Leadership, Governance and Accountability

in the Saskatchewan Public Service

Doug MatthiesSaskatchewan Finance

September 25, 2007

Overview

Introduction Context – Financial Integrity / Public Responding to the Challenge

• Changes and Emphasis

• Accountability Framework

Where to Next

Introduction

FMI Vision:…best practices related to the management of public

sector resources.

Values:• Sharing: …creating opportunities for sharing of

experience

• Relevance: …perspectives on the current challenges and best practices in public sector management

Context – “Accounting Fraud” USA, UK, Australia, Canada, Italy, Belgium, India,

Germany, France, Chile, Ireland, …

ENRON, WorldCom, Parmalat, AOL, Kmart, JP Morgan, Merrill Lynch, …

AIG (2005)• restated financial statements, reduction in book value of

USD $2.7 billion • agreed to a fine of USD $1.6 billion. • two executives plead guilty to criminal charges

Context – Japan Sept 13: Shinzo Abe, the Japanese prime minister, abruptly

announced his resignation yesterday the Mainichi newspaper reported a further possible explanation for

the unexpected resignation: a political funding scandal

May 28: Toshikatsu Matsuoka, Agriculture Minister, commits suicide hours before facing questioning in Parliament over money scandals

August 1: Norihiko Akagi, another Agriculture Minister, resigns following an accounting scandal

September 3: Takehiko Endo, who lasted one week as Agriculture

Minister, resigns over misuse of farm subsidies

Context – Canadian Politics

Gomery Commission (sponsorship scandal) Shawinigate (Jean Chretien) Airbus (Brian Mulroney) Bingogate / Fantasy Gardens (BC) Constituency Allowances

• Newfoundland (4 MLA’s / 3 parties)

Context – Saskatchewan Political level

• MLA Constituency Allowances (16 members)

• Caucus employee theft

Employees• Community Resources; loss > $1 million

• Sask Environment; loss > $300,000

• Inappropriate expenses / CVA use; <$1,000 ->$3,500

Venders• Fuel dealer; fictitious billings > $75,000

Where Are We Now

Public is frustrated, demands better

Public wants to know problems are being fixed

Public expects consequences

Not just fraud, money is spent wisely

How Do We Tackle This?

Leadership, Governance and Accountability

Three Interconnected PrinciplesAccountability

GovernanceLeadership

Leadership (numerous concepts)

Ability to inspire others to achieve more

Characteristics of good leadership• Integrity (#1 quality in business survey)

• Clear vision

• Effective communicator

• Leads by example

Sets the moral culture of the organization

Leadership (?)

Governance (also numerous concepts)

Determines who has what power Establishes how decisions will be made What checks and balances will exist Sets out the institutions, rules and procedures Determines accountability requirements

Reinforced by strong performance management system

Accountability

“Accountability…a broad concept that requires government to answer to elected officials and the public they represent to justify the raising of public resources and to explain the purposes for which they are used.” (From the CICA Handbook)

“There are four major approaches to addressing an accountability problem: rules, oversight, structure and leadership…” Peter Aucoin, “After the Federal Accountability Act”, Winter 2007 FMI Journal

Rules

Financial Administration Act, Financial Administration Manual

Stronger internal controls Criminal record check policy

Emphasis: • not so much on new rules but on training and

applying existing rules

• Ensuring competent people

Oversight

Internal or external scrutiny• Provincial Auditor

• Public Accounts Committee

• Freedom of Information

• Various other officers of the Legislature Expanding internal audit functions Quarterly Losses Report

Emphasis: Effective supervision

Structure

“Balance / allocation of power” “Freedom from influence / negative

consequences for doing the right thing”

New fraud policies being drafted• Focus on ethical, positive environment

• Expectations of individuals

• Mechanism to safely report

Leadership

PSC• Statement of Organizational Culture

• Code of Conduct

Improved Accountability • Enhance Accountability Framework

Accepting Responsibility

Emphasis: Culture of walk the talk

Accountability Framework

Strategic Direction

Components

PLANNING

Government-wide Planning

Interdepartmental Planning

Department Planning*

Work Unit Planning

Individual Planning

PERFORMANCE MANAGEMENT

Performance Measurement

Risk Management

Program Evaluation

Individual Performance Review

REPORTING

Financial Reporting

Government-wide Performance Reporting

Department Performance Reporting

External Audits

Accountability for Performance

Results of performance measurement, program evaluations, and auditsFeedback influences future planning and resource allocation

* Includes human resources, information technology, capital and financial planning

Updated December, 2002Performance Management Branch

Saskatchewan’s Framework

Intended to :Create a common approachFocus on outcomesLink policy objectives and expendituresMonitor performanceUtilize program evaluation and risk management

Pace of Implementation

Progress on the Framework is steadyAuditor as the keen observer:

“Saskatchewan’s accountability system compares well with most Canadian jurisdictions, and in some respects, leads others …” (PA 2005 Fall Report - Volume 3)

Capacity and Timing

Challenge: Linkage between framework / budget

Financial Reporting

Legislation:• Public Accounts / Quarterly Updates

Province’s Financial Statements – budget to actuals on both a GRF and Summary Financial Statement basis

Public Sector Accounting Board (PSAB) standards for Summary Financial Statements

Public Accounts payee listPerformance plan reporting

Where to Next?

Ensure current problems addressed

Longer outlook and plans• Managing the growth

• Don’t repeat Calgary

• How are we managing the risks