Costing Centre of Expertise - fmi*igf Centre for Expertise - Scott Davis... · Chief Human...
Transcript of Costing Centre of Expertise - fmi*igf Centre for Expertise - Scott Davis... · Chief Human...
Outline
• Why we exist
• What we do
• How we do it
• Where we are going
Office of the Comptroller General, Financial Management Sector
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Why?
• July 4, 2013, Prime Minister approved several measures to strengthen the Expenditure Management System– Improvements to new spending– Improvement to existing spending
Office of the Comptroller General, Financial Management Sector
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What’s Been Done …
• Costing Centre of Expertise– Built upon capacity within the Office of the
Comptroller-General (3 positions)– Staffing-up since the fall of 2013 (28
positions)– Went-live February 3rd, 2014 (70% staffed)
• Our Niche:– Challenge of new spending initiatives and – Horizontal reviews in conjunction with EMS– External charging & User Fees Act
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New Spending Reviews …
• More stringent Chief Financial Officer attestations – Guideline effective January 1, 2014
• Costing Centre to conduct ‘enhanced due diligence’ review of Cabinet documents of interest
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Capacity Building
• Creation of CCE capacity
• Development of training on costing for the community– Introduction to Costing (CSPS F-132 )– Application of Costing Principles (CSPS F-133 )– Advanced Costing - Under development
• Development of Guidelines– Guide: Costing (update in Fall 2014)– Guide: Costing of Capital Assets (Fall 2014)– Guide: IT Enabled Capital Assets (Fall 2014)– Guide: Recording, Reporting of Internal Services
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High Level View of Secretariat
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Program Sectors Policy Sectors Enabling Functions
Human Resources
Jayne Huntley
Office of the Chief Human Resources Officer
Parliamentary Secretary Dan Albas
President of the Treasury Board
The Honourable Tony Clement
Legal Services
Dora Benbaruk
Secretary of the Treasury Board
Yaprak Baltacıoğlu
Corporate Services
Christine Walker
Chief Information Officer
Corinne Charette
Deputy Chief Information Officer David Adamson
Compensation and Labour Relations
Manon Brassard
Associate Assistant Deputy
Minister Carl Trottier
Strategic Communications and Ministerial Affairs
Monique Lebel-Ducharme
Government Operations
Cécile Cléroux
Pensions and Benefits
Bayla Kolk
Expenditure Management
(Vacant)
A/ Deputy Assistant Secretary Sally Thornton
Priorities and Planning
Roger Scott-Douglas
Social and Cultural
Leslie MacLean
International Affairs, Security and Justice
Iain Stewart
Regulatory Affairs
Michael Vandergrift
Office of the Comptroller General
Comptroller General
Bill Matthews
Acquired Services and Assets
Elisa Mayhew
Financial Management Roger Ermuth
Economic
Taki Sarantakis
Chief Human Resources Officer
Daniel Watson
Governance, Planning and Policy
Ross MacLeod
Associate Secretary
Ron Parker
Internal Audit and Evaluation
Mike Milito
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Financial Management Transformation
Patricia Sauvé-McCuan
Internal Audit
Anthea English
Vision
Decision-makers are provided robust financial information framed by entity-level metrics when asked to consider a funding proposal.
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Meaning …
Costing approach is suitable to
decision
Data is appropriate for decision point
Cost/Time to close any gaps
Benchmark to like projects
Assess overhead costs: stepped
variable
Funding strategy
Evidence Base Due Diligence Comparisons
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Evidence Base …
• Approach to costing suitable for decision point– Guide to Cost Estimating of Capital Assets
• Appropriate data for decision-point– CFO Attestation– Working papers supporting the CFO
attestation
• Closing any gaps– Liaison with the CFO through the Program
Sector of TBSOffice of the Comptroller General, Financial Management Sector
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Enhanced Due Diligence …
• Review of the financial Information presented– Alignment– Assumptions– Comprehensiveness– Methodology– Contingency– Modeling where appropriate
• Chance to exceed budget• Areas of financial risk
• Identify Financial Risks
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Comparison …
• Benchmark Direct Spending to like-projects– Historical projects – Other jurisdictions
• Review Internal Service Costs– Appropriateness– Capacity assessment– Stepped variable costs
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How do we get there …
• Five Year Financial Review– Policy instruments
• Professional Standards (OCG & CFO communities)– Designations– Working papers
• Training– Advanced courses– Working paper development/maintenance
• Modeling• Entity level metrics (aka strategic analytics)
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Five Year Financial Policy Update
• 1 Policy– Concepts relevant to Accounting Officer
• 8 to 10 Directives– User fees and costing principles identified
• Guidelines and Tools– Accessible through web portal– Recommendations, not prescriptive
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Professional Standards
• Lessons Learned from other jurisdictions– UK Capital Asset Project Management
Course– United States General Accounting Office
(GAO)
• International Cost Estimating & Analysis Association (ICEAA)– Cost Estimators Body of Knowledge (CEBoK)
• Government Specific Standards or Affiliate– Reach out to Provincial/Territorial bodiesOffice of the Comptroller General, Financial Management
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Professional Designation
Volume of Cost Estimates
Com
plex
ity o
f Cos
t Est
imat
es
Intermediate Costing Training Required
Professional Designation Required
(ICEAA potentially)
Intermediate Costing Training Required
Basic Understanding of Cost Estimating Techniques
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CFO Attestation Working Papers …
• Support CFO Attestation
• Develop common professional standards for Working Papers to facilitate 3rd party review
• Should be available for the ‘enhanced due diligence’ review of Cabinet documents
• Considering quality assurance of Working Papers by Costing Centre of Expertise outside of Cabinet document process
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Modelling …
• What happens to the Cost Estimate in the face of uncertainty?– Sensitivity analysis is insufficient
• Possible or Probable– Cost– Scope– Schedule
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Entity Level Metrics
• What questions do we need to answer– Can direct program funding be benchmarked– What is an appropriate Internal Service (IS)
Rate– Should IS funding be based on a stepped
variable principle
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No Single Internal Service Rate
HIGHMEDIUMLOW
HIGH
MEDIUM
LOW
Dept’l Operating ReachD
ept’l
Ope
ratin
g Si
ze
and
Com
plex
ity
DND
AANDC,HC, DFO
Comm.of
Lobbying
Policy or Centralized Operational
Entities
Highly Dispersed
Operational Entities
Moderately Dispersed
Operational Entities
PCO, TBS, FIN DFAIT
CRTC,PSC
TC, PWGSC,
ESDC
Small size and relatively low operating
complexity (e.g., most
SDAs)
Relatively large,
complex operating entities
Medium-sized,
reasonably complex entities
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Internal Service Rate Analysis
Departmental IS MAF Assessment
Results
Departmental IS cost ratios in relation to the median cluster
cost ratios
A reasonable proxy for the department’s IS cost
performance (both blended and for each IS
line)
GC IS cost performance in relation to other
governments (illustration purposes
only)
1
2
3
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Lessons Learned to Date
• CFO Organizations need to be engaged sooner– CFO organization should endorse drafts
before they are sent to TBS for review
• TBS Analysts need to be engaged sooner as well
• Answer TBS questions quickly and completely
• Reflect the new perspective into subsequent drafts of the document
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