Modern

Management -
Managing
Together

Accountability Framework
Information Booklet

Government of Newfoundland and Labrador

Office of the Comptroller General
Treasury Board Secretariat
October 2003
 CONTENTS

PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

MODERN MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

GOVERNANCE.... Setting the Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

LEADERSHIP .... The Building of Excellence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

ACCOUNTABILITY.... Leveraging Responsibility For More Effective Government . . . . . . 6

PERFORMANCE MEASUREMENT..... Building on Success . . . . . . . . . . . . . . . . . . . . . . . . 8

LEARNING AND GROWTH .... Excellence Through Change . . . . . . . . . . . . . . . . . . . . . . . 11

RISK MANAGEMENT.... Calculated Risk-Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

FINANCIAL MANAGEMENT.... Managing Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

THE MODERN MANAGEMENT VISION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

GLOSSARY OF RELEVANT DOCUMENT TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

FURTHER READING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Modern Management Accountability Booklet

PURPOSE

The purpose of this information booklet is to provide managers with an overview of Modern
Management objectives and related functions which, when linked together, form best business
practices and help to achieve outcomes. In the public sector across Canada, this has been described
with the term “Modern Management” or “Modern Controllership”. It is only with the teamwork of
all managers in the public sector that optimal outcomes can be achieved.

It should be noted by managers that the terminology and functions discussed in this document may
not represent ‘new’ ideas as such. For instance, good business practice has always entailed the
development of such areas as sound governance, leadership and financial management. Many
managers within Government successfully apply these principles daily without conscious thought
that they are Modern Management techniques. However, what is now being asked of management,
through documents such as this, is that managers do give conscious thought to their activities;
thinking clearly about each of the elements of the Modern Management vision discussed below. In
particular, Modern Management is really about the linking of these elements in relation to direct
work processes and working in concert with others throughout the organization to achieve outcomes.
Managers should use this document in a workable way to help direct their overall actions in a
positive and focused manner. To assist in the understanding and use of this document, a list of
Relevant Document Terms has been included at the end of the document.

This booklet is not a policy document as the various component policies have been issued through
other means.

MODERN MANAGEMENT

The current public sector financial management environment in Canada has begun using the term
“Modern Management” to describe a vision which seeks commitment to management based on
principles and informed decision-making. For an organization, this means developing a culture that
looks to underlying principles for making good decisions. For managers, this is a challenge. In
order to rely on principles, they must truly understand not only the controls in their own individual
environments, but must also understand the core controls in their organization as a whole.

Modern Management is a way of addressing this challenge. It involves the linking of financial and
management principles to the development of efficient and focused governance and work processes.
The ultimate goal of this link is to ensure enhanced organizational accountability. These financial
and management principles include:
• Controls: sound management and financial controls and practices
• Ethics: ethical accountability and learning through organization-wide thinking
• Risk Management: established risk management behaviours and practices
• Performance: outcome measurement processes to report on planned results

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These principles should be a primary concern in the planning and work process levels of any
organization. To ensure effective organizational outcomes, these principles must not only become
a part of all decisions, but must be thought of in an integrated way. For instance, the design of a
work process should consider relative risk and performance objectives, as well as the ethical nature
of the process and whether it enhances controls.

This document discusses those sound Modern Management functions employed within Government
which help to meet the control, ethics, risk and performance principles. As indicated below, the
functions include Governance, Leadership, Accountability, Performance Measurement, Learning
and Growth, Risk Management and Financial Management. Each of these will be discussed
separately in the sections which follow.

Key Modern Management Functions

Governance

Leadership

Accountability

Performance Measurement

Learning and Growth

Risk Management

Financial Management

The role of teamwork within this vision of Modern Management is important. Modern Management
cannot be employed by managers in isolation of each other. Government managers in all program
areas and all environments (eg. public bodies, departments, etc.) must participate as a team in
developing Modern Management practices and processes. True collaboration means sharing
information, determining best-practices, developing partnerships and creating opportunities for
team-building. Working together will ensure consistent and focused work processes are established
which will lead to desired outcomes for their organizations, and also for the Province. Ultimately,
such cohesion and concentrated effort will lead to improved accountability to citizens.

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GOVERNANCE.... Setting the Course

“Every organization has to ask and answer the following question, ‘What are we
trying to accomplish’ ?” (Prof. M. Jensen)

Governance has been defined as the exercise of authority, direction and control on behalf of a public
or private organization (LeClerc, 1996). It involves those high-level and long-term activities
primarily concerned with establishing a vision, mission, goals and policies that support strategic
directives.

Governance is different than management. Management involves day-to-day actions which control
an organization - the ‘how to do’ of the organization. Governance is more focused on effective
direction - the ‘what needs to be accomplished’ by the organization. It is linked to accountability
for performance. Governing entails a clear determination of the long-term course for an
organization, as well as the opportunities and threats to that course. The mission which flows from
such vision ensures an organization can discharge its responsibilities; effectively creating
accountable governance.

In the public sector, governance becomes complicated by the array of participants involved in the
process, for example, the House of Assembly, Cabinet, Cabinet committees, line departments,
agencies, boards, Crown corporations, commissions, etc. In addition, many of these organizations
operate under differing mandates and legislative authorities. It is important to appreciate that such
governing bodies are created by Government or the Legislature for the purpose of implementing
public policy (Treasury Board, Excellence in Governance). Therefore it is very important that those
in governing positions learn to develop those effective decision-making skills which will allow them
to focus on their organizations and the citizens they represent. This sharing of responsibilities is
important to ensure the social and economic goals of Government are achieved.

The four cornerstones for good governance include:

• Authority Legal authority to conduct the organization’s affairs.
• Leadership Governing bodies are expected to reflect the value system and
priorities of Government within their organizational context.
• Responsibility Governing bodies must manage the organizational resources
effectively and efficiently to accomplish their mandate.
• Accountability Governing bodies are ultimately accountable for the actions
of the organization.

As part of the governance process, it is important that sound principles and ethical behaviour guide
decision-making and are shared amongst all organizational levels. In addition, it is important that
governing bodies represent their stakeholders appropriately, have the suitable mix of expertise to
offer good governing advice and understand their role in the organization.

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As indicated in the various Accountability Framework documents, there are many examples of ethics
and behaviour which should be used to guide those involved in governance processes. As indicated
below, some of these include considerations of constituents, perspectives on service and the role of
governance, and the link between behaviour and an organization’s mandate.

Governance Ethics and Behaviour

View service on a governing body as an opportunity to serve the Province

At all times consider constituents and how decisions will affect them

Recognize that governance is not the managing and operating of the

organization but ensuring that it is well managed and operated

Seek to provide programs and services based on the needs of the constituents
within the mandate of the governing body

Only make decisions after all relevant facts and research has been presented
and discussed

Ensure that the organization uses its limited financial resources to achieve
maximum benefits consistent with its mission, mandate and strategic goals

Such behaviours ensure an appropriate stewardship over Provincial resources, and are relevant for
all governance situations/structures within Government. Through the Accountability Framework and
Modern Management practices, work processes can be linked to the governance direction set out
by
leaders, and Government can be held accountable for outcomes realized.

LEADERSHIP .... The Building of Excellence

“Managers are people who do things right, while leaders are people who do the
right thing”. (Dr.W. Bennis)

In the current management environment, leadership has taken on a new importance. With a rise in
the importance of accountability initiatives, leaders have had to learn to plan, achieve, measure and
report on outcomes in new ways. Increasingly, leaders are required to:

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• address organizational challenges by developing learning and growth opportunities

which promote creativity, change and development; and
• ensure accountable stewardship over resources through the development of new
processes and practices.

A fundamental question for Governments, as for other organizations, is whether their managers are
leaders or whether their leaders are managers ? To ensure sound management within Government,
managers need to be leaders...providing needed vision and guidance. In the same respect, these
same leaders need to be good managers of the resources (human, financial, technological) entrusted
to them.

Leadership takes on added complexity in Government as leaders are required to link their vision to
the needs and requirements of the citizens for whom they work. This stewardship must become not
only the responsibility of all leaders, but of all members of the organization. It is important that
leaders develop processes and practices which ensure this message and responsibility is clearly
communicated to all staff.

As indicated earlier, Government organizations take many forms. This complicates the leadership
role, but leaders must learn to filter through information and provide the direction and guidance
necessary to achieve the social and economic goals of their individual organizations as well as those
of Government. To do this, leaders must learn to:
• consult with all stakeholders of their organizations, ensuring that the overall mandate
of their organization in the context of Government is appropriately delegated;
• ensure that stated expectations are effectively communicated to all stakeholders;
• ensure appropriate plans which meet stated expectations are fully developed, clearly
communicated and are approved; and
• facilitate and arrange for training and development supports which are required to
allow the organization to meet its mandate.

In addition, it is also vitally important that Government leaders have the ability to creatively develop
solutions, adapt to change quickly, communicate effectively, provide coaching, mentoring and
information-sharing opportunities for their staff, and allow exploration and discovery in the
workplace.

All organizations require leadership to allow them to move toward their vision and goals. Leaders
do not command excellence, they build excellence. Excellence starts with leaders of character who
engage in the entire process of planning. As with any planning cycle, leaders in Government must
develop skills and abilities to enable them to create a vision and establish organizational direction.
This facilitates practices which establish the tasks and priorities for work activities. Appropriate
leadership ensures that effective structures and resource allocations are fostered to facilitate the
eventual review and measurement of completed activities. This ensures that the right outcome will
either have been achieved or an improvement process will be initiated to ensure achievement in the

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future. As indicated below, the leadership planning cycle involves all of these activities in a
reinforcing manner.

Leadership Planning Cycle

Create
Adjust
Vision

Measure Establish
Results Goals

Perform Plan

Through learning and development programs leaders can learn to explore and improve their
decision-making skills and potential. Through such programs, it is anticipated that leaders will take
initiative and assist in the development of newly designed financial and management controls
supporting Modern Management within the overall Accountability Framework.

ACCOUNTABILITY.... Leveraging Responsibility For More Effective Government

“I believe that every right implies a responsibility; every opportunity an obligation;

every possession, a duty.” (J. Rockefeller)

While accountability has always been important, that importance has increased recently as
Governments have established policies, legislative requirements and frameworks for more
systematic accountability processes. Many now believe that accountability for performance has
become the foundation upon which financial and management systems and controls should be built.
Accountability is about results. More than ever, rules and procedures are needed to support the
achievement of mission, goals and objectives which lead to those results. Appropriate design of
financial management processes, therefore, must also be results driven.

“Accountability establishes the right of citizens to know what Government and its entities intend to
achieve on their behalf and how well they have met these intentions” (Canadian Comprehensive

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Auditing Foundation, 1999). Throughout developed countries, citizens are calling for increased
levels of accountability in the expenditures of monies for the provision of public services. In
response, Governments are rapidly and continually improving their accountability processes.

The Accountability Framework establishes the structure under which Government and its public
bodies create communication, interaction, accountability and teamwork processes. It also
establishes those responsibilities conferred on Government by its citizens and the obligation to
report on the discharge of such responsibilities as well as the results obtained. To fully implement
an accountable work environment, processes and procedures for each organization in Government
must be developed which focus on client, financial, internal business process and learning and
growth outcomes. A discussion of each of these elements of the Accountability Framework can be
found in the Accountability document “Excellence in Governance”.

The key ingredients of this Province’s Accountability Framework involve the planning, monitoring
and reporting and feedback activities that form the ‘Accountability Loop’. As indicated below this
loop forms a cycle of events that help an organization understand fundamental issues, define policy
choices, and establish priorities for action, including resource allocation.

The Accountability Loop

Feedback Planning

Monitoring
& Reporting

The issues and the choices subsequently made are fundamental to good financial management. They
link an organization’s performance to its contribution to overall Government and departmental goals.
This loop assumes a clarity of roles and responsibilities and an element of external reporting.
Accountability applies to all levels of Government to ensure the public is well served and assured

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of quality programs and services. For this reason, adequate accountability measures are being
implemented at both the departmental and public body level. To be accountable, Government
organizations must be clear about goals, establish activities to achieve objectives and properly
measure performance. These organizations must also report and explain any differences between
expected and actual results, and where results are less than expected, outline actions taken for
continuous improvement. Management is responsible for the design of such activities, work-plans
and performance measures. The development of Modern Management practices ensure work
processes achieve goals and objectives and are appropriately reported.

The commitment to accountability should be thought of as a constructive tool for organizational

development and renewal; enhancing governance, management practices, planning, monitoring and
reporting. Improved accountability can lead to a better sense of organizational direction, improved
communications, better links within organizations, a better understanding of roles and relationships,
and more reliable, timely and relevant information. In favoring the development of practices which
support improved accountability, Modern Management encourages evidence-based decision-making.

PERFORMANCE MEASUREMENT..... Building on Success

“To aim is not enough, you must hit!” (German proverb)

“Don't tell me how hard you work. Tell me how much you get done.” (J. Ling)

In the current management environment, balanced performance measurement can be used as a tool
to direct Government toward excellence in performance. Through the regular performance review
process which focuses on feedback indicators, it can be used to ensure Government is meeting its
defined objectives, has strong accountability, and explores creative possibilities allowing the
organization to grow.

Achieving excellence is the result of high performance throughout an entire organization. Every
process performed in an organization has an external or internal recipient as its end result.
Increasingly organizations, both in the public and private sector, are committing to quality practices
and focusing on new models of service delivery and partnership.

In assessing performance, Modern Management requires that managers learn to clearly assess
performance at both an individual and an organizational level. Governments are currently
developing models of performance evaluation and reporting that link not only organizational
performance to work planning, but also individual performance. This means that learning itself will
now become an outcome to be measured and reported. For managers, this requires that work
processes are established which target individual performance and learning. Such processes must
encompass both managerial and employee levels, consider all resources in strategic and operational
planning and be subject to regular review and reporting processes.

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Performance itself is tied to the ability to lead, develop supportive policies and strategies, manage
people, and effectively deploy resources. These skills employed in the right mix of processes should
lead to improved employee, recipient, and societal satisfaction. Achieving planned performance
then occurs concurrently with satisfying the needs and expectations of everyone with an interest in
the organization. In establishing this model within Government’s workflows, timely, accurate and
understandable measures of performance can be developed and reviewed. As indicated in the model
which follows, these activities are vital to excellence in performance.

Model for Performance Excellence

People Employee
Management Satisfaction

Policy & Recipient

Leadership Processes Results
Strategy Satisfaction

Society
Resources
Satisfaction

This model is tied to the accountability function as good performance must be measured against
stated goals and objectives. These goals and objectives must be established through the
accountability process to ensure that needs are met. Benchmarking allows the comparison of
achieved results to planned performance. Only through such a review can improvements to
processes and practices be determined, and appropriate changes made.

When considering which organizational outcomes to report, managers must link organization goals
and objectives to outcomes. This link will allow a clearer development of appropriate indicators
which verify that organizational requirements are being met. Through this process, management
must clearly identify:
• who is responsible for collecting relevant data;
• who is accountable for specific outcomes;
• who must be consulted and involved; and
• who should be informed of results.

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This introspective process will help managers identify the purpose and process to be used in
collecting relevant information and providing feedback. As a final step in the process, reporting
must be thought of in the same manner. As per the Strategic Planning Master Template (Excellence
in Strategic Planning, Treasury Board Secretariat), the following tool can be used to review and
assist in developing appropriate processes around performance reporting.

Performance Reporting Factors to Consider

List of Indicators/measures

Who will compile the report for each measure ?

Who will present the report ?

Who will receive the report ?

Exactly what is required in the report ?

How should the information be reported ?

What are the format expectations ?

What is the maximum length of the report ?

When should reports be presented ?

When should data be collected ?

What is the acceptable margin of error ?

Who must be notified if data cannot be collected ?

The analysis and summary of information from such a review should be used to assist organizations
in prioritizing its needs, establishing key issues and determining goals for strategic planning.
Ultimately for Governments, this valuable information must be linked to overall directions set by
Government. Through such a review and the reporting/evaluation of both financial and non-
financial performance results against stated goals and objectives accountability can be achieved.
The compilation of multi-source and multi-factor performance information (beyond simple cost
information) allows managers and others in Government to see the connection between finances,
performance and results in a systematic and integrated way. Such integration will improve
performance within Government.

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LEARNING AND GROWTH .... Excellence Through Change

“Life is change. Growth is optional. Choose wisely.” (K. Clark)

Learning and growth are tied to leadership to ensure learning and growth activities are appropriately
established to support the organizational needs. Inevitably, learning and growth are also tied to
accountability as development must ultimately aim to satisfy the needs of the organization’s
stakeholders.

Training is an organized learning experience, conducted in a definite time period, which increases
the possibility of improving job performance and growth. Performance is improved by showing a
person how to master a new or established technology. The technology may be a piece of heavy
machinery, a computer, a procedure for creating a product, or a method of providing a service.
Training is part of human resource development, however, development itself involves training
people to acquire new horizons, technologies, or viewpoints. It enables leaders to guide their
organizations into new expectations by being proactive rather than reactive.

While training is important as it improves present job performance, learning, is also vital as this is
the process of acquiring knowledge. In Government, learning has been identified as a key element
of management success. As a result, an increased emphasis has been placed upon the learning
function. Increasingly leadership and management development programs have been developed to
focus on management growth. Leadership and management development requires managers
themselves to be party to the process of the identification and linking of five core competencies:
• leadership;
• resource management;
• communication;
• planning and decision-making; and
• team-building.

In addition to managers developing their own learning plans, Government’s managers are
increasingly required to look at the learning and development needs of their staff by using a similar
assessment. It is vital that managers look at learning and development as a bridge between planning
individual work activities and meeting organizational requirements. If this comparison is made
regularly, managers will soon see how the competencies of themselves and their staff map to those
required by Government. More importantly, such a review allows the identification of gaps in those
competencies. It then becomes incumbent on management to close those gaps by providing learning
and development supports within their organizations.

Government has begun linking the learning and development needs as identified in these types of
assessments to its defined strategic priorities. However, as such priorities change, it can be
expected that learning and development programming will also change. To fulfil their mandates,
managers must be aware of such changes, and keep abreast of the changing needs of their

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organizations and of the needs of Government. Where required, managers must seek out courses,
sessions, workplace training, and other learning opportunities that meet identified needs. In
addition, managers must voice needs in these areas to ensure relevant and appropriate programming
will continue to be offered.

In managing the acquisition, application, storage and distribution of information gained through
learning, education and development, managers will find that they have built upon their role as
Knowledge Manager in the organization. As indicated below, these activities are inextricably linked
and should be managed within organizations.

Learning & G row th - K now ledge

M anagem ent Fram ew ork

K now ledge
Acquisition

K now ledge K now ledge

D istribution Ap plication

K now ledge
Storage & O rganization

In Government, a systems approach has been used to design learning, education, and development
programs to ensure the Province has the capability to leverage the most from its resources. With
increased pressures to learn faster and manage knowledge better, Government managers will find
that a focus on learning and growth will facilitate a more flexible public service which is better
prepared to handle and adapt to future challenges. Adapting to such change will require well
established Modern Management practices that end in improved accountability to the public.

More information on currently available programs, courses and development tools

is available from the Centre for Learning and Development, Treasury Board
Secretariat.

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RISK MANAGEMENT.... Calculated Risk-Taking

“There are risks and costs to a program of action, but they are far less than the
long-range risks and costs of comfortable inaction.” (J. F. Kennedy)

Risk Management involves the process of identifying, analyzing and treating potential risks which,
if left unaddressed, could prevent an organization from attaining its goals and objectives.

As indicated by the Canadian Institute of Chartered Accountants (CICA, Risk Management and
Governance - Appendix B), there are many ways to think about risk and the potential implications
for Government are extensive. Managers should consider such issues when making decisions.

Risk Management – Potential Risk Assessment Questions

STRATEGIC RISKS, arising from choices about what will be done, for example:
• financial risks such as changes in exchange rates, interest rates and capital availability
• changes in the political environment
• changes in government funding
• changes in regulatory framework
• technological developments
• a potential risk that transcends the organization (eg. communications failure, power disruption)

OPERATIONAL RISKS, arising from choices about how strategy will be implemented, for example:
• physical damage / business interruption
• environmental issues
• service quality
• safety
• legal
• labour relations
• fraud
• credit risk
• communication practices with stakeholders and the media

EMERGENCY RISKS, arising from choices about crisis preparedness, for example:
• the use made of techniques such as contingency planning
• the extent to which plans are tested
• the existence of a communications plan

RESILIANCY RISKS, arising from choices about flexibility, for example:

• options available to vary investments as environments and opportunities change
• alternatives available to deal with key service interruptions

LEADERSHIP RISKS, arising from choices about leadership, for example:

• the extent to which the organization benefits from everyone's leadership ability
• the extent to which experimentation is supported
• the extent to which management is able to learn from experience

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Risk management techniques reduce the potential for liability to an acceptable level and identify
those factors which could impede the achievement of program objectives. Governments have
increasingly placed considerable time and resources in developing such techniques. The value-
creating function of risk management occurs when calculated risks are determinable. While risks
cannot be reduced to zero, it is important for management to have a ‘risk realism’ which allows
appropriate balance between risk and opportunity.

Managers will find that such techniques offer alternate methods of evaluating operations, designing
potential improvements, and focusing resources on high risk operational areas. The efficiencies,
systems and procedures which are created through a risk management process ensure compliance
with legal/contractual requirements, and promote compliance with practice agreements, business
plans, and general accounting functions.

Managers must begin to use risk management techniques to go beyond strictly financial issues and
apply these to non-financial areas as well. In addition, managers must think of risk not only in terms
of their own organization, but also risk in relation to Government as a whole. In this way, the
development of the elements of the basic stewardship function and control system will be based on
risk assessments while also focusing on results.

FINANCIAL MANAGEMENT.... Managing Outcomes

“Parties who want milk should not seat themselves on a stool in the middle of the
field in hope that the cow will back up to them. (E. Hubbard)

Financial Management is the organizational function concerned with the efficient allocation and
effective use of available financial resources to achieve optimal outcomes. The processes of
planning, approving, recording, monitoring, and reporting financial transactions play a fundamental
role in financial management and determining the benefits of activities to the people of the Province.
Such activities set out the information which can be used to provide accountability to the public.
Managers establish financial management practices by implementing good financial controls.

Control is effective to the extent that it provides reasonable assurance that the organization will
achieve its objectives reliably. Effective control supports the success of an organization:
• staff learn to exercise their judgment and creativity, while managing the risk of
inappropriate actions;
• staff are given the flexibility to address change while addressing known risks;
• staff are provided with reliable information and are able to make use of it at the right
time and within the right place in the organization; and
• the organization can achieve improved effectiveness and efficiency, and greater
confidence on the part of external parties.
As per the CICA (CICA, Risk Management and Governance), control comprises those elements of

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an organization (eg. resources, systems, processes, culture, structure, tasks) that, taken together,
support people in the achievement of the organization's objectives. These can include operational
effectiveness/efficiency, reporting reliability or compliance objectives.

Financial Management – Control Objectives

OPERATIONAL EFFECTIVENESS AND EFFICIENCY

Objectives related to an organization's goals, such as service, the
safeguarding and efficient use of resources, and financial stability/profitability.
This includes the safeguarding of the organization's resources from
inappropriate use or loss and ensuring that liabilities are identified and
managed.

INTERNAL/EXTERNAL REPORTING RELIABILITY

Objectives related to matters such as the maintenance of proper accounting
records, the reliability of information used within the organization and of
information published for third parties. This includes the protection of records
against two main types of fraud: the concealment of theft and the distortion of
results.

COMPLIANCE WITH LAWS, REGULATIONS, INTERNAL POLICIES

Objectives related to ensuring that the organization's affairs are conducted in
accordance with legal and regulatory obligations and internal policies

Policies prescribe how things should be done and prohibit inappropriate action, thus providing the
limits of acceptable action. These are developed based on the determined control objectives.
Understandable policies, communicated throughout the organization and translated into specific
practices, provide direction on how operations are to be conducted and reflect a judgement as to
which risks are deemed acceptable. Policies, together with objectives, provide the frame of reference
for the design of control activities.

Managers should develop appropriate control activities and the underlying policies and procedures
to support these activities within the vision of Modern Management. This means that in addition
to strict financial concerns, activities must be designed which:
• address the overall governance direction;
• link to leadership processes and are championed within the organization;
• provide an accountability for appropriate outcomes;
• ensure appropriate processes and monitoring/evaluations of those processes occur;
• ensure staff have appropriate training and expertise to complete assigned tasks; and
• assess the level of risk for various activities.
In recent years, the focus on accountability has lead to an increase in organizational accounting

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information demands. Increasingly in Government, attention to such areas as accrual accounting,

tangible capital assets, performance indicators, budgetary control, and full cost accounting have
required managers to develop processes which satisfy such information demands. To address some
of these issues, Government is continuously developing targeted management development
programs to assist in learning and technical skills training. In addition, relevant reference guidance
(eg. Financial Management Handbook, Financial Management Circulars) offer resources managers
can use in their planning, operations, reporting, and monitoring processes.

THE MODERN MANAGEMENT VISION

The vision of Modern Management is built upon sound financial and management principles. This
vision is supported by the development of those practices and activities which allow work processes,
through management and leadership, to appropriately focus on accountability and resource
stewardship. Government managers must apply the Modern Management philosophy to help
establish those learning and growth and performance measurement activities which transform the
organization. Such an organization, with a flexible and productive culture, will be ready to take
well-managed risks to achieve its goals and objectives.

In focusing on the key Modern Management functions of Governance, Leadership, Accountability,

Performance Measurement, Learning and Growth, Risk Management and Financial Management,
managers should be able to develop better practices and processes. This decision-making structure
will provide better information and answers which can be used to develop better programs.

This vision is about changing a culture within Government and as such it will take time to
accomplish. However, through teamwork and planning, concentrated efforts will lead to improved
financial and management processes and procedures and to sound decision-making skills which
consider control, ethics, risk and performance. Ultimately through these activities accountability
of Government to its citizens can be achieved leading to better and more-effective Government.

Additional Information:

For additional information on Governance, Accountability, and Performance Measurement, please

contact:

Accountability Division, Office of the Comptroller General, Treasury Board Secretariat,

Executive Council, Government of Newfoundland and Labrador.

For additional information on financial management learning and development opportunities, please
contact:

Centre for Learning and Development, Treasury Board Secretariat, Executive Council,
Government of Newfoundland and Labrador.

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GLOSSARY OF RELEVANT DOCUMENT TERMS

Accountability The ownership of conferred responsibilities, combined with an obligation

to report to a higher authority on the discharge of these responsibilities and
on the results obtained.

Accounting Policies The specific accounting principles followed by an organization and the
procedures for applying those principles.

Activities The actions that transform the available inputs or resources into outputs.

Authority Freedom to make decisions and take actions, within limits, that are clearly
defined when this freedom is delegated.

Benchmarking The study of competitive business practices in order to improve the

performance of one’s own organization.

Compliance Conformity in fulfilling requirements. This is often required with

legislative or regulatory requirements.

Control The ability to influence actions. In an accounting environment, control

relates to the effect of factors which generally enhance the effectiveness of
policies and procedures, and is often required to assist in implementing
legislation or regulations.

Effectiveness The extent to which a program or service is meeting its stated objective and
an aspect of performance that describes how well the organization’s
activities are contributing to achieving its goals.

Efficiency An aspect of performance that describes the relationship between inputs and
outputs or outcomes, or the relationship of the inputs to the outputs.

Ethics Standards of conduct or moral judgment, often leading to motivation based

on those ideas of right and wrong.

Goal A general statement of desired results to be achieved over an unspecified

period of time.

Governance The exercise of authority, direction and control.

Leadership The act of providing direction or guidance to desired performance in the

achievement of a specific outcome.

Management The act, art or manner of controlling or conducting affairs and the skillful
use of means to accomplish a defined purpose.

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Objective A specific target or milestone set to promote achievement of a particular

goal by a specific future date. Objectives answer both ‘what’ and ‘when’
quantitatively.

Outcome An external result which informs of decisions regarding future objectives.

Output What is produced as a direct result of transforming resources through an

activity or process.

Performance Measurement A systematic process which enables an organization to track, manage and
report progress on its strategic goals and objectives. It focuses on the
desired quantitative and qualitative outcomes required for an organization
to achieve its mission and goals, and is a means of determining an
organization’s planned versus achieved results.

Planning The process of prioritizing goals and objectives and choosing the most
suitable means of achieving them prior to taking action.

Process A series of activities that are intended to create a desired output.

Program A grouping of activities with a common purpose, common clients and/or

common outcomes.

Reliability The extent to which an act leads to repetitive results or dependability of

outcome.

Resources Any valuable input which is used in a process to create an output/ outcome.
Examples of resources include: human, technological, natural, etc.

Risk Management The set of activities which an organization undertakes in order to minimize
exposures it faces in its business activities.

Stakeholders All persons within or external to the organization, who believe that they
have a claim to the organization’s attention, resources and/or inputs; or are
affected by the organization’s outputs and/or outcomes. This includes any
groups who feel they can influence or be affected, either now or in the
future, by the organization’s programs, services or any of its activities.

Stewardship Careful and responsible management of something entrusted to one’s care.

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FURTHER READING

Canadian Comprehensive Auditing Foundation. July 1999. Leadership symposium: Main report
on proceedings - An accountability framework.

Canadian Institute of Chartered Accountants. Risk Management and Governance. CICA Handbook.

Crookall, P. 2003. Modern Comptrollership - Buckley’s or Bordeaux ? Issue 1. Canadian

Government Executive Journal. Quoted. Blake, Ivan.

Crookall, P. & Schachter, H. Spring-Summer 2003. Redefining Comptrollership. Vol. 14 No. 3.

Ottawa, ON: FMI Journal.

Kaplan, R. & Norton, D. January-February 1996. Using the balanced scorecard as a strategic
management system. Harvard Business Review.

LeClerc, G., Mooynagh, W.D., Boisclair, J.P., Hanson, H.G. 1996. Accountability, Performance
Reporting, Comprehensive Audit - An Integrated Perspective. Ottawa, Canada: CCAF-
FCIV, Inc.

McDavid, J. & Marson, B. 1991. The well-performing government organization. Institute of Public
Administration of Canada.

Office of the Provincial Controller. 2003. Working Together Towards Modern Controllership.
Government of Ontario.

Treasury Board. Excellence in Governance: A Handbook for Public Sector Bodies. Government
of Newfoundland and Labrador.

Treasury Board. 2000. Achieving Excellence 2000: A Guidebook for the Improved Accountability
of Public Bodies. Government of Newfoundland and Labrador.

Treasury Board. 2000. Achieving Excellence 2000: A Guidebook for the Improved Governance of
Public Bodies. Government of Newfoundland and Labrador.

Treasury Board. 2003. Financial Management Handbook. Government of Newfoundland and

Labrador.

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