and Innovative Administrator
For fiscal year 2009-2010, Telefilm assessed its objective
“to be an efficient and innovative administrator” through three items: a
special examination from the Office of the Auditor General (OAG),
a strategic review directed by the Treasury Board of Canada
Secretariat, and an analysis of the management expense ratio (MER) for
programs managed by Telefilm.
1. Special Examination Report
The OAG did not identify any significant deficiencies in
Telefilm’s systems and practices, and noted good management practices,
but did identify some areas for improvement. Telefilm is proud of the
results of its first special examination
and intends to move ahead with responses to the OAG recommendations.
Special Examination Report 2010
The Financial Administration Act (FAA)
stipulates that Telefilm shall cause financial and management control
and information systems and management practice to be maintained. Such
systems and practices shall be kept and maintained in such manner as
will provide reasonable assurance that its assets are safeguarded and
controlled, that its financial, human, and physical resources are
managed economically and efficiently, and that its operations are
carried out effectively. The FAA requires Telefilm to have a special
examination of its systems and practices carried out at least once every
10 years, conducted by the OAG.
The Auditor General has the responsibility to express an opinion on
whether there is reasonable assurance that during the period covered by
the examination—from May 2009 to January 2010—there were no significant
deficiencies in Telefilm’s systems and practices.
Key systems and practices examined
Findings and recommendations
Telefilm had a governance structure and systems that
enable it to discharge its responsibilities. Telefilm has sound
governance practices through the Board, its committees, their assigned
responsibilities and relations with senior management.
To improve its values and ethics practices, the OAG
recommends that Telefilm should implement a mechanism to inform the
Board of Directors of internal and external complaints, including those
having to do with the disclosure of wrongdoing.
Strategic planning, performance measurement and reporting
Telefilm has an appropriate strategic planning
process. OAG suggested that the new corporate plan include information
about the allocation of financial, human and material resources, and
make a link between the strategies and the resources allocated for the
OAG noted that management is aware of major risks, but
recommended that Telefilm implement a more integrated risk review,
evaluation and monitoring process and report on it to Board members.
Telefilm has processes for measuring performance and
reporting on it; key performance indicators that were measured were
defined in the strategic plan, and management reported periodically on
Funding of audiovisual productions
Telefilm deals with funding projects consistently and
objectively through guidelines, policies and procedures. Improvements
could be made to documentation in the management information system and
to the quality assurance process.
All applications had been evaluated in a manner
consistent with current guidelines, policies and procedures. Telefilm
analysts and managers were very knowledgeable about their market. For
feature film and new media projects, the Sineweb management information
system could be used more efficiently.
OAG recommended that Telefilm strictly follow
procedures for the Sineweb system to improve operating efficiency, and
complete the development and implementation of the quality assurance
OAG noted that strategic planning for information
technology and the operational plan for IT reflect Telefilm’s needs and
strategic orientation. Activities related to the management of
information provide a high quality service.
Human resource management
Telefilm has a stringent staffing policy, but should
ensure that letters of offer clearly set out the conditions of
employment and reflect the provisions of policies in force.
Telefilm provided learning and training opportunities
related to strategic objectives, and made an effort to integrate human
resources planning into operational planning.
The performance evaluation process should be applied
consistently within Telefilm and the results documented. Performance
bonuses awarded should be justified and documented properly.
Source: Special Examination Report-2010, Office of the Auditor General of Canada
2. Strategic review
The strategic review found that programs delivered by
Telefilm are aligned with the priorities of Canadians. The Government of
Canada confirmed in its 2010 Budget that spending reallocations were
Federal organizations that receive appropriations from
Parliament are required to conduct a strategic review every four years
as part of their normal planning process. Such reviews are directed by
the Treasury Board.
The strategic review assesses whether programs are: achieving their
intended results; effectively managed; and appropriately aligned with
the priorities of Canadians and with federal responsibilities.
This comprehensive review was undertaken by Telefilm for the
first time in fiscal 2009-2010. This exercise will help Telefilm bring
about improvements in its management practices.
3. Management expense ratio (MER) for programs managed by Telefilm
a) All programs
MER reflects the percentage of administrative expenses
required to deliver programs that Telefilm is responsible for managing.
This ratio measures the operating and administrative expenses (Schedule D
of the Financial Statements) net of amortization, against Telefilm’s
total assistance expenses, including the funding programs managed on
behalf of the Canadian Television Fund (CTF).
The current all-program MER stands at 6.1% and the
year-over-year decrease (15%) is explained by both a decrease in
Telefilm’s operating and administrative expenses and an increase in its
program assistance expenses (including the CTF funding programs).
b) By program
The Canada Feature Film Fund (CFFF)
MER went up from 8.2% to 9.7%. This increase is mainly due to
additional work required by Telefilm’s shared services areas—departments
such as Communications, Strategic planning and project development,
Legal, Information performance and risk, Compliance and collection.
The MER for the Canada New Media Fund (CNMF) in its final
year of operation decreased to 11.9%. The drop was mostly related to
lower labour inputs to deliver the fund, such as project financing and
business relations, as it was being phased out. No MER will be presented
for the CNMF in the next annual report.
The MER for the Canadian Television Fund (CTF)
fell to 2.4% from 2.7%. This favourable performance was achieved by
controlling administrative costs (which applies to all funds) combined
with an assistance expenses increase of $41M year-over-year. CTF MER is
expected to rise to 2.9% for the next fiscal year, because new digital
media programs will be delivered for 2010-2011 in addition to former CTF
Management expense ratio
Management expense ratio (MER) is a universal indicator of
the resources utilized compared to the dollars managed per program. As
an indicator, it can serve in certain circumstances to assess cost
effectiveness in delivery of the programs.
Telefilm applied standard MER calculations to the Canada Feature Film Fund (CFFF), the Canadian Television Fund (CTF)
and the Canada New Media Fund (CNMF). Since all of these funds are
subject to different guidelines, budgets and agreements, MER should only
be judged as a trend indicator by fund over time. For disclosure
purposes, Telefilm performs formal cost accounting on all these funds
using the same method for each.
Assistance expenses for the CFFF and the CNMF are presented
respectively in Schedules A and B. Details of costs of main programs are
disclosed in Schedule E of the Financial Statements. Since Telefilm is
managing program funding on behalf of the CTF under a Services
Agreement, CTF assistance expenses are not disclosed and do not form
part of Telefilm’s Financial Statements.
Note that for the 2008-2009 MER calculation, expenses
related to Compliance and collection were presented separately from the
cost of programs, as recovery fees. The 2008-2009 ratio has not been
recalculated since those differences are immaterial.
Management expense ratio
Source: Telefilm database
Using resources, process and technology to be an efficient administrator
Telefilm is enhancing organizational efficiency by combining three key elements in its initiatives and projects as follow:
Committed and skilled employees;
Defined processes; and
Telefilm’s human resources plan
This fiscal year, a new leadership model was implemented
that integrates values, behaviours and competencies. The performance
evaluation framework was also updated to reflect these new leadership
competencies. These initiatives are important, because they help
employees understand the nature and degree of change at Telefilm.
Electronic process management
Core management processes at Telefilm include program
decision-making and contracting due diligence. This fiscal year,
Telefilm took important steps to standardize and automate these
processes. By breaking down core processes into well-defined major steps
and applying IT tools, major improvements have been made to efficiency,
productivity, compliance, traceability and security. The new system
also enhances financial controls. All contracts are now signed through
an electronic process that strengthens security over signatories.
Telefilm is making better use of its Intranet to improve
efficiency in internal communications, and to explore new capabilities
as a management and sharing tool. A collaboration software has been
deployed to improve the way information is organized and shared across
the organization. This software not only shares information in real
time, it also provides secure and accessible archiving in a
Buisiness continuity management plan
Telefilm’s buisiness continuity management plan aims to
protect three core processes: contracting, payments and budget
follow-up. As a result of continual testing and updating, the plan’s
communications strategy has been substantially improved this fiscal
year. It has been used by Telefilm to manage potential issues such as
the Vancouver office during the Olympic Winter Games, and to help manage
the H1N1 flu virus situation at all offices.