Bill 46, Public Sector Accountability Act, 2001

Flaherty, Hon. Jim Minister of Finance

Versions

Bill 46 2001

An Act respecting
the accountability of
public sector organizations

CONTENTS

	Interpretation
1.	Purposes
	Public Sector Organizations
2.	Public sector organizations
3.	Exclusions
	The Planning Process
4.	Duty to prepare business plan
5.	Duty to plan for balanced budget
	Reporting on Results
6.	Duty to prepare annual report
7.	Public inspection
8.	Publication or disclosure of annual reports
	Monitoring Performance
9. 10.	Effect of failure to achieve objectives Effect of a deficit
	General
11.	Enforcement
12.	Prohibition, obstruction
13.	Accounting principles and standards
14.	Personal information
15.	Effect of authorized disclosure of information
16.	Delegation by Minister of Finance
17.	Protection from liability
18.	Conflicts
19.	Regulations
20.	Commencement
21.	Short title
	______________

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Interpretation

Purposes

1. The following are the purposes of this Act:

1. To initiate best practices in public sector organizations by measuring their performance against their established goals and by reporting publicly on the progress made.

2. To improve program effectiveness and accountability to the public by promoting a stronger focus on the results and the quality of service of public sector organizations.

3. To improve the delivery of service by requiring that each public sector organization prepares a plan to meet identified objectives and to provide information about the results and quality of service that are achieved.

4. To improve decision-making in public sector organizations by ensuring that relevant information is made available to the public about the organization's objectives and about the effectiveness and efficiency of its activities.

5. To improve the fiscal responsibility of public sector organizations by requiring them to prepare a balanced budget each year.

Public Sector Organizations

Public sector organizations

2. The following persons and entities are the public sector organizations to which this Act applies:

1. Every agency of the Crown in right of Ontario and every authority, board, commission, corporation, office or organization of persons a majority of whose directors, members or officers are appointed or chosen by or under the authority of the Lieutenant Governor in Council or a member of the Executive Council.

2. The corporation of every municipality in Ontario.

3. Every local board as defined in the Municipal Affairs Act and every authority, board, commission, corporation, office or organization of persons some or all of whose members, directors or officers are appointed or chosen by or under the authority of the council of the corporation of a municipality in Ontario.

4. Every board as defined in the Education Act.

5. Every university in Ontario and every college of applied arts and technology and post-secondary institution in Ontario whether or not affiliated with a university, the enrolments of which are counted for the purposes of calculating annual operating grants entitlements.

6. Every hospital referred to in the list of hospitals and their grades and classifications that is maintained under the Public Hospitals Act, every private hospital operated under the authority of a licence issued under the Private Hospitals Act and every hospital established or approved by the Lieutenant Governor in Council as a community psychiatric hospital under the Community Psychiatric Hospitals Act.

7. Every corporation with share capital, at least 90 per cent of the issued shares of which are beneficially held by, or for, one or more public sector organizations described in paragraphs 1 to 6, and every wholly-owned subsidiary of such a corporation.

8. Every corporation without share capital, the majority of whose members, directors or officers are members of, or are appointed or chosen by or under the authority of, one or more public sector organizations described in paragraphs 1 to 6, and every wholly-owned subsidiary of such a corporation.

9. Every board of health under the Health Protection and Promotion Act and every board of health under an Act of the Assembly that establishes or continues a regional municipality.

10. Such other persons and entities as may be prescribed.

Exclusions

3. (1) This Act does not apply to the Office of the Lieutenant Governor, the Assembly and the offices of persons appointed on the address of the Assembly.

Same

(2) This Act does not apply to such persons and entities as may be prescribed by regulation, despite section 2.

The Planning Process

Duty to prepare business plan

4. (1) Every public sector organization shall prepare a business plan every year.

Contents

(2) A business plan must contain the following information with respect to the fiscal year for which it is prepared:

1. A description of the governance structure and management structure of the organization.

2. A comprehensive statement of purpose, addressing the major functions and operations of the organization.

3. A description of the major activities of the organization for the year.

4. A statement of the goals and objectives to be achieved with respect to each major activity of the organization during the year.

5. A description of the actions the organization will take during the year to achieve those goals and objectives.

6. A description of the human, financial, technological and other resources that the organization will need during the year to achieve those goals and objectives.

7. A description of how the organization will monitor its performance during the year and how it will monitor the resources that it uses to achieve its goals and objectives. If it is not possible to monitor them using objective, quantitative measurements, the plan must explain the reasons and describe how the organization intends to assess its performance.

8. A description of any significant factors outside the control of the organization that are likely to affect the achievement of its goals and objectives.

9. A description of the actions that the organization will take to establish the reasonableness of the business plan and to review the organization's success in achieving its goals and objectives.

10. A description of the methods that the organization will use to set future goals and objectives and the organization's timetable for doing so.

11. A description of the measures that the organization will take to improve its services and its efficiency and the measures it will take to identify alternate methods of delivering its services, including the delivery of those services by the private sector.

12. Its budget for the year.

Consultation

(3) When preparing a business plan, the organization shall consider the views of persons and entities outside the organization who may have an interest in its activities.

Approval

(4) The business plan must be approved by the governing body of the organization.

Impact of change in status

(5) If a person or entity is a public sector organization to which this Act applies for only part of its fiscal year, the organization is not required to prepare a business plan under this section for that year.

Transition

(6) Despite subsection (5), every public sector organization to which this Act applies on the day section 2 comes into force is required to prepare a business plan for its first fiscal year that begins after March 31, 2001.

Duty to plan for balanced budget

5. (1) Every public sector organization shall plan for a balanced budget every year.

Exception

(2) An organization is not required by this Act to plan for a balanced budget for a particular fiscal year if it is not required by this Act to prepare a business plan for that year.

Definition

(3) In this section,

"balanced budget" means, with respect to a public sector organization, a budget in which the organization's anticipated expenditures for a fiscal year do not exceed its anticipated revenues for the year.

Reporting on Results

Duty to prepare annual report

6. (1) Every public sector organization shall prepare an annual report, and shall do so within six months after the end of the applicable fiscal year.

Exception

(2) An organization is not required by this Act to prepare an annual report for a particular fiscal year if it was not required by this Act to prepare a business plan for that year.

Contents

(3) The annual report must include the following information and documents:

1. The business plan for the year.

2. A description of the extent to which the organization achieved its goals and objectives for the year, as set out in the business plan.

3. If any of those goals or objectives were not achieved, a description of the reasons that they were not achieved and of the steps that the organization plans to take to achieve them.

4. If the organization considers that any of those goals or objectives cannot be achieved, a description of the reasons that they cannot be achieved and of the steps that the organization plans to take as a result.

5. A statement indicating whether the books and records of the organization for the year are complete and accurate.

6. A statement indicating whether the systems and practices of the organization during the year can reasonably be relied upon to have ensured that the organization protected its assets, spent money only as authorized and managed its resources efficiently.

7. The financial statements of the organization for the year.

8. The business plan for the following year.

Audit requirement

(4) The financial statements must be audited by one or more persons licensed as auditors under the Public Accountancy Act.

Approval

(5) The annual report must be approved by the governing body of the organization.

Public inspection

7. (1) Every public sector organization shall make available to the public each annual report it prepares under this Act, and shall do so within six months after the end of the fiscal year to which it relates.

Sale to the public

(2) The organization shall give a copy of its annual report to every person who asks for one and may charge the fee, if any, prescribed by regulation.

Delivery to ministries

(3) The organization shall give a copy of its annual report for a fiscal year to the Ministry of Finance and to every other ministry of the Crown from which the organization receives funding, directly or indirectly, during the year, and shall do so within six months after the end of the fiscal year.

Publication or disclosure of annual reports

8. Any person may publish the information contained in an annual report prepared under this Act and any ministry of the Crown may disclose such information.

Monitoring Performance

Effect of failure to achieve objectives

9. (1) This section applies if, in the opinion of the Minister of Finance, a public sector organization repeatedly fails to achieve the objectives set out in its business plans or fails to achieve one or more significant objectives in a business plan for a particular year.

Review by the organization

(2) The Minister of Finance may require the organization to review its financial management, business practices and operating practices if, in his or her opinion, such a review is in the public interest having regard to the purposes of this Act, and to report the results of the review to the Minister.

Review by the Minister

(3) The Minister of Finance may review the organization's financial management, business practices and operating practices if, in his or her opinion, such a review is in the public interest having regard to the purposes of this Act.

Purposes of review

(4) A review is undertaken in order to enable the Minister of Finance to make recommendations to the organization, to determine whether to exercise any of his or her powers under this Act or to determine whether to make recommendations, and what recommendations to make, to another minister of the Crown about the exercise of a power that the other minister may have under any other Act.

Requirements re review by organization

(5) If the Minister of Finance requires the organization to undertake a review, the Minister may impose such requirements and restrictions with respect to the review as he or she considers appropriate.

Notice

(6) The Minister of Finance shall give notice of a review to any other ministry of the Crown that provides funding to the organization.

Duty to co-operate

(7) If the Minister of Finance undertakes a review, the organization and its directors, members, employees and agents shall co-operate with each individual conducting the review on behalf of the Minister and shall give him or her full access to all information, documents, records and things in their possession or control that the individual considers to be relevant to the review.

Confidentiality of personal information

(8) Before giving an individual conducting a review on behalf of the Minister access to information, documents, records and things in its possession or control, the organization shall ensure that all references to the name of any individual and all other information that may identify an individual are removed.

Cost of review

(9) The Minister of Finance may require the organization to pay all or part of the cost of a review, and the organization shall do so.

Effect of a deficit

10. (1) This section applies if a public sector organization has a deficit for a fiscal year for which the organization was required by this Act to plan for a balanced budget.

Change in requirements for business plans

(2) The organization is required to prepare a business plan for each of the two following years, and to do so before the beginning of the following year.

Same

(3) Subsection (2) applies whether or not the organization would otherwise be required to prepare a business plan under section 4 for the each of the following two years.

Change in requirement to plan for
balanced budget

(4) Instead of planning for a balanced budget in each of the following two years, the organization is required to plan to have a surplus in the following year and it may have a surplus in the second year.

Same

(5) Subsection (4) applies whether or not the organization would otherwise be required to plan for a balanced budget in each of the following two years.

Additional requirement for surplus

(6) The organization is required to plan its budget for the following two years so that, during those two years together, it has a surplus equal to the initial deficit.

Definitions

(7) In this section,

"deficit" means, with respect to a public sector organization, an excess of expenditures of the organization for a fiscal year over its revenues for the year; ("déficit")

"surplus" means, with respect to a public sector organization, an excess of revenues of the organization for a fiscal year over its expenditures for the year. ("excédent")

General

Enforcement

11. (1) This section applies if a public sector organization fails to comply with section 4, 5 or 6 or subsection 9 (7) or section 10 or with a requirement of the Minister of Finance imposed under section 9.

Amounts withheld

(2) The Minister of Finance may require a minister of the Crown to withhold all or part of any amount that the ministry is required by law to pay to the public sector organization.

Payment of amounts withheld

(3) The minister of the Crown shall pay the amount withheld under subsection (2) to the organization when, in the opinion of the Minister of Finance, the organization complies with section 4, 5 or 6, subsection 9 (7) or section 10 or with the requirement of the Minister of Finance imposed under section 9, as the case may be.

Exception

(4) Subsection (3) does not apply if, in the opinion of the Minister of Finance, the non-compliance continues after March 31 following the date on which the Minister requires the amount to be withheld from the organization under subsection (2).

Same

(5) An amount withheld under subsection (2) that is not subsequently paid to the organization by virtue of subsection (4) is part of the Consolidated Revenue Fund.

Prohibition, obstruction

12. (1) No person shall knowingly obstruct an individual conducting a review on behalf of the Minister of Finance under section 9 or withhold or conceal from such an individual any information, document, record or thing that the individual considers to be relevant to the review.

Offence

(2) A person who contravenes subsection (1) is guilty of an offence and, on conviction, is liable to a fine of not more than $2,000.

Accounting principles and standards

13. (1) A public sector organization is required to use the same accounting principles and standards when preparing its budget as it uses to prepare its financial statements for the purposes of this Act.

Same

(2) The financial statements of a public sector organization must be prepared in accordance with generally accepted accounting principles or in accordance with such other standards as may be prescribed by regulation.

Personal information

14. (1) The Minister of Finance may directly or indirectly collect and use personal information in accordance with this section for the purposes of administering and enforcing this Act, and the Minister shall disclose such information if, and only if, the disclosure is necessary for those purposes.

Restriction on use

(2) The Minister of Finance shall not combine personal information provided by a public sector organization under this Act with other information so as to identify an individual.

Restriction on disclosure

(3) The Minister of Finance shall not disclose personal information provided by a public sector organization under this Act in such a way that the information can be used to identify an individual or to infer the identify of an individual.

Same

(4) The Minister of Finance shall not disclose personal information provided by a public sector organization under this Act for a purpose that is not directly related to the Minister's duties under this Act.

Non-application

(5) Subsections (2), (3) and (4) do not apply to personal information in respect of employment matters.

Effect of authorized disclosure of information

15. The disclosure of information made in accordance with this Act, or in the reasonable belief that the disclosure is required by this Act, shall not be deemed by any court or person to be in breach of or contrary to any agreement that purports to restrict or prohibit that disclosure regardless of whether the agreement is made before or after this Act comes into force.

Delegation by Minister

16. (1) The Minister of Finance may delegate, in writing, to a person or entity his or her powers and duties with respect to the conduct of a review under subsection 9 (3).

Application of Freedom of Information
and Protection of Privacy Act

(2) The Freedom of Information and Protection of Privacy Act applies with respect to all information, documents, records and things obtained from a public sector organization by a delegate of the Minister of Finance, and they shall be deemed to be under the control of the Ministry of Finance for the purposes of that Act.

Protection from liability

17. (1) No action or other proceeding shall be commenced against an individual conducting all or part of a review under subsection 9 (3) on behalf of the Minister of Finance for any act that is in good faith done or omitted in the performance or intended performance of his or her duties.

Liability of the Crown

(2) Despite subsections 5 (2) and (4) of the Proceedings Against the Crown Act, subsection (1) does not relieve the Crown of a liability to which the Crown would otherwise be subject in respect of a tort.

Conflicts

18. Subsections 9 (5) and 11 (2) and (5) prevail over any other Act or regulation unless another Act specifically refers to them and provides otherwise, and they prevail over any provision in an agreement that provides otherwise.

Regulations

19. (1) The Minister may make regulations,

(a) prescribing those things that are required or permitted by this Act to be prescribed or to be done by regulation;

(b) exempting public sector organizations from any requirement of this Act or a regulation, subject to such conditions or restrictions as may be specified.

Same, public sector organizations

(2) A regulation referred to in paragraph 10 of section 2 (public sector organizations) may provide,

(a) that a person or entity is a public sector organization even though it does not directly or indirectly receive funding from the Crown in right of Ontario;

(b) that, despite subsection 4 (5) (impact of change in status), a person or entity shall be deemed to have been a public sector organization for all of a specified fiscal year in the circumstances specified in the regulation.

Scope of regulations

(3) A regulation may be general or particular in its application.

Classes

(4) A regulation may create different classes and may impose different requirements, conditions or restrictions on or relating to each class.

Commencement

20. This Act comes into force on the day it receives Royal Assent.

Short title

21. The short title of this Act is the Public Sector Accountability Act, 2001.

EXPLANATORY NOTE

The Bill enacts the Public Sector Accountability Act, 2001.

The purposes of the Act are set out in section 1. The public sector organizations to which the Act applies are described in section 2, and additions and exemptions may be made by regulation.

Each public sector organization is required to prepare a business plan each year, and the contents of the business plan are specified in section 4. Organizations are also required to plan for a balanced budget each year.

Within six months after the end of a year for which an organization prepares a business plan under the Act, the organization must prepare an annual report. The contents of the annual report are specified in section 6. Annual reports are to be made available to the public.

Section 9 allows the Minister of Finance to require an organization to review its financial management, business practices and operating practices if, in the Minister's opinion, the organization repeatedly fails to meet its objectives or if it fails to meet a significant objective in a particular year. The Minister may also undertake such a review directly. The purposes of such reviews are set out in section 9.

Section 10 sets out planning and reporting requirements for an organization that has a deficit in a particular year. Such an organization is required to plan for a surplus in the two years after the deficit occurs to offset the amount of the deficit.

If an organization fails to comply with the Act, payments from the Crown to the organization may be withheld. Section 11 of the Act sets out the circumstances and restrictions that apply.

Section 14 governs the collection, use and disclosure of personal information by the Minister of Finance. Certain restrictions are set out.