Departmental financial and budget cycle

Introduction

• In our parliamentary system, the government must seek Parliament’s approval to spend public funds
• The government presents its estimates – its detailed spending plans – to Parliament for review, and Parliament authorizes the government to spend funds through the approval of appropriation bills

Expenditure management system

Financial cycle – Federal Budget

The government’s financial cycle is a continuous process, there is no specific beginning and end to it.

It is simpler to start with the Federal Budget, which is presented to Parliament by the Minister of Finance in February or March.

The reporting cycle for government expenditures

Financial cycle – Estimates

The Estimates, along with the Minister of Finance's Budget and Economic and Fiscal Update, reflect the Government's annual budget planning and resource allocation priorities.

The Estimates are divided in 3 parts:

• Government Expenditure Plan
• Main Estimates
• Departmental Plans and Departmental Results Reports

Each year, the Government prepares Estimates to request Parliament for authority to spend public funds. This request is formalized through the tabling of appropriation bills in Parliament.

The Main Estimates, the Departmental Plans and the Departmental Results Reports require Minister’s approval.

Financial cycle – Departmental Plan

Shortly after tabling the Main Estimates, the government tables the Departmental Plan (DP) for each government organization. The DP is included in Part III of the Estimates.

These reports include a Minister’s message and outline the results the government expects to attain with the resources provided.

They set out each organization’s overall program structure, called the Departmental Results Framework (DRF). This specifies the financial investments and human resources allocated to each Core Responsibility.

Financial cycle – Supplementary Estimates

Basic instrument used to make approved vote transfers, OGD transfers, etc.

A vehicle used to obtain additional funding  for new or changing government initiatives. (TB Submissions)

Successful submissions are approved by Parliament in the form of Supplementary Estimates normally two times a year

Financial cycle – Departmental Results Report

In the fall, usually in November, the government presents results reports for each government organization.

These are called “Departmental Results Report” (DRR), and they set out the performance that has been achieved with the resources available, as assessed against the expected results outlined by DRF in the previous year’s DP. They include a Minister’s message and are included in Part III of the Estimates.

Financial cycle – Public Accounts

Also in the fall, the government tables the Public Accounts of Canada, the government’s consolidated financial statements for the recently completed fiscal year.

Whereas the Main and Supplementary Estimates seek Parliament’s approval to spend funds, the Public Accounts outline how much was actually spent during the fiscal year by each government organization.

All Branch Heads sign a Representation Letter attesting to the Information in some of the Public Account Plates.

The Minister’s office expenditures are detailed by Standard Object in Volume 3 of the Public Accounts.

Other expenditure management system documents

The following documents are prepared internally by all departments and sent to various central agencies, but not tabled in Parliament. They require Minister’s signature.

• Memorandum to Cabinet (MC)
• Treasury Board (TB) Submission
• Departmental Attestation Form (TB Streamlined Attestation Process)