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Parliamentary Committee Review of the Estimates Documents
Auditor General's messageAs the Auditor General, I recognize that Parliament requires good, credible information on plans and results to hold the government to account for its use of taxpayer dollars. Parliamentary scrutiny of the performance of public programs is an important part of the Estimates process. My Office is committed to helping parliamentarians oversee public finances. By auditing federal government departments and agencies, most Crown corporations, and many other federal organizations, my Office provides Parliament with objective and reliable information. Parliamentary committees may review our reports, conduct hearings, and make recommendations for action. This revised document updates recent developments and provides a perspective on the role of the Senate, the House of Commons, and their committees. The parliamentary committee review of Estimates and associated documents has evolved over the years in a number of significant respects:
These developments provide Parliament with greater opportunities to review the Estimates documents. Parliamentary committees play an important role. They can challenge the government to provide clear plans and priorities, and they can enhance the way Parliament holds the government to account by scrutinizing performance information. Parliamentary review of expected performance encourages better reporting, and can motivate departments to report fairly and reliably. I encourage you to read this document and discuss the various approaches to reviewing the Estimates. My office is available to help you and your committees in this regard.
Sheila Fraser, FCA IntroductionParliament plays a fundamental role in the government's expenditure management process. It must authorize all government expenditures, whether they are approved annually or on a statutory basis. While it is the government that manages programs and sets priorities, Parliament and its committees can influence government decisions. The focus of this document is the role of parliamentary standing committees, where detailed review of the government's expenditure management process takes place. This document is designed to help parliamentarians review expenditure plans and performance reports. It outlines the reasons why committees should review Estimates documents, and it describes the Estimates review cycle, including some useful parliamentary review mechanisms. It also discusses the role government departments and agencies, the Treasury Board Secretariat, and the Office of the Auditor General play in the review process. Finally, this document identifies lines of inquiry that committees may pursue and how the Office can help them during their reviews. Committee review of Estimates documents is importantDespite the fact that the government is committed to improving expenditure plans and the performance information provided to Parliament and that parliamentarians have an increased opportunity to use that information, the question remains: Why should parliamentarians allocate their limited time to reviewing the government's expenditure plans and performance reports?
There are several reasons for a review:
The House of Commons is responsible for reviewing government expenditures and for holding the government to account for its performanceThe House of Commons has the right and the obligation to review and approve all spending from the public purse. It can hold the government to account because the government must retain the confidence of the House of Commons in order to continue to govern. It can reduce or eliminate any estimate (vote) sent by the Governor General to the House of Commons. (A vote is a maximum amount that is proposed to be spent for one item in the Estimates and, if the House of Commons agrees, is included in the schedule of an appropriation bill.) Exercising the right to review is an important part of Canada's democratic parliamentary tradition. The Senate is responsible for reviewing government expenditures before approving any appropriation billThe Senate has the right and the obligation to review and approve all spending from the public purse. The Senate must approve all appropriation bills. The individual estimates are set out in the schedules of those bills.
Reports on plans and priorities and departmental performance reportsReports on plans and priorities and departmental performance reports help Parliament to hold the government to account; they provide information about departmental priorities, plans, and achievements. They enable comparisons because they provide annual information about what a department plans to do and what it has done. Reviewing Estimates documents can contribute to good public policyThere are several ways that committee review of Estimates documents can help improve public policy, including the following:
Reviewing Estimates documents provides departments and agencies with valuable feedback to improve their economy, efficiency, and effectivenessParliamentarians can provide government departments and agencies with important feedback that can help them be more effective. For example, reviewing Estimates documents generates a discussion about how programs can be better designed and delivered, potentially leading to improved, cost-effective management of government programs. Reviewing Estimates documents can improve the quality of information provided to parliamentarians and the publicBy reviewing, questioning, and challenging Estimates documents, parliamentarians can encourage departments to improve their planning and performance documents and, ultimately, to provide better information to the public. The information in these documents can be improved by making it more relevant, balanced, and user-friendly. Better information will enhance government credibility and help create a more open and accountable government. Committees can make a differenceCommittee hearings with officials enable parliamentarians to influence departmental actions. These hearings are public meetings, and the proceedings can be followed by those most affected by government decisions and the media. Officials speak on the record and can be held to account for what they say. By questioning officials, especially when lines of questioning are followed up, parliamentarians can influence departments and agencies by focussing attention on their actions. Committees can report on the management and operation of departments and agencies and their long-term expenditure plans and priorities. The Expenditure Management SystemThe Expenditure Management System defines the government's spending priorities. It was designed to promote greater fiscal responsibility and help the government meet its fiscal targets. That is, it will help the government provide quality services that are affordable. The Expenditure Management System aims to integrate departments, central agencies, and parliamentary committees with the Cabinet processes that result in preparing the federal Budget and Estimates. The Estimates review processThe government must seek Parliament's approval, under an appropriation act, to appropriate funds from the Consolidated Revenue Fund to meet its financial obligations and put in place programs approved by Parliament. The process associated with this approval is called the business of supply. Each year, the projected annual expenditures or Main Estimates are sent by message of the Governor General to the House of Commons for review and approval by 23 June. They are also tabled in the Senate for consideration and review. The Main Estimates are divided into three parts:
The government may also table Supplementary Estimates, often in the fall and the spring, if the amount voted in the Main Estimates is insufficient or if new funding or a reallocation of funds is needed. The Main Estimates are referred by the House of Commons to committees by 1 March. Standing committees may review them and report back to the House by 31 May. Committees may also choose to review and report on performance reports when they are tabled in the fall. The Main Estimates are referred by the Senate to committees in March. The Standing Senate Committee on National Finance may review them and report on them throughout the fiscal year. Figure 1 describes the Estimates cycle, which comprises several steps. Review by standing committees is shaded in grey; joint committees follow the review cycle of the committees of the House of Commons. Parliament's role in the Expenditure Management SystemParliamentary standing committees can help the Expenditure Management System function properly. For example, by reporting on Estimates documents, committees can provide advice to the government for developing subsequent Budget and Estimates proposals.
Parliamentarians can contribute to setting government expenditure plans and priorities three times a year during
Each spring, all departments and agencies submit reports on plans and priorities to Parliament. The appropriate standing committee reviews them and, for the House of Commons, has until the end of June to submit a report. These documents are intended to provide information on the spending plans and priorities of departments and agencies and on how resources entrusted to them will contribute to the achievement of their strategic outcomes.
Each fall, government departments and agencies prepare a departmental performance report. These reports are tabled in Parliament and may be reviewed by the appropriate committees. They provide information on program results over several years and on whether performance targets are being met. This information reaches Parliament during the same period as other key accountability and planning documents, including the Public Accounts of Canada (the annual financial statements and record of transactions that show all federal spending, borrowing, and taxation), the Budget consultation strategy papers, the Annual Financial Report of the Government of Canada, and the annual report of the President of the Treasury Board on results-based management and accountability. The focus of the 2003 and 2004 annual reports of the President of the Treasury Board, Canada's Performance, was the quality of life of Canadians. When the government tables the Budget, it declares its spending priorities for the upcoming years. Main Estimates are tabled shortly thereafter, outlining the government's detailed expenditure plan for the next fiscal year. Then the government seeks the approval of the House of Commons for its overall direction, which provides the clearest opportunity for the opposition to move amendments of no confidence. Both the Budget and the Main Estimates are based on the consultations that have occurred during the previous year, including the advice and reports provided by committees. The Estimates cycle starts over at this point as departments and agencies table their next reports on plans and priorities. Reviewing these plans gives committees the opportunity to assess how the advice they provided the previous spring and fall affected multi-year planning. Selected parliamentary review mechanismsIn the past few years, several changes have been made to improve the Estimates review process. Those include changes to planning and performance documentation; review in the House of Commons of the Estimates of two departments or agencies by a Committee of the Whole; and creation of the Standing Committee on Government Operations and Estimates of the House of Commons, with the Chair from the Official opposition. The Standing Senate Committee on National Finance has continued its review of Estimates matters. Planning and performance documentationAs a result of the ongoing Improved Reporting to Parliament Project, information provided to Parliament should become easier to understand, more descriptive, and more focussed on results. Reports on plans and priorities focus on strategic outcomes and the program activities that benefit Canadians, and describe the roles and responsibilities of the department or agency in achieving those outcomes. They have a three-year planning period and describe the organization's mandate, mission, and strategic objectives. They also provide information about the organization's management, resources and results structure, planned results, performance measurement strategy, and the link between resources and program activities. Departmental performance reports outline the achievements of departments and agencies in relation to the goals set out in the reports on plans and priorities. Departmental performance reports seek to show how an organization contributed to its strategic outcomes, explain any shortcomings in performance, and indicate lessons learned. (See Appendix A for a glossary of common results-based management and accountability terms.) Reports on plans and priorities and departmental performance reports enable
Review in the House of Commons by a Committee of the WholeOn 4 October 2001 (and amended on 18 September 2003), the House of Commons' standing orders were amended to re-introduce another method for reviewing selected Estimates. The Leader of the Opposition, in consultation with the leaders of the other opposition parties, refers the Estimates of no more than two departments or agencies to a Committee of the Whole House for review. The chosen Estimates are reviewed, one day each, in a four-hour session. The review of Estimates by the Committee of the Whole House allows for
Standing Committee on Government Operations and Estimates of the House of CommonsThe mandate of the Standing Committee on Government Operations and Estimates enables it to review management and expenditure plans of the Privy Council Office, the Treasury Board Secretariat, the Public Service Commission, and Public Works and Government Services Canada. It can also review specific expenditure items across all departments, including the use of information and communication technologies. For all these, the Committee can reduce any estimate (vote) in co-ordination with other committees, subject to reinstatement by the House. In addition, the Committee has a mandate to review the Estimates process, Crown corporations, private foundations that distribute government funds, horizontal government programs, and the use of contingency funds. The Committee provides for
Since its beginning, the Committee has examined departmental spending and reported to the House on the Estimates referred to it. The Committee has also reported on improvements needed in the Estimates process. Standing Senate Committee on National FinanceThe mandate of the Standing Senate Committee on National Finance is to focus on government spending and examine federal estimates, including the national accounts, the reports of the Auditor General, and government finances. It also undertakes special studies of specific issues that are usually related to government spending and the Estimates. The Committee
Other key participants in Estimates review processAs well as Parliament, several other participants are important to the Estimates review process (Figure 2). Departments and agencies are responsible for program deliveryThe key contacts for committees are the officials of the departments and agencies who prepare the Estimates documents. These officials plan and implement programs and ensure that the information in the Estimates documents is fair and reliable. Departments are also responsible for program evaluations, internal audits, and reports on the results of their programs. They also discuss with committee members the important features of their reports to Parliament. These include
Overview, context, and strategic directionsThese are described in reports on plans and priorities and departmental performance reports and include the following:
Performance expectationsThese are set out in the reports on plans and priorities and departmental performance reports and include the following:
Actual performance against expectationsThis is described in departmental performance reports and includes the following:
Lessons learnedThese are described in reports on plans and priorities and departmental performance reports and include the following:
Central agencies integrate the departmental and Budget planning processCentral agencies include the Department of Finance, the Privy Council Office, and the Treasury Board Secretariat. These agencies co-ordinate the Budget process by helping Cabinet determine government-wide priorities, reviewing programs, and allocating resources. Public input into the Budget planning process is sought through the Finance Minister's tabling of the fall Economic and Fiscal Update in the Standing Committee on Finance, as well as the Committee's subsequent hearings and report, and nation-wide discussions with the provinces and other stakeholders. The Treasury Board is the government's management boardThe Treasury Board is a Cabinet committee that manages the government's financial, human resource, and administrative responsibilities. Its ministers set policy, examine and approve the spending plans of government departments, and review the development of programs approved by Cabinet. It is supported by the Treasury Board Secretariat and the Public Service Human Resources Management Agency, and is considered the expenditure manager, employer, and general manager of the Government of Canada. As the government's expenditure manager, the Treasury Board, through its Secretariat, prepares Estimates and monitors departmental program spending. As the government's employer, it establishes the terms and conditions under which the public service attracts and retains the staff it needs to do its work. As the government's general manager, the Treasury Board provides the policy framework for accounting, audits, evaluations, contracts, financial management, information technology, real property, and regulatory affairs. Treasury Board ministers are also responsible for ensuring departments and agencies comply with the acts that govern human resource management, public service pensions, employment equity, official languages, access to information, privacy, and the management of real property. The Treasury Board Secretariat supports the Treasury BoardThe Treasury Board Secretariat can be described as the Treasury Board's administrative arm. Its mandate is to support the Treasury Board as a committee of ministers and to fulfill its statutory responsibilities as a government central agency. It provides advice to the Treasury Board and its President about policies, directives, regulations, and program expenditure proposals that affect the government's financial, human, and material resources. It is responsible for the general management of horizontal initiatives, issues, and activities. However, the primary accountability for program policy and operational management rests with departments and agencies. The Treasury Board Secretariat can help committees and their research staff review Estimates documentsCommittees may seek information that is beyond the information tabled by individual departments and agencies. The Secretariat can help committees by
Committees may want to consult with the Secretariat about any improvements to these tools, systems, and information. The Office of the Auditor General identifies opportunities for improvementThe Office performs independent performance (value-for-money) and financial audits of departments and agencies. These audits often identify opportunities to improve government systems and practices. They may also include recommendations that support corrective action. The Office analyzes and comments on information provided by departments. This helps Parliament hold the government to account for its stewardship of public funds and how it exercises public authority. The Office provides independent information to Parliament and offers advice on how to improve government programs. The Office serves Parliament and the well-being of Canadians by promoting an accountable government, an ethical and effective public service, good governance, sustainable development, and the protection of Canada's legacy and heritage. The work of the Office answers three questions:
The Auditor General may present to the House of Commons up to three reports a year, in addition to her annual report. These reports contain the following:
The Auditor General also provides an opinion on the government's financial statements (attest audit), which is included in the Public Accounts of Canada and published each fall. The Commissioner of the Environment and Sustainable Development, on behalf of the Auditor General, reports annually to the House of Commons on the extent to which departments have met the objectives and implemented the plans set out in their sustainable development strategies. Committee review of Estimates documentsPlanning and performance information should allow committees to assess the overall direction of public policy and the government's use of resources, and to suggest areas where priorities should be adjusted or resources reallocated. A certain amount of trial and error will undoubtedly occur when departments prepare reports and committees review them. In addition, departments may be reluctant to candidly report on performance that did not meet expectations. By holding departments to account, that is, encouraging them to explain what happened, to report corrective actions, and to discuss what they have learned, the process can be instructive for the committee and the department.
The Office of the Auditor General's December 2000 Report, Reporting Performance to Parliament: Progress Too Slow, noted that the review of Estimates was limited. Parliamentarians cited their frustration over the limits in the role they can play in the Estimates process. While some committees of the House of Commons actively review Estimates documents, most do not. These concerns were reinforced by a survey of parliamentarians in late 2003, conducted by the Library of Parliament and published as The Parliament We Want, Parliamentarians' Views on Parliamentary Reform. Effective meetings with officialsThrough research and planning, asking the right questions, and seeking help from other organizations, committees can make their review of Estimates documents more effective. Committees can do the following:
Questions standing committees can askWhen reviewing reports on plans and priorities and departmental performance reports, committees can ask several questions. (These questions, which are listed below, are available in PDF format in Appendix B.) Government policy and direction
Benefits for Canadians
Delivery of the program
Better ways of delivering results
Usefulness of the Estimates documents
Depending on the answers to these questions, committees may decide to report on the results of their study and, if appropriate, recommend changes to program priorities. This could be done in June before the last sitting day, in the fall when departmental performance reports are tabled, or in the spring when the following year's Estimates are tabled. Committees may want to suggest changes to the reports in order to better serve their needs. The Office of the Auditor General can helpThe Office of the Auditor General's main relationship with Parliament is with the House of Commons Standing Committee on Public Accounts. In the Senate, the Office also works with the Standing Senate Committee on National Finance. The Commissioner of the Environment and Sustainable Development's reports are referred to the Commons Standing Committee on Environment and Sustainable Development. There are several ways the Office can help other parliamentary committees review spending plans, past performance, and other management issues. The Auditor General and other senior representatives of the Office are available to appear as witnesses, where the Office has done relevant audit work. Over the years, the Office has audited many government entities and management practices. Its staff can describe the results of these audits to committees or to their staff. They can also comment on actions taken by departments in response to recommendations made in the Auditor General's reports or in reports of the Standing Committee on Public Accounts. The Office monitors committee interests and concerns in order to provide information that is timely and relevant. It works with committees and their staff to help them understand and efficiently use audit information. In the past, the Office has shared its plans with committees and has made an effort to conduct audits when they would be most useful to them. The Office carefully considers all requests from committees to conduct audits. For example, at the request of the Standing Committee on Government Operations and Estimates, the Office audited the Office of the Privacy Commissioner of Canada and reported its results in September 2003. The Office will report on the quality, fairness, and reliability of selected departmental performance reports. The Standing Committee on Public Accounts requested that the Office review selected departmental performance reports; the first review was published in May 2003. These reports help the Committee review specific departments and agencies and develop critical analysis techniques. The Office also can help Committee research staff review planning and performance documents. Where the Office has expertise, it can support parliamentarians and committees when requested. Office staff have extensive knowledge about government departments and management practices. The Office can help parliamentarians by conducting briefings on an individual basis or with parliamentary committees on subject matters of interest based on past audits. Concluding thoughtsReporting to Parliament is critical to ensuring accountability. Key changes within the federal public sector need to be scrutinized by Parliament. Examples of these changes include alternative service delivery mechanisms for federal public policy and a continued emphasis on results-based management. Providing better planning and performance information, having the Estimates reviewed in the House of Commons by a Committee of the Whole, creating the Standing Committee on Government Operations and Estimates, and the continued review by the Standing Senate Committee on National Finance allow for a more effective review of Estimates documents. We encourage committees to devote time to reviewing Estimates documents. They can challenge the government to provide clear plans and priorities and hold it to account by scrutinizing performance information.
Appendix A — Results-based management and accountability termsHorizontal result: An outcome that is produced through the contributions of two or more departments or agencies, jurisdictions, or non-governmental organizations. Managing for results: When managing for results, ministers, senior officials, and managers make decisions based on what a program is achieving—the results that citizens value—and at what cost. Outcome: An external consequence attributed to an organization, policy, program, or initiative that is considered significant in relation to its commitments. Outcomes may be described as immediate, intermediate or final, direct or indirect, intended or unintended. Output: Direct products or services stemming from the activities of a policy, program, or initiative and delivered to a target group or population. Performance: How well an organization, policy, program, or initiative is achieving its planned results measured against targets, standards, or criteria. In results-based management, performance is measured and assessed, reported, and used as a basis for management decision making. Planned results (targets): Clear and concrete statement of results (including outputs and outcomes) to be achieved within the time frame of parliamentary and departmental planning and reporting (1–3 years), against which actual results can be compared. Strategic outcome: The long-term benefits to Canadians that stem from a department's vision and efforts. These outcomes describe the difference a department is mandated to make. In most cases, these outcomes will require the combined resources and sustained effort of several partners over a long period of time. More importantly, progress toward these outcomes will require, and Canadians will expect, the leadership of a federal department or agency. (In previous documents this term was also called departmental outcome, strategic objective, key results commitment, and business line outcome.) Source: Lexicon for Results-Based Management and Accountability, Treasury Board Secretariat, (www.tbs-sct.gc.ca/rma/lex-lex_e.asp). A lexicon for reports on plans and priorities and departmental performance reports is available at www.tbs-sct.gc.ca/est-pre/20052006/Lex_e.asp.
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Last Updated: 2005-03-15 |