ACFO President Milt Isaacs is calling on the federal government to consider the implications to financial oversight and accountability as it prepares to table the upcoming budget. Mr. Isaac’s opinion/editorial from the Feb. 20 issue of the Hill Times newspaper is reproduced below.

Penny Wise, Pound Foolish

As governments around the world try to sort out their fiscal challenges, it is imperative that they recognize the value of finance professionals. Greater financial management is necessary to bring public service budgets in order and to ensure their long-term viability.

A good start is to keep in mind that fiscal capacity is an investment.

The Government of Canada has launched an approach that decentralizes the implementation of its budgetary measures, as stated by Treasury Board in hearings held by the House of Commons Government Operations and Estimates Committee in 2011.

That is fine. But as I stated in the same committee hearings, you may lose your financial road map if you don’t have the right people to provide financial oversight: when a financial officer’s position becomes vacant, it could get absorbed into programs. When that happens, you have weakened oversight.

This Conservative government states that it wants to strengthen financial oversight in numerous situations, among them:

  • international financial institutions
  • securities regulations
  • grants and contributions spending

However, the government will not be able to provide the right oversight if it diminishes its capacity by cutting the people tasked to provide that oversight. After all, this government was initially elected on a platform of increased accountability. Financial officers are an essential part of the accountability framework.

Qualified finance professionals will ultimately be responsible for applying the financial discipline necessary to improve the efficiency and effectiveness of Canadian government program delivery.

Not only do Government of Canada Financial Officers (FI group) follow all the standards required of the private sector, they have additional accountability and transparency obligations that stem from handling public funds. These include:

  • operating complex integrated financial management systems
  • managing hundreds of billions of dollars in transactions
  • overseeing spending controls balanced against risk and public trust
  • performing comprehensive analyses that go into managing government programs

Canada takes pride in its strong financial stewardship. When cutting public services, we must consider the implications to financial oversight and accountability. When government reduces financial capacity it risks exposure to conditions that can result in a loss of public trust and confidence in the international community.

Look across the Atlantic. The cost of ignoring the importance of financial capacity becomes painfully clear. Government is responsible for improving the welfare, prosperity, opportunity for growth, safety and security of its citizens.

Financial stewardships touch the lives of all citizens. When you build and maintain financial capacity, you are making an investment. The cost of not getting it right is too high, and the risk of ignoring its importance is too great.

Governments drowning in debt would do well to retain the staff responsible for throwing them a life-preserver precisely when it is needed most.

Milt Isaacs, CMA

President, Association of Canadian Financial Officers