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Internal Audit Report on Corporate Planning Framework
Basis for evaluating FCAC planning
Planning model used
To facilitate our audit we developed a 'planning model' as adapted to FCAC's environment (see Diagram 1). The model was used as a basis for reviewing FCAC's planning process. The model describes the basic principles of planning as follows:
- Broad statements of objectives are aligned with and support the achievement of FCAC's legislative mandate
- Strategic priorities contribute to achieving a focus for operations, as well as identifying opportunities for change in ongoing operations and projects
- The planning process is iterative and adjustments are made to the strategic plan and business plans so that FCAC's plans reflect changing circumstances during each two-year planning period
- Management is assured that strategic priorities and business plans are likely to be achieved within available capacities (sufficient resources, skills and other needs are available)
- An assessment of and reporting on progress against plans is incorporated into management reporting.
Description of the planning model
Overview
The model has two main planning phases: strategic planning and business planning.
Strategic planning focuses on the development of a five year forward looking plan. This is articulated through a series of direction setting statements (strategic priorities) establishing a future desired state for FCAC. The key question to answer is: Will FCAC's objectives deliver on its mandate? What will FCAC look like in 3-5 years time? How will FCAC have changed for the better?
The business planning process focuses on alignment of operations and projects plans with the strategic plan and it demonstrates how the strategic priorities are to be achieved. The key question to answer is: In support of the strategic priorities, what can be done within FCAC's overall capacities in the business planning period (i.e., 2 years)?
The strategic plan and business plans are inextricably linked through the alignment of corporate objectives with overall capacities and business plans. Decisions and trade-offs about the commitments for achievement of strategic plans and business plans are formalized as the basis of finalizing unit Activity plans (resources, budgets and work tasking).
The planning model introduces the Planning Sandbox Tools composed of environment scanning 2, enterprise risk management, capacity requirements assessment, and performance measurement. These tools are used in forming and assessing the strategic and business plans, and setting up monitoring and performance measures for reporting against the plans.
Governance and accountability
Governance and accountability can generally be described as the processes and structures though which decision making authority is exercised. Governance and accountability is an overarching element to effective planning and communications with planners and generally to staff. There is an active and visible commitment of the Commissioner as well as the management committee in key planning decision steps. Staff participation also occurs to ensure buy-in to overall strategic direction.
Strategic planning
The first step in corporate planning is establishing strategic areas. These areas cover the full range of operational and management considerations. As such, they provide a structure for developing and assessing broad strategic priorities (objectives) for change in direction within the confines of FCAC's legislative mandate.
Within each strategic area, a direction is articulated through strategic priorities that define what to achieve. The priorities address how FCAC is to achieve its mandate as well what is needed to achieve a strengthened or changed focus to the organization.
Strategies and activities are developed detailing how to achieve the strategic priorities. Some activities are broadly stated in that they affect the organization as a whole while others may be operationally (business line) focussed.
Business planning (balancing priorities to business capacities)
An important step in planning is translating the strategic plan into business plans. The purpose of the business plan is to assess the impact of the strategic plan on activities by demonstrating how the strategic priorities will be achieved.
Business plans carry out a capacity assessment of whether FCAC has the means of achieving the strategic priorities in addition to ongoing operational demands. The central questions that business planning answers are as follows: Are overall capacities for undertaking strategic priorities and supporting activities in the business planning period sufficient with respect to resources, timelines, and, generally operations and project requirements? If not, what alternatives and trade-offs between projects and operations are required? This exercise is depicted in the middle of the planning model, 'Balancing'.
For an organization the size of FCAC the business plan will assess the resource requirements by demonstrating how competing demands, for both new activities and on-going activities across the organization will be balanced. They provide the Management Committee with an opportunity to review and challenge assumptions about emerging business conditions, anticipated operational and project workload, financial considerations, and how changes in one area of activity may affect other areas. It is important that business planning be cross-cutting recognizing the dependencies between different units in achieving overall results.
Once business plans are developed they are used in preparing detailed unit activity plans, staffing plans and budgets. From the commitments made in the business plan the overall HR, IM/IT, and other “enabling” requirements are identified and estimated. The last step in the planning process is setting out performance measures for monitoring and reporting against the corporate and business plans.
Planning Sandbox Tools
Developing plans requires what we refer to as Planning Sandbox Tools. Each tool provides essential information to allow for a full analysis and assessment at each phase of the planning process. The tools are: environmental scanning, enterprise risk management, capacity requirements assessment, and performance measurement.
- Environmental scanning - Environmental scanning is an ongoing process providing analysis and assessment of day-to-day monitoring of financial and economic risks as well for planning purposes. This involves monitoring of internal and external factors that can potentially point to strengths/weakness (internal), opportunities/threats (external) with respect to the operational effectiveness and efficiency. In planning, this involves an environmental scan document laying out the key issues that could be faced in the coming years as well as an analysis of the implications of these risk factors.
- Risk management - This tool takes a risk focussed lens to identifying internal and external weaknesses and threats, and the mitigation efforts required to manage the risks. A consolidated analysis and assessment (i.e.a corporate risk profile) is a key input into planning. The corporate risk profile provides essential information in forming corporate objectives and actions, and setting priorities such that risks are effectively managed.
- Capacity requirements assessment - Throughout the planning model, the concept of assessing plans against overall capacities is applied in progressively detailed information. This tool involves an assessment of the overall capacity particularly at the strategic plan and business planning phases to ensure an equitable balance is achieved.
- Performance Measurement - The final stage in the planning model is setting out monitoring and performance measures against corporate and business plans. This will provide important feedback for accountability and performance reporting, and as appropriate for the adjustment of plans.
Footnote 2 . For planning discussions purposes, a consolidated analysis and assessment is prepared of key internal and external environmental and emerging issues.
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