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POLS 2250 (94)
Chapter 20

Chapter 20

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Department
Political Science
Course
POLS 2250
Professor
Nanita Mohan
Semester
Winter

Description
Public Administration Chapter 20: Management of Financial Resources Page 315-326 Focus: This chapter focuses on the government’s ability to handle public funds, the role of the Auditor General, and the transfer of government funds. Key Terms: Estimates, Interim Supply, Supplementary Estimates, Auditor General, Public Accounts, Comprehensive audits. Figure 20.1 page 316 depicts the various departments involved with the financial processes. Parliament - All expenditures must be approved by the legislature first. - The president of the Treasury Board begins the process, in February or March of each year, by tabling a series of documents from each department in the House of Commons. These documents are called estimates. - The departments submit their overall budget requests for the year stating their priorities, where the money will go, and their strategies to achieve these goals. - Next, the estimates are sent to various appropriate committees within the house for a more in depth look. - The new fiscal year is April first, which means that the estimates will nth be done their approval process. From the period of April first to June 30 , parliament provides the departments with about one fourth of their budget requests to keep things moving, these are known as Interim Supply. - Interim Supply is used to keep existing programs running. New programs must wait until the budgets are approved. - The estimates are then brought to hearings where ministers and senior officials go to defend their requests. - These hearings also allow for other interested political parties and other experts to attend. - The committees recommend what the budget ought to be to parliament, and after all are received in the House of Commons a vote takes place on the full budget contained in the estimates. - This vote is also referred to as the confidence vote. Should the government lose this vote they should resign, as an act of convention. - The vote must take place on or before June 30 meaning that opposition parties cannot delay the process, but they can defeat the budget. - Once the budget is passed it is called the Appropriation Act, for that year. - Once the budget is passed, the government cannot transfer funds or spend more than estimated for certain activities. In order to spend more money in areas, usually for unforeseen reasons, the government must provide Supplementary Estimates. These estimates are pieces of legislature that the government presents in the House of Commons for either additional funding, or to transfer money between programs. Problems: There is limited time for Parliament to review and pass the lengthy budgets and most of them do not even get reviewed. Supplementary estimates follow the same pattern, many are not reviewed. Parliamentarians also show little incentive to change the estimates because of party discipline. Solutions: Instead of addressing the full range of estimates, focus on particular programs. The Treasury Board - Once the Appropriation Act is passed, the departments are able to access funds as outlined by the act. - The treasury board now has certain authorities to make regulations in most areas of general administration and financial management. - Examples of the Treasury Board’s power: • Establishing allotments or subdivisions of parliamentary appropriations that cannot be varied without approval. • Prescribing rules and procedures to be followed before a cheque is issued. • Prescribing rules for the receipt of government funds paid to the government and for the safeguarding of public property. • Ensuring coordination of administrative functions and services within departments and the government as a whole. • Prescribing the form and manner in which government accounting records will be kept. • Establishing regulations for entering into contracts and for purchasing. - The main role of the Treasury Board is to ensure that all the diverse and decentralized units of the total organization are conducting their administrative activities in an appropriate and reasonable uniform manner. In other words, keeping track of funds, how they are spent, and where they go. Operating Departments - Departments operate most of the large government programs; examples are the environmental department, the health care department, etc. - Departments must establish pre-audit procedures, set by the Treasury Board, which confirm that appropriate conditions have been met before payment is approved. These procedures include: ensuring that the expenditure has been authorized by parliament, that adequate funds still remain in appropriation, that goods and services have been received, and that everything is in line with the contract. In other words, the department receiving the money must prove that they are entitled to it. - Departments must also establish an internal audit group,
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