This Web page has been archived on the Web.

1996 September Report of the Auditor General of Canada

Assistant Auditor General: David H. Roth
Responsible Auditor: Nancy Cheng

Main Points

16.1 Government expenditures on information technology, including capital, operating, personnel and other related costs, represent a major investment of over $3 billion annually. Using information technology judiciously is recognized as a prerequisite for renewing government services.

16.2 We examined two sets of initiatives relating to the government's Blueprint for Renewing Government Services Using Information Technology . We noted that implementation of the Blueprint framework is starting to gain momentum and that visible progress is being made in moving toward shared administrative systems. At the same time, we also identified several areas for improvement. For example, we noted that the Treasury Board Secretariat focusses on reporting the status of flagship projects but not the results they have achieved. Reporting their results could promote departmental participation and build on the Blueprint's existing momentum. There is a need for more timely development and implementation of government-wide network management to support the sharing and interoperability of systems. We observed some lessons that can be learned in the use of technology funds to encourage partnership and innovative use of information technology.

16.3 There has been significant progress since the establishment of the Chief Informatics Officer function at the Secretariat in 1993. The release of the Blueprint framework in 1994 was a key milestone in the move toward a government-wide perspective of technology. Furthermore, the use of an interdepartmental committee structure and related work groups has encouraged dialogue and fostered co-operation in the information technology and user communities within government.

16.4 Yet many challenges remain. To harness and build on the existing momentum of support for service renewal, the Secretariat needs to exercise corporate governance and accountability through strategic oversight, without jeopardizing the consensus-building process that fosters horizontal co-ordination, and co-operation across departmental lines.

Introduction

The Chief Informatics Officer and the Office of Information Management, Systems and Technology

16.5 Government expenditures on information technology, including capital, operating, personnel and other related costs, exceed $3 billion annually. Information technology not only represents a significant investment by government but also is a prerequisite for supporting the renewal of government services. In the third annual report to the Prime Minister on the Public Service of Canada, the Clerk of the Privy Council referred to the importance of new technologies to help public servants serve clients better.

16.6 In 1993, the Treasury Board established the position of the Chief Informatics Officer (CIO). Supported by the Office of Information Management, Systems and Technology (IMST), the CIO was to provide leadership in aligning the government's information technology with its business activities. The CIO function was intended to serve as a focal point for using information technology and re-engineering in government to increase productivity in the delivery of services and to reduce the cost of administration.

16.7 At that time, there was a recognized need for an overall vision and a technological framework to guide and support the renewal of government administration and services. A framework document entitled Blueprint for Renewing Government Services Using Information Technology was developed and released for consultation in early 1994. In June 1994, the Treasury Board endorsed and approved the document's direction, principles and approach.

16.8 The Blueprint document sets out a vision of renewal to make government services affordable, accessible and responsive through judicious use of modern information technology. It provides for an integrated approach to restructuring program and administrative services across government departments. Exhibit 16.1 shows five aspects in renewing government services. Each of the aspects (called "architectural views" in the document), the related principles and an implementation approach are described in the Blueprint.

16.9 Concurrent with the development of the Blueprint document, many other renewal initiatives were under way, such as process re-engineering, shared systems, locally shared support services and government-wide electronic infrastructure. In addition, a framework entitled "CityPlan" was developed to provide direction for the implementation of the Blueprint. The framework integrated underlying concepts, principles and approaches embodied in the Blueprint and provided for the development of an information management and technology infrastructure to support client-focussed service renewal. The CityPlan was endorsed by the Treasury Board in November 1995 and later circulated to all heads of departments.

16.10 Our audit, three years after the establishment of the CIO function, examined components of two major initiatives to assess the extent to which they provide economical and efficient support for the renewal of government services. Our objective was to identify possible areas where the government could make improvements. The results of this audit may also provide an insight into the CIO's progress in leading the renewal of government services using information technology. Further details about the audit are included at the end of the chapter.

16.11 In November 1994, the Office of Information Management, Systems and Technology became a sector in the Financial and Information Management Branch of the Treasury Board Secretariat. Since June 1995, the CIO function, including the IMST sector, has been led by the Branch's Deputy Secretary and Deputy Comptroller General. The responsibilities of the Deputy Secretary and Deputy Comptroller General, as they relate to information management and information technology, and those of the CIO are shown in Exhibit 16.2 .

Observations and Recommendations

Infrastructure Development

16.12 The conceptual and implementation frameworks for information technology hold the development of a government-wide electronic infrastructure as a key to service renewal. We reviewed four major components of this initiative:

  • the implementation across government of the recommendations in the Blueprint document setting the direction for infrastructure development;
  • the program of standards relating to information technology in government;
  • the implementation of a common government-wide electronic infrastructure; and
  • the use of technology funds intended to facilitate implementation of the Blueprint document and to promote partnering among departments and agencies.
Blueprint implementation is starting to gain momentum
16.13 The Treasury Board Secretariat focussed on three areas of action to implement the Blueprint - innovative service delivery; modernized internal administration; and government-wide electronic infrastructure.

16.14 To facilitate the implementation, the Secretariat identified in each of the three areas a number of flagship projects intended to set the direction for service renewal and to demonstrate progress and results.

16.15 Some projects were launched by the IMST; some were initiated by other government departments and agencies. Initially, in late 1994, 12 flagship projects were identified. By March 1996, a total of 18 flagship projects were being tracked. Of the six new projects, five relate to developing a government-wide electronic infrastructure. Almost all of the new projects are led by the Secretariat.

16.16 Periodically, IMST staff seek an update on the progress of the projects against their milestone dates; the information serves as the basis for the Secretariat to report progress to the Treasury Board. Moreover, at various interdepartmental committees involving senior management of departments and agencies, IMST has been presenting these flagship projects to demonstrate progress and to help generate momentum for the Blueprint.

16.17 The Blueprint document calls for government departments to use it in planning and implementing their own service renewal. Specifically, it states:

Departments will use the Blueprint in planning and implementing their own internal renewal activities. They will reflect their planned approach to implementation in such planning instruments as annual operational plans and information management plans, starting in 1994-95.
16.18 We selected a number of departments and reviewed their 1995-96 departmental business plans and their most recent information management plans. We found that, to a varying extent, departments have generally moved to incorporate Blueprint principles in their plans for service renewal.

16.19 In some cases, there was a clear indication that the conceptual framework in the Blueprint has been adopted and used. Departmental initiatives involving information technology are specifically related to Blueprint principles. For example, one department has developed a long-range plan to provide simpler and more timely service delivery through information systems that are open, accessible, flexible and interconnected. These principles are consistent with those set out in the Blueprint. Although use of the Blueprint in planning appeared in a couple of cases to be at an initial stage, we noted that most departments have begun to adopt the basic principle of implementing shared systems, a major concept in modernizing government administrative services.

16.20 The Blueprint document presents a conceptual framework, setting out the government's vision, direction and principles for using information technology to support service renewal. In our view, the implementation of the Blueprint is starting to gain momentum.

Monitoring would foster implementation but is lagging
16.21 Through strategic planning and operational review, departments prepare business plans and submit them annually to the Treasury Board Secretariat. The Secretariat uses the business plans as a primary vehicle for interacting with departments. According to the Secretariat, teams are formed to review the plans and to provide strategic oversight. As applicable, the IMST staff form part of these teams and address components of the plans involving information technology.

16.22 However, there is a need for a more concerted effort to monitor the development of technological direction in departments. Such monitoring would provide a basis for selective and strategic involvement with departments by the IMST to foster adoption of the technological direction that has been set out or to identify barriers and impediments that need to be addressed. Departments prepare information management plans as part of the planning process to outline their strategic direction for information management and technology. The IMST could use these plans, or other available documents that include a comprehensive orientation to information technology, as a starting point for direct communication with individual departments to facilitate use of the Blueprint framework.

16.23 Reporting the progress of flagship projects provides a good vehicle to communicate achievements to date and to build momentum for using the Blueprint framework. In reviewing the progress report, we noted that the updates generally focussed on the status of the various flagship projects against project milestones. However, the reports did not highlight results or benefits that were achieved.

16.24 In our opinion, the reporting of results would solidify support and could generate further buy-in and commitment from departments. The current approach runs contrary to the objective of using the flagship projects to demonstrate results. Although some projects are in early phases, it would be feasible in about one third of them to start capturing results and benefits derived.

16.25 A critical element of ensuring a government-wide electronic infrastructure is to adopt and comply with standards that permit various components to communicate and interoperate. Since 1987, the Treasury Board Secretariat has had in place a program for the Treasury Board Information Technology (TBIT) standards, promulgated as part of Treasury Board policies. In implementing information technology, departments and agencies are required to comply with these standards.

16.26 An internal review was undertaken in 1995-96 to determine whether departments were effectively making reference to the TBIT standards in their acquisitions, and whether industry was demonstrating its support of those standards by supplying goods and services that conformed to them. Among its observations, the review found that departments generally were not citing TBIT standards when they acquire information technology, but the common procurement process was forcing some level of standardization. The review also questioned the relevance of the standards. It recommended an examination of both the existing standards and the method of monitoring departments' compliance with them.

16.27 The IMST has sought Treasury Board support for refocussing the program of TBIT standards. In April 1996, the Board endorsed the new direction, emphasizing "standards as solutions; standards as appropriate". In the new direction, the standards are to become more relevant to government operations and more flexible, embracing de facto standards of industry in addition to those sanctioned internationally.

16.28 However, the implementation plan remains at a policy level and has yet to address the specific issue of ensuring compliance. Given the significance of the standards, it is important that the Secretariat devise an approach to monitoring so that it can be aware of implementation practices for information technology and can take appropriate action to ensure compliance.

Government-wide network management has yet to be developed and implemented
16.29 A key principle of the Blueprint framework is interoperability and connectivity, the principle of permitting information technology components to work together interactively. A government-wide electronic infrastructure comprising electronic networks and other computing services is a key to the renewal of services to the public. It is critical to supporting concepts for new modes of service delivery such as an expert service centre, where the public could receive services at a single point of contact ( Exhibit 16.3 ).

16.30 Most departments have put in place electronic networks but have done so to serve their own specific operational requirements. As a result, there has been a proliferation of independent telecommunications networks and computing services. Many are based on incompatible technologies, making it difficult to communicate and interoperate government-wide. In addition, it has been recognized that smaller departments may not have the necessary resources or expertise to take advantage of advances in the industry.

16.31 In late 1994, the Secretariat endorsed a number of infrastructure initiatives. They included establishing government-wide connectivity in the use of electronic messaging, an electronic directory, and a private high-speed fibre optic network for the National Capital Region. A separate and broader initiative was to establish common telecommunications and network management services that would support interoperability across the government.

16.32 The Government Telecommunications and Informatics Services (GTIS) of Public Works and Government Services Canada has been responsible for the specific initiatives. We observed that government-wide electronic messaging is now in place through the Government Message Handling Service, connecting over 200,000 desktop computers across Canada. A government-wide electronic directory, through the Government-wide Electronic Directory Service of GTIS, was formally introduced in June 1996. According to GTIS, a government fibre optic network has been implemented in the National Capital Region. We were advised that this dedicated government service, provided under contract, is not being used fully due to market forces and competitive alternatives. The GTIS indicated that it has recently agreed to transfer the contract to the primary contractor, and work is under way to enhance service and exploit the value of the contract.

16.33 In 1995, the Secretariat and four major departments developed a proposal to seek joint action in network management, using a phased approach. The proposal recommended forming cluster groups around several major departments to allow smaller departments to share and integrate existing networks, eventually moving toward a government-wide integrated network. In June 1995, the Secretariat and the four departments formally agreed to the proposed joint action. In July 1995, a steering committee on network management was established. Subsequently, in November 1995, Treasury Board endorsed the implementation of a government-wide integrated network with an intermediate target of three cluster arrangements involving the four departments.

16.34 In the fall of 1995, the Canadian Radio-Television and Telecommunications Commission rendered a decision that deregulated non-dominant carriers of telecommunications services, to foster competition. The decision triggered an immediate need to review and revise the government's process for procuring those services. The focus of the network management committee shifted to the procurement issue. In May 1996, a new procurement process was being developed, with testing planned for August 1996 and implementation scheduled for early 1997.

16.35 When we completed our audit in May 1996, the cluster arrangements approved by the Treasury Board were not proceeding as planned. In July 1996 the Secretariat advised us that, working with departments, it is in the process of defining and articulating a future vision of a common network infrastructure, including establishing a governance regime and developing an implementation plan. However, it was not evident if and how the cluster arrangements were to proceed. The procurement issue is being addressed and progress is being made in connecting desktop computers through electronic messaging and electronic directory services. However, we noted little visible movement toward the implementation of common network management services to support the sharing and interoperability of systems across the government.

Management of technology funds needs to be improved to fully realize the benefits
16.36 It has long been recognized that technology investment funding is often needed to promote innovative use of technology and partnering among departments and agencies. We examined the use of two such technology funds - the Informatics Partnership Fund and the Informatics Infrastructure Fund.

16.37 In October 1991, the Treasury Board approved the establishment of a $10 million Informatics Partnership Fund. The purpose of the Fund was to use start-up funding to promote increased sharing and collaboration among departments and/or the private sector in testing innovative uses of information technology in government programs and administrative processes. Submissions to the Secretariat were evaluated case by case, and the funding granted to the sponsoring departments was non-repayable. In total, 16 projects were funded with over $9 million. The Informatics Partnership Fund was ended on 31 March 1996.

16.38 We observed that many of these projects involve innovative use of information technology. We also noted some instances of inconsistency in approving proposals for use of the Fund. For example, specific criteria for approval included a condition that funds would be "awarded only once for a project since the intention was to provide seed money only." In one instance, a sponsoring department received funding twice for the same project. Yet a separate project co-sponsored by two departments was refused funding for its second phase. The criteria also specified that "preference [would] be given to departments applying for the first time as opposed to past recipients." We noted that two departments received funding on five and four occasions respectively.

16.39 In addition, funding requests were submitted for two projects that were similar in nature, both relating to shared systems approved by the Treasury Board Secretariat. One request was not supported by the Secretariat; the other was approved. The files did not contain an adequate explanation for the different treatment. We also noted that the funds for the project that was approved were provided to the Secretariat rather than the sponsor department.

16.40 Moreover, there was no evidence that the IMST has followed up on a key condition of the Informatics Partnership Fund. The general criteria stated:

There must be a review at the end of the project that will be shared with the government information technology community. The sponsor must agree to the dissemination of this information, so that there is government-wide sharing of the knowledge.
16.41 There were no progress reports on file, nor was there evidence that project results were being shared. We followed up with some sponsor departments and ascertained that the funding did contribute to developing the use of information technology. However, there was only limited evidence that the objective of sharing was being served.

16.42 Our interviews with departments also identified two deterrents to applying for use of the Fund. First, the submission process was onerous and lengthy. Project sponsors were required to seek approval in their own departments, followed by a formal submission to the Treasury Board. Upon its acceptance, financing was provided but at times quite late in a fiscal year, leaving little time to apply the funds. Second, the funding was designed to support project planning and definition. Projects received an average of about $500,000 in financing. The majority of the funding needed - for project development and implementation - remained the responsibility of the sponsor department.

16.43 Further, we found that there had been a significant turnover in fund management at IMST. In the 12-month period ended March 1995, the Informatics Partnership Fund was managed successively by five different IMST staff members. The Secretariat advised us that there had been internal reorganization during that time. The frequent turnover in fund management eroded corporate memory. It was not efficient for ongoing interaction with existing and would-be participants and it might have limited the IMST's ability to provide information supplementary to that contained in the files.

16.44 Our follow-up with departments shows that the Informatics Partnership Fund has contributed to advancing the use of information technology. However, we believe that lessons can be learned from its experience and applied in administering other technology funds to maximize the benefits of using information technology in government.

16.45 The Informatics Infrastructure Fund was approved by the Treasury Board in January 1995 to support departments in undertaking projects to move toward the government-wide information technology infrastructure and architecture envisioned in the Blueprint. The Fund has a budget of $15 million per year, amounting to $60 million over four years starting in 1995-96. Unlike the Informatics Partnership Fund, funding from the Informatics Infrastructure Fund requires a payback through a reduction in the department's future expenditure reference level.

16.46 The Fund was not widely used in its first year. As of May 1996, two projects totalling $4.5 million over four years had been approved; five other enquiries were received but have not proceeded for various reasons. In the first year of operations, only $100,000 in total was allocated. Of the $15 million budget for 1995-96, $10 million was reprofiled and extended to 1999-2000.

16.47 In today's climate of continuing fiscal restraint, many departments are reluctant to commit to a payback requirement that would reduce their future expenditure reference levels. Their concern is that the reduction may become permanent. We understand that this payback requirement was a significant factor in the withdrawal of one project submission.

16.48 However, the payback requirement was not evident for the two projects that were approved. In the first project, payback will be effected through means other than a reduction in the future expenditure reference level. This project was submitted by a department working with several other departments and the private sector to develop a technological product for use across government. For the second project, no payback was required. The latter project funds the Secretariat's project office to direct and co-ordinate activities of a government-wide strategy. Although this project met criteria for funding, it is not entirely clear that it conformed with the Fund's purpose of accelerating the attainment of the government-wide information technology infrastructure and architecture set out in the Blueprint. In our view, lack of clarity causes confusion and potentially reduces the effectiveness of the Informatics Infrastructure Fund.

16.49 The Secretariat indicated that it requires flexibility in interpreting terms and conditions of the funds. We were also advised that the IMST is reviewing the payback requirement and the terms and conditions of the Informatics Infrastructure Fund. We believe that the review would benefit from the experience of both technology funds; clarification and communication of the Informatics Infrastructure Fund's objective, terms and conditions are essential to fully realize the benefits.

Shared Systems

16.50 Today, there are numerous individual departmental systems and sub-systems being used for common administrative processes. The sharing of administrative systems could provide a major opportunity to reduce overhead costs and to streamline and improve administrative services.

16.51 The shared systems initiative is a key element of renewing the government's internal administrative systems. The Blueprint refers to the concept of shared systems as one of the guiding principles of service renewal. The initiative is one of the flagship projects used by the IMST to demonstrate the progress and results achieved with the Blueprint.

16.52 The merit and significance of the shared systems concept were recognized well before the Blueprint was promulgated in 1994. The Council for Administrative Renewal, comprising senior officials from various departments and agencies, was formed in 1991 to advise the Treasury Board on ways to reduce the cost of administration and improve support for delivery of government services. The Council established a Shared Systems Working Group, and the Salary Management System cluster was approved as a pilot project in 1992.

16.53 In 1993, the Program Review Implementation Board approved the shared systems initiative and a proposed set of targets. Various committee structures were formed in 1994, including the Committee on Government Systems (a sub-committee of the Council) and cluster work groups and committees.

16.54 The initiative has been endorsed by the Treasury Board and is supported by the Deputy Ministers' Task Force on the management of overhead services. In its report of January 1996, the Task Force reaffirmed the direction and goals of the initiative.

Visible progress is being made toward shared administrative systems
16.55 Since 1993, various administrative areas have been identified as offering a potential for sharing systems across government. In particular, cluster groups have been established for administrative systems in five areas - financial management, human resources management, materiel management, salary management and travel administration. In addition, three new areas are under review and development: business planning; management of executive information; and management of documents and records.

16.56 The work of the cluster groups is most advanced in the areas of financial management and human resources management. At the end of May 1996, seven financial and three human resources systems had been approved.

16.57 After consultation and discussion with the Committee on Government Systems and other stakeholders, the IMST proposed strategies and actions to the Treasury Board for implementing the shared systems initiative, and received approval in April 1996.

16.58 The financial management area has been identified as fully mature and its seven systems are deemed to be sufficient to meet the needs of all government departments. The Treasury Board approved limiting departments' selection to one of the seven financial management systems. The Secretariat advised us that each department and agency will be asked to specify its choice by December 1996 and to provide a plan for migrating its systems. Departments seeking to use a system other than the approved clusters would have to justify their position.

16.59 If the departments limit their choice to the seven approved systems, this aspect of the shared system initiative will represent a move from more than 30 financial systems in the government to seven. With user acceptance and proper implementation, the initiative has the potential to generate substantial savings by reducing duplication of effort and the cost of developing and maintaining individual systems.

16.60 In IMST's view, the human resources area is not fully mature and there may be a need for additional systems in this area to be able to serve all departments and agencies. The IMST expects to seek Treasury Board approval when there has been acceptance that the clusters collectively are capable of serving the needs of all departments.

16.61 The major cluster in the area of human resources management is the Human Resources system of PeopleSoft Inc. (PeopleSoft). Unlike the financial systems, where departments are to join existing approved clusters, the IMST has taken a lead role in acquiring this commercial off-the-shelf application for use government-wide ( Exhibit 16.4 ). As of May 1996, 17 departments, including some large departments, had committed to using PeopleSoft and have become part of the cluster group. The PeopleSoft cluster has the potential to become the government system for human resources management.

16.62 In summary, the direction of the shared systems initiative is consistent with the vision and principles articulated in the Blueprint. At this time, we have observed visible progress toward sharing administrative systems in government.

Clustering is fostering horizontal co-ordination
16.63 Under the clustering approach, departments and agencies participate as members of the cluster group to identify administrative systems and discuss means for sharing among member departments. Participants are supposed to share not only the associated risks and costs but also the benefits and results.

16.64 We observed that the approach builds synergy and enthusiasm among participants in seeking a common solution to a shared set of issues. The process helps to build consensus, as decisions generally affect all participants. It also encourages cluster members to place the common interest ahead of their specific departmental needs.

16.65 The PeopleSoft cluster demonstrated that many departments can work together to resolve common issues ( Exhibit 16.4 ). Working originally with 15 departments, the cluster group was able to specify common government requirements. As a result, a government version of PeopleSoft has been developed and will continue to be supported by the software supplier in its future upgrades.

16.66 Consensus building is essential in today's government environment. Departments and agencies are re-examining their programs and services to the public and are seeking ways to consolidate and streamline service delivery. In our view, the clustering approach can foster the consensus needed for horizontal co-ordination across departments.

Targets and results need to be better defined
16.67 When the Program Review Implementation Board approved the shared systems initiative in October 1993, it also approved certain related targets. Specifically, the initiative is expected to:

  • reduce, over five years, the number of major administrative systems from 60 personnel, 30 financial and 30 materiel systems to 3, 4 and 3 systems respectively;
  • migrate 80 percent of major departmental systems to shared systems within five years;
  • ensure that major shared systems interconnect by September 1996; and
  • achieve $800 million in savings to departments and agencies over five years.
16.68 Progress is being made toward meeting the first target of reducing the number of systems in the three administrative areas. There are three approved clusters for human resources management systems. The number of approved financial management systems has grown from four to seven. The IMST advised us that the seven systems will be able to serve all departments, rather than four shared systems serving 80 percent of the departments. At present, there are two approved cluster groups for materiel management. According to the IMST, its medium-term strategy is to move toward integrated financial and materiel management systems.

16.69 However, IMST confirmed that most targets would not be achievable by late 1998. In particular, with the exception of some integrated financial and materiel management systems, major shared systems will not interconnect by September 1996. It is important that the targets be updated, clearly defined and communicated to reflect present circumstances. Reasonable and realistic targets can provide a basis for measuring progress and performance and can help guide implementation efforts.

16.70 The IMST has been using cost avoidance as the measure of cost savings. It attempts to estimate the costs that would have been incurred without the sharing of administrative systems. The IMST advised us that the measure was chosen in order to not duplicate savings identified by departments in meeting Program Review targets. We are concerned that the use of only subjective measurement such as this may not be sufficiently meaningful or persuasive to demonstrate results of the initiative. There is a need for better measurement to estimate and compare the costs of acquisition, implementation and ongoing maintenance of shared systems with those of existing systems across government.

16.71 The shared systems initiative originated under the guidance of the Council for Administrative Renewal, was endorsed by the Deputy Ministers' Task Force on the management of overhead services, and was approved by the Treasury Board. Furthermore, it has the support of the community in principle. However, no business case has been made to assess the costs of investments against their expected benefits to the government as a whole. Nor is there any indication of what results the initiative would achieve and how those results would meet the overall objectives of reducing overhead costs and improving support for service delivery.

16.72 For example, the approved PeopleSoft human resources cluster is not supported by a corporate business case. Only 5 of the 17 participating departments have prepared separate business cases. In various discussions, the IMST has acknowledged that the benefits of common initiatives may not accrue evenly among departments and agencies, but emphasizes that benefits ought to be considered at a corporate level. Thus, it is important that an enterprise-wide business case be developed for each cluster to identify costs and benefits, both tangible and intangible, and to demonstrate how corporate objectives are being met. Participating departments could then conduct supplementary analyses, focussing on the implications for their own operations.

16.73 Gaining the commitment of departments to participate in the initiative takes time. A good corporate business case would demonstrate the value of the undertaking. Supplementary departmental analyses could highlight areas where significant payback can be expected. Such information could encourage participants to commit to the partnership, as departments could redeploy resources from reduced overhead services to delivering their programs.

16.74 In our view, revising targets and setting out expected results of the initiative would improve its implementation and serve as a basis for performance measurement and accountability.

The concept of shared accountability triad carries risks that have to be managed
16.75 The management framework approved in April 1996 as part of the shared systems initiative uses the concept of a shared accountability triad. The Treasury Board Secretariat provides leadership by developing policies and setting priorities, approving clusters and managing enterprise investment funding. Each of the clusters will be managed by a cluster management board with a shared accountability triad of a service co-ordinator, departmental implementation managers and the service provider ( Exhibit 16.5 ).

16.76 The cluster management board will include representatives from all participating member departments and agencies. Its role involves planning, problem resolution and decision making. The cluster co-ordinator supports the management board and co-ordinates the joint efforts of member departments.

16.77 As indicated in paragraph 16.65, the PeopleSoft experience has demonstrated the strength of clustering in building consensus. However, it also provides other lessons that can be learned. Preliminary findings of a review commissioned by the Secretariat and completed in April 1996 show a need to strengthen the management framework for PeopleSoft. A primary concern is the lack of direction and guidance from the PeopleSoft Board of Directors ( Exhibit 16.6 ).

16.78 In the fall of 1995, the management board approved in principle a government joint internal audit of the PeopleSoft project. In January 1996, the internal auditors from the departments involved prepared a draft set of terms of reference for the audit. However, the management board remained inactive until late April 1996. In the absence of the board's sanction and support, the planned audit did not proceed. In the meantime, there were concerns in the community that departments might be customizing their PeopleSoft systems considerably, which could result in 17 different versions of the human resources management system. Customization, if not checked, would erode the intended savings and benefits of the shared systems initiative.

16.79 The new management framework addresses some of the management issues by defining the respective roles of the parties involved. Yet, depending on the cluster, some management boards could involve 20 member departments. A sizable committee that meets regularly would easily fill a steering or advisory role. However, it is not certain whether these management boards could be sufficiently responsive and accessible for decision making and problem resolution. In addition, the cluster co-ordinator's role is to co-ordinate cluster activities between member groups and the service provider as well as joint efforts undertaken by the cluster. The responsibility for day-to-day management is to be left to the triad, while departments are to continue to be responsible for operating their systems. This new framework could run the risk of delays and inefficiency, particularly when the cluster is in a development or implementation stage, where there is usually a high level of activity.

16.80 The new management framework carries risks that could undermine the benefits of the shared systems initiative. In putting the framework in place, the Secretariat needs to continue its leadership role by retaining oversight, monitoring progress and taking joint action with departments as appropriate to further the interests of the government as a whole.

Progress Made and Challenges Ahead

Significant progress has been made since 1993
16.81 The development and promulgation of an information technology framework through the publication of the Blueprint is a key milestone in moving the government toward technology-based renewal of services. Supported by the CityPlan and many flagship projects, the Treasury Board Secretariat has been providing leadership and setting the direction for the use of information technology in government. We observed that momentum for change is starting to build in the information technology community of government.

16.82 An equally important but subtle accomplishment is the synergy and co-operation that is being generated among departments. In recent years, through various audit reports, we have expressed repeated concern about insufficient co-ordination and co-operation among government departments on operational and policy issues.

16.83 Under the auspices of the Chief Informatics Officer, the Treasury Board Secretariat has been shifting the focus of the information technology community in government from an individualistic, vertical, departmental environment to one with a horizontal, corporate, enterprise-wide perspective. Facing shared issues and seeking common solutions, departments are encouraged to embrace horizontal co-ordination rather than concentrating on individual departmental needs that may not be essential or significant at a government-wide level.

16.84 In particular, the interdepartmental committee structure and various related work groups can facilitate dialogue and foster co-operation across government. The committees and work groups involve staff at the working level as well as senior management, including deputy ministers.

16.85 The fiscal climate has demanded a fundamental review of government's role in providing service to the public. Judicious use of information technology can become a forum for discussion and act as a springboard for an integrated approach to program delivery. It is encouraging to observe a cultural shift toward horizontal co-ordination, and co-operation that crosses departmental lines.

Challenges to overcome in order to realize benefits
16.86 In auditing the two major initiatives, we noted challenges ahead that need to be met before the government and, in turn, the public can realize the full benefits of using information technology to renew service delivery.

16.87 The Secretariat set the strategic direction for using information technology in government. We found a general lack of focus on measuring results and providing information on outcomes. The reporting of results to demonstrate the success and value of the undertakings could promote earlier commitment and help deflect reluctance by departments to participate in interdepartmental partnerships.

16.88 We recognize that in some cases it might be difficult to measure results. Nevertheless, we believe that better attempts can be made. Many large companies in the private sector have a multitude of holding companies and/or branch operations involving multiple business lines. Through identification of tangible and intangible benefits of investments, undertakings receive endorsement and are carried out. The actual benefits and the end results are then measured against the cost of the investments.

16.89 Monitoring actual outcomes of initiatives is an integral part of measuring performance against objectives. It provides the information to help assess benefits of the initiatives against their costs and to guide decisions. Measurement of results also serves as the basis for accountability to Parliament.

16.90 At a time when acceptance of the Blueprint is starting to build and many initiatives are under way, the biggest risk is a failure to sustain the momentum. This risk could be mitigated through stronger exercise by the Treasury Board Secretariat of its oversight role. From the two initiatives we audited, it is not evident that the Secretariat has the information or the assurance that departments are following the functional direction it has set. The committee structure and the work groups have been effective in fostering horizontal co-ordination. But their roles do not generally involve delivering measurable results.

16.91 The government has undergone major reorganizations since 1993. The role of the Treasury Board Secretariat and its relationship with departments and agencies have been evolving since then. In our November 1995 Report, we commented on the need for balancing centralized and decentralized administration. In this chapter, we are not advocating centralization or a highly controlled environment. Rather, the Secretariat needs to exercise corporate governance and accountability by playing a strategic oversight role while continuing to facilitate consensus building among departments.

16.92 The challenge of striking the right balance is not an easy one. However, for purposes of corporate governance and accountability and to realize the full benefits of initiatives, it is important to ensure that the policy and direction set by the Secretariat are implemented in partnership with departments and agencies.

16.93 Where policy and direction for the use of information technology have been set and promulgated, the Treasury Board Secretariat should track implementation at a strategic level to measure the results against government-wide objectives and take corrective actions as appropriate.

16.94 The Secretariat should ensure that government-wide network management is developed and implemented on a more timely basis to support interdepartmental operability for program and administrative service renewal.

16.95 The Secretariat should better define expected results of strategic initiatives involving information technology and relate them to the overall government-wide objectives, to encourage partnership among departments and to serve as a basis for performance measurement and reporting.

Treasury Board Secretariat's response: The Treasury Board Secretariat recognizes the importance of information technology. It is striving to further improve on the positive contribution information and technology have made, and are expected to continue to make, to the government renewal agenda. We welcome the Auditor General's comments in this regard.

The Treasury Board Secretariat will take specific steps to deal with recommendations for improvement by strengthening its strategic oversight function and by working with departments, which ultimately have the responsibility for making decisions on the deployment of information technology. It intends to continue to provide leadership through the Chief Information Officer to realize the promise of information technology-based renewal, in partnership with the government IT community and the private sector.


About the Audit

Scope and Objective

We audited selected components of two major initiatives in the Treasury Board Secretariat's implementation of its conceptual framework for the use of information technology to renew program and administrative services. The audit objective was to assess the initiatives and the extent to which they provide economical and efficient support to the corporate objective of government service renewal, with a view to identifying areas for improvement.

Specifically, in reviewing the infrastructure development initiative, we covered the implementation of the Blueprint framework and the Treasury Board Information Technology Standards program, the implementation of a government-wide electronic infrastructure and the use of technology funds. For the shared systems initiative we reviewed its progress, including the approved cluster of the Human Resources system of PeopleSoft Inc., but we did not audit the PeopleSoft application or its implementation across government. We have also not audited the seven approved financial management systems or the related Financial Information Strategy.

We conducted our audit primarily at the Information Management, Systems and Technology Sector of the Secretariat. For a stakeholder perspective, we also interviewed staff of some departments and reviewed planning instruments from several departments.

Criteria

Where appropriate, the observations in the chapter reflect the audit criteria we used. In general, we looked for the following:

  • The initiatives and the related activities should support the business priorities of government and be consistent with the government's overall vision and strategy for information technology.
  • The objectives and expected results of the initiatives should be clearly identified.
  • There should be appropriate monitoring and reporting on progress toward the achievement of objectives and results for the initiatives.
  • Procedures should be in place to ensure economical and efficient use of funds in support of technology initiatives.

Audit Team

Greg Boyd
Joyce Ku

For information, please contact Nancy Cheng, the responsible auditor.