Update and Status of Update and Status of Financial Management Financial Management Transformation Transformation in the Government of Canadain the Government of Canada

Doug Lloyd,Financial System Authority

fmi*igf Alberta ChapterJune 19th, 2012

Efficient Integrated Accountable

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Where we are todayFinancial Management ServicesFinancial System Authority (FSA) Initiatives• Common FM-BP Initiative (FM-BP)• Common Enterprise Data Initiative (CEDI)• Common Financial Management System

Configuration (FM-SC)The Convergence PathTarget Financial Management Environment for GC

Agenda

Who is FSA?

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OFFICE OF THE COMPTROLLER GENERAL(Treasury Board Secretariat of Canada)

Comptroller General’s Office

Financial Management SectorInternal Audit Sector Acquired Services and

Assets Sector

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

FSA is not technology focused

FSA focus is on functional business requirements

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FSA Vision and Services

FSA Linkages in GC

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FSA Initiatives for GC• FM-BP• CEDI• FM-SC

Strategic Direction

Fulfillment

Requirements, Expertise Common

Processes

Enablement

Validation

Standardization through

Collaboration

Departments(DM/CFO, Management)

Cluster GroupsService Providers

Departmental Operations

Policies, Directives, Standards, Guidelines, Tools

Policy Centres & Central Agencies

GC-wide Direction

Mazankowski Tellier Report

Reports to the Prime Minister on the Public Service

Services Sector Finance Council Recommendations

Blue Ribbon Panel

Annual Budgets

Horizontal Initiatives

CEDI STSI Grants & Contributions

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Where We Are TodayGC Financial Management

Service Delivery Transformation

Fiscal Challenges

GC Financial Mgmt.“Tradition of

Excellence”

GC Priorities

Integration Challenges

Financial System Authority (FSA)

GC FM Communit

yPublic Service

Renewal

Administrative Services

Review

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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

Financial Management in the Government of Canada

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Priorities•Accountability

• Transparency• Value-for-money

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Initiatives•Public Service Renewal•FM Policy Renewal & MAF Alignment•Administrative Services Review (ASR)

Where we are today GC Priorities & Initiatives

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

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Financial Management Services

Policy Directive

Service Levels Financial Service Profiles

Costing, Pricing and Value

Common Financial Management

System Configuration

Initiative (FM-SC)

Common Financial Management

Business Process Initiative (FM-BP)

Common Enterprise Data Initiative (CEDI)

Financial Management TRANSFORMATION

‘LENS’

PRESENT SITUATION(2012-2013)

POST-TRANSFORMATION AND CONVERGENCE: (after

2014)

• 5 Departmental Financial Management Systems • 30 – 40 configurations• Over 100 departmental charts of accounts• Differing services and standards

FM-BSP service point

B

FM-BSP service point

D

FM-BSPservice point

C

Future

Future

FM-BSP service point

A

SDA Service point

HC

IC

TBSSAP

• 1 DFMS used at a variety of service points• 1 standard configuration• 1 departmental chart of accounts• Common services and standards

CHRT

G/X

TC

Oracle

FreeBalance

FM-SC(Common

Configuration)

SDA Service Point

Project

FM-BSP Service Point

Project

FM-BP(Common Processes)

CEDI(Common

Data)

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The Convergence Path

RG

CDFS

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

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The Common FM-BP InitiativeGoal: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

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GCs Common FM-BP modelsPlanning 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

16Models in bold italic are available now.

Sample Level 2 Process Flow

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Sample Level 3 Process Flow

Comprehensive Process FlowIntegrated view across all FM-BP processesLinkages to process description and RACIConsideration 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] (…)

[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.

Comprehensive Process DescriptionIntegrated view across all FM-BP processesReference to applicable policy or regulation Identification of Roles and ResponsibilitiesConsideration of controlsLinkages to Process Flow and RACI

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 enableinteroperability among stakeholders.

Deliverables:•6 TBS Standards •and several TBS Guidelines

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Managers

Central Agencies

Employees

Departments

Parliament

Canadians

Results

Actual

Plan

Guideline - Common Line Object Codes (Draft)

Other financial master data

Transaction data

Standard on Customer Record

Reference data

Standard - Dept Common Chart of Accounts (Draft)

FY14-15+

Standard on Vendor Record

FY10-11

FY11-12

FY12-14

Standard on Procurement Item Managers

Central Agencies

Employees

Departments

Parliament

Canadians

Results

Actual

PlanResults

Actual

Plan

Guideline - Common Line Object Codes (Draft)Guideline - Common Line Object Codes (Draft)

Other financial master dataOther financial master data

Transaction dataTransaction data

Standard on Customer RecordStandard on Customer Record

Reference dataReference data

Standard - Dept Common Chart of Accounts (Draft)Standard - Dept Common Chart of Accounts (Draft)

FY14-15+

Standard on Vendor RecordStandard on Vendor Record

FY10-11

FY11-12

FY12-14

Standard on Procurement ItemStandard on Procurement Item

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

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.

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

Data Information KnowledgeInformation Chain

CEDI - Introduction and Context

GC Enterprise Data Architecture

Definitions & Standards

Controls & DataManagement

Financial Management Data Components

Enterprise Reporting and

Resource ManagementRequirements

Proactive DisclosureHorizontal InitiativesEnterprise Perform.

Departmental Perform.Operational Reporting

Public EnquiriesParliamentary Reports

Planning/BudgetingContracting/Procurement

Resource UtilizationHR Financial

Performance/OutcomesCorporate services

Business Processes

Resource Management System (ERP)

Other Master Data

Common TableValues

MaterielRecord

Vendor & CustomerRecord

Chart of Accounts

Data Integration

Governance

Policy andDirectives

And standards

Meet CEDI’s objectives through a series of projects that evolve into a Financial Data Management Program

Sample Projects

Data Standards Framework

CEDI – Approach

• 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 – Communication Principles

CEDI - Prioritize Stakeholder Groups

• Departments and Agencies Financial Operations

• Program delivery in departments

• PWGSC• External• Service Providers

• Enterprise: Reporting / Obligations

• Enterprise Analysis• Finance Senior

decision makers• I.T. Senior decision

makers• HR Senior decision

makers• MM Senior decision

makers

• Policy Makers• GC Internal

Services• Advisors to senior

decision makers• Strategic Advisors

and Associated Tactical Advisors: Headquarters (HQ), Working Groups, Regional Councils / Working Groups

“Data Providers” Data Supply

“Information Consumers” Information Demand

“Key Enablers”

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.

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Data Management Maturity ModelSource: Enterprise Data Management Council

Resource Utilization

Level 1 Level 2 Level 3 Level 4 Level 5

Valu

e

VALUE GAP

Initial Reactive Defined Managed Optimized

Capability Maturity

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 Officer6.1.3 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 board6.4.1 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.

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Common Financial Management System Configuration (FM-SC)

Layout of Each ComponentINTRODUCTION

PURPOSE SCOPE PRINCIPLES APPROACH

COMPONENT DETAIL PROCESS REQUIREMENTS DATA REQUIREMENTS REPORTING REQUIREMENTS INTERFACE REQUIREMENTS INTEGRATION REQUIREMENTS

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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

The Way Forward

Financial Management Service Framework

Policy Directive

Service Levels &Service Guarantees

Financial Service Profiles

Costing, Pricing and Value

Common Financial Management System Configuration Initiative (FM-SC)

Common Financial Management Business Process Initiative (FM-BP)

Common Enterprise Data Initiative (CEDI)

DATA PROCESSES CONFIGURATION

FM Transformation Timeline

April 1 2012 April 1 2013April 1, 2011April 1 2010

FM-BP Issue 1 Guideline

Issue 10 Guidelines

Issue 10 Guidelines

CEDI Issue 1 Guideline Issue 4 Standards Other Standards and

Guidelines

FM-SC Issue 1 Guideline Subsequent Phases

Cluster Plan Review

MAF Ongoing

Phase 1

PSFMS Implementation Ongoing

Infinity and beyond

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Financial Management Service Profiling for GC

Service ProfileService Profile

ProcessInformation Configuration

FM Transformation Vision

•Chief Information Officer Branch•Office of the Comptroller General•Public Works Government Services Canada

FISI

FUTURE

Large Complex &

(incl. Grants &

Contributions)

Administrative Services Review (ASR)

Deficit Reduction Action Plan

FM TRANSFORMATION

OTHE

RSmall Organizations

PWGS

C Large Complex Organizations

To B

e De

term

ined

Standard on ERP systems

STAKEHOLDERS

• 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.

Finance / Materiel

Inter-operability

Current Projects

BUSINESS • Processes• Goals & Objectives• Outcomes

• OCG • OCG • FM-BP

INFORMATION • Flows• Data Dictionary

• OCG • OCG • CEDI

TECHNOLOGY • IT • CIOB • CIOB

APPLICATION • Business Functionality

• Workflow• IT Foundation (S/W)

• OCG

• CIOB

• OCG

• CIOB

• FM-SC

FSA Strategic Roadmap to “Finance in the Cloud”

Domain

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Dept’s

Cluster

• Needs• Deficiencies• Success factors• What works well• Performance targets

Vendor

Central Agencies Parliament Other

Countries Provinces Private Sector

Fin Prof’lBodies

• Best Practices• Success Stories• What doesn’t work well• Options• Roadmaps

• Analysis• Rec’n on

improvements• Roadmap Maintenance

Existing Model

Version 1

Updated Model

Version 2

• Rec’s to enhance• Business case(s)• Design• Arch. solution• Updated roadmap

BuildEnhanced

Model

TargetModel

Proposed

FSA

Technology(Gen’l)

Roadmap to “Finance in the Cloud”

Why a Service Catalogue?

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Purpose of a service catalogue:The document that specifies the services, the costs and associated service levels provided in an organization

CustomersProvides the one source of information for services Clear service acquisition processOutlines service standards and sets expectationsConsistent levels of service and cost information

OrganizationTransparent service offeringDe facto SLA Allows processes to be developed linking to the services levelsCosts can be established in support of those servicesCreates organizational stability

Communication Tool

1) Service overview Service name, description, features and functions, and

availability2) 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

logins4) Service Levels

Service guarantees, recourse for service failure5) Pricing

Cost of services, support charges, and other rate information

Options related to the service

Typical Structure

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‘Must include’ sections of a service catalogue:

Service Profile Categories for FM Services

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Example of FM Services in the area of “Financial Operations”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.

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Finance Service Category Corporate Finance Financial Operations

• Transaction Processing• Financial Reporting• Asset Management

Financial Management Services

Planning & Budgeting Financial Systems

Related Services Category

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)

Other Jurisdictions

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DiscussioDiscussionn

and and QuestionsQuestions

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Contact information:Contact information:Doug Lloyd – Executive Director, FSA

doug.lloyd@tbs-sct.gc.ca613-952-3208

Marcel Boulianne – Communications Director, FSA

marcel.boulianne@tbs-sct.gc.ca613-946-4512

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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