Corporate Management and Direction

Expected Result - Sound strategic direction, financial and treasury management

Demonstrate excellence in oversight and management leadership

Our legislation, the Canada Customs and Revenue Agency Act , established a unique governance structure for the CRA, which has three components: a Minister; a Board of Management to oversee human resources, financial and administrative authorities; and a Commissioner, accountable for the day-to-day administration of the human resources and administrative authorities.

Working within this governance structure, the Board of Management provides strategic oversight in the CRA's direction and administration. In 2004-2005, the Board's actions significantly enhanced our organization through the following:

• the approval of the CRA Injury and Illness Policy;
• the approval of the CRA Employment Equity Strategic Direction;
• the approval of a range of corporate governance instruments, including the media relations policy and emergency communications guidelines; and
• the approval of the CRA's funding proposal for cost-recovery initiatives.

As a result of the Board's interest in performance reporting, the Corporate Business Plan and the Annual Report have become our key planning and reporting documents. Together, these documents facilitate accountability at all managerial levels.

Section 89 of the Canada Customs and Revenue Agency Act requires Parliament to undertake a review of the legislation five years after November 1, 1999, the date when it came into force. To support the parliamentary review, we prepared a submission to the House of Commons Committee on Finance, entitled The Canada Customs and Revenue Agency: The First Five Years - Setting the Foundation for Tax and Benefit Administration in the 21st Century. This report describes the impact of the legislation on the CRA's operations and the quality of its services. Overall, the report concludes that we have achieved our objectives of a more efficient and effective administration and a closer relationship with the provinces and territories. The report also concluded that the transformation of our human resource and administrative regimes has enabled us to improve our service to Canadians.

As a demonstration of our commitment to transparency, Annual Reports and Summaries of the Corporate Business Plan are available on the Internet (see Schedule D).

Reflecting modern comptrollership principles, demonstrate excellence in financial stewardship, including sound cash and financial and non-financial information management

Modern Comptrollership is a set of management reforms that focuses on results and value for money. The CRA has been active in promoting modern comptrollership by maintaining an intranet site that links the four key indicators or “pillars” underpinning the concept, with day-to-day business methods. To build comptrollership capacity and expertise, we provide training to executives and managers.

Strengthening financial management is a key priority at the CRA. In 2004-2005, the CRA spent $3,051 million, about 5.4% less than our budget of $3,226 million. The CRA's 2004-2005 financial expenditures remained relatively stable, increasing by some $105 million, or about 3.6%, over 2003-2004. Over the past years, we have introduced and implemented various Investment Plan initiatives and reviews aimed at improving efficiency. These measures are contributing to savings in terms of operating expenditures. Part of the CRA's resource management strategy is to limit administrative overhead spending, where possible, and to reallocate funding to program priorities.

The CRA strives to optimize the use of funds to mitigate risk to program delivery. In 2004-2005, as a result of our internal financial review sessions, we reallocated funds from lower to higher priorities in support of program delivery. We identified a package of expenditure reduction initiatives, contributing to the Government of Canada's expenditure review exercise; the CRA's expenditure reduction obligations total $438.9 million over the next five years.

To contribute to our sound cash management objective, we strive to deposit funds as quickly as possible. For 2004-2005, for tax funds, 94.6% of the volume of receipts (representing 98.1% of the value of all tax funds) were deposited within the 24-hour window. This is a slight decline in performance from 2003-2004, which can be attributed to the impact of the CRA labour disruption in 2004. Excluding the period of labour disruption, the 2004-2005 performance for cash deposits performance was slightly better than that in 2003-2004.

In 2004-2005, enhancements were made to the CRA's Performance Measurement Program System (PMPS) which facilitates our focus on performance results. The system is used to record performance data against targets and report these on a quarterly basis to senior management for their review, providing an enhanced ability to take the required corrective action. Though much progress has been made, more work is needed to set remaining targets, and establish additional clear and concrete performance measures.

Improve financial management controls and systems to be responsive to the needs of internal and external stakeholders

As part of the government-wide priority to establish a new framework for results reporting and management, the CRA developed a new Program Activity Architecture (PAA). This structure will be used as a basis to more clearly link resource utilization to the results of our program activities. The CRA's activity-based costing methodology will add costing accuracy to provide an end-to-end causal link between resources and results.

In 2004-2005, we increased the reliability and efficiency of our revenue ledger system, which is used to record revenues owed by and due to taxpayers. We strengthened our electronic controls and monitoring to respond to the Auditor General of Canada's concerns about financial control weaknesses.

The Corporate Administrative System (CAS) is our primary expenditure management system. In its 2005 report, the Office of the Auditor General of Canada indicated that additional action is required to achieve the desired results in terms of optimizing electronic security, monitoring and control features of CAS. In response, the CRA initiated a full review of the framework guiding electronic access. Access adjustments resulting from this review, including those identified by the Auditor General, will be implemented in the coming months.

Our internal audit and evaluation function supports our strategic goals by providing reviews to senior management concerning the adequacy of our systems and controls. The most notable review this year was the National Audit of Contracting Processes, which led to the introduction of a four-point action plan to enhance risk management in contracting. Among the new control measures implemented was an instrument that strengthened the delegation of procurement authority; reduced delegations to program officials, a requirement that all contracts over $1 million be reviewed by senior management committee; and centralized procurement in common service/commodity areas, such as training.

Date modified:

2005-10-26