Government Commits to Clean Up Previous Government Problems Identified by the Auditor General's Report

• Backgrounder: Expenditure Management System Renewal

Ottawa - The Honourable John Baird, President of the Treasury Board, today thanked the Auditor General for her 2006 Annual Report and said Canada's New Government is taking action to fix the long-standing problems she has identified under the previous government.

"Some of the issues the Auditor General has raised have been around for years," said Minister Baird. "Canada's New Government came to Ottawa to improve the way business is done in this town. This includes taking responsibility for cleaning up the problems identified under the previous government by the Auditor General, and finding better ways to manage taxpayers' money."

"An important part of our Government's efforts to affect culture change includes the Federal Accountability Act," said Minister Baird. "In nine short months, this Government has introduced the Bill, worked with the elected House of Commons to strengthen it, and just last week, returned an even stronger Bill to the Senate for a second time."

Among the many measures in the Federal Accountability Act, Minister Baird noted that the provisions that protect whistleblowers, increase the rigour in government appointments and provide for more consistent enforcement and penalties for those who deliberately break the rules are just three of the mechanisms that would now be in place to address the issues raised by the Auditor General.

"When the Bill is passed, the mechanisms to help catch problems earlier and to deal with them more consistently and decisively will at long-last be in place," said Minister Baird.

Minister Baird also explained that Canada's New Government takes follow-up to AG reports seriously. "Departments will be expected to develop clear action plans and report on their progress in addressing the Auditor General's recommendations. We won't let Auditor General reports be swept under the rug."

Minister Baird added that action is already being taken in a number of areas identified in the report. He highlighted the Government's new approach to expenditure management. The new Expenditure Management System will set higher standards for the quality of information required to make responsible spending decisions. It will also put in place a process for Cabinet to review federal programs to ensure they remain relevant, produce results, and provide value for money. The attached Backgrounder provides more information on the new Expenditure Management System.

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Backgrounder -

Expenditure Management System Renewal

In our ongoing commitment to provide the necessary oversight and accountability for Canadians' hard-earned money, Canada's New Government launched a review of the expenditure management system in Budget 2006 and committed to bring forward a new approach this fall.

The Federal Accountability Act was this Government's first step in enhancing accountability in government. Improving how spending is managed through a new Expenditure Management System is the next step to ensure Canadians' hard-earned tax dollars are well spent.

The Expenditure Management System is the framework for the development and implementation of the Government's spending plans and priorities within the limits established by the Budget. It supports all Government spending decisions.

On September 25, 2006 Canada's New Government signalled its intent to manage spending more tightly and took initial steps to ensure that government spending achieves results, effectively and efficiently. But responsible spending is not a one-time exercise. That is why Canada's New Government has been working to put in place a new approach to ensure that all programs provide value for taxpayers' dollars.

In the Economic and Fiscal Update presented by the Minister of Finance last week, the Government reconfirmed its commitment. Minister Flaherty outlined key directions to strengthen the expenditure management system by improving the way departments manage and evaluate the performance of their programs and the way Cabinet reviews the relevance, funding and cost-effectiveness of existing programs and the rigour with which it examines new funding proposals.

The Auditor General's assessment of the shortcomings of the existing Expenditure Management System echoes the concerns of Canada's New Government. This confirms that the Government is on the right track to ensure the sound stewardship of taxpayers' dollars.

Under the new approach to be put in place in the coming months, departments and agencies will be required to manage their programs with clearly defined objectives.

Financial and non-financial information will be collected across the government to track program performance and report on results, thus providing a solid foundation for decision-making and transparency to Parliament and Canadians.

To assess program performance against the clearly defined objectives, Canada's New Government will also require the evaluation of direct program spending, building on the requirement of the Federal Accountability Act for the evaluation of all grant and contribution programs.

In addition, the Government will implement a process for the Cabinet review of federal programs to ensure they remain relevant, produce results, and provide value for money. Canada's New Government will rigorously and systematically examine new and existing spending, approving only the funding that can be justified and is needed to deliver concrete results. We have higher standards for the quality of information and advice required to support effective decision-making.

This Government is doing business differently. It is entrenching a culture of sound management of spending to deliver programs that achieve results for Canadians and maximize value for money. It is also improving the way that departments report on the results of their programs, and that the Government reports on the outcomes of its spending, government-wide.

Simply put, the new approach to expenditure management is good public administration that will support:

• Managing for Results by establishing clear responsibilities for departments to better define the expected outcomes of new and existing programs;
• Decision-making for Results by ensuring that all new programs are fully and effectively integrated with existing programs by reviewing all spending to ensure efficiency, effectiveness and ongoing value for money; and
• Reporting for Results by improving the quality of departmental and Government-wide reporting to Parliament.

Canada's New Government will be implementing these changes to strengthen the Expenditure Management System over the coming months and will continue to report as progress is made.