Building blocks for adopting Performance Budgeting in Canada

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Building blocks for adopting Performance
Budgeting in Canada
Bruce Stacey Executive Director Results Based
Management Treasury Board Secretariat, Canada
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Canadas Expenditure Management System (EMS)
Renewal was geared towards ensuring management
excellence and fiscal credibility

• In 2003, the first roll out of performance
  budgeting requirements to departments in the form
  of Program Structures, financial and
  non-financial information
• In 2005, the MRRS Policy was formalized by
  Cabinet and an implementation plan was developed
• In 2007, the Expenditure Management System
  Renewal was formally articulated to build on the
  work done so far. The goals
• Aggregate fiscal discipline (i.e. control of
  overall growth in spending)
• Effective allocation of all government resources
  to areas of highest relevance, performance and
  priority
• Efficient and effective program implementation
• A new program evaluation policy will shortly be
  approved and will focus on evaluation from a
  value for money perspective

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EMS renewal is supported by three key pillars

• All spending must be managed to results/outcomes
  that are transparent to Canadians
• Have clear measures of success
• Be formally assessed and evaluated systematically
  and regularly
• Demonstrate value for money
• For new spending proposal Up-Front Discipline
  to manage overall spending growth. New proposals
  must
• Include clear measures of success
• Provide solid information about how the proposal
  fits with existing spending and results i.e how
  do they fit into the program structure
• Provide reallocation options for funding
• For existing spending Strategic Reviews assess
  all existing programs and spending over a
  four-year cycle to ensure alignment with overall
  priorities, as well as relevance, effectiveness,
  efficiency and economy
• Spending/programs must demonstrate measurable
  results in support of priorities
• Decision-making must rely on objective
  evidence-based information

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Management, Resources and Results Structure
(MRRS) Policy The foundation of the renewed EMS

• Represents a common approach to the collection,
  management, and reporting of performance
  information
• Provides detailed information on all government
  programs
• Establishes the same structure for both internal
  decision-making and external accountability
• Links resources to results for each program -
  planned and actual
• Has made program implementation excellence a much
  greater focus of Senior Management

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The Program Activity Architecture

• Policy requirements for Strategic Outcomes incl
• Performance Measures

Strategic Outcome
Accountability levels to Parliament (Estimates
Public Accounts) require TB approval, incl.
major minor changes
Policy requirements for each program activity
element include Program title description
Expected results Performance
measures Planned actual expenditures Target
actual results Governance
Program Activities
Departmental PAA reflect the inventory of all
the programs of a department depicted in their
logical relationship to each other and to the
SO(s) to which they contribute require TBS
sign-offl
Sub-Activity Level
Sub-Sub Activity Level
Lowest Level programs
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MRRS enhances decision-making not only for
central agencies, but also for departments and
parliamentarians
More logical and consistent basis for interaction
TBS Informed decisions on investment choices
based on priorities and value for money
MRRS
Policy Objective Development of a common,
government-wide approach to the collection,
management, and reporting of financial and
non-financial performance information - to
provide an integrated and modern expenditures
management framework
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MRRS Implementation An incremental approach
based on lessons learned since first attempt in
2003

• Implementation of MRRS consists of five steps
• Departments develop fully articulated structures
  for their Program Activity Architectures (PAA)
• (2006 )
• Departments identify/define Performance
  Measurement Frameworks Governance Structures
  for their entire PAAs
• (2007)
• Departments create, capture and use MRRS
  information systematically
• (2008 and onwards)
• TBS develops and rolls out a system to capture
  the standardized departmental performance
  information
• ( 2009 and onwards)
• Embed MRRS information in all expenditure
  management processes
• ( 2009 and onwards)

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Some progress has been made on the information
systems issue

• In 2003, an attempt was made to build a system
  but under the tight timelines available, the
  system was not built in a sustainable manner
• We have since developed a new integrated
  financial component of the Expenditure Management
  Information System (EMIS)
• We are in the process of adding a results
  component to this
• Lessons learned are
• Systems to deal with the entire end to end
  performance budgeting process are not available
• Systems to deal with hierarchical program
  structures are not available or simple to design
• It is important to spend a considerable amount of
  time upfront articulating roles and
  responsibilities, business processes and
  requirements

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End State Integrating performance information
into the decision-making process
Responsible and Effective Spending
Operational Efficiency and Effectiveness
Effective government-wide allocations
Aggregate Fiscal Discipline
EMS Renewal Outcomes
Integrated Cabinet Budget Decision-Making
Annual Strategic Periodic Reviews
Results-focused MCs and TB Submissions
(integrated information on new and existing
spending)
EMS Renewal Outputs Inputs
Strategic Advice to Cabinet to Support
Decision-Making for Results
Expenditure performance management, oversight and
accountability
Renewed Evaluation Function
MRRS/PAA (Program Activity Architectures and
related performance measurement information)
Renewed Audit Function
Financial management, control and oversight
Strengthened Information Base to Support
Departmental Management, Decision-Making and
Reporting for Results