2005 November Report of the Auditor General of Canada

Insufficient attention by central agencies

4.73 The Privy Council Office and the Treasury Board of Canada Secretariat should identify the circumstances that require special attention as horizontal initiatives and the appropriate governance regimes for different conditions and types of horizontal initiatives.
(4.65–4.72)

4.79 The Privy Council Office and the Treasury Board Secretariat should develop frameworks that set specialized guidance and expectations on governance, accountability, co-ordination, and results-based management of horizontal initiatives for federal organizations. As part of this effort, the Treasury Board Secretariat should develop specialized guidance for evaluating horizontal initiatives.
(4.74–4.78)

4.86 The Treasury Board Secretariat should identify and develop guidance on allocating funding for horizontal initiatives and develop appropriate funding instruments for the horizontal delivery of federal programs.
(4.80–4.85)

It is correctly pointed out in this chapter that working well horizontally, both internally and with other levels of government, is increasingly important for delivering quality service to Canadians. More and more, this way of working is becoming the order of the day. Indeed, at a basic level, there are very few government initiatives that are not horizontal to some degree.

The government will respect the spirit of the Auditor General's recommendations and is committed to continuing to improve the tools available to help public servants deliver successful horizontal initiatives. The Treasury Board Secretariat (TBS) and the Privy Council Office (PCO) will ensure that this is done in a way that is sensitive to the need for continued flexibility in design of particular initiatives and that builds on our experiences over time.

Managing horizontal initiatives is very challenging, particularly in an organization as big and as complex as the Government of Canada. The government is taking action to meet the challenge; the work will require ongoing adjustment and improvement to get it right.

The fundamental principles of ministerial responsibility need to be respected while bringing together federal departments and agencies—all with their own accountabilities, parliamentary appropriations, and legal responsibilities—in pursuit of common objectives and strategies. The allocation and re-allocation of resources, and performance measurement and assessment, for example, need to be managed horizontally while respecting individual ministers' responsibilities and accountabilities.

In respect of horizontal initiatives, and indeed of all key new initiatives, a valid central agency function is to play a facilitating role in their launch. This ensures that such initiatives are positioned effectively within government priorities and are established in such a way as to ensure that an integrated approach is developed. On the three specific horizontal initiatives under audit, PCO and TBS ensured that appropriate departments were involved in the Cabinet and Treasury Board processes, that horizontal governance structures were put in place, and that departmental leadership and roles were identified.

Central agencies must respect the leadership and accountability of departments to implement the initiative in a way that is consistent with their areas of responsibility and that respects Treasury Board management policies. As acknowledged by the Auditor General, it is the responsibility of federal departments and agencies to have the central and ongoing role in managing the initiatives, not PCO or TBS.

Implementing the chapter's recommendations entails, in large measure, a transformation in the way government works, and will require fundamental changes in government information structures and systems. The government is moving forward systematically to achieve this transformation. For example, through the Management Resources and Results Structure and the Management Accountability Framework, it has initiated changes in its information structures and systems to improve the identification of horizontal issues, improve information on what is spent on them, better define outcomes, and improve reporting to Parliament. In addition, and as noted in the chapter, progress has been made in providing guidance on horizontal management of policy and programs.

At the sectoral level, where guidance is put into practice, the government has been moving forward strategically—reflecting in part resource constraints, and in part the need to learn and refine approaches and apply them more broadly based on lessons learned. Central agencies and departments are working through governance issues and putting in place structures believed appropriate to address specific initiatives. We are learning what works and what does not work. For example, the government has changed the governance structure around the climate change initiative with one that we believe will be more effective, and Budget 2005 launched an evaluation of all climate change programs with a view to ensuring the government is making the best investments. We recognize that the nature of horizontal issues means that they require continual attention and ongoing improvement.