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Presentation by: Bruce Manion FCMA Manitoba Chapter February 28 th, 2012 Allocating Resources to Results: Facts or Myths Justin Bieber and the Cost of.

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Presentation on theme: "Presentation by: Bruce Manion FCMA Manitoba Chapter February 28 th, 2012 Allocating Resources to Results: Facts or Myths Justin Bieber and the Cost of."— Presentation transcript:

1 Presentation by: Bruce Manion FCMA Manitoba Chapter February 28 th, 2012 Allocating Resources to Results: Facts or Myths Justin Bieber and the Cost of Cigarettes or

2 OUTLINE What Are we Talking About? But First, Some Numbers Where We’ve Been and Where We Are Now Key Drivers and Considerations A Concrete Example The Bieber and the Butts Why is this so hard? ‘ Strategic ’ Resource Reviews Wrap-Up


4 WHAT ARE WE TALKING ABOUT? " What gets measured gets done, what gets measured and fed back gets done well, what gets rewarded gets repeated." - John E. Jones, Professor and Expert in employee feedback and surveys " It is an immutable law in business that words are words, explanations are explanations, promises are promises but only performance is reality." - Harold S. Geneen, CEO of ITT " In God we trust, all others bring data." - W. Edwards Deming, Quality Management Guru and Statistician

5 WHAT ARE WE TALKING ABOUT? ``We expected that by then (2001) most managers would be trying to manage for results and that many would have good systems in place. We found some progress in a few areas, but managing for results was clearly not yet the norm in the departments we audited.`` `` The main barrier is less a technical than a cultural problem: there is little pressure at any level to make more performance information available. Public servants detect this, and moreover, are not inclined to produce information that could embarrass their ministers. The accountability battery thus never gets charged up. `` - L. Denis Desautels, FCA, Auditor General of Canada (1991-2001)


7 BUT FIRST, SOME NUMBERS 2011-12 Expenditures Transfer payments to individuals Elderly benefits Employment Insurance Children’s benefits Total Transfer payments to individuals Major Transfers to other levels of govt. Health and other transfer programs Fiscal Arrangements Alternative Payments for standing programs Canada’s Cities & Communities Other Total Transfers to other levels of govt. Direct Program Spending Subsidies and other transfers Dept’al and Crown Corporation operating expenses Capital amortization Total Direct Program Spending Total Program Expenditures Public Debt Charges TOTAL EXPENDITURES $ 38.0 19.5 13.1 70.6 38.7 16.9 - 3.1 2.0 3.8 58.2 37.3 77.6 4.7 119.6 248.4 33.0 281.4 % 13% 7% 5% 25% 14% 6% -1% 1% 21% 13% 28% 2% 43% 88% 12% 100% 2011-12 Revenues Income Tax Personal income tax Corporate income tax Non-resident income tax Total Income Tax Excise Taxes/Duties Goods and Services Tax Customs import duties Other excises taxes/duties Total Excises Taxes/Duties Total Tax Revenues Employment Insurance Premiums Other revenues TOTAL BUDGETARY REVENUES $ 119.9 32.5 5.4 157.8 30.1 3.8 11.0 44.8 202.7 18.9 27.6 249.1 % 48% 13% 2% 63% 12% 2% 4% 18% 81% 8% 11% 100% Source: June 2011 Federal Budget (in $ billions) Federal Revenues and Expenditures

8 BUT FIRST, SOME NUMBERS Federal Expenditures ($70.6 B) ($37.3 B) ($77.6 B) ($33.0 B) ($58.2 B)

9 BUT FIRST, SOME NUMBERS (Billions $)2007- 2008 2008- 2009 2009- 2010 2010- 2011 2011- 2012 2012- 2013 2013- 2015 2014- 2015 2015- 2016 Budgetary Revenues 242.4233.1218.6235.6249.1264.4281.2298.6309.2 Program Spending 199.5207.9244.8240.8248.4247.3252.0257.7256.6 Public Debt Charges 33.3 31.0 29.4 30.9 33.0 36.5 38.6 39.4 Total Expenses 232.8238.8 274.2271.7281.4283.8290.7297.1305.0 Surplus / (Deficit) 9.6 (5.8) (55.6)(36.2)(32.2) (19.4) (9.4) (0.3) 4.2 Other Income 0.2 2.2 Federal Debt457.6463.7519.1553.1585.4604.8614.2614.5610.3 Evolution of Federal Resources

10 WHERE WE’VE BEEN AND WHERE WE ARE NOW Not New in the Federal Govt Mostly focused on inputs/outputs, activities and cost factors until mid-90’s Major Reform initiatives targeting Planning and Performance Reporting in late-90’s to present date MRRS and the Canada Performance Report The Estimates – A Work in Progress

11 KEY DRIVERS AND CONSIDERATIONS No ‘bottom line’ Managing `` at the margins `` Different motivations and horizons Lack of good information vs. data Apples to oranges to grapefruits Are we good, lucky or a bit of both? The impact of the media and social media Reduced deference / questioning of leaders

12 A CONCRETE EXAMPLE $58.2 B in Transfers to Other Levels of Government $38.7 B - Health & Other Social Programs $16.9 B - Fiscal Arrangements $2.0 B - Canada’s Cities & Communities $0.7 B - Other $26.9 B - Health Transfer (CHT) $11.5 B - Social Transfer (CST) $0.25 B – Wait Times Reduction $1 B - CHT Transfer to Prov. of Manitoba


14 Table 2. Summary of Expenditures for Social Affairs (in $billions) Note: Due to rounding, numbers may not sum exactly to totals. Outcome Areas 2010–11 Planned Spending 2010–11 Actual Spending Healthy Canadians31.832.6 A diverse society that promotes linguistic duality and social inclusion 9.19.4 A safe and secure Canada12.611.2 A vibrant Canadian culture and heritage 3.13.4 Total for Social Affairs56.556.6 Source = Canada’s Performance Report 2010-11

15 A CONCRETE EXAMPLE Source = Canada’s Performance Report 2010-11

16 A CONCRETE EXAMPLE Source = Canada’s Performance Report 2010-11

17 A CONCRETE EXAMPLE Source = Canada’s Performance Report 2010-11

18 A CONCRETE EXAMPLE Source = Manitoba Health - Annual Report 2010-11

19 A CONCRETE EXAMPLE Source = Manitoba Health - Annual Report 2010-11 The Following Section provides information on key performance measures for 2010-11. This is the 6 th year in which all Government of Manitoba depts. have included a Performance Measurement Section, in a standardized format, in their Annual Reports. What is being measured ( W ) and using what indicator ( I )? Why is it important to measure this? W = Manitobans’ access to cardiac surgery I = Median wait times for cardiac bypass surgery by level of urgency Timely access to surgical services is important W = Manitobans’ access to radiation therapy for cancer I = Median wait times for patients to commence radiation therapy Timely access to treatment services is important

20 ``THE BIEBER AND THE BUTTS`` One of the most significant demographic health concerns is the increase in smoking rates among young women under the age of 25. How can we get younger women to stop or, better yet, to not take up smoking? It pays to advertise! Get them while they’re still young! Get an ‘ opinion leader ’ for the younger female demographic to come out against smoking saying it’s not ‘COOL’

21 ``THE BIEBER AND THE BUTTS`` + $10 Million = Plan A: Plan B: Double the price of cigarettes!!!

22 ``THE BIEBER AND THE BUTTS`` The American Plan A in the 1980’s Warning: The Surgeon General Has Determined that Cigarette Smoking is Dangerous to Your Health

23 ``WHY IS THIS SO HARD?`` Annual Resource Cycle is a marginal exercise Attribution difficulties Highly complex ecosystem of programs and results Evaluation cycle not aligned with decision cycle Too much data, not enough insights Lack of focus in reward systems

24 STRATEGIC RESOURCE REVIEWS Began in 2007-08 Part of the new Expenditure Management System in 2007 Aim is to better manage and control government spending Based on a cyclical review over 4 years of all program and operational spending (100%) Could be used to identify reallocation opportunities from low priority to higher priority activities BACKGROUND FOR FEDERAL STRATEGIC REVIEWS

25 STRATEGIC RESOURCE REVIEWS FEDERAL STRATEGIC REVIEWS – What are they? A 100% ‘in good faith’ review of an organization’s direct spending 3 key parameters: Increase efficiencies/effectiveness Focus on core roles Meet evolving priorities of Canadians To be completed by all federal organizations who receive annual appropriations Includes all operating, program and statutory program delivery costs

26 STRATEGIC RESOURCE REVIEWS FEDERAL STRATEGIC REVIEWS – What are they? Must identify at least the bottom 5% of resources associated with lowest priority / performing programs or activities Done on the same timeline each year to align with the Resource Approval and Budgeting cycles Results of each round are presented in the annual Federal Budget Results of an organization’s SR are also incorporated into their RPP and DPR for future years

27 STRATEGIC RESOURCE REVIEWS Federal Strategic Reviews – What have they achieved?

28 STRATEGIC RESOURCE REVIEWS Glassco Commission (1963) Lambert Commission (1979) Nielsen Task Force (1985) Program Reviews 1 and 2 (1994 & 1996) Corporate and Administrative Shared Services (2004) Expenditure Review Committee (2005) Strategic Reviews (2007, 2008, 2009, 2010…) Admin Services Review (Budget 2010) Strategic and Operating Review (Budget 2011) Federal Resource Reviews – Past and Present


30 WRAP-UP A very complex issue Results are hard to pin down in the Public Sector – it doesn’t mean that we should not try! Unlikely to ever achieve a perfect ‘Resources-to-Results’ allocation regime Lots of different models and approaches A Work in Progress - Stay tuned ….


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