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Thursday, May 21, 2009

Finance and Technology for More Effective Systems

Christine Walker, the CFO of the Canadian International Development Agency (CIDA) discussed the impact of the government stimulus package and the use of technology during a keynote at the 23rd Annual ICGFM Conference.

The stimulus package requires identifying risks. Based on these risk, internal controls need to be established. Effective reporting is essential. This need effective IT systems. Systems in use by the Canadian government were not designed to handle quarterly reporting, according to Ms. Walker.

The budget bill that passed in January. Each department to receive the money needed to design systems and programs to achieve parliamentary approval. All submissions were accumulated to a single bill that was passed in Parliament, which has never been done in Canada before.

The challenge for government departments is the complex procurement process for all purchases over $25,000. This process is designed to protect the government. Ms. Walker suggested that it was very difficult to quickly manage stimulus procurement. Hiring people to help was very difficult and the government found that they had capacity problems. Vendors are able to appeal to the Canadian International Trade Tribunal should there be any mistake in the procurement process. This can delay procurements by over a year.

Ms. Walker identified numerous risks of delay such as complex environmental assessments and just-in-time project reporting. She indicated that the monitoring and reporting burden became significant. Timely and accurate information is required. The government needed to asses a certain level of risk. CIDA has created a vendor assessment and audit process to help pre-select a short list of vendors.

Parliament wants to know non-financial information. They want to know progress to date against the project plan. Governments are not used to reporting on financial and non-financial at the same time. It is imperative to use IT systems to compare projects according to Ms. Walker. Parliamentarians will demand why projects have not been completed in their ridings. She believes that the political environment will be very challenging. No one wants to be a CFO in the Government of Canada, according to Ms. Walker. IT systems are critical to support effective financial management for the stimulus package.

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