Deloitte

July 14, 2008 08:00 ET

Deloitte Study: Canadian Government Strives for Improved Financial Management

A lack of current financial data increases risk for government agencies

TORONTO, ONTARIO--(Marketwire - July 14, 2008) - A Deloitte report released today reveals that Canada's public sector finance departments believe their organizations lack some financial management capabilities. The survey also indicates that government finance officials must surmount a number of significant, but attainable, hurdles to reach a maturity level that would justify their place at the executive-decision making table.

Mastering Finance in Government: Transforming the Government Enterprise through Better Financial Management, provides an unprecedented look at financial management in more than 200 government departments from 28 countries and identifies inadequate risk management as one of a myriad of challenges finance officials face within their organizations.

While the CFO role in government has typically focused on reporting and compliance activities, government finance is now becoming a more strategic contributor to increasingly complex missions and programs for which government leaders in Canada are now accountable by law. Public sector organizations that involve both the CFO and the finance function are able to realize immediate cost savings, identify underperforming programs, eliminate inefficiencies by identifying and understanding total costs, better manage risk, and plan for costs and benefits in early planning stages. Too often, though, governments at all levels still fail to take advantage of financial data to help manage and contribute to a needed transformation.

"One interesting trend at both the federal and provincial levels," said Andy Potter, associate partner at Deloitte and principal contributor to the study, "is that with the exception of Alberta and the recent movement at the federal level, our governments do not require audited and certified departmental financial statements, unlike many jurisdictions around the world. The respondents identified the need for more clarity in financial governance and accountability. To do that will require, defining financial management roles and responsibilities between central agencies, line departments and program areas is a definite must," he adds.

Respondents expressed concern about a lack of clarity over financial governance, and believe that they spend too much time dealing with short-term financial issues, rather than longer-term ones. Most surprisingly, a significant number of Canadian respondents feel that public sector program owners do not understand the full cost of their services.

As Canadian organizations face increasing pressures internally, and from the general public to be transparent, efficient and responsible in an environment of heightened expectations and increasingly scarce resources of time, budget and people, senior government finance leaders need to transform to meet 21st century demands.

Learn more about Mastering finance in government: Transforming the government enterprise through better financial management (http://www.deloitte.com/dtt/article/0%2C1002%2Ccid%253D214865%2C00.html).

About Deloitte

Deloitte, one of Canada's leading professional services firms, provides tax, audit, consulting, and financial advisory services through more than 7,600 people in 56 offices. Deloitte operates in Quebec as Samson Belair/Deloitte & Touche s.e.n.c.r.l. the firm is dedicated to helping clients and its people excel. Deloitte is the Canadian member firm of Deloitte Touche Tohmatsu.

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