar slide deck and overview questions
• FAQs
• the BPS Procurement Directive Implementation Guidebook
• a BPS Procurement Directive toolkit is being developed for BPS organizations. The toolkit
includes checklists, templates and process maps (to come)
In addition, to support the BPS Procurement Directive, the Ministry of Finance:
• conducted information webinars in February 2011 attracting almost 1000 participants from
over 400 organizations
• offered full day training sessions in March 2011 attracting almost 900 participants from more
than 300 organizations
www.fin.gov.on.ca/bpssupplychain
30
Thank you
• Questions?
Jim Hadjiyianni
Senior Manager
BPS Supply Chain Secretariat
__________________
Treasury Board Office
Ministry of Finance
Catherine Brown
Assistant Deputy Minister
HR Management and Corporate Policy Division
___________________
Ministry of Government Services
31
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