2006 November Report of the Auditor General of Canada

Aligning a program's funding with its requirements

2.46 The Treasury Board Secretariat should assess risks related to alignment issues in the Treasury Board submission process.
(2.14–2.45)

As stated in the response to the recommendation of paragraph 1.64 of Chapter 1, the issue of alignment is being reviewed in order to identify areas for improvement.

2.50 The central agencies (Treasury Board Secretariat, Department of Finance, and Privy Council Office), in consultation with senior financial officers should

• investigate the causes of lack of alignment of program funding, timeframe, and funding profile with program requirements; and
• develop an action plan for remediation of these problems, to be carried out along with the government review of the Expenditure Management System.
  (2.14–2.49)

As stated in the response to the recommendation of paragraph 1.64 of Chapter 1, the issue of alignment is being reviewed in order to identify areas for improvement.

Responding to central expenditure review

2.63 The central agencies (Treasury Board Secretariat, Department of Finance, and Privy Council Office), in consultation with senior financial officers, should

• redesign the process for central expenditure review, in conjunction with the government review of the Expenditure Management System; and
• ensure that departments improve their capacity to respond to future central expenditure reviews.
  (2.51–2.62)

Agreed. The implementation of systematic reviews of ongoing programs will address this.

Using Supplementary Estimates

2.88 In relation to the Supplementary Estimates

• the central agencies (Treasury Board Secretariat, Department of Finance, and Privy Council Office) should develop an action plan for consolidating spending items in the Main Estimates, in order to limit the use of Supplementary Estimates;
• the Treasury Board Secretariat should ensure that departments respect the parliamentary control framework; and
• these measures should be taken along with the government review of the Expenditure Management System.
  (2.68–2.87)

Main Estimates remain the primary vehicle for setting out government spending for review by Parliament. Reducing the use of Supplementary Estimates is one of the objectives in the new Expenditure Management System.

The Treasury Board Secretariat is very clear in its guidance to departments as well as Treasury Board decision letters that Treasury Board approval does not mean authority to spend since Parliament has not provided spending authority. Treasury Board Secretariat has, particularly in recent years, been very pro-active in cautioning departments. The call letter sent to departments for Supplementary Estimates states,

"While the Treasury Board, as part of the executive arm of government, has authority to approve departmental spending proposals, such approval does not constitute the authority to spend, but only to seek spending authority through the Estimates. Departments face a supply risk if they start to spend in advance of parliamentary approval. Parliament can reduce the amounts contained in the supply bills, and has done so in the recent past. If departments do elect to start spending in advance of parliamentary approval of Supplementary Estimates supply, even for initiatives announced in the Budget, they must manage this risk by being prepared to reallocate funds from existing programs to make up the potential shortfall."