CONTEXT
The December 2002 Auditor
General’s Report includes a chapter on the results of an audit of the planning,
acquisition and management practices for office accommodation of Public Works
and Government Services Canada (PWGSC).
The Standing Committee on
Public Accounts (SCOPA) considered that chapter of the report and heard
testimony March 24, 2003 on this matter from senior officials of both the
Office of the Auditor General and PWGSC.
Subsequently, SCOPA
tabled its Nineteenth Report in the House of Commons on June 6, 2003.
The Government has taken
note of the observations and recommendations in the Nineteenth Report and is
firmly committed to acting upon the recommendations found therein. It agrees with the recommendations for
improving the planning, acquisition, management practices and reporting to
Parliament for office accommodation services.
Furthermore, the Government agrees to examine the implementation issues
of direct charging in detail.
The Government has
introduced significant changes to manage office accommodations in a
business-like fashion over the past decade and will do much more to build on
these successes.
In responding to the
recommendations, the Government reaffirms its commitment to ensuring value to
taxpayers for real property resources by providing office accommodation
effectively, efficiently, economically and in an environmentally sound
manner. PWGSC, together with its client
departments, provides essential, productive workplaces to support the daily
operations of government in meeting the needs of Canadians.
The Government of Canada
appreciates the contribution of SCOPA to ensuring that the acquisition and
management of office accommodation is carried out efficiently, effectively,
fairly and in the public interest.
RECOMMENDATION No. 1
That Public Works and
Government Services Canada prepare a detailed description of the progress
achieved in developing and reviewing community
and regional investment
plans and strategies. That this
information be provided to the Public Accounts Committee no later than 31 March
2004.
Response
PWGSC agrees to provide a
status report by March 31, 2004 containing a detailed description of the
progress achieved in developing, reviewing and maintaining community and
regional investment plans and strategies.
The status report will
cover how various strategic plans have been developed, coordinated and
implemented in a consistent manner.
These strategic plans include the Community-Based Investment Strategies
(CBISs), Regional Investment Strategies (RISs) and the National Investment
Strategy.
By December 31, 2003, all
RISs will be in place.
By March 31, 2004, all
CBISs will be up-to-date.
Treasury Board Ministers
approved the updated National Investment Strategy in 2001 that establishes the
objectives, guiding principles and overall direction for real property
investment activities.
The status report will
also indicate how well investment decisions required in the plans are being
documented and supported by timely information on market conditions for both
the supply and demand for office accommodation.
The report will also
describe the process by which CBISs, RISs and the National Investment Strategy
routinely updated, monitored and reported.
The process will indicate how milestones, deadlines, resources and
results identified in the plans are controlled, monitored and reported.
Recommendation No.
2: That Public Works and Government
Services Canada prepare a document containing a detailed description of the
progress achieved with client departments in developing long-term accommodation
plans. That this information be
provided to the Public Accounts Committee no later than 31 March 2004.
Response
PWGSC agrees to provide a
status report by March 31, 2004 on the progress achieved with client
departments in developing long-term accommodation plans.
PWGSC, in consultation
with its clients and stakeholders, will develop, implement and monitor a plan
to have Master Occupancy Agreements (MOAs) or other appropriate formal business
arrangements in place for all its clients.
Master Occupancy Agreements, approved by Deputy Ministers, formalize the
partnership between PWGSC and its client departments and agencies regarding the
provision and utilization of office accommodation. They identify and clarify the responsibilities and
accountabilities of office space users and providers.
The progress report will
provide an update with respect to meeting the targets of the plan. Detail will be also be provided on the
specific MOAs and other business arrangements in place or under negotiation.
Recommendation No.
3: That Public Works and Government
Services Canada prepare a document containing a detailed description of the
progress of initiatives designed to strengthen long-term options analysis. That this information be provided to the
Public Accounts Committee no later than 31 March 2004.
Response
PWGSC agrees to provide a
detailed description by March 31, 2004 of the progress of initiatives designed
to strengthen long-term options analysis for office space acquisition.
PWGSC, in cooperation
with Treasury Board Secretariat, its clients and other stakeholders, will
examine its planning practices, administrative measures and funding approaches
to reinforce the application of its community and regional investment
strategies. Initiatives will be
identified which help increase lead-times for consideration of the full range
of long-term options for office space acquisition. Such options typically include purchase, build, lease or
lease-to-purchase. This longer period
for analysis should help increase the opportunities where PWGSC can take
advantage of the most cost-effective alternative for securing office
accommodation.
Recommendation No.
4: That Public Works and Government
Services Canada prepare a document disclosing the progress of its initiatives
designed to strengthen and upgrade its financial information systems, policies
and practices to support project management.
That this information be provided to the Public Accounts Committee no
later than 31 March 2004.
Response
PWGSC agrees to prepare a
document by March 31, 2004 to disclose the progress of its initiatives designed
to strengthen and upgrade its financial information systems, policies and
practices to support project management.
The progress report will
show how PWGSC addresses, on an ongoing basis, the issue of ensuring an
adequate cost-effective financial and reporting system with the capacity to
provide credible, relevant, timely, accessible, complete and accurate full-cost
information for managing and controlling the budgets of client projects. Specific new modifications will be
highlighted and their significance to enhancing performance and the overall
business environment will be explained.
Work is underway to
develop a strategy to integrate the data contained in the Department’s existing
systems and to ensure that all necessary management information is recorded and
accessible. Results in this context
will also be reported.
Recommendation No.
5: That Public Works and Government
Services Canada ensure that its Departmental Performance Report contains
information on the progress (achievements versus planned targets) of the Action
Plan initiatives designed to improve the Department’s planning, acquisition and
management of office space. That the
Department begin reporting this information in its Departmental Performance
Report for the fiscal year ending 31 March 2004.
Response
PWGSC agrees to start
reporting on the progress of the response initiatives in the Action Plan that
address the recommendations of the Auditor General’s 2002 Report.
The Auditor General made
recommendations to improve several aspects of the planning, acquisition and
management of office space. They cover
matters such as the need to have better planning and information systems to
properly manage both the supply and demand of office space. The Auditor General also noted that PWGSC
has to find a way to be able to consistently consider long-term options for
office space acquisition. There was
concern about the lack of good financial information about how much it costs to
provide office accommodation.
PWGSC agreed with all the
recommendations and prepared a comprehensive Action Plan to respond to the
recommendations and to remedy the shortcomings.
This annual progress
reporting to Parliament on the Action Plan will begin with the Departmental
Performance Report for the fiscal year ending March 31, 2004.
Recommendation No.
6: That Public Works and Government
Services Canada urge the Government of Canada to amend the Real Property
Management Framework Policy, the Common Services Policy and other relevant
policies to allow the department to charge accommodation and realty services
directly to all departments and agencies, and that the Department report back on
this issue to the Public Accounts Committee no later than 31 March 2004.
Response
PWGSC will examine
charging office accommodation directly to departments and agencies and report
to SCOPA by March 31, 2004. This
examination will include consultations with stakeholder departments and
agencies.
Without limiting the
scope of the examination, PWGSC will study issues such as accountabilities,
resource allocations, governance and sustainability. A thorough comparative analysis of the advantages and disadvantages
between the current accountability regime and a direct charge regime will be
conducted.
At present, office
accommodation stands out as the one major area of spending in government
without apparent accountability by user organizations. The current Space Envelope Regime and the
Expansion Control Framework which includes a user pay component, were
implemented with the expressed purpose of achieving greater
accountability. There are good
arguments in favour of direct charging.
With the introduction of a market-type business arrangement, between the
provider and user of office space, greater discipline in the supply and demand
of office accommodation would be fostered.
The user would be more accountable because the cost of rent would be
more visible and the demand for space and amenities would be better
rationed. At the same time, PWGSC would
be revenue dependent and even as sole provider would stay better focused on the
needs of each and every client and how it allocates operating and capital
resources. There are challenges, of
course, such as maintaining economies of scale for real property services and
expertise and ensuring a whole-of-government portfolio approach.
Recommendation No.
7: That Public Works and Government
Services Canada collect from its client departments and agencies all relevant
financial and managerial information related to accommodation services and
prepare, on a full accrual basis, a single financial report containing detailed
information on the cost of accommodation and realty services across the federal
government and that the Department table this report to Parliament on an annual
basis beginning 1 April 2004.
Response
The Government will
conduct consultations with appropriate stakeholder departments and agencies to
define the information requirements in terms of relevance, usefulness and level
of detail for a single, annual report.
It will then develop a cost-effective process to ensure that the
financial and management information on accommodation and realty services across
the federal government is collected and disclosed fully to Parliament annually.
PWGSC is not the only
custodian department and not all government accommodation costs are included in
PWGSC’s centrally managed appropriations.
Any department or agency can incur costs from their own appropriations
for office
accommodation. Therefore, each department and agency will
be asked to contribute to this initiative, whether it is a custodian department
or not.
By March 31, 2004, the
Government will report back to the Committee on the results of its
consultations about the information requirements definition and on the
development and implementation timetable of a process to satisfy Parliament’s
information needs in this context.
Conclusion
The set of solutions
presented here to respond to the Committee recommendations will contribute
significantly to meeting departmental performance outcomes and to reporting
fully to Parliament on office accommodation.
While each recommendation is considered individually, they should be
thought of as an integrated package which will build upon the Government’s
approach to accommodation management.
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