CPPM Policy Chapter 2: General and Financial Management
This Core Policy and Procedures Manual chapter clarifies government's general and financial management framework founded on Part 2 of the Financial Administration Act (FAA). The accountabilities of Treasury Board, the Minister of Finance, deputy ministers, executive financial officers, the Comptroller General and central agencies are stated, along with supporting policy. Government's approach to control and risk is updated from a traditional input focus to broader measures of performance and achievement of objectives.
The role of the Financial Management Branch, Office of the Comptroller General, in maintaining the Core Policy and Procedures Manual and developing financial management policy is covered, as are the responsibilities of other central agencies by subject area in an appendix table.
- 2.0 General and Financial Management
- provide central direction for general, financial and administration policies across government
- ensure essential processes are a part of management and financial administration systems
- define the framework of accountability, organizational principles and functional relationships for management and financial functions
- ensure financial management processes and control systems are adequately documented, communicated and understood
The Financial Administration Act, Part 2, establishes the organization, authority and responsibility for ministries and central agencies to carry out government operations and financial function activities.
The management principles for government's operating framework are:
- resource allocation decisions made during the budget process communicate the government's priorities;
- government and ministry goals and objectives must be communicated clearly to the public and staff throughout the hierarchy to ensure that all staff are working toward the same ends;
- assignment of responsibilities to minimize duplication of tasks and to ensure that someone is responsible for completing each function;
- staff who have been assigned responsibilities are given the authority to carry them out. Statutes grant authority to ministers and deputy ministers, and the authority is delegated throughout the organization; and
- individuals are held accountable for their stewardship after objectives have been established, responsibility assigned, authority delegated and resources allocated to individuals.
The key components of the government's financial management framework include:
- legislation, regulations, policies and procedures;
- financial planning and budgetary control;
- systems and internal controls;
- delegation of authorities and responsibilities;
- adherence to standards; and
- holding individuals and organizations accountable for performance.
Government's approach to the broad area of control has evolved with new demands for enhanced governance and has moved beyond traditional financial and general management control. In any organization, the essence of internal control is purpose, commitment, capability and monitoring. This is embodied in a redefined management and comptrollership for government.
Government resources, structures, systems, processes and culture all support management and staff in achieving objectives. Control can assist in monitoring performance by providing reliable information on measures used, which may lead to further management decisions or actions. However, control cannot prevent the taking of decisions that are, in retrospect, flawed. There are inherent limitations even though due care and diligence may have been exercised. Risk assessments are necessary in making choices in the face of uncertainty, because of the possibility of adverse consequences from those choices.
Treasury Board acts as a committee of the Executive Council in matters relating to (Financial Administration Act, Section 4):
- accounting policies and practices;
- government management practices;
- government financial management and control, including expenditures and assets;
- evaluation of government programs as to economy, efficiency and effectiveness;
- government personnel management; and
- other matters referred to it by the Executive Council.
In addition, Treasury Board may make regulations or issue directives respecting:
- the planning, management and reporting of capital expenditures by government and government bodies (Financial Administration Act, Section 4.1); and
- accounting policies and practices for the government reporting entity, and the form and content of documents required to be made public (Budget Transparency and Accountability Act, Section 23).
The Minister of Finance is responsible for:
- the management and administration of the Consolidated Revenue Fund;
- oversight of revenues and expenditures;
- government fiscal policy; and
- any other financial matter not assigned to Treasury Board or to any other person.
The Minister of Finance is also the chair of Treasury Board.
Deputy Ministers, on behalf of their respective ministers, are responsible for:
- supervising the management of the business and affairs of their respective ministries. Specific financial responsibilities are normally delegated, as appropriate, to assistant deputy ministers and to other executive, senior and financial officers. Deputy ministers review and approve matters related to ministry operations, strategic direction and organizational structure to ensure government and the public's best interests are served. Duties include:
- strategic planning, review of service plans and identification of ministry opportunities and challenges;
- approval of annual operating and capital budgets;
- review principal risks of the ministry and plans, systems and processes to manage such risks;
- oversight on the reliability and integrity of internal control and management information systems, and management practices and processes to ensure compliance with applicable policy and legislation;
- monitoring senior executive performance and succession planning; and
- communicating with stakeholders in a timely, accurate and effective manner.
The Comptroller General is responsible for:
- government's financial management and administration policy and procedures;
- policies and procedures for maintaining the central accounts of government;
- preparing the Public Accounts and other financial statements and reports required by Treasury Board or the Minister of Finance;
- direction and coordination of financial management and administration policy and procedures, control and reporting systems; and
- the approval of ministry financial organizational structures.
Treasury Board Staff are responsible for:
- providing the support to Treasury Board necessary to fulfill its statutory responsibilities, excluding those specific duties assigned by statute or delegation to other central agencies such as the Office of the Comptroller General and the BC Public Service Agency.
Central Agencies such as Shared Services BC, the BC Public Service Agency and the Chief Information Office are responsible for:
- coordinating government-wide activities in specific areas under the authority of different statutes and authorities.
- Ministry and agency systems of financial administration must integrate and be fully compatible with government-wide systems to ensure a cohesive framework for overall financial management and control.
- Ministries must establish, maintain and operate systems of financial administration that are consistent with statutes, regulations, policy and directives.
- Deputy ministers must ensure staff that are assigned responsibilities for program delivering, including financial administration, complete their responsibilities in accordance with government policy.
- Deputy ministers must delegate authority for ministry systems of financial administration to an executive financial officer, or to another officer depending on the size, structure and activities of the organization. This officer must be referred to as the chief financial officer and must report to an executive financial officer.
- Executive financial officers are accountable for the overall performance and effectiveness of ministry financial administration systems, and in most cases, have responsibility for personnel, data processing and general administrative services.
- Responsibility centre managers must manage the human, physical and financial resources allocated to them for achieving their program objectives. Ministries must ensure that responsibility centre managers are clearly identified in their organizational structure and approve their signing authorities.
- Financial systems, processes and procedures related to a ministry's system of financial administration are to be clearly defined, documented and communicated to all levels within the ministry.
- Ministries must periodically review their financial administration systems for compliance with policy, best practice improvements and to ensure activities are carried out efficiently and effectively.
- Responsibility centre managers and their subordinate staff are subject to the functional direction provided, on behalf of the deputy minister, by executive and chief financial officers in matters related to the financial administration and control.
- Personnel charged with functional responsibilities must have the requisite qualifications and experience to assure an overall quality of management and financial administration. Professional development and training will be required as necessary to maintain standards.
- Position descriptions for personnel must reflect key functions and activities for the organization, and accurately describe the knowledge, skills and abilities required for the position.
- Deputy ministers, executive financial officers and, where applicable, chief financial officers will be subject to the functional direction and guidance of the Comptroller General in matters related to the administration and control of the government's system of financial administration.
- The Comptroller General must be part of selection processes in appointing chief financial officers.
- The Comptroller General must review any proposals for the establishment of, or revision to, regulations under the Financial Administration Act.
- The Minister of Finance must approve all proposals for the establishment of, or revision to, Treasury Board Regulations prior to submission to Treasury Board (see Information and References, Regulations, Order in Councils and Directives).
- The Financial Management Branch, Office of the Comptroller General, develops, issues and maintains the online Core Policy and Procedures Manual. Review and consultation with Treasury Board Staff, the Deputy Minister Committee, Assistant Deputy Ministers on Corporate Service Committee, Chief Financial Officer Council, and other central agencies, as appropriate, must precede the issuance of new policy.
- Ministries, central agencies and offices sponsoring amendments to policy must circulate the proposed policy change to the Office of the Comptroller General. In conjunction with the Office of the Comptroller General, the ministry, sponsoring central agency or office, is responsible for obtaining approval for the policy from the appropriate agency identified in policy 16.