Federal Accountability Act:
Implications
By Bill Matthews
May 2008
What is important to
departments?
Context
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Departmental management
– Accounting Officer model
– Public Servants Disclosure Protection Act
Personal obligations
– Conflict of Interest Act
– Lobbying Act
– Fraud offences and penalties
Human resources
– Public Service Employment Act amendments
Program activities / Business lines
– Grant & contribution programs
– Procurement
– Public Opinion Research
Reporting and Access to Information
– Requests from Parliamentary Budget Officer
– Access to Information Act amendments
Context
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Numerous changes occurring in the financial
management environment in the Federal Government;
Independent Audit Committees;
Internal Control Certification;
CFO Model
Audited departmental financial statements;
Accrual appropriations;
Quarterly Financial Statements?
Departmental
management
The Accounting Officer Model
•
Deputy Ministers and heads of government institutions are designated as
accounting officers for their respective organizations
•
Legal obligation to appear before parliamentary committees and answer
questions relating to:
1. the measures taken to organize resources to deliver departmental
programs in compliance with government policy and procedures
2. the measures taken to maintain effective systems of internal control
3. the signing of the departmental accounts
4. the performance of other specific duties assigned by law or regulation
in relation to administration of the department
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However, this obligation is set within the context of the Minister’s
management and direction of the department and his or her accountability
to Parliament
Accounting Officer Model:
Tools and Strategies
Compliance with Policies
#1. The measures taken to organize resources to deliver departmental
programs in compliance with government policy and procedures
Scope – Key Questions and Tools
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How do I know what I am supposed to be compliant with?
– Clarify accountabilities through Policy Suite Renewal Initiative
– Three Reviews:
• Blue Ribbon Panel on Grants and Contributions
“Web of rules”
• Review on Procurement Practices
initiatives
• Financial Management Review
How do I know if I am compliant?
– The Management Accountability Framework (MAF)
– Investments in Functional Communities
– Investments in Oversight Mechanisms
Accounting Officer Model:
Tools and Strategies
Systems of Internal
Control and Signing the
Accounts
#2. The measures taken to maintain effective systems of internal control
Scope – Key Questions and Tools
•
How to ensure an effective system of internal controls?
– MAF:
• Stewardship Element
– Investments in Functional Communities
#3. The signing of the departmental accounts
Scope – Key Questions and Tools
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Assurance with respect to signing the departmental accounts:
– Audited financial statements
– New accreditation standards for Chief Financial Officers (CFOs) and
Chief Audit Executives
Departmental
management
Overview of Public Servants Disclosure Protection Act (PSDPA)
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PSDPA strives to achieve an appropriate balance between the two
principles of freedom of expression and duty of loyalty to the employer
PSDPA applies to all persons employed in public sector including agencies,
separate employers and parent crown corporations (CF, CSIS, CSE
excluded)
Commitment in Preamble to a Charter of Values of Public Service
PSDPA requires that:
– TB adopt a Code of Conduct for the federal public sector
– Chief executives establish organizational codes consistent with TB code
– Bargaining agents be consulted in developing the TB code
PSDPA gives mandate to Minister responsible for Canada Public Service
Agency (CPSA) to promote ethical practices and a positive environment for
disclosing wrongdoings in the public sector
Departmental
management
Public Servants Disclosure Protection Act [cont]
• New regime imposes significant obligations on chief executives, including:
– Ensuring employees are aware of legislation, how it works and
protection available
– Designating senior officer, and establishing mechanisms and
procedures for internal disclosures
– Protecting employees in disclosure process from reprisals, ensuring
confidentially of information and protecting identities as possible
– Permitting employees access to Public Sector Integrity Commissioner,
responding to PSIC’s recommendations and taking corrective action
where necessary
– Making information about disclosed wrongdoing accessible to the public
– Reporting annually to CPSA on all disclosures of wrongdoing
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Personal obligations
Conflict of Interest Act
•
Few changes for public office holders, but greater scrutiny for all
•
COIEC can self-initiate examinations
•
Public can bring complaints, through a MP, against any public office holder
•
Minor administrative breaches could be subject to administrative monetary
penalties and publication
Lobbying Act
•
5-year ban on lobbying for designated public office holders – includes
former DMs, Associate DMs, ADMs and similar rank, Ministers
•
Breaches subject to criminal proceedings and fines
•
Confirmation of meetings with registered lobbyists may be requested by the
Commissioner
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Personal obligations
Fraud offences and penalties
• New indictable offence of fraud involving public money by public servants
managing it
• Maximum penalty of:
– Five years and a fine of $5,000 for a fraud of $5,000 or less;
– Fourteen years and a fine equal to the amount of the fraud for a fraud of
more than $5,000
• Inability to contract with the government, or to hold a government office, for
those convicted of the offences
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Human resources
Public Service Employment Act amendments
•
Remove priority appointment process for ministers’ staff, but allow those
with 3 years of consecutive service to apply for internal public service
competitions for up to one year
•
Give the GIC authority to appoint special advisors to Ministers
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Program activities /
Business lines
Grant and contribution programs
• Requirement for review every five years of relevance and effectiveness of
all departmental programs
• Expansion of AG’s “follow the money” powers
– Amended definitions of “funding agreement” and “recipient” expands
class of recipients of grants, contributions and loans into which AG can
inquire about use of funds and conduct performance audits to assess
value for money
– Authority to make regulations to include deemed terms in contracts
respecting provision of information or records to AG about the use of
those funds
• Authority to make regulations to include deemed terms in contracts
prohibiting payment of contingency fees as part of a contract to any person
to whom the Lobbying Act applies
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Program activities /
Business lines
Procurement
• Legislated commitment to fairness, openness and transparency in the
bidding process for contracts
• Procurement Ombudsman to be appointed at PWGSC to review
procurement practices of departments to assess fairness, openness and
transparency
• Authority to make regulations to include deemed terms in contracts:
– Respecting corruption and collusion in the bidding process
– Requiring bidders on contracts to make declarations they haven't
committed specific offences
– Requiring public disclosure of basic information on contracts in excess
of $10,000
Public Opinion Research
• Library and Archives of Canada Act requires all departments to send final
written POR reports to LAC
• Every POR contract must contain term that a written report is to be provided
• Authority to make regulations prescribing form, content and public release
of contracts and reports
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Reporting and Access to
Information
Parliamentary Budget Officer (PBO)
• PBO may request any financial or economic data in possession of
department
Access to Information Act amendments
• New requirement to make every reasonable effort to assist requestor,
without regard to identity
• New discretionary exemption for internal audit drafts/working papers for up
to 15 years
• Time limit for making complaints clarified to 60 days
• New requirement for annual report on Ministers’ offices expenses
• Amended discretionary exemptions regarding potential financial injury as a
result of release of information, to include harm’s test on the basis of a
government institution as well as government as a whole
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General Implications
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Federal Accountability Act is not a new rulebook for public sector
management
– It is largely a codification of existing practices, conventions and policies
Most changes impacting public sector are related to increasing
transparency about government management:
– New reporting requirements around meetings with lobbyists
– Conflict of Interest Act requirement for reporting public office holders to
publicly disclose recusals from discussions, decisions, debates or votes
– Establishment of Parliamentary Budget Officer
– Expansion of Access to Information Act coverage
– Establishment of Procurement Ombudsman
However, new reality for management accountability and government
transparency, along with need for balance between rules and flexibility
– TBS continues efforts to clarify expectations, decrease transactions and
reduce reporting requirements
Impacts on Financial
Management Function
• Accounting Officer = more attention on financial
information;
• Support for audit committees and departmental financial
statements growing;
• More questions (PBO , Audit Committees);
• An already heavy workload is growing- questions about
capacity
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