BCMS Annual Report - 2000-2001

Content

• Introduction
• Highlights of 2000-2001
• Supporting Government-wide Strategic Goals
• Business Line Evolution
• Public Trust
• Key Linkages
• Expertise
• Looking Ahead to 2001-2002
• BCMS Organization and Contacts

Introduction

The Banking and Cash Management Sector (BCMS) is an important part of the Receiver General function carried out by Public Works and Government Services Canada (PWGSC). BCMS is responsible for issuing all Receiver General payments, encompassing most of the payments issued by the federal government, manages cash flows and arranges for the government's Canadian and foreign banking services. BCMS works closely with the program departments of the federal government, the Bank of Canada, Canada Post and financial institutions to deliver these government-wide mission-critical services. In addition, BCMS provides internal support for the Internet and Intranet activities of Government Operational Service (GOS), the GOS office infrastructure and GOS activities in electronic commerce and Government Online.

Highlights of 2000-2001

Standard Payment System

BCMS began a project to make the Standard Payment System (SPS) more accessible and user friendly by putting a number of its functions on the Intranet. The Web technology offers interactive features and a better presentation of information.

Financial Information Strategy

The current year saw full implementation of the Financial Information Strategy (FIS), a government-wide initiative to streamline federal accounting procedures. Through its support services, BCMS helped more than 60 departments and agencies that were not yet FIS compliant become so in time for the target date of April 1, 2001.

Banking contracts

Implementing its new banking strategy with its focus on flexible, innovative contracts for banking arrangements, BCMS awarded contracts for pre-authorized debit (PAD) services using the SPS and for receiving payments via credit or debit cards and implemented the latter service. Another innovative contract was for a financial institution remittance service on behalf of the Department of Fisheries and Oceans.

Supporting Government-wide Strategic Goals

The Business Model

During the past year, GOS updated its business strategy to reflect new challenges and support government-wide goals. The GOS strategy is now organized around four broad themes: business line evolution, expertise, key linkages and public trust. BCMS focused on these four themes in support of the strategic directions of GOS, PWGSC and the federal government overall. The strategy is based on a business model whereby GOS and BCMS increasingly deliver services directly to users at their desktops or other end point (e.g. Canadians' bank accounts). This one-stop, self-service approach is flexible, efficient, cost-effective and client-focused. It is made possible by the integration of systems and services and the creative use of technologies such as the Internet. Services are automated to the extent feasible and BCMS managers and staff provide added value through expert advice, information, training and problem solving.

Direct deposit for Employment Insurance is a good example of this business model in action. Human Resources Development Canada electronically signs the file of payment requisitions and sends it to the SPS. Then the process is fully automated right up to the point where the payees withdraw the money from their bank accounts. PWGSC provides the system, the processing power and the network. It arranges the banking services that make the deposits possible. It provides expert advice on using the system and handling problems but does not become involved in the operation unless something goes wrong.

The SPS

Over the year, BCMS continued to automate and integrate its services according to the user-focused, self-service business model. A major initiative was to put components of the SPS onto the Intranet so that users could more easily make inquiries and receive status updates on payments. The Web front end allows for a more dynamic and logical presentation of information and interactive features such as the "Contact Us" button, providing e-mail access to BCMS staff. This new Web service, and a training package for users, was piloted with Veterans Affairs Canada. Phased roll-out to other departments will begin in 2001-02.

SPS WEB Screen

Business Line Evolution

BCMS also enhanced the SPS with a new online payment function that allows users to requisition single, non-urgent payments online and have them processed through a production centre the next day. (Previously they would have to group the requisition in a file of other requisitions, a more cumbersome and less timely process.By the beginning of the fiscal year, the SPS had been expanded to handle almost all payment functions for the entire government. In 2000-2001, BCMS completed this initiative by automating a number of operational processes supporting the SPS and moving all remaining accounts payable to the system. The streamlining and automation of payment processes through the SPS in recent years has changed the nature of work in the Payment Service Line. There is almost no need for staff to perform purely manual functions. The emphasis is now on maintaining the sophisticated system and supporting departments in its use by providing expertise. In response to this new direction, BCMS has been adjusting the size of its workforce and creating a more consolidated organization of knowledge workers through the Payment Service Delivery Project launched in 1998-99. Under this project, the Payment Service Line continued to reduce regional staff as workload diminished. Of approximately 200 staff made redundant by these developments, the vast majority have found new positions within government. Only about 20 still required placement at the end of the year.

New Program Payments

BCMS began issuing payments through the SPS for a number of new programs that previously had been delivered through the accounts payable system. The change is in line with the FIS and facilitates reporting and reconciliation. The new programs include First Nation payments, Veterans Independence Program, excise tax refunds, excise duty refunds, rebates on tobacco products sold in PEI, the Customs Commercial Refund System (refunds to importers and customs brokers), and reimbursements to duty free shops on rebates paid to visitors.

Banking services

Again in the interest of "one-stop" service, the sector set up banking arrangements to allow for the collection of government payments through pre-authorized debits (PAD), deducted automatically from clients' bank accounts. A contract for the service was awarded and work done to prepare for implementation. Initially the PAD service will apply to payments due the Canada Customs and Revenue Agency (CCRA), but will eventually be expanded to include other departments. An interesting feature of this arrangement is that it will use the SPS to take advantage of existing interfaces between the department, BCMS and financial institutions.

The Sector also awarded new contracts for and implemented banking arrangements that enable the public to pay for government services via credit or debit cards. The new contract involved a switch from one financial institution to another, a major undertaking requiring conversion of equipment, software and interfaces. Another contract enables individuals to pay for Department of Fisheries and Oceans fishing licenses through financial institutions. In tendering for all these contracts, BCMS implemented its new banking strategy that aims to achieve four objectives: best value for money, improved flexibility, fast implementation and the ability to exploit new technology and adapt to change during the life of the contract.

Government Programs - Inflows for Fiscal Year 2000-01

In 2000-01, BCMS began a two-year initiative to replace the Bank Facilities System (BFS), which supports day-to-day cash management operations, with a utility that gives users desktop access to a variety of banking services. The revamped system, called the Government Banking System (GBS), will be available not only internally to BCMS users but also to the Department of Finance, program departments, financial institutions and the Bank of Canada. The goal is to provide a seamless integration of this service with users' systems and to offer the system via the Internet for better user access. In 2000-01, BCMS completed the preliminary analysis and systems architecture for the GBS. The implementation goal is April 2003.

Public Trust

With its responsibility for controlling the flow of money in and out of the Consolidated Revenue Fund, BCMS plays an important role in guarding the public trust.

FIS

Over the year, the Sector continued to support the FIS, a government-wide initiative to improve federal accounting procedures and financial management by adopting full accrual accounting. Part of the process of making departments FIS-compliant has been to establish them on the SPS -- a standard and transparent payment system for all of government. In 2000-2001, BCMS helped all departments that were not yet on the SPS -- more than 60 -- migrate to the system. This involved interface testing to ensure departmental systems are compatible with the SPS and training of and support to departments for FIS implementation. As well, the Sector completed the detailed work of adjusting BCMS cash management and reconciliation processes to comply with the FIS. This provided an opportunity to review and improve a number of processes that had not been updated for some time.

Receiver General cheque

The Receiver General cheque is an important symbol of the federal government and its programs for many Canadians and its security and appearance affects the public trust. In 2000-2001, BCMS introduced a new Receiver General cheque with enhanced security features making it more difficult to counterfeit. A dynamic new design featuring a map of Canada and maple leaves reflects the Canadian sense of identity and reinforces the federal presence. Training packages and information sessions to financial institutions in detecting counterfeits accompanied the launch.

Direct deposit

The messaging that accompanies Government of Canada direct deposit payments in bank books or statements also has the potential to become a very visible symbol of the federal presence. BCMS plans to work with financial institutions to improve standard messaging so that these payments are more readily identified with the federal government. In support of this initiative, the Sector conducted a survey to determine what words, abbreviations or symbols are most effective.

Euro

BCMS prepared for the phasing out of traditional European currencies and the full implementation of the euro in 2002. The Sector opened a euro bank account in Bonn and began issuing payments in that currency.

Large-value payments

BCMS started processing process transfer payments to the provinces using the Large-Value Transfer System through the SPS. The SPS was modified to handle and provide proper controls over these large-value sums. To further enhance security, the Sector also negotiated a Memorandum of Understanding with the Bank of Canada and the Department of Finance, which requisitions the payments, on each party's responsibilities in the payment process.

Key Linkages

BCMS strengthened its linkages with other organizations both in the public and private sector, sharing expertise and innovative solutions to improve services.

Federal-provincial initiatives

In support of stronger federal-provincial cooperation and more efficient government, the Sector continued to issue merged Receiver General payments for related federal and provincial/territorial programs. These arrangements, which take advantage of the Receiver General infrastructure, yield significant savings to the provinces and territories in administration and printing costs. Three new joint payment projects were launched this year, all in conjunction with CCRA. On behalf of provincial partners the CCRA administered, and BCMS arranged payments for: the Harmonized Sales Tax Credit for the Province of Saskatchewan, the Ontario Taxpayer Credit and the Alberta Energy Tax Refund.

Banking colloquium

BCMS once again organized a one-day Banking Colloquium, bringing together major departments, financial institutions and central agencies to discuss government banking needs and supplier services. The Colloquium itself was held in the new fiscal year (April 12, 2001), but all preparatory work, including consultations with industry and government partners on the agenda were completed in the current year. The event focused on the government's strategic directions related to banking services and on E-commerce opportunities. There were also discussions on the challenges of implementing Public Key Infrastructure and on aligning government business requirements with the service offerings of the banking industry. In addition to holding this major event, BCMS staff maintained contacts with the financial community through conferences, information sessions, informal links and participation in industry associations. Employees were active on several working groups of the Canadian Payments Association and with the Ottawa chapter of the Treasury Management Association of Canada.

Technology services

The Sector continued to share expertise and services in information technology with its government partners, supporting the Government Online initiative and electronic commerce.

BCMS has become increasingly involved in Web development for clients in GOS, providing not only content and standards but also sophisticated interactive features. Initiatives in this area included:

- an interactive year-end procedures application for the Central Accounting and Reporting Sector of GOS;

- a financial information database used by the GOS Finance Sector for financial reporting;

- a database for updating client contact information; and

- assistance during the development of an online pension calculator.

The Sector also began conversion of its own Web sites to comply with new Treasury Board "look and feel" standards and continued to update sites with material on conferences, meetings, etc.

Another important service is BCMS' automated test facilities for detecting flaws and improving systems. This year, the Sector expanded its client base to the Central Financial Management Reporting System of the Central Accounting and Reporting Sector. Preliminary work began to identify testing services which could be provided during the development of the GBS.

Using their unique combination of expertise in payments and testing, employees in the Sector took advantage of the sophistication and power of the SPS and the automated test facilities to streamline testing, training, and implementation of new users on the SPS. This innovative solution greatly facilitated the FIS implementation and will continue to provide benefits to all new users.

Expertise

The Sector developed staff expertise to create a specialized work force capable of responding to emerging needs and providing added value to clients. Staff participated in high-level conferences, workshops and industry activities to keep abreast of developments in technology and the business environment. Examples of such events included the Electronic Payments Conference, the Association of Certified Fraud Examiners conference, several Treasury Management Association of Canada seminars and an international software testing conference. (One staff member attained certification as a Certified Software Test Engineer.) Staff also stayed current through trade publications, Web sites and informal contacts. Training was offered in various technology areas such as web development tools.

Four people, all members of visible minorities, joined BCMS on eight-month assignments through the Financial Officer Recruitment and Development (FORD) program. A participant in the Aboriginal Career Assignment Program was hired on a one-year assignment to be project manager for the GBS. Among other development opportunities, the assignees received mentoring from high-ranking BCMS staff. These initiatives brought new energy and ideas to the Sector, gave promising people a chance to broaden their experience and helped BCMS in its efforts to create a work force representative of Canadian diversity. They also helped BCMS management prepare for the new generation of employees entering the workforce.

A number of BCMS staff were given acting positions at higher levels than they normally hold or in other areas, thus developing new skills. One person was hired on the Youth Internship Program. The Sector continued to provide focused training to staff in the National Capital Area affected by the consolidation of BCMS payment services.

Looking Ahead to 2001-2002

Business Line Evolution

The Sector will tender for a single contract providing for all its foreign banking services requirements through a lead service provider, a more efficient way of doing business than through multiple contracts. With such a service, BCMS will be able to offer direct deposits to recipients outside Canada and the United States and to expand electronic payments and revenue collection around the world.

Receiver General Foreign Payments

Tendering will also proceed for a Financial Institution Remittance Service that enables departments to offer clients alternative payment arrangements (e.g. through PC banking, telebanking, over the counter at a financial institution, etc.). This will also enable program departments to achieve internal administrative savings by outsourcing some or all of their receivable activities. Again, BCMS will seek service delivery through one lead service provider.

In support of Government Online initiatives involving the movement of funds, the Sector will conduct information sessions to make departments aware of what kinds of electronic transactions are currently possible and how they work. BCMS will help departments set up the interfaces they need to receive payments through the Web.

Implementation work on the PAD initiative will be completed and this method of collecting payments will be launched The first application will be tax installment payments due to CCRA.

The new Government Banking System will be further developed.

Work will continue to make more SPS functions available on the Web, in particular, the production of priority payments.

The Sector will continue to expand automated testing services to new clients, expand its services in Web development and strengthen the skills of staff involved in Web applications.

Public Trust

The sector will continue to maintain public confidence in Government of Canada cheques by monitoring the effectiveness of security features and enhancing them as needed.

Key Linkages

The Sector will continue to respond to requests for new federal-provincial payment and remittance products.

BCMS will support a government-wide initiative to create an Electronic Supply Chain, whereby all aspects of procurement, from tendering to purchasing to payment, are done electronically.

Expertise

BCMS will participate with the rest of GOS in a cross-sector initiative to recruit staff at the AS2 category. Through this initiative GOS sectors will combine resources to recruit, screen, train and provide assignments for the new staff. Next year, BCMS will also participate in the Junior Officer Development program.

BCMS Organization

Director General - Carol Armatage

(819) 956-2942;carol.armatage@pwgsc.gc.ca

BCMS is organized into the following directorates and divisions:

Payment Products and Services Directorate - Cheryl Ford, Director

(819) 956-2738;cheryl.ford@pwgsc.gc.ca

Responsible for Government of Canada as well as joint federal-provincial payments -- about 200 million payments a year -- including those that many Canadians rely on for income security.

Specifically, the Payment Products and Services Directorate:

• Manages the issue of Receiver General payments made by cheque, direct deposit and EDI. Provides payment services and advice to federal departments and agencies and to a number of provincial and territorial governments.
• Manages the printing of non-payment items (e.g., tax information slips) on behalf of departments.

Cash Management Operations Division - Michel Bonenfant, Manager

(819) 956-2919;michel.bonenfant@pwgsc.gc.ca

Manages the flow of federal money into and out of the Consolidated Revenue Fund, tracking receipts, settling for payments, transferring funds for investment and preparing accounting input.

Specifically, Cash Management Operations:

• Establishes bank accounts for the purpose of accepting payments made to the Receiver General via federal departments and agencies.
• Performs reconciliation of daily deposit data, transmits the information to departments and records the data in the accounting system.
• Reimburses financial institutions through the Bank of Canada for the redemption value of federal government payments.
• Transfers the federal government's excess cash balances for investment in term deposits.
• Operates foreign bank accounts for federal payments in foreign currencies.

Banking Arrangements Directorate - Pierre Gingras, Director

(819) 956-2945; pierre.gingras@pwgsc.gc.ca

Deals with financial institutions to set up the banking services required by the Receiver General and client departments.

Specifically, Banking Arrangements:

• Negotiates or tenders for banking services from financial institutions and implements these arrangements.
• Maintains the "float model," a procedure for calculating the cost of the flow of money between the government and financial institutions.
• Calculates the compensation due financial institutions for their services.

• Provides an information management system (the Bank Facilities System), which supports banking operations carried out in the sector and banking arrangements established between the Receiver General and financial institutions.

Business Infrastructure Support Division - Robert Baggs, Manager

(819) 956-6576; robert.baggs@pwgsc.gc.ca

Provides technical advice and support to GOS on information technology matters.

Specifically, Business Infrastructure Support:

• Assists clients test their applications using automated test facilities to detect flaws early and improve functionality.
• Works with the Government Telecommunications and Informatics Service (GTIS) to ensure that desktop software used by GOS is reliable and meets its requirements.
• Provides technical support for developing and managing the Branch Web sites. Helps launch new versions of these sites. Ensures that Treasury Board and PWGSC standards are adhered to in the presentation of material on the Web sites.

Payment Standards Division - Gerry Matthews, Manager

(819) 956-9328; gerry.matthews@pwgsc.gc.ca

Monitors, sets and implements the standards used in producing all Government of Canada payments, whether these are made by cheque or EDI. The Division is also responsible for controlling the cheque stock inventory for all Receiver General payments.

Specifically, Payment Standards:

• Sets and implements standards used for Receiver General cheques and envelopes, electronic payments, and departmental bank accounts.
• Procures cheque stock and envelopes for Receiver General cheques. Monitors inventory and ensures that production centres have the required stock.
• Works to ensure the security of Receiver General cheques by monitoring security issues, conducting quarterly reviews on security, coordinating the Receiver General response to thefts and counterfeiting, and communicating with financial institutions on security concerns.
• Manages the GOS Electronic Commerce and Government Online Secretariat.