The Center for Literacy

I worked 22 years in the federal government, ending with my work at the Treasury Board Secretariat. I was Secretary of the Treasury Board and Comptroller General of Canada. This position is not the same as the Auditor General. The Comptroller General is part of the government, whereas the Auditor General reports directly to the House of Commons.

The Treasury Board acts as the general manager of the government and oversees its policies, rules and regulations. The role of the Treasury Board is one of ensuring prudence, probity, economy, effectiveness, efficiency.

• ‘Economy’ means acquiring goods/services for the least possible cost.
• ‘Efficiency’ means generating a specific output with the fewest inputs.
• ‘Effectiveness’ means delivering the appropriate outputs which will achieve the goal.
• ‘Prudence’ and ‘probity’ mean doing things in an appropriate way - that seems to be appropriate to taxpayers and auditors. It means acting in the public interest.

Results and effectiveness are part of the overall responsibility. The Treasury Board ensures that programs will be evaluated and audited.

In 2006, I was one of three members of the Independent Blue Ribbon Panel to advise on Grant and Contribution Programs. This panel was created by the President of the Treasury Board as part of the government’s Federal Accountability Act and Action Plan.

When I first came to government in 1972, Adult Basic Education was a significant federal expenditure in the department that was then called Canada Manpower & Immigration. It was created at the end of the Pearson era and the federal government had been looking for constitutionally legitimate ways for the federal government to invest in manpower. They decided to invest in adult basic education, and the major instrument was to purchase “places” at community colleges. It was funded on a per seat basis.

I have been rather critical of them but the genesis is understandable. These measures became more extensive and intrusive as a result of the “HRDC boondoggle” which was greatly overblown by the opposition parties. There was a very good book written by David Good (from the University of Victoria) about this. There is also a great article on the subject, written by Arthur Kroeger. “The HRD Affair: Reflections on Accountability in Government”. You can find it on the Blue Ribbon Panel website. It shows in retrospect there wasn’t a boondoggle at all. Of the $1 billion allegedly lost or misspent, there was maybe $15,000 that was unaccounted for. In fact the main problem was that there was a lot of loose bookkeeping. There was likely more spending in the constituencies of some government members as opposed to others’. But there was likely little that was misused or wasted.

Then there was the George Radwanski scandal at the Office of the Privacy Commissioner regarding misuse of funds. Finally, there was the Sponsorship Scandal. So, the first impetus for [the development of these guides] was a perceived breakdown in probity and prudence. A second impetus was the budget reduction of the Program Review of 1995, where the government reviewed spending on all things that were discretionary. Too many of the internal control resources were cut in an effort to reduce expenditures.

A related impetus was the increasing backlash to the political advocacy that community groups were engaging in. In some cases this advocacy was highly critical of the government. The political backlash to such advocacy included a move to project funding rather than core funding. This means that you have to demonstrate that you are producing results rather than spending time advocating for things the government would prefer not to do.

Finally, there was the changing role of the Treasury Board Secretariat. It got out of the budget office role that such offices perform the world around, which is challenging the spending proposals. The Secretariat seemed to lose interest in doing budget office work and fell back on what was thought to be a more macro management work. This was made explicit in the adoption of the label of management board in addition to the historical treasury board. The hope was to require better management practices across the board. The effect has turned out, in my view, to be counterproductive. The Treasury Board has imposed mandatory frameworks such as results-based management frameworks which sound rational but have led to extremely burdensome paper processes. Everyone has to comply with the mandatory requirements.

I wrote an article with my colleague Harry Swain entitled “Distinguishing the real from the surreal in management reform: suggestions for beleaguered administrators in the government of Canada” (Canadian Public Administration, Winter, 2005). The theme is surreal management and the article describes how these excesses have tied administrative processes into knots which then find their way down to processes that grant recipients have to follow at the community level, such as adult literacy processes in Parkdale. To my surprise, the federal government invited me with Frances Lankin to look at how to improve the operations of grants and contributions programs.

We are in the era of the Federal Accountability Act. This makes things worse: it creates the climate for more burdensome administrative processes. By establishing the Independent Blue Ribbon Panel, the government invited us to look at how to achieve accountability with a minimum additional burden. The Prime Minister understood that trade-off. He was interested in having us look into producing accountability with the least cost to efficiency of operations.

Part of the problem is the universal one of results measurement in a complex system. What one always finds 100% of the time is that the program administrators will game the measures. Why? Because everyone wants to be perceived to be successful. You’ll do whatever you can within the bounds of your own ethical standards, the defined rules, and the threat of exposure through audit. It is simply human nature to do what you can to make the results measures look good. The extent that administrators will game the system depends also on the incentives. If there is a results-based system there is a huge incentive to do this.

Another term for this is the ‘principal-agent problem.’ The ‘principal’ in this case is the management arm of the government, the Treasury Board. The principal needs someone else – the agent – to do something on its behalf. The question is how do you get someone else to do it? You need measures to ensure others will do it. What has happened is that this has produced the excessive cost of gaming and the cost of the principal trying to keep track of this is through accountability. The reason this is worse now is because governments are increasingly insisting that the same measurement system be used for managing as is used for public accountability. This is naïve. And across the board measures are unable to respond to differences between departments.

There’s no perfect solution. The way that I would recommend would be to rely on big macro evaluations by academics and people knowledgeable in the field who would take a look at the overall program, at practices and effects across jurisdictions through comparable measures, through regressions of socio-economic variables to figure out what are the important factors and the impacts. In the meantime, I would like to see the government rely on good hiring, good judgment, and good sense. Then, based on having hired experienced people who are knowledgeable about the field, the principal would say to the agents: we believe you’ll work hard, that you have the best interests of program participants in mind, and that you know what you want to achieve. We will not try to measure your performance every year. Why? Because:

1. the effects take too long to measure
2. there are too many other factors that you don’t have control over
3. If you do it, you’ll waste too much time

Instead, we’ll concentrate more on selecting the right people for the project. We principals will have to apply some judgment, including whether to renew the funding.

I think ironically that when resources become scarcer, there will be more concern about getting real results, and people will be less concerned about measuring results. Things will have to be done that are self-evident. People will say: let’s go and do them, let’s get them done, and avoid the artificiality of constantly reporting on things.

Many civil servants are petrified by the current atmosphere of political and administrative risk aversion. They fear that if they utter anything that looks like it is inconsistent with the Prime Minister’s Office message that there will be dire consequences. And I suspect that political advisors believe that most community groups who are involved in advocacy do not vote for the current government. So we have a rather toxic situation.

The government is looking at how to change the internal processes. Overall, I am impressed with the progress that Treasury Board and vanguard departments are making, creating more simplified ways of demonstrating accountability. From what I am led to believe, public servants have prepared material for Cabinet consideration and have been making progress on identifying how to improve the internal processes. But even if they are successful at this it will not have much effect at the community level for another year or so. I suspect people you interview in service delivery will not have detected any difference in the level of scrutiny and process requirement. There may be some brave and enlightened managers who say let’s move ahead in anticipation. However, others may be more cautious.

Accountability is an overrated concept. Currently, many seem to believe that accountability trumps everything… that you have to go to every effort to get accountability. Twenty or thirty years ago we didn’t talk very much about accountability. At Treasury Board we viewed the world in terms of those 2 ‘P’s and 3 ‘E’s [Prudence, Probity, Economy, Efficiency, Effectiveness]. The goal was to do them in a way that was beyond reproach. When you think of it that way, accountability is pretty straightforward.

The purpose of an accountability regime is basically to correct mistakes and to improve performance – to produce better results for taxpayer’s money. But the preoccupation with accountability has a whole lot of people preoccupied with reporting, checking and measuring and gaming the system and not all that many people worrying about the results, about whether we’re going about getting all that much literacy. If you really cared about that how would you do it? You would find people you thought had a good approach and you would encourage them to come up with good ideas. You would get them enthusiastic about delivering it, you would develop a kind of partnership and you’d get on with it. If it’s something that’s important to you in your personal life – finding a lost child or rescuing them from a burning building – you don’t worry about accountability processes. You just go and get the job done. If there’s a way to think about applying the human realities of common sense about what we know about how people behave and how you mobilize people to get things get done – like building a dock, or a barn… that kind of thinking about achieving results in government, then I think we’d be better off.

The government has engaged in a serious stakeholder consultation involving a national workshop (hosted by the School of Public Policy and Governance at the University of Toronto on June 26) and a series of regional workshops in the fall. Frances Lankin and I attended the national workshop and were impressed with the progress that had been made to date. The Treasury Board Secretariat team that is leading this effort is impressive. The senior members have had extensive experience in operating departments that administer grants and contributions and they have demonstrated a good knowledge of the challenges facing community groups.

I believe that many provinces face similar challenges and they will be watching the federal process to see what can be learned and applied to provincial administration of grants and contributions. It was one of the hopes of the Blue Ribbon Panel that there could be greater coordination among the two levels of governments. I know that the Treasury Board team is thinking about the best way to address this.

Here in academia and research institutions, proposals are selected on the basis of peer review judgment. You’ve got people who are thought to be the best people to judge their peers, who know the field, and then they select. The accountability mechanism is that you’ve got the best in the field. They judge that that was the best project. Do they need a 400-page document rationalizing that this was the best? No. It’s peer judgment.

If you’ve got high quality managers who are known to be expert in the field, and they gather a few others who are known to be disinterested in the results, you can have a selection panel. The project goes forward and there would be a review of experts of some kind to say whether or not they did a good job. You don’t need a huge amount of paper processes to do that.

One of the ways the current system is naïve is to believe that you can use the same management information for managing things as you can for holding the operation to account. This was the goal espoused by Reg Alcott, the President of the Treasury Board in the Paul Martin government. [The hope was that ] if you can apply all the great technology you have and apply the appropriate management information and arrange it sensibly then managers can use it to manage their programs directly and we can report all this to Parliament and the Parliament can hold the government to account and get one system. For the reasons I have noted, this is very naïve. Because people will inevitably game the accountability measures, by trying to force the same measures to be used for accountability and for management, you could easily end up with an information system that is good for neither.

I would advocate that we should recognize that management and accountability information are different things for different purposes. We should allow good managers to collect the kind of information they need to manage things then have some reporting requirements to hold people to account. In many cases the information systems will be different. We should not devote an unrealistic amount of time producing the accountability measures, but rather we should rely on more in depth evaluations. These would take a serious look, for example, at adult literacy efforts of the last 10 years and then use judgment to decide whether they are on track or whether they need to try something different.