1. Benchmarking Financial Management Institute of Canada Ottawa, Ontario September 25, 2014
Mike Lionais Acting Executive Director, Costing Centre of Expertise Office of the Comptroller General
Kiran Hanspal Executive Director, Results-based Management Expenditure Management Sector

2. Table of Contents Benchmarking Challenges in the Public Sector
Benchmarking Internal Services
Continued Efforts to Benchmarking
Annex A – Definition of Internal Services
Annex B – Internal Services Performance Measurement Framework

3. Done right, benchmarking can drive performance!
The action of identifying, comparing, understanding and adapting outstanding practices found either inside or outside an organization. Benchmarking is based mainly on common measures and the comparison of obtained results both internally and externally. Comparing results against those of a best practice organization will help the organization to know where it is in terms of performance and to take action to improve its performance.*
Done right, benchmarking can drive performance!
*Source: Treasury Board of Canada’s Supporting Effective Evaluations: A Guide to Developing Performance Measurement Strategies

4. Challenges in the Public Sector
In the private sector, benchmarking can be done more readily:
common goal of profitability; and
comparable services amongst competitors.
In the public sector, benchmarking faces unique challenges:
concept of value for money is focused on public good, effectiveness and efficiency rather than profits;
agencies and departments are often the sole provider of goods and services (e.g., issuing passport); and
varying mandate of organizations has led to inconsistency in measures and interpretations.

5. Benchmarking Internal Services
The Canadian government has been paving the way to make benchmarking feasible for internal services.
Often referred as corporate and administrative services (CAS), these functions incur costs in support of departmental programs and activities. The costs are normally incurred outside of program branches for the benefit of the department as a whole (Annex A).
Establishment of proposed internal services performance measurement framework (Annex B).
Our government has been reporting on internal services as a common program activity since 2009:
Recent spending reviews have provided additional insights on the use of internal services in program operations.

6. Continued Efforts to Benchmarking
To allow historical and comparable information on internal services, the Canadian government has recently:
developed draft standard internal service performance measures for 7 of the 10 IS categories;
streamlined the presentation of internal services;
developed a Guide on Internal Services Expenditures: Recording, Reporting and Attributing; and
issued a Guide to Costing to ensure fundamental costing principles and concepts are consistently applied in decision making, performance comparison and resource management.

7. Contacts Expenditure Management Sector (EMS) mrrs-sgrr@tbs-sct.gc.ca
Office of the Comptroller General (OCG)

8. Annex A Definition of Internal Services
Revised structure effective April 1, 2015
Sub-programs   
Management and Oversight
Communications
Legal
Human Resources Management
Financial Management
Information Management
Information Technology
Real Property
Materiel
Acquisition
*Source: Treasury Board of Canada’s Guide on Internal Services Expenditures: Recording, Reporting and Attributing

9. Program - Internal Services Link
Program Direct
Support
Cost
Internal
Services
Program Outputs
Program Direct
Program outputs’ costs = direct costs + all supporting costs (both in the program or in internal services)
Cost should be linked to results
Measurement regime
Program effectiveness.
Program efficiency.
Internal Services effectiveness.
Internal Services efficiency.

10. Annex B Proposed Internal Services Performance Measurement Framework
Outcome Measures
Measures of any departmental-wide impact of the service
This should be aligned with any TB Policy Objectives, beyond compliance of the policies
Would be best to have an outcome statement (s) e.g. the department rates the condition of all major assets and uses this to allocate resources.
Measures would be % of department assets rated; % of departmental assets in poor condition; evidence of allocation of resources based on asset condition
Services Measures
Typical measures of any service
Establishment of service standards and monitoring achievement
Measurement of client satisfaction
Cost/Efficiency Measures
Relative cost of the service e.g. cost of service as a percentage of departmental spending
The efficiency of the service, usually a cost per output. E.g. cost per HR action. Proxies can be used to measure
efficiency e.g. cost per departmental FTE, where the FTE is a proxy count of the number of outputs.

11. Example of Proposed Measures: Financial Management