5.1 Business Planning Processes
The annual business planning process at AANDC involves the development of business plans by each sector and region within the Department, as well as the preparation of a higher level corporate business plan. Sectors are provided the flexibility to develop business planning processes that best support their needs. In reviewing business planning across a number of sampled sectors, the audit found that initiatives are being undertaken by sector and regional management to improve their annual business planning processes. More robust business planning processes are being established, and this is leading to business plans that better define sector priorities and planning commitments and that better demonstrate alignment to the Department's PAA and its priorities.
While initiatives taken by sector management are leading to improvements in sector and regional business plans, three (3) opportunities to improve business planning processes at both the sector and departmental level were identified that would support:
- Developing sector business plans that are supported by Finance and HR plans (i.e. integration);
- Developing sector business plans that align horizontally with the plans of other sectors (i.e. identify points of intersection or shared accountability for related results and dependencies); and
- Developing sector business plans in a more streamlined manner (i.e. timely, responsive, aligned, cost-efficient).
Audit observations relative to each of these three (3) opportunities are provided in the following pages.
5.1.1 Integrating Sector Business Plans with Finance and HR Plans
The Clerk of the Privy Council's 2010-11 Public Service Renewal Action Plan identified integrated planning as one of the "four renewal pillars" to be incorporated into the organizational cultures of federal departments. More particularly, the action plan states:
"Planning is the foundation for management excellence and must be accompanied by effective and efficient implementation and sound reporting on results. The goal is to align and integrate human, as well as financial, asset, and information resources required to deliver on the business of government"Footnote 4.
At AANDC, annual planning processes require that in addition to business plans, sectors and regions develop financial resource plans, HR plans, IM/IT plans, procurement plans, and investment plans. Many of these planning processes are completed independently, supported by various internal functions within three sectors, namely PSD, CFO Sector, and HRWSB.
Given the interdependent nature of these planning activities, and the overarching importance of business planning to the Department, the audit expected to find that the departmental planning processes associated with business, resource and HR planning were appropriately integrated and aligned. The audit also expected to find that sectors' business planning processes included the identification of the financial and human resources needed to support the priorities and planning commitments included in their business plans.
Integration with Financial and HR Planning: While sector business plans articulate sector priorities and specific planning commitments, the audit found that plans do not address the resource requirements necessary to achieve these priorities and commitments. Sector business plans reviewed during the audit included the identification of deliverables and milestones in relation to specific planning commitments, but did not indicate the financial or human resources required to meet these commitments. Further, the audit identified that sector business planning processes did not include any explicit requirement to demonstrate the link between available resources and the priorities and commitments established by the sector.
Alignment with the Timing of Financial and HR Planning: The audit also found that, for the past two years, the timing of business planning processes has not aligned with related departmental planning processes (i.e. financial and HR). The official launch of the business planning process for both 2012-13 and 2013-14 occurred after the start of the fiscal year. PSD management advised that the business planning process was delayed in 2012-13 as a result of DRAP and by a need of the Department (and its sectors) to consider and incorporate the direction provided by the Federal Budget 2012. The delay in the 2012-13 planning cycle caused a delay in the launch of the 2013-14 cycleFootnote 5. PSD management advised that efforts are underway to try and realign the timing of these planning processes for 2014-15.
When business, financial and HR planning activities across the Department are sufficiently integrated, the risk that planning commitments may not be sufficiently resourced or that resources are not allocated efficiently will be reduced.
5.1.2 Aligning Sector Business Plans - Shared Accountabilities and/or Dependencies
AANDC's business is complex, involving multiple stakeholders. The horizontality, breadth of scope, and complexity of AANDC's priorities requires the development of well-informed and appropriately aligned directions and plans. Given that the work of sectors and regions is very interconnected the audit expected to find departmental business planning processes that supported the horizontal alignment of sector plans and priorities and clearly identified points of intersection and shared accountability, or areas where dependency relationshipsFootnote 6 existed.
For the most part, sectors and regions develop their business plans at the same time. This can contribute to challenges in situations where one sector's priorities and planning commitments requires support from one or more sectors or from regions. Sectors have the flexibility to develop their own processes for establishing business plans, which means that they may or may not engage with other sectors to identify points of intersection, shared accountabilities or dependencies. While PSD encourages horizontal alignment during the business planning process through their call letter and the work they do to support sectors in developing their plans, PSD does not review sector and regional plans with the specific intention of ensuring horizontal alignment of plans and priorities.
Without the horizontal alignment of business plans across regions and sectors, there is the potential for gaps and inefficiencies (duplication, uncoordinated or conflicting activities, etc.) to occur. Further, the Department runs the risk of sectors working at cross purposes leading to desired outcomes not being realized and potential reputational damage. Of particular concern is the extent of intersection of accountabilities and mutual dependency between regions and sectors. Given the extent of these relationships, it is essential that sector and regional plans and planning processes explicitly consider those areas of shared accountability and dependency.
5.1.3 The Need for Sector Business Plans to be Developed in a More Streamlined Manner
Considering the flexibility sectors and regions have to adopt planning processes that support their needs, the audit expected to find sector (and departmental) planning processes that were nimble, flexible and streamlined, allowing management to plan and prioritize in a timely, responsive, aligned, and cost-efficient manner. The need for streamlined processes was considered particularly important in light of the reduction in sector staffing levels that accompanied DRAP.
The audit found that sectors are working to develop more robust business planning processes, which is leading to business plans with better defined priorities and planning commitments. However, the processes and procedures in place within sectors to develop the plans are not adequately streamlined. Business planning is evolving in the Department, and the audit found that different sectors' processes are maturing at different rates. Some sectors are ahead of others in terms of both the overall quality and the timeliness of their business plans and related processes.
While PSD supports the dissemination of best practices through avenues such as the monthly meetings of the Integrated Planning, Reporting, Management and Analysis Forum, sectors expressed a desire for additional support from PSD for developing their planning processes, to make them more timely, responsive and cost-efficient. Also, sectors and regions would benefit from a structured process for the dissemination of best practices by PSD (see section 5.3).
A lack of nimble, streamlined processes can result in the inefficient use of the departmental resources engaged in the planning process. If senior management views existing planning processes as being streamlined and efficient, sectors will be encouraged to increase their efforts in the development of sound planning processes that support effective and useful plans.
1. The Senior Assistant Deputy Minister of PSD Sector should take further steps to collaborate with the CFO Sector and HRWSB to better align the timing of planning activities and, within available resources, develop business planning processes that effectively integrate resource requirements associated with priorities and planning commitments and should ensure that processes support horizontal alignment across sector business plans when there is shared accountability and where dependencies among sectors exist.
2. The Senior Assistant Deputy Minister of PSD Sector should develop support mechanisms (e.g. additional training, guidance in establishing and implementing new processes, tools, etc.) within available resources, and provide sectors with additional guidance for the development of efficient and effective planning processes.
The governance framework and related processes that support the quality assurance and oversight of business planning processes is considered essential to effective business planning. The Report of the Expert Panel on Integrated Business and Human Resources Planning in the Federal Public Service (December 2008) suggested that leadership is the "fundamental driver" of integrated planning. More specific to governance, the report stated that "demand from the top with clear governance, accountability, and performance expectations is indispensable".
In light of AANDC's decentralized approach to the development of sector and regional business plans, the audit identified the need for AANDC's governance structure in support of business planning to be enhanced through:
- Defined quality assurance expectations at the sector level to support the quality and detail of sector business plans; and
- Oversight at the departmental level to support the consistency of sector plans, and the alignment of common/cross-cutting priorities and resource requirements.
Audit observations in regard to the governance structure in support of business planning are provided below.
5.2.1 Quality Assurance at the Sector Level
Sectors and regions have flexibility to develop business planning processes that best support their needs. Staff within PSD's Corporate Results-Based Management Directorate review sector business plans when requested. Senior Strategic Outcome Advisors (within PSD but part of a different Directorate) are available to provide guidance and advice to sectors as they develop their business plans. However, sectors and regions are responsible for establishing their own business plans and these plans require ADM/RDG approval prior to their submission to PSD for the development of the CBP. The audit expected to find that effective quality assurance processes had been developed at the sector level to ensure that business plans are reviewed, challenged and scrutinized prior to their submission to PSD.
The audit found that sector business plans are approved by the respective Sector leaders (e.g. the ADM). Within some sectors, the business planning process also includes the formal review of draft sector plans by senior management levels below ADM (DG,RDG), prior to seeking ADM approval. However, the audit found that departmental expectations in regard to quality assurance have not yet been defined or documented by either individual sectors or by PSD on behalf of the Department. While most sectors were able to outline the process by which business plans are developed, these processes did not consistently demonstrate how quality assurance is sufficiently incorporated into the business plan approval process. For example, sector planners charged with consolidating directorate/branch level input into sector plans may have neither the time nor the expertise to critique or otherwise scrutinize these inputs in light of sector-wide priorities or planning commitments.
A lack of well-defined expectations around quality assurance can result in sector business plans that are not consistent in terms of the quality and level of detail of their planning commitments, targets and milestones.
5.2.2 Oversight at the Department Level
As noted previously, the breadth of scope and the complexity of AANDC's priorities require the development of well-informed and appropriately aligned directions and plans. In support of such directions and plans, the audit expected to find that sector business plans were subject to departmental oversight to ensure the consistency and quality of plans, and that there was appropriate integration and alignment of component priorities and resource requirements.
The audit found that the Associate Deputy Minister (Associate DM) plays an integral role in providing departmental oversight of the business planning process. In addition to reviewing the quarterly reports of both regions and sectors, the Associate DM reviewed the business plans of some sectors in 2013-14. Based on information provided by PSD management, the review conducted by the Associate DM was completed on a risk basis (i.e. quarterly reporting history was considered when selecting sector plans for review).
The work of the Associate DM establishes the "tone at the top" in support of business planning and, more specifically, in providing the basis upon which business plans are used for monitor progress against business objectives. However, and notwithstanding the Associate DM's direct involvement, the audit could not determine whether expectations for departmental oversight had been defined from the onset.
A well-defined governance framework that supports quality assurance and oversight of business planning will have a positive impact on the quality and consistency of sector business plans. It can also increase the possibility of benefitting from opportunities for the identification and alignment of common/cross-cutting priorities and resource requirements. It is important to have departmental influences that compel sectors to work together to establish consistent and aligned priorities and planning commitments.
3. The Senior Assistant Deputy Minister of PSD Sector should, within available resources, develop and implement a governance framework that supports quality assurance and oversight by defining the expectations of sectors as they develop their business plans, by providing support through the review of plans for quality and consistency, and by addressing the alignment of shared priorities and resource requirements across sector plans.
5.3 Objectives and Expectations for Business Planning
Effective and efficient business planning is an important means by which management supports stewardship, prudence, accountability and the delivery of an organization's mandate. Just as processes and governance are needed to support sound business planning, an organization's culture is an important critical success factor. Specifically, a culture that embraces planning principles and activities as being inherently beneficial will naturally adapt and mature in its planning capabilities. The audit identified the emergence of such a culture at AANDC as sound business planning continues to be seen more as a value-added practice and less as an administrative requirement by management.
In support of this ongoing cultural shift at AANDC, it was apparent that business planning would benefit from additional departmental efforts to both promote, guide and support business planning. In this regard, the audit expected to identify a framework comprised of expectations, strategy and guidance that would serve to focus and align business planning around Department-wide planning objectives. While the audit identified a number of useful tools and practices (e.g. PSD's annual call letter, the business planning template and PSD's support of business planning), as well as sector-specific initiatives, there was no clear framework that served to support the consistent and deliberate maturation of business planning.
The audit identified the PSD Sector as being in the best position to facilitate and otherwise drive the development and communication of those Department-wide objectives and expectations that support the achievement of more effective and efficient business planning. Sectors would also benefit from PSD providing broad guidelines that support key objectives and expectation such as those related to the alignment and integration of business planning across the Department. Such guidelines, as an evergreen resource, could also be used to share and promote best practices and to support sectors in improving the efficiency and effectiveness of their own business planning processes.
4. The Senior Assistant Deputy Minister of PSD Sector should facilitate the development of Department-wide expectations, and a corresponding strategy, for business planning across AANDC, and within available resources, develop broad guidance (e.g. guidelines) to support sectors in optimizing the value of planning in their own context and promote Department-wide consistency required to enable aligned and integrated plans.