Ottawa’s change agent

FCMA Paul Gauvin brings strategic expertise to a changing public service

By Robert Colman

The fiscal management of Canada’s federal government has undergone, and continues to experience, significant change, with the implementation of the Financial Information Strategy (FIS) and the Modern Comptrollership Initiative (MCI). FIS had as its mandate to establish detailed policies on capital assets and departmental financial statements. MCI was designed to provide managers with integrated financial and non-financial performance information, a sound approach to risk management, appropriate controlsystems, and a shared set of values and ethics.

Formerly, senior financial officers (SFOs), like other senior managers in government, were often hired as generalists — individuals who could look at the broad spectrum of government business and make responsible decisions.

MCI and FIS require that accounting professionals come to the fore to champion reform in government, to bring stronger fiscal management into government operations and modernize accounting processes to better reflect generally accepted accounting principles (GAAP) as used in the private sector.

Paul Gauvin, CMA, FCMA, is probably the finest example of such a champion in government today. As deputy commissioner, corporate management and comptrollership, for the Royal Canadian Mounted Police (RCMP), he has demon-strated that, in a short three years, the corporate governance of a federal institute could be completely revamped, turning it from an underachiever in fiscal management, to an example of best-in-class management and control.

Gauvin is a member and/or chairman of a variety of interdepartmental and government-wide committees, working groups, and councils on strategic, operational, technological, human resource, and functional issues. These bodies also include SFOs, senior managers and functional experts from a range of other disciplines. Gauvin brings to these committees a wealth of management accounting expertise and an insider’s perspective. He’s able to offer this because of his extensive experience implementing innovative projects within the public sector. 

Champion for change

Gauvin has had a long and illustrious career in the federal government, and his many accomplishments have been recognized through Public Service and other awards. For more than 30 years he has served in positions of increasing senior financial and management responsibility. He has worked in some of the largest, most complex departments, including Employment and Immigration Canada, and Transport Canada.

It was at Employment and Immigration Canada that Gauvin’s ability to manage large, complex change in an organization first became widely noted. While serving as assistant deputy minister, finance and administration, between 1981 and 1990, he led the development and implementation of the Employment and Immigration Canada (EIC) Information System (EIIS). This was EIC’s first national, integrated management information system designed to capture, manipulate and integrate financial, personnel and operational data at the corporate level and in more than 500 local service offices across Canada.

The implementation of EIIS resulted in reduced operating costs and increased data reliability, and this in turn supported significantly improved departmental planning and accounta- bility. The system continued to evolve over the years and was cited by the Auditor General and the Comptroller General for its valuable contributions to sound financial management and control at EIC.

Gauvin also initiated a major and innovative national project to upgrade and improve EIC’s service offices — the Canada Employment Centres (CECs) and Canada Immigration Centres (CICs) — across the country. The initiative was long overdue and had a significant impact on the offices. The functionality, efficiency and professional image of them all improved. Gauvin remained the champion of this initiative and was involved in all aspects of the process, including providing direction to the project team.

The logistics were complex. The team had to assess the needs of each individual office, and determine how these needs might be met either uniquely or in common with other offices. Complicated procurement processes were required to achieve economies of scale, and work had to be done within specific time lines to accommodate lease changes, relocations and other issues. The result, however, was extremely well received by managers, employees and clients.

The negotiator

From 1992 to 1997, Gauvin served at Transport Canada as SFO and as assistant deputy minister, finance and administration, and ultimately as senior assistant deputy minister. At the time, Transport Canada was one of the largest and most diverse program and service delivery departments in government, with 20,000 employees dispersed across Canada within air, surface, rail and marine program and service divisions, including federal and local airports, the Canadian Air Navigation System (ANS), and the Canadian Coast Guard. Annual Transport Canada expenditures were $4 billion, with $1 billion in revenues.

In the mid-1990s, the federal government embarked on a major program review and significant deficit reduction initiative across all departments and agencies. This included the divestiture of specific entities the government felt it no longer needed to operate that could be privatized. At Transport Canada, this involved divesting a number of local airport authorities, and selling the ANS. ANS was, and remains (in private ownership), responsible for several million aircraft movements annually, in Canadian and other specified North Atlantic airspace. It comprised 6,100 employees, a vast network of air traffic control facilities, electronic navigation aids, extensive land, equipment and other assets.

Gauvin served as the government’s chief negotiator for the sale of ANS. Directing a multi-disciplined team of government and private sector professionals, he was able to successfully sell the system for $1.5 billion to NAV Canada, a not-for-profit, private sector corporation. This was a remarkable first internationally — the first time a government had successfully sold an owned and operated ANS, transferring it to the private sector with no further government ownership or debt guarantees. It was a model for other government commercialization efforts and earned Gauvin the rarely given Minister of Transport Gold Medal, a Public Service Award of Excellence and the National Transportation Week Award of Achievement.

While assistant deputy minister, finance and administration, Gauvin also led the development and implementation of Transport Canada’s national integrated finance and materiel management system (IDFS) — the first such system in the federal government. Implementation began in July 1994 and was completed on time, and within its $60 million budget in March 1996. 

IDFS had several different modules, such as accounts payable and purchasing, and it was successfully implemented as the one authoritative corporate system for 4,000 users across Canada. The implementation process was complex: planning, organizing and delivering national and regional user training, including the development of training materials; ensuring accurate and extremely complex software customization through private sector suppliers; maintaining stringent change management control processes to avoid system creep and resulting cost and time implications; and developing internal and external communication strategies and tools to address sensitive client and user issues.

The system was designed to interface with other government systems; replace many separate, overlapping and out-of-date departmental systems; and significantly reduce paper burden and facilitate business re-engineering. It accomplished all of these goals. The Office of the Auditor General and the Treasury Board Secretariat cited its success, and its functional specifications became models and the basis of other government departments’ systems initiatives.

Change management

When asked about how he is able to drive change, Gauvin insists that it’s not magic.

“There has to be a will to change, strong senior management support and senior project support,” he says. “There has to be a clear goal and a plan, you have to know what direction you want to go in. There also has to be strong financial control. You don’t want budget creep. Stick within the budget. If you add something, you have to take something away. This is especially important with IT projects, which tend to go over budget.”

 Communication is also a critical cornerstone. “You have to maintain timely, consistent communication within and outside your own group,” he notes. “When you join an organization, there are a number of people who don’t know you. You need to create talking points with them so they understand what you are doing. You also need to keep the lines of communication open with employees, clients and partners because they will be affected. It’s important to have a sensitive HR strategy, to find replacements and help with realigning staff who stay on. If necessary, you may have to spend more time helping some people with transition, but don’t let this get in the way of your goal.”

At the same time, Gauvin notes that central agencies also have to be briefed so that they understand what you are doing and continue to support your course.

All of this was crucial for him when he joined the RCMP in 1999, after a busy period following his retirement in 1997, when he took on other challenges such as the role of chief of staff for the Solicitor General, and managing some senior consulting assignments. The RCMP is one of the largest and most complex federal government organizations, with a $3 billion annual budget including $1 billion in revenues, 22,000 employees, and $2.3 billion in assets.

With his appointment as deputy commissioner, corporate management and comptrollership, and SFO, Gauvin has been instrumental in restoring the RCMP’s financial stability and viability through a variety of strategic, structural and procedural initiatives. This included the development and implementation of a comprehensive three-year financial management improvement plan, to integrate sound financial principles and practices into the culture of the RCMP and all aspects of its planning and decision-making processes.

“Change management is never a perfect process,” he notes. “But you always find that there’s a handful of people who can drive a process, and that’s all you really need. When I joined the RCMP, there were not enough people, nor was there the organizational structure, to do the job. I couldn’t bring in all of the people that I would have liked to bring in immediately, but eventually I was able to do so. Some people are more comfortable with change than others and those that welcomed the challenge of change stayed, while others chose to seek new opportunities. I was then able to further strengthen the organization.

“Internal audit was a good example,” he continues. “The branch was underperforming for a number of reasons. The people heading the branch did not have the professional audit credentials and experience to carry out audits, although they did have important operational experience. Within two to three months, several staff chose to leave and we were able to bring in appropriately qualified professional auditors to do the job. At that point we were able to develop proper risk-based audit plans and actually carry out the type of audits necessary to meet management expectations and requirements. We have had very positive support and recognition from the Auditor General for our progress. No department can do without a proper audit function because it is a key element of accountability.”

Hands on modern comptrollership

Gauvin emphasizes the importance of having a goal. When the federal government began to push the Modern Comptrollership Initiative, he knew that this was the impetus the RCMP needed to become a better organization.

“When the federal government was looking for pilot departments, I immediately put the RCMP forward as a candidate,” he recalls. “Initially I was told, no, ‘you’re not ready,’ they said. However, I said that this was ideal — I had to tie change to something tangible.”

Gauvin introduced a number of measures to make the pilot project a success. Among other initiatives, he:

• established an RCMP Office of Modern Comptrollership, to lead various initiatives such as a comptrollership capacity check, which highlighted priority areas for implementation efforts;
• developed a communications strategy to “sell” modern comptrollership principles and practices internally, and introduced communications initiatives and tools directed at various audiences, including senior management, regional managers and functional specialists; and
• the integration of the comptrollership initiative into senior management committees and discussions as a basis for RCMP management improvements.

“We tied everything to the initiative, introducing better information and systems, a new financial management framework that included information on how forecasting was to be done, how often and how it was to be presented,” says Gauvin. “An accounting framework was also introduced, and we had SAP and Peoplesoft programs to provide good information. Two or three people were there to coordinate the initiative but the work was done by a broad section of staff members.” 

Gauvin also ensured that the Treasury Board Secretariat included the RCMP as a Financial Information Strategy (FIS) pilot department. He set up a FIS project office and remained very involved throughout the strategy’s implementation to ensure that the necessary infrastructure and support were available for effective implementation, government systems interfaces, and production of compliant accrual-based financial statements. He also chaired the Senior FIS Steering Committee, and ensured that the RCMP was represented on the many FIS working groups.

With this dedication, the RCMP successfully met its April 1, 2001, target date to interface with the government’s central accounting systems.

“Two elements are critical to the successful management of any department — information and proper controls,” says Gauvin. “You have to ramp up your information gathering and use it at the same time. More information is readily available now, so you have to use that information as effectively as possible.”

As an example, the RCMP uses the Balanced Scorecard as an effective management tool to go beyond fiscal management issues. “This gives us quality feedback on our service in communities and other areas,” says Gauvin. “As an example, our involvement in aboriginal communities is an important focus for us. We had to determine what we were doing in those communities. For instance, in some communities we may have had detachments adopting alternative justice methods to adapt to the needs of the community. Another detachment in another area may not have attempted anything similar. The use of the scorecard and other management tools allows us to focus our operations better, creating integrated procedures where that makes sense.”

The RCMP was one of several pilot departments audited by the Office of the Auditor General (OAG) in 2001-02 and the OAG commented positively on both the strong commitment of RCMP senior management to the MCI and the effectiveness of the RCMP’s overall implementation strategy and progress.

The RCMP is now a mentor department for effective fiscal and strategic management. It continues to be approached for information and advice by many government and policing organizations such as the Ontario Provincial Police. And Gauvin has made other efforts to share information about the RCMP’s experiences and lessons learned, through presentations, published articles and other activities.

Accountants a must      

With the reestablishment of the Comptroller General function, and the various scandals that have affected the federal government in the past few years, the importance of good reporting practices and accountability has clearly been demonstrated. However, more growth in government is still necessary.

“Internal audit is still pretty dismal in the government,” notes Gauvin. “We don’t have the knowledge in the SFO postings yet to manage this, but with the new Comptroller General this will no doubt change. But now we are at least creating financial statements that other organizations can understand. We aren’t yet accruing revenues but we are accruing expenditures. Each step is an important one.”

An important job for the Comptroller General will be to attract accounting professionals to government service. From his own experience, Gauvin insists that there is a lot to recommend public service.

“There may be salary limitations at the top, and it’s necessary to work within policy and legislation boundaries,” notes Gauvin, “but there is also a great diversity of functions in government. You can work in communities and with a variety of stakeholder groups. It’s possible to work overseas, job security and benefits are very good, and there are lots of opportunities for mobility. There is also access to tremendous expertise among the diverse population in government, and the chance to use very sophisticated technology and systems. And if you’re willing to chase the opportunities, there are a lot of opportunities to be innovative in your job.” 

As for his own success, Gauvin takes it in stride. He insists it’s just the way he operates. “Government is very large but in some ways it’s really just like a large corporation,” he notes. “You want it to be known that you are doing your job and that you are someone people can trust to get the job done. Creating a strong department is not only good for your clients, it’s also good for your employees. Others will want to hire them for the knowledge that they carry with them and they will spread that expertise.”

Robert Colman is the editor-in-chief of CMA Management. 

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