Rescinded [2017-04-01] - Directive on the Stewardship of Financial Management Systems

Ensures that the departmental financial and materiel management system, as well as the financial information input and output from program systems and central systems, provides accurate, reliable, accessible and timely financial information.
Date modified: 2012-04-01

This page has been archived on the Web

Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.

More information

Topic:

Archives

This directive is replaced by:

This directive replaces:

View all inactive instruments
Print-friendly XML

1. Effective date

1.1 This directive takes effect on January 1, 2010.

1.2 Requirements outlined in Section 6 of this directive will be phased in over a period of three years commencing January 1, 2010, according to a schedule to be determined by the Comptroller General.

2. Application

2.1 This directive applies to departments as defined in section 2 of the Financial Administration Act. Throughout this directive, the terms "government-wide" and "across government" refer to these organizations.

2.2 Section 6.5.2 and those portions of section 7.2 that provide for the Comptroller General to monitor compliance with this policy within departments and/or request departments take corrective action, do not apply with respect to the Office of the Auditor General, the Office of the Privacy Commissioner, the Office of the Information Commissioner, the Office of the Chief Electoral Officer, the Office of the Commissioner of Lobbying, the Office of the Commissioner of Official Languages and the Office of the Public Sector Integrity Commissioner. The deputy heads of these organizations are solely responsible for monitoring and ensuring compliance with this policy within their organizations, as well as for responding to cases of non-compliance in accordance with any Treasury Board instruments that address the management of compliance.

3. Context

3.1 Financial management systems (FMS) are essential to the management of government operations. These systems are designed to ensure strong financial management and internal controls over public resources, reinforce the principles of probity and prudence, and contribute to better decision making, lower costs and improved service delivery.These systems process and collect data on a wide range of government transactions and generate decision-making information in support of programs and policies across government.

3.2 Standardizing and streamlining FMS, business processes and data across government provide significant direct and indirect benefits relative to the quality of financial management in the Government of Canada. Standardization, by establishing a common set of rules in place of many, reduces the plethora of different systems, business processes and data that undermine the quality and cost of decision-making information. As government-wide standardization is increased, efficiency, integrity and interoperability are improved.

3.3 To ensure a higher degree of standardization, the Government of Canada continues to promote and leverage the expertise, capabilities and best practices of the DFMS cluster groups to facilitate the efficient and effective implementation of FMS requirements. The DFMS cluster groups originated from the Shared Systems Initiative (SSI), which was established to reduce the number of departmental financial, human resource, materiel management and other administrative systems in use across government and to achieve savings and efficiencies from the adoption of common systems configurations, common financial management business processes and common enterprise data. Departmental cluster group representatives and the chairs of the cluster group management boards are important stakeholders who actively contribute to the objectives of this directive.

3.4 Notwithstanding that the deputy head is ultimately responsible for all aspects of financial management systems (FMS) within their department, the stakeholder responsibilities for these systems are department specific, affecting in various capacities, the chief financial officer (CFO), chief information officer (CIO), vice president (VP), assistant deputy minister (ADM), or director . These responsibilities pertain to departmental financial and materiel management systems (DFMS), departmental program systems and central systems, all of which encompass business processes, procedures, controls, common enterprise data and software applications. In all cases, the CFO is ultimately responsible for the information contained in, and management of, DMFS.

3.5 This directive supports the objectives of the Policy on the Stewardship of Financial Management Systems by setting out the responsibilities of CFOs and managers concerning FMS.

3.6 The Office of the Comptroller General (OCG) provides government-wide functional direction for the stewardship of FMS and assists in the evaluation and approval of strategic investment plans for FMS.

3.7 This directive is to be read in conjunction with the Policy on Financial Management Governance and the Policy on Management of Information Technology.

3.8 This directive is issued under the authority of section 7 of the Financial Administration Act.

3.9 The Treasury Board has delegated authority to the President of the Treasury Board to issue, amend or rescind this directive and standards providing specific instructions on common enterprise data, common financial management business processes and systems configuration, in support of the Policy on the Stewardship of Financial Management Systems, and to approve any exceptions to such directives and subordinate policy instruments.

4. Definitions

Definitions are included in the Appendix.

5. Directive statement

5.1 Objective

The objective of this directive is to ensure that DFMS, as well as the financial information input and output from program systems and central systems, provide accurate, reliable, accessible and timely financial information.

5.2 Expected results

The expected results of this directive are the following:

5.2.1 Improved quality of financial information at a departmental and government-wide level;

5.2.2 Enhanced governance of FMS across government;

5.2.3 Improved service delivery based on interoperability and effective support of financial management operations;

5.2.4 Decreased cost of ownership of FMS across government;

5.2.5 Improved enterprise-wide management and operations of FMS across government; and

5.2.6 Increased efficiencies at a departmental and government-wide level through economies of scale from government-wide licensing resulting from standard configurations, common enterprise data and common financial management business processes across departments.

6. Directive requirements

6.1 Chief Financial Officer

The CFO is responsible for the following:

6.1.1 Ensuring sound governance and appropriate departmental resources are available to support standardized and interoperable FMS, common financial management business processes and common enterprise data;

6.1.2 Maintaining strategic, operational and investment plans for the departmental financial and materiel management systems (DFMS);

6.1.3 Implementing DFMS cluster group system configurations and OCG-endorsed system functionality as they are established or made available from time to time;

6.1.4 Ensuring that the department is a member of all applicable DFMS cluster groups that are representative of their DFMS applications. If not a member, or if the DFMS cluster group system configuration or the endorsed systems functionality is not appropriate to the business needs of the department, the CFO will consult the OCG; and

6.1.5 Endorsing the DFMS cluster group annual plan through the assigned departmental representative of the DFMS cluster group.

6.2 Managers responsible for a program system that collects data required by FMS are responsible for the following:

  • Ensuring, in collaboration with the CFO, that standardized common financial management business processes and data are incorporated in all FMS under their responsibility.

6.3 Managers responsible for a central system or common or shared services are responsible for the following:

6.3.1 Specifying all new information or operational requirements that affect FMS at a government-wide level, within the time frame agreed on with DFMS cluster groups, and collaborating with the OCG and the DFMS cluster groups to develop an appropriate systems change management process and an implementation plan; and

6.3.2 Collaborating with the OCG to align, to the greatest extent possible, FMS for which they are responsible with the government-wide direction.

6.4 DFMS cluster groups

6.4.1 Chair of the DFMS cluster group management board

The chair of the DFMS cluster group management board is responsible for evolving the cluster configuration in alignment with the criteria established by the OCG for cluster configurations.

6.5 Monitoring and reporting

6.5.1 Chief Financial Officers

CFOs support deputy heads in the implementation and monitoring of this directive in their departments. They bring to the deputy head's attention areas of difficulty, gaps or compliance issues and develop proposals to ensure adequate monitoring and compliance.

6.5.2 TBS (Office of the Comptroller General)

The Comptroller General is responsible for the following:

6.5.2.1 Monitoring compliance with this directive in a variety of ways including, but not limited to, assessments under the Management Accountability Framework, examinations of Treasury Board submissions, results of audits and evaluations and reports and special studies by Parliament or its agents;

6.5.2.2 Recommending that corrective action be taken when a department has not complied with the requirements of this directive; and

6.5.2.3 Establishing a framework for the review of this directive and its supporting policy instruments and ensuring that a review is initiated within five years of the effective date of this directive.

7. Consequences

7.1 The CFO develops proposals on how to deal with instances of non-compliance and, when appropriate, implement remedial measures identified by the deputy head to ensure compliance.

7.2 If the Comptroller General determines that a department may not have complied with any requirements of this directive, the Comptroller General may request that the CFO:

7.2.1 Conduct an audit or review to assess whether requirements of this directive have been met. The cost of such an audit or review will be paid from the department's reference level; or

7.2.2 Take corrective action and report back on the results achieved.

7.3 If the OCG determines that a department has complied with the requirements of this directive, the CG may reduce the number or scope of such audits or reviews.

8. Roles and responsibilities of government organizations

This section identifies organizations that have a role in support of this directive. In and of itself, this section does not confer an authority.

8.1 Treasury Board Secretariat

The Treasury Board Secretariat (TBS) is responsible for supporting the Treasury Board in the general management of the Government of Canada and the initiatives, programs and activities that cut across all departments and organizational entities as reported in the Main Estimates. TBS is also responsible for the comptrollership function of the Government of Canada.

8.1.1 Within the area of FMS, the OCG provides functional leadership in determining business process and data requirements by:

  1. Supporting Treasury Board in issuing appropriate policy instruments as and when required to define government-wide data and standardized common financial management business processes;
  2. Ensuring sound governance of FMS by establishing government-wide governing structures as required and by designating representatives from the OCG as members within the DFMS cluster group governance structures; and
  3. Reviewing plans for investments for FMS and establishing criteria, and approving DFMS cluster group annual plans.

8.1.2 Other TBS organizations with significant FMS-related responsibilities include the following:

  1. The Chief Information Officer Branch (CIOB), whichprovides functional leadership on the Information Management and Information Technology (IM/IT) support needed to meet OCG and other policy centre requirements.
  2. The Government Operations Sector (GOS), whichsupports Treasury Board with policy responsibilities for governance and Crown corporations as well as assets and acquired services, in addition to program sector responsibilities for departments, agencies, Crown corporations, agents of Parliament and parliamentary entities. GOS, along with other sectors within TBS, brings all transformative initiatives to Treasury Board and continues to play a significant role in the implementation of the Federal Accountability Act and Action Plan.
  3. The Expenditure Management Sector (EMS), which provides a central focus for the functions that support and strengthen the TBS's role in the government's expenditure management system with the collection and reporting of aggregate information held in financial management systems (FMS) on program expenditures in order to assess program outcomes through the Program Alignment Architecture (PAA).

8.2 Department of Finance

The Department of Finance, in collaboration with the Canada Revenue Agency and the Receiver General for Canada, is a key stakeholder in the collection and reporting of aggregate information in financial management systems (FMS) on economic, fiscal and taxation data and in the resulting issuance of the financial statements in the Government of Canada.

8.3 Department of Public Works and Government Services

The mandate of the Department of Public Works and Government Services is to be a common service agency for the Government of Canada's various departments, agencies and boards.

8.3.1 Receiver General (RG)—The RG is responsible for the operations of the federal treasury, including issuing payments and collecting revenue for all government departments, maintaining the Accounts of Canada, preparing the Public Accounts and producing the government's Monthly Statement of Financial Operations. These activities ensure the government's financial stability and public confidence through accurate and timely issuance of payments to Canadians and reporting of the government's financial activities. The RG is also responsible for the collection and reporting of aggregate information in FMS on the financial transactions of the Government of Canada.

8.3.2 Common and Shared Services—With respect to the shared services agenda, PWGSC delivers common, central and shared services to federal departments in support of government operations and manages major shared service initiatives. PWGSC is a key stakeholder in the collection and reporting of financial data related to travel, assets, real property and the procurement of goods and services from financial management systems (FMS).

8.4 Statistics Canada

Statistics Canada is a key stakeholder in the collection and reporting of aggregate information from central systems at the RG by following the TBS-approved data structure and the reporting of information on Government of Canada expenditures so that the effect on the Canadian economy can be assessed.

9. Applicable references

10. Enquiries

Enquiries about this directive should be directed to your department's headquarters. For interpretation of this directive, departmental headquarters should contact

Financial Systems Authority
Financial Management Sector
Office of the Comptroller General of Canada
Treasury Board Secretariat
300 Laurier Avenue West
Ottawa ON K1A 0R5

Email: fin-www@tbs-sct.gc.ca
Telephone: 613-957-7233


Appendix—Definitions

Business process (Processus opérationnel):

Is a collection of interrelated tasks and key controls operating together to achieve a desired result. Business processes shall include, but are not limited to, the financial management activities of planning, budgeting, accounting, reporting, financial control, oversight, analysis, decision-making support and advice.

Central systems (Systèmes centraux):

For the purposes of this directive, are financial management systems (FMS) used by the central agencies and the Receiver General for Canada to provide selected services that are required to ensure the delivery of fundamental management services to all departments and agencies; these include the Receiver General's central suite of systems, as well as other TBS systems for budgeting, expenditure management and reporting.

Departmental financial and materiel management system (DFMS) (Système ministériel de gestion des finances et du materiel (SMGFM)):

Is a financial management system (FMS) whose primary objectives are to demonstrate compliance by the government with the financial authorities granted by Parliament, comply with the government's accounting policies, inform the public through departmental financial statements, provide financial and materiel information for management and control, provide information for economic analysis and policy formulation, meet central agency reporting requirements and provide a basis for audit.

Financial and materiel management systems (DFMS) Cluster Group (Regroupement d'usagers du système de gestion des finances et du materiel - SMGFM)):

Is a collective of departments working together to promote and implement business-driven and standardized solutions for interoperable financial and materiel management in the Government of Canada.

DFMS cluster configuration (Configuration du regroupement d'usagers du SMGFM):

Are specific system settings or any custom programming delivered by the cluster to departments satisfying generic business requirements.

Financial event(Activité financière):

Is any activity having financial consequences for the Government of Canada.

Financial information (Information financière):

Is any data or information and knowledge used in understanding, managing and reporting on the monetary aspects of any activity. Financial information is not limited to accounting data but includes aggregated information and knowledge developed and used to understand, manage and report on the monetary aspects of any activity.

Financial management systems (FMS) (Systèmes de gestion financière (SGF)):

Is any combination of business processes (end-to-end, automated and manual), procedures, controls, data and software applications, all of which are categorized as either a departmental financial and materiel management systems (DFMS), or program system or central systems that produces financial information and related non-financial information.

Financial management systems are used for any of the following:

  • Collecting, processing, maintaining, transmitting and reporting data about financial events and to maintain accountability for the related assets, liabilities and equity;
  • Supporting financial management, planning, budgeting and decision-making activities;
  • Accumulating and reporting cost information; or
  • Supporting the preparation of internal and external reports, such as departmental financial statements and input to the Public Accounts of Canada.
Program systems (Systèmes de programme):

For the purposes of this directive, are financial management systems (FMS) that support programs and provide operational functionality by feeding into or taking information from departmental financial and materiel management systems (DFMS) or central financial management systems that report or provide financial information significant to the financial management and/or the general management of departments or agencies on a consolidated or non-consolidated basis.

Related non-financial data (Données non financières connexes):

Are data that have no direct financial connotation but rather quantitative or statistical facts about a business entity or financial event. They are composed of individual elements that must be collected and classified to derive related non-financial information. Examples of non-financial data include the classification of employees and the type of training.

Related non-financial information (Information non financière connexe):

Is any data or information contributing to the understanding, management and reporting upon of financial information.

Software application (Application logicielle):

Is a computer program that handles a specific working task, such as word processing, spreadsheet calculations or database management, or that performs one or more specialized functions, such as financial management, materiel management, contract management or asset management.

Date modified: