1998 April Report of the Auditor General of Canada

April 1998 Report—Chapter 1

Exhibit 1.4—Some of the Challenges or Difficulties Associated with Program Review

• A short time frame to submit proposals. The time frame between the launch of Program Review (May 1994) and the deadline for departments to submit their proposals for expenditure reductions (August 1994) was short. Thus, there was not much time for analyzing in detail the impact of what was proposed. Not all departments met the deadline. The short time frame resulted in the final test, the "affordability test", being the determining factor that drove proposals and eventually decisions.
• Difficulties of setting fiscal targets at the portfolio level. Fiscal targets for ministerial portfolios were based on perceptions and the experience of central agency personnel; there was no scientific basis for them. As a result, some could be challenged or negotiated. Furthermore, significant differences in information available at the central agency level compared with that available in departments led to at times lengthy and arduous discussions about the numbers that were to be used as a base for making expenditure reductions.
• Departmental performance varied. Departments that had launched their own rethinking initiative prior to Program Review were generally better positioned to review their programs within a strategic framework than those departments restructured in June or November 1993. There were also differences in the way that departments applied the six test questions, and the results were uneven, depending on several variables such as the degree of commitment and involvement of departmental officials. Even if departments were asked to look at programs and activities for a more strategic focus and improved co-ordination and integration of programs and activities within their portfolio, such strategic frameworks were generally not developed. There were no specific criteria or predetermined performance indicators that could be used to objectively evaluate the performance of departments.
• Certain issues were not raised or not resolved. The responsibility for raising horizontal issues was left mostly with departments, the "centre" intervening only at the request of ministers. Although a number of horizontal issues were raised, and some resolved - such as the consolidation of responsibilities for food inspection - other issues were not identified or could not be resolved, such as the presence of many government departments in international affairs and in embassies, instead of a more centralized approach. Certain functions or activities were not examined, such as the roles and responsibilities of central agencies in relation to governance or to human resource management.
• Program Review II. Although decisions stemming from Program Review I were not revisited, the announcement of Program Review II soon after so much effort had been devoted to meet the requirements of Program Review I had some negative effect. More expenditure reductions were required and a 3.5 percent across-the-board cut was imposed on departments and agencies.
• Renewal initiatives. While renewal initiatives such as La Relève are seen by central agencies as an opportunity to tackle persistent and emerging human resource issues, they are received with cynicism by officials in some departments still struggling with downsizing issues - partly because human resource issues, such as the need for renewal and rejuvenation, have been made worse by the implementation of Program Review decisions. Furthermore many departments had not integrated such issues in their expenditure reduction plans, or made allowance for addressing them.