Key Information for the Government’s Progress Reports
to Assist Parliamentary Monitoring and Oversight of Budget 2009
FOCUS QUESTION
If
quarterly reports are to be a reality in the future
then
what mechanisms must be in place in order to make timely reporting plausible?
considerations
given the present position and the patronage of the parliamentary budget officer by the government in this 40th parliament of canada, i take
kevin page's discussion paper seriously, identifying in it one potential template for a national discussion-cum-exercise, which given our times
aims at a style of modern reporting to parliament that is enabled by a commitment to broad analysis and the employment of novel, digital
tools.
early on, the paper unexpectedly succeeds in laying out the basic framework for a model of popular education concerning parliamentary and
budgetary processes. it later details the needs and means for a thorough manner of efficient budget reporting. but early on, the framework
outlined supports instruction and discussion about parliamentary matters, be they re-occurring, annual, or novel. it asks: how can we bring
people up to speed? people includes parliamentarians but also everyday citizens and everyone in between.
the type of effort the pbo hopes to co-ordinate as outlined in the second half of his discussion paper is only achievable upon the success of a
concentrated national dialogue, which builds implicitly upon the pbo's explanatory text contained in the first half of his discussion paper. this
order is necessary because the pbo requires the informed and voluntary reporting by mid-level managers and actors, who at present have no
avenue of submission. to clarify, input is needed from mid-levellers, not rationalized by the need to include “all voices,” but rather by the
contemporary need for timely (read: near-instant) reporting, which in every assessment implies the necessary adoption of novel methods and
approaches. just as one now visits wikipedia expecting the latest, fullest updates on any given topic, all researchers, students, and surveyors
each have their own criteria for scanning and verifying the validity of the current information. likewise with any resource that allows for trusted
citizen participation. only by forming rings of contribution can an initiative guarantee dependability and legitimacy of its various aspects.
in my interpretation, the role of the pbo is to educate. and in my opinion, a supreme-level education befitting of our parliamentarians is the
same level due to our intellectual citizens. that is unless a group wants to claim that mps are temporarily in possession of the highest
intellects. since the case is otherwise there is a shared interest between the citizenry and our parliament in fostering reporting excellence –
we all reasonably expect to be as informed as utterly possible pursuant to public monies.
--
thoughts
The MacIntosh Leopard Operating System's built-in dictionary defined governance as "the action or manner of governing." A start. It said,
"see GOVERN." I saw it. And the note was attached: from the latin 'gubernare', and further, from the Greek 'kubernan' - to steer. Plato
employs 'kubernan' in Book VI of his Republic, where he compares leading a city to the steering of a ship. Plato is concerned with the
manner of steering, not with they who steer. He asks of the reader - how will the true pilot be regarded when, unlike the egoists who seek to
impose direction, he takes his cues from "the year and seasons and sky and stars and winds, and whatever else belongs to his art." In
modern terms, we must act in full knowledge of the prevailing conditions. It is now clear to me that full (updated) knowledge of our state can
only be gathered through voluntary accounting of lived conditions, as subjectively experienced. No official census will achieve this necessary
aim. Allowing for unprecedented individual contribution to the reporting of our 'state of affairs' will gift the state with agility and bestow the
individual with a sense of relevance. But only if we meet certain conditions. If modern governance involves mass participation, then in what
way does it remain comprehensible and relevant to the average local? We might do better to refer to these folks as 'regionals'. By framing
national developments within regional contexts, we permit those reporting as well as those assessing to view things in their particular way
whilst we gather a federation of insights.
---
KEY POINTS
* quarterly Progress Reports
* increased scrutiny presents
opportunity to improve
budgetary reporting and
oversight practices for Parliament
* PBO recommends:
est. of an appropriate provisional reporting framework
to be done prior to release of the Gov.'s reports
ensuring appropriate information collected up-front
w understanding reports can be improved over time as
information accumulates and the situation evolves
* note provides PBO view on the KEY INFORMATION REQUIREMENTS for
the content of these reports
central goal of which of which should be to provide Parliament with:
ACCURATE TIMELY and EASILY UNDERSTOOD information that details:
1) recent economic and fiscal developments and prospects (20*)
2) the implementation and effectiveness of budget measures (80*)
3) and the budget results in light of its guiding principles
FUTURE PROGRESS REPORTS
may include
* evaluation of economic developments relative to Budget 2009 assumptions
* assessment of economic risks that uses an updated survey of private sector forecasts
and, if applicable, the government's own forecast
* summary of recent fiscal results and analysis of fiscal risks
estimate of government's structural budget balance
statement of its fiscal targets
* clear IMPLEMENTATION & OVERSIGHT FRAMEWORK that:
describes for each budget measure:
the spending authority and delivery mechanism
implementation indicators and progress benchmarks
expected output and/or outcome indicators
(see included note)
* discussion of progress relative to three guiding principles
timely, targeted, and temporary
INTRO
Five Key Objectives
1 improve access to financing and strengthen the financial system
2 help Canadians and stimulate spending
3 stimulate housing construction
4 build infrastructure
5 support business and communities
High-Profile Economic Goals
* create or maintain (189,000) jobs
* increase aggregate economic activity
raising GDP by 1.9% by the end of 2010
BDGT 09 entails creation of several new programs and agencies
what are the programs? agencies? where do they fit in?
architecture of programs and agencies?
POINT: "on-going monitoring of the plan's implementation is needed to ensure it uses taxpayer
dollars effectively and can reallocate resourcing among priorities, if needed as the
situation evolves.
QRTRLY PRGRSS RPRTS
* increased scrutiny...paves the way for improved budgetary reporting and oversight practices
* accomplishing this task will not be easy
* expectations should be tempered
* these developments represent
an important opportunity for:
Parliament, the Government, and the public service to
improve budget planning, reporting and implementation for
this budget and future budgets to come
PRPSD PRGRSS RPRTS expected to:
* update the economic and fiscal outlooks and
the budget's implementation and impacts
GENERAL CONTEXT
Basic Financial Cycle
* AUTUMN: Economic & Fiscal Update presented to HOC Finance Committee
followed by consultation between HOC FC & Dept. of Finance
* budget gen. presented in February,
* followed by introduction of Bdgt Implementation Act (BIA)
ensuring appropriate legislative authorities are in place to move forward
BIA generally authorizes year-end spending, but in exceptional cases can authorize
spending for forthcoming year which would otherwise receive funding approval later
* Main Estimates contains planned expenditures for upcoming fiscal year (April 1-March 31)
typically does not include new spending from most-recently-announced budget
* ME must be tabled by March 1st and approved by June 23
corresponding appropriation legislation approved at the same time
New spending measures from the budget are normally contained in the
Supplementary Estimates
which are typically not passed until December
but can be presented to Parliament much earlier
the Gov. intends early SE
typically two in a year
Basic Roles of Legislature and Executive & their Information Requirements
* In Westminster-style systems, such as Canada's, the legislative branch (Parliament) is
responsible for management of public funds
* Parliament's responsibility articulated in two key conventions
1) that all revenues are collected into a single, consolidated revenue fund (CRF)
2) that any disbursements from this fund require Parliament's authority
* Executive Branch (i.e. Ministers with support of the public service)
which draws its authority from Parliament, to which it is accountable
is responsible for
establishing priorities
proposing tax and spending measures
managing its programs once they have received Parliamentary approval
In practical terms, this means:
in forwarding proposals and overseeing their implementation
the Executive must
perform due diligence
track relevant information and
identify for each initiative tangible, measurable goals and
key operational risks
When Parliament is
deciding whether to approve or reject proposals that draw funds from the CRF
Parliament must understand
the Gov.'s due diligence framework
have a reasonable assurance it is being followed
and focus particular attention on apparent exceptions
To have such assurance, Parliament requires
Timely and Accurate Information from Government
in order to
understand primary assumptions underpinning the spending
estimates for each initiative, including such things as:
implementation timelines
partnerships and
staffing requirements
In Parliament's oversight role, it also needs to be provided with info detailing:
any changes to the assumptions that justif ied the initial spending estimates; and
any identif ied risks that have been realized, or new, previously un-identif ied risks
This information flow is crucial to ensure all stakeholders are using common data and assumptions,
and more importantly, to help Parliament hold the Government to account for its spending.
COMMON CHALLENGES TO EFFECTIVE REPORTING
• Mis-alignment of financial and performance information across budget, estimates and
public accounts due to issues such as timing and accounting conventions (e.g., cash vs.
accrual-based reporting at different stages in the process);
• Information provided to legislators may be aggregated at a high level. In Canada’s case,
for example, parliamentary spending authority is provided at the departmental vote-level,
whereas in some other jurisdictions it is granted at the program, output or outcome level;
• Performance indicators can be limited at the budget implementation or appropriations
stage. In many parliaments, the performance review is often undertaken ex-post via the
audit process for public accounts rather than as part of a due diligence process prior to the
granting of spending authority; and
• The linkage between budget resources, program outputs and program outcomes is not
always as clear in practice as it may appear in theory.
ESSENTIAL COMPONENTS of
Gov't of Can BDGT 09 Reports to Parliament
Difficult because
situation continually evolving
takes time to implement announced budget measures and
establish their ultimate results
Parliament may wish to establish
an appropriate provisional reporting framework
prior to the release of the Government's regular reports
A) ECONOMIC and FISCAL information
Economic
• A detailed evaluation of recent economic developments, regionally, nationally, and abroad,
with an assessment of short-term and medium-term economic risks.
• An updated Department of Finance survey of private sector forecasters that incorporates
the results of the most recent quarter from the National Income and Expenditure
Accounts and Labour Force Survey employment data.
• Summary tables that report the differences between realized economic results and Budget
2009 assumptions for key survey variables on a quarterly and annual basis, see Annex A
Tables A1 and A2 for specific examples.
• Finally, it would also be useful if the Government provides its view, if it differs from the
private sector survey results, for key variables, including: Canadian real GDP growth,
nominal GDP growth and employment for the current and upcoming quarters. Note that
the GDP and employment results are particularly important to update the progress
towards the Government’s Economic Action Plan key economic stimulus goals
(also see the Budget Principle 2: Targeted Measures, in section 3.C below).
FISCAL INFORMATION
* the aggregate economic variables that matter most for the government finances are included
in the private sector surveys
Potentially useful fiscal information includes:
• A summary of recent fiscal results, including deviations relative to Budget expectations.
• A detailed discussion of fiscal risks for the Government relative to Budget 2009
assumptions. If the economic survey were to change dramatically relative to budget
assumptions, it may be necessary to update the five-year fiscal forecast. Fiscal risks could
also be analyzed with scenario analysis or ‘stress testing’ the fiscal outlook, by quantifying
what the fiscal track would be if, say, the economic slowdown were longer and/or more
protracted than assumed in the budget.
• An estimate of the Government’s cyclically-adjusted (i.e., ‘structural’) budget balance
would help inform discussions of the longer-term sustainability of the Budget 2009, (also
see the Budget Principle 3: Temporary Measures in section 3.C below).
• Finally, the Government could clarify its current fiscal target(s).
B. OVERSIGHT AND IMPLEMENTATION FRAMEWORK
* tracking implementation of Budget measures
* assessing their performance using output and outcome indicators (they are?)
[Link]/pbo-dpb
* Template requests key information, including:
the initial legislative requirement of each program
details on implementation methods and measurement
expected output and outcomes
measured progress towards achieving them
Where possible, to limit administrative burden for government departments, we suggest:
data that are typically contained in
Departmental Performance Reports
Reports on Plans and Priorities or
accompany a typical treasury board submission
Suggested information for reporting in the current template includes:
Type of Measure (Tax or Expenditure)
Tax measures can generally be implemented quickly through the Budget Implementation Act.
Government expenditures, either operating expenses or transfer payments, may require additional
supply and may be required to conform to additional government policies before implementation.
Legislative Requirements (Budget Implementation Act, Main Estimates or Supplementary
Estimates)
Some budget measures require no legislative changes or approvals or will be implemented
immediately upon royal assent of the Budget Implementation Act. Other measures require
additional supply that can only be approved by Parliament through an appropriations act which
typically requires a longer process.
New Initiative and/or Organization
Creating new programs requires separate Treasury Board approvals on program details as well as
time to develop and implement new organizational structures, potentially slowing program delivery
relative to existing programs.
Delivery (Direct, Partners or Third Party)
Measures can either be delivered directly; with partners, such as other levels of government; or
through third parties such as industry associations, non-profit organizations or foundations.
Measures may be at risk of delay if they require multi-jurisdictional agreements, transfers to arms-
length organizations, or delivery through third parties.
Implementation Indicators and Benchmarks
Tangible, objective indicators of implementation progress should be identified for each of the
relevant budget initiatives on a quarterly basis. Each indicator, of course, will differ depending on
the nature of the program. However, these examples illustrate potential indicators for these
particular programs:
• Insured Mortgage Purchase Program: the value of purchased mortgage pools;
• EI training program: total funding provided to each province and territory; and
• Infrastructure Stimulus Fund: the number and value of applications received and approved
and the federal funding provided.
Expected Output or Outcomes and Objectives and Impact Measurement Indicators
The final two categories are among the most important, listing the expected outputs and outcomes
(generally as identified in Budget 2009) and indicators of progress towards achieving these
objectives. These indicators should also be tangible and objective, for example:
• EI Training Programs: increase in the EI training program participants by province; and
• Infrastructure Stimulus Fund: the number and total value of work completed/underway and
the estimated direct and indirect effects on employment and output.
Also
where programs are being extended
or additional funds are being allocated to similar programs
information on implementation and outcomes achieved should also highlight
the performance of the underlying/existing programs, to enable Parliamentarians to
better assess the impact of the new funding
Note
for programs that are part of a suite of initiatives, individual program indicators may
not be as relevant
Example
Improving Access to Financing and Strengthening Canada's Financial System
it may be reasonable for the government to assess outcomes through
market-wide or broader economic data
C. ASSESSING BUDGET 2009 RELATIVE TO GUIDING PRINCIPLEs - THE 3 Ts
How to assess the budget based on - targeted, timely, temporary ?
120 days to be most effective
therefore, May 27th - full accounting of all measures underway
1.9% up in GDP - 190,000 jobs (Create or Maintain)
Annex 1 of Budget 2009 reports
the difference between GDP and employment with and without stimulus
?: can they provide no-stimulus baseline/benchmark for GDP/EMP
Phase out the budget
dealing with projections, structural budget balances, trajetory
CONCLUSION
this presents an opportunity to
improve, not simply frequency, but quality of reporting to Parliament here forward
again,
information quantity not a guarantee of better reporting
what is needed is
information that is
accurate timely easily understood
that details
recent economic and fiscal developments and prospects
the implementation and effectiveness of budget measures
budget's results in light of guiding principles