Government Response to the Twelfth Report of the Standing Committee on Public Accounts
Public Accounts of Canada 2006
The Government of Canada presents to Parliament for discussion and debate a model, including projected costs and benefits, on extending full accrual accounting to budgeting and appropriations by 31 March 2007, and implement accrual accounting in budgeting and appropriations by April 1, 2008. That, if the Government is not able to do this, reason be provided to the Public Accounts Committee.
The Government agrees that there are benefits to be obtained from extending the use of accrual accounting to appropriations and department-level budgeting and proposes a two-phased approach, consistent with the recommendation. The first phase would focus on the development of a model of accrual-based appropriations and budgeting and the second phase would be implementation of the model.
Since appropriations are Parliament’s tool for exerting financial control over government, it is critical that the model focus on the needs of Parliamentarians. The Government intends to follow the process used for the last major revision to the Estimates and set up a working group of Parliamentarians to cooperate with a Project Management Office in the Treasury Board Secretariat in the development of a detailed model. Once developed, this model, including information on implementation requirements, would be presented to Parliament for further discussion and debate.
This process is an efficient and effective means of developing a model that will best meet the requirements of Parliamentarians. However, this process would not be completed by the 31 March 2007 deadline in the Recommendation. Given the variations in related practices in other jurisdictions and inherent range of choices possible in designing a model, the complexity of the subject and the potential impacts, a challenging target date for presenting a model to Parliament is March 2008.
The model selected will determine what is needed for implementation in terms of resources and time. Evidence from the recent meetings of the Standing Committee on Government Operations and Estimates on the issue of accrual budgeting and appropriations suggest that five years is a reasonable timeframe for development of a model and the implementation of ensuing changes to systems, processes and legislation as well as the development and provision of guidance on the new model.