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Capital Asset Management Framework: 10. Reporting & Monitoring

Last updated on January 4, 2021

10.1 Introduction

The Capital Asset Management Framework is based in part on the principle of strong accountability in a flexible, streamlined process. Agencies are free to carry out their capital mandates with minimum intervention from the Province with flexible guidelines to encourage innovation and to accommodate differences in agencies, projects and the factors driving service delivery needs. At the same time, agencies must be fully accountable for managing capital assets effectively.

Reporting and monitoring are essential to accountability as well as to effective risk and cost management. The Budget Transparency and Accountability Act requires public agencies to publish financial and other information on capital projects with provincial contributions over $50 million.

Agencies need to gather and report relevant information about a project’s status such as the physical progress, financial information, risk assessment and any other elements necessary to understand the status of the project to appropriate stakeholders in a timely manner to support informed

decision making. Additionally, strategies to effectively manage variations from the project’s approved plan should also be identified. Further information on reporting components provided in Table 10.2.

The following chapter supports these objectives by:

  • identifying standard reporting components agencies should consider when establishing reporting processes
  • offering high-level guidance regarding "internal" reporting processes for capital-related information
  • identifying the routine capital-related information required by the Ministry of Finance to meet statutory and budget-related public information disclosure requirements, and
  • providing an overview of the information Treasury Board may require of individual agencies, according to either the agency's or a project's risk profile

10.2 Standard Reporting Components

Public-sector agencies are required to report on the progress of capital projects and should develop processes to ensure that this occurs on a regular, timely basis.

Table 10.2. describes the standard reporting components that should be addressed, consistent with the parameters identified in the planning process, as part of the due diligence undertaken in reviewing service delivery options and developing business cases. These reporting components are relevant for both internal (agency) and external audiences.

Table 10.2

Standard Reporting Components
Component Description
Scope A succinct but comprehensive description of the project’s approved scope, consistent with the scope established in the business case. Details of the project’s critical objectives should be provided along with the intended outcome such as a description of the end product or output including quality standards, tasks performed, resources consumed. Identifying the outcomes are important to measure the success of the project.
Schedule Agencies should provide itemized information regarding the project's schedule, with key milestone dates and corresponding project deliverables.
Financial Agencies should provide a breakdown of all the financial parameters for planning, design, construction, acquisitions and operation of the asset or service, including any revenue forecasts. This should include the cost to complete the project and identify any variances (with an explanation) from the original estimates.
Other Critical Business Case Elements Where relevant, agencies should provide information on any issues unique to the project’s business case, such as environmental assessments, alternative procurement methods, labour, legal and/or First Nations issues, or performance criteria.

10.3 Internal (Agency) Reporting & Monitoring Standards

Agencies should develop internal policies and procedures to ensure there is routine, timely and relevant reporting of risk-related information to the appropriate decision- making authorities. This supports ongoing public accountability. It also supports agencies to meet requirements for various capital-related approvals.

Specifically, agencies should:

  • ensure that there is routine internal monitoring of standard reporting components during all phases of the project (e.g. design, construction and operating)
  • ensure that there is timely reporting for each standard reporting component (as described in Section 10.2) to the appropriate decision-makers, and
  • establish an appropriate internal reporting and approval framework (typically including levels of authority, accountability and responsibility consistent with the agency's governance structure). The framework should be sufficiently flexible to accommodate changes to the underlying parameters of the project, such as changes to expected utilization, demand for service or financial conditions, etc

10.4 Routine Reporting Required by the Ministry of Finance

The Ministry of Finance is required to prepare regular public reports on the Province's economic and fiscal performance. Specifically, it must provide "planned versus actual" information on an aggregated agency basis (consolidating information from all public agencies that are part of a given reporting entity), and for specific projects where required by legislation or by Treasury Board.

As part of this process, agencies may be required (as communicated through a Crown agency mandate letter or Treasury Board Decision Letter) to provide monthly or quarterly reports to the ministry.

As part of this routine reporting, agencies are also required to report any material variations from a project’s approved parameters, including scope, schedule and cost and to identify strategies to effectively manage those variations. This variance-based approach to reporting has two important benefits:

  1. It allows the Province to minimize the administrative burden associated with mandatory reporting requirements and to focus on essential information, and
  2. It provides ongoing opportunities for agencies to demonstrate their accountability for recognizing and remedying emerging issues throughout a project’s life

10.4.1 Calendarized and Monthly Aggregate Reports

Agencies may be required to submit a calendarized forecast of their overall capital expenditures at the beginning of the fiscal year and a Monthly Aggregate Report thereafter.

Generally, the calendarized forecast should be submitted within 15 working days of the start of the fiscal year. Monthly aggregate reports should be prepared on an accrual basis and submitted within 10 working days of the end of each month.

Figure 10.4.1 below provides an overview of the content of a typical monthly aggregate report.

Figure 10.4.1

Monthly Aggregate Report

Generally, the report includes:

  • a roll-up of total actual capital expenditures for the month just ended, and
  • an updated forecast of capital expenditures calendarized (i.e. broken down by month) for the balance of the fiscal year

In the event of a material variance between the actual monthly capital expenditures and the calendarized forecast capital expenditures, a variance report should provide the reason(s) for the variance.

In the event of a significant variance between an agency's total annual calendarized capital expenditures and its Capital Expenditure Limit, the variance report should provide:

  • reasons for the forecast variance
  • strategies to address the forecast variance, and
  • an assessment of the impact of the variance on capital expenditures in subsequent fiscal years

10.4.2 Quarterly Project Reports

For specific projects (generally those where the provincial contribution exceeds $50 million), agencies may be required to submit a calendarized forecast of capital expenditures at the beginning of the fiscal year and quarterly thereafter.

As outlined below in Figure 10.4.2, quarterly reports provide more detailed information than monthly aggregate reports. They should be prepared on an accrual basis and submitted to central government within 15 working days of the end of each fiscal quarter.

Figure 10.4.2

Quarterly Reports

Should include the following information:

  • A short project description
  • Project start and forecast completion dates
  • Total project budget
  • Total project cost forecast
  • Estimated cost to complete
  • Cumulative spending to most recent fiscal year end
  • Cumulative spending to date
  • Reasons for any material variance in forecasts, together with:
    • strategies to address the forecast variance, and
    • an assessment of the impact of the variance on capital expenditures in subsequent fiscal years

10.5 Risk Based Reporting Requirements

Risk-based reporting is another component of the Province’s commitment to balance accountability with agency-level flexibility. Depending on the specific risk profile presented by a project and/or its sponsoring agency, the agency may be required to:

  • provide specific reports, or more detailed information regarding particular project risks
  • report to central government more frequently, and/or
  • adhere to a specific reporting format

These requirements may be part of Treasury Board’s conditions for approval, or they may be outlined in an agency's Mandate Letter. See Figure 3.2.1, Project Risk Factors For examples of the factors considered by Treasury Board to determine the levels of oversight for capital projects.)

The overviews below indicate the levels of information appropriate for risk-based reporting on initiatives of different scope and complexity. Although the report components are identical, the level of detail required for each varies according to the project’s specific features.

Comprehensive Report

A comprehensive report would generally be used for high-risk, high-cost and/or high-profile initiatives. It would typically include:

  • a description of the project’s approved scope and objectives, including quantifiable benefits and risks
  • an update on the schedule for each major component, compared to the approved schedule
  • for each major financial component:
    • the budget and forecast financial information by month at the time of approval, including cost at completion
    • the actual financial information for the month, year to date financial information and forecast financial information by month, and
    • details of financial commitments and status of the contingency
  • an update on existing or potential risk(s) and proposed mitigation plan(s)

 

Detailed Report

A detailed report would generally be used for moderate-risk, cost and/or profile initiatives. It would typically include:

  • a description of the project’s approved scope and objectives
  • a detailed update on the schedule compared to the approved schedule; including corresponding capital expenditures for each milestone date, and
  • a detailed update of the actual and forecast financial information compared to the approved financial information, including the forecast financial information at completion

10.6 Attestation

Each time an agency reports to central government whether to meet public reporting requirements or Treasury Board risk-based oversight conditions, the report must be accompanied by correspondence signed by the responsible officer(s) attesting to the accuracy and completeness of the information provided.

10.7 Audits, Reviews & Oversight

Treasury Board or its designate may direct an independent third party to conduct audits or reviews to verify compliance with any reporting component, including any specific conditions of project approval. In exceptional circumstances or in high risk, complex projects, Treasury Board may also require independent, third-party oversight to monitor and report on a project’s progress.

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