Background
In October 1999, the government set up the Alberta Corporate Service Centre to improve the cost-effectiveness of delivering administrative service.
In October 1999, the government set up the Alberta Corporate Service Centre to improve the cost-effectiveness of delivering administrative services. The Centre was established to deliver transaction and processing services to government organizations in the areas of human resources, finance, administration, and
information technology. Strategic and governance functions for these areas, such as long term strategy and policy development, were to remain the responsibility of ministries and central agencies.
The main goal of the Centre was to reduce administrative costs by 20% over three years
The Centre was established under the Ministry of Executive Council with a Chief Executive Officer (CEO) and a board of directors comprised of Deputy Ministers. The main goal of the Centre was to reduce administrative costs across government by 20% over three years. Other goals of the Centre were to implement consistent processes within government and add value to ministries
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by allowing them to focus on strategic issues and program delivery.
Since 1999, the Centre and ministries have been working on the design and implementation of shared services.
On April 1, 2000 the Centre began operations and entered into a Memorandum of Understanding with each ministry
On April 1, 2000, the Centre started with a budget of $1.8 million.
During the year, it entered into a Memorandum of Understanding with each Deputy Minister to establish an interim operating
arrangement between the Centre and ministries. Each Memorandum defined the resources (staff and dollars) to be assigned to the Centre by the ministry. Ministries and the Centre identified 33 products and services, supported by over 1,100 staff and funding of
$134 million, to be assigned to the Centre.
The expenses of the Centre for 2000-2001 were approximately $2 million, consisting mainly of administrative costs
The expenses of the Centre for 2000-2001 were approximately
$2 million, consisting mainly of administrative costs relating to the core management team of the Centre. This amount was paid by the Ministry of Executive Council during the year and allocated at year-end back to all departments. Ministries paid the costs for the
products and services assigned to the Centre during the year.
The Centre is now a program of the Ministry of Government Services with a budget for 2001-2002 of
$138.7 million
The March 2001 government reorganization moved the Centre to the Ministry of Government Services. The Centre is now a program of the Ministry of Government Services. The 2001-2002 budget for the Centre is $138.7 million, including $4.5 million in management and administration costs. The remaining costs are for direct service delivery, including $9.1 million for the cost of providing services to the Ministry of Government Services. Cost recoveries from other departments, are budgeted for $129.6 million.
Service level agreements
Recommendation No. 2 Service level agreements
We recommend that the Deputy Minister of Executive Council, the Alberta Corporate Service Centre and Ministries take immediate action to develop and sign service level agreements that detail the services to be provided by the Centre, the associated costs and performance measures.
Shared service arrangements present risks
Shared service arrangements present two significant risks to organizations:
• Services will not meet the needs of the recipient organization.
• Anticipated efficiencies are not achieved.
Agreements need to be in place to mitigate these risks
Contracts or agreements need to be in place to mitigate these risks.
Effective contracts should define roles and responsibilities of each party, compensation, measurable performance expectations and reporting requirements.
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Original plans called for the Centre to have service level agreements in place with all ministries by September 2000.
Original plans called for the Centre to have service level
agreements in place with all ministries by September 2000. This was not achieved. During 2000-2001, the Centre and ministries were focused on agreeing on the products and services and related resources to be assigned to the Centre. This was a challenging and time consuming process, in part, because some ministries lacked information on current service levels and costs.
The Centre recently signed operating agreements with ministries
The Centre recently signed operating agreements with ministries for the period April 1, 2001 to March 31, 2002. As of
September 14, 2001, the Centre has signed all 25 operating agreements with ministries. The operating agreements provide for the Centre to be the sole service provider for approved products and services and to continue to work with departments to develop the information necessary to prepare service level agreements.
The operating agreements are not sufficient to mitigate the risks of shared service arrangements
The operating agreements are not sufficient to mitigate the risks associated with shared service arrangements. These agreements do not identify the specific service requirements of individual
ministries, costs for the services provided, and performance measures.
The current plan is to replace the operating agreements with detailed service level agreements for 2002-2003. To do this, the Centre and ministries will have to agree on the following:
• identification of unique products and services to be provided to ministries
The Centre and departments must develop and agree on performance measures and costs for services to establish service level agreements for 2002-2003
• performance measures and targets for each product and service to be provided
• base line service level information and costs for the performance measures
• how the performance measures will be determined and reported upon
• the costs for services provided The nature and extent of
products and services and the roles and
responsibilities, and service level standards for these services also have to be finalized
The operating agreements include a summary list of products and services. The Centre’s more detailed Directory of Products and Services is to be approved by deputy ministers on
September 26, 2001. The Senior Financial Officers, Human
Resource Directors, Administrative Services and Chief Information Officers Councils (the Councils) and the Centre have not yet finalized the roles, responsibilities and service levels for the products and services. These documents were drafted in 2000 and, in some cases, were approved by the responsible Council. However, the operating agreements indicate that these documents still need to be finalized.
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No agreements exist for services provided to organizations within ministries
In addition to providing services to ministries, the Centre provides services to a number of organizations within ministries such as Child and Family Service Authorities. No agreements exist with these organizations. The operating agreements with ministries include the provision of services to all organizations within a ministry. This is a concern because service recipients are not involved in negotiating for the cost and service levels for the services they receive and therefore do not have the ability to manage their budget. In some cases, Deputy Ministers may not have the authority to encumber the budgets of other organizations within their ministries.
Clarification of the Centre’s governance structure is needed to ensure that an appropriate framework is in place for the development of service level agreements
The governance of the Centre has changed since it was established.
The Centre was created under the Ministry of Executive Council.
The Centre is now a program in the Ministry of Government Services and, according to the Centre’s latest activity report, the
CEO now reports to both the Minister and Deputy Minister of the Ministry. A Deputy Minister Steering Committee was set up when the Centre was established to oversee the operations. The terms of reference of the Steering Committee have not been reviewed since the Centre was transferred to the Ministry of Government Services.
We have also been advised that the role of the Councils in the Centre’s operations has evolved to a more consultative role.
Clarification of the Centre’s governance structure is needed to ensure that an appropriate framework is in place for the development of service level agreements with ministries.
There is a significant amount of work to be done by the Centre and ministries to sign service level agreements by April 1, 2002
It has been seventeen months since the Centre began operations on April 1, 2000 and limited progress has been made on preparing service level agreements. There is a significant amount of work to be done by the Centre and ministries to sign service level
agreements by April 1, 2002, which is the goal stated in the
operating agreements. Both parties have to work together to clarify the nature and extent of services to be provided by the Centre, roles and responsibilities, service level standards, base line costs and performance measures. Significant progress will be required in the short-term to ensure that shared services are successful.
Progress is important since
ABCs will be required to use the Centre in 2002-2003
Progress is especially important since the Government Reorganization Secretariat’s Report on the Review of ABCs
recommends that agencies, boards and commissions should use the Centre in 2002-2003 unless specifically exempted by the
Secretariat. It would be risky for the Centre to assume responsibility for service delivery for several new clients without service level agreements in place.
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