Update and Status of Financial Management Transformation in the Government of Canada
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Transcript of Update and Status of Financial Management Transformation in the Government of Canada
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
Marcel Boulianne – Communications Director, FSA
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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