Chapter 20: Management of Financial Resources
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
- 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
- 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
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
• 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.
- 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,