New Brunswick Internal Services Agency · Louise Lemon President, New Brunswick Internal Services Agency. Table of Contents ... New Brunswick Internal Services Agency - Annual Report

New BrunswickInternal Services AgencyAnnual Report 2010-2011

Published by:

New Brunswick Internal Services AgencyProvince of New Brunswick

Brookside Place435 Brookside Drive

Fredericton, New BrunswickE3A 8V4Canada

November, 2011

ISBN: 978-1-55471-656-2

Our VISIONTo be an outstanding organization that:

provides quality services driven by quality peoplein a competitive environment;

is client-focused and valued by stakeholders; and

strategically delivers innovative, effective and efficient services.

November 22, 2011

The Honourable Claude WilliamsMinister of Transportation and InfrastructureProvince of New BrunswickFredericton, New Brunswick

Dear Minister Williams,

On behalf of the Board of Directors, it is my pleasure to submit to you the New Brunswick Internal Services Agency’s annual report for the 2010-2011 fiscal year.

Sincerely,

Marc LégerNBISA Board Chair

Report from Board Chairperson

It is an honor to present the first annual report of the New Brunswick Internal Services Agency. Our Board of Directors is directed to administer the affairs of the Agency by ensuring that decisions and actions are based on sound business practices. It is our responsibility to ensure that NBISA delivers on its mission to transform delivery of transactional services to the Government of New Brunswick. Specifically, the Board is committed to ensuring that NBISA meets its legislated mandate by:

• providing common services, • streamlining processes, • acquiring and maintaining infrastructure, • identifying, promoting and implementing best practices, and • providing services to other governments or levels of government or their agencies or institutions

as required.

The ten members of the Board of Directors (who are all Deputy Ministers whose departments and agencies receive services from the agency) take this responsibility seriously. The Board meets on a regular basis in order to ensure that NBISA has the necessary strategic oversight and governance to meet the aggressive mandate that it has been given.

During this first year of establishing the Agency, the Board has focused its energies on guiding the Executive Team through the transition of services and staff, developing strategy and go-forward actions, and overseeing the deployment of services to 31 departments and agencies of government.

The Board recognizes that shared service is a proven model of service delivery in other Canadian jurisdictions that, over time, has delivered significant cost savings. We are pleased that savings generated through the New Brunswick Internal Services Agency will assist government in returning to a balanced budget and provide additional funding for priority areas.

I am confident that the foundation that has been laid during the Agency’s first year will enable the delivery of quality services to departments and agencies of government while making a significant contribution to debt reduction in New Brunswick.

Marc LégerChair, NBISA Board of Directors

Message from the

PresidentIt is my pleasure to present the New Brunswick Internal Services Agency’s inaugural annual report.

Much work has been done to get the agency up and running. We brought together a strong and committed management team, created a new and innovative workspace, redesigned service processes, introduced new technologies, and began the building of a multi-talented and multi-functional agency team. With this strong foundation, I am confident that our new organization will successfully deliver on the mandate set out in our legislation.

We have made good steps in accomplishing this already. The agency has completed deployment of IT Service Desk and Payroll and Benefits, and is on track for completion of Accounts Payable on June 22, 2011. Our Infrastructure and Operations group continues to lead in the delivery of enterprise-wide infrastructure and services, and is tracking to commission the new data centre in the fall of 2011. Print Optimization is also well underway. Our team is now delivering services to over 10,500 employees of 31 Part I departments and agencies.

I am also proud of the creation of a new and innovative workspace that encourages innovation and service excellence. I am confident that our workforce benefits from open-concept space rich with collaborative work areas, unique training facilities, and welcoming common areas.

And NBISA has already delivered value to GNB. This year we provided training and certification in project management to NBISA and to others from the broader GNB community; we have shared widely our approach to process redesign; we have begun the development of key performance measures and indicators; and we have engaged all levels of GNB in conversation about opportuni-ties for process improvement.

This report provides a retrospective look at the significant work undertaken by NBISA in the 2010-11 fiscal year. The hard work and dedication that went into establishing this new organization is remarkable, and I am proud of what we have accomplished during our first year of operation.

Respectfully submitted,

Louise LemonPresident, New Brunswick Internal Services Agency

Table of

ContentsEstablishing Shared Services - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1

Report from the Chief Operating Officer - - - - - - - - - - - - - - - - - - - - - - - - - 5

Report from the Chief Technology Officer - - - - - - - - - - - - - - - - - - - - - - - - 7

Report from the VP of Transformation - - - - - - - - - - - - - - - - - - - - - - - - - - - 8

Report from the VP Agency Services - - - - - - - - - - - - - - - - - - - - - - - - - - - - 10

Performance Metrics and Tools - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 12

Moving Forward - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 14

Financial Statements - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 15

Appendices

APPENDIX A: Service Transition Framework - - - - - - - - - - - - - - - - - - - - 29

APPENDIX B: Rolling-Wave Deployment Schedule - - - - - - - - - - - - - - - 30

New Brunswick Internal Services Agency - Annual Report 2010/11 | 1

EstablishingShared Services

The Internal Services Alignment (ISA) initiative was introduced in March 2008 under the responsibility of the Department of Supply and Services. ISA’s mandate was to develop a shared services delivery model that would realign ‘common services’ – information management and technology, human resources, and financial and administrative services – within the Government of New Brunswick (GNB).

As a result of ISA’s work, the New Brunswick Internal Services Agency (NBISA) was established on May 1, 2010. The service-delivery model used by this new shared services organization was ultimately selected and developed in order to realize the inherent benefits of both centralized and decentralized service-delivery models. This is accomplished through the use of Service Partnership Agreements, the development of clear unit costs, the creation of collaborative partnerships to ensure understanding of core business drivers, and the development of commercially driven customer focused services.

Service Partnership Agreements (SPA) create a “shared responsibility for delivery of services”, and Key Performance Indicators (KPI) assure that we measure and share results on a regular basis. The collaborative framework and approach ensures that clients are engaged in prioritization activities as shareholders and partners.

4Disparate processes

4Multiple standards

4Duplication of effort

4Different control environments

4High cost and costs unclear across the business

4Not scaleable

4Responsive to Business and Operational needs

4Business/Operations control decisions

4Customized solutions to meet Business/ Operational requirements

4Highly customer focused

4Commercially driven

4Service Partnership Agreements

4Clear unit costs

4Flexible delivery

4Clear understanding of drivers and activities

4Common systems and support

4Consistent standards and controls

4Tight control environment

4Economics of scale

4Remote from business

4Unresponsive and inflexible

4No Business/ Operational control over costs

4Viewed as central overhead

4Prevalence of shadow operations

CentralizedDecentralizedShared

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LEGISLATION

One of the most significant milestones achieved during the past year was the proclamation of the New Brunswick Internal Services Agency Act effective on May 1, 2010. The Act is the first shared-services legislation of its kind in Canada. It enables NBISA to be wholly owned and operated by, and responsible to government, with the ability to pursue, deliver and manage shared services on behalf of government departments and other areas of the public service. The Act also enables NBISA to operate like a business with a focus on clients, delivering service excellence and driving performance.

GOVERNANCE

Board of Directors

Senior leadership and support from the top levels of government have been essential to the establishment and on-going success of shared services within the Government of New Brunswick. A steering committee of 12 deputy ministers was instrumental to the success of this initiative, providing guidance, insight and direction in the development of this new service delivery model.

The steering committee’s leadership continues today through the agency’s Board of Directors. NBISA’s Board consists of 10 senior public servants appointed by the minister designated by the Lieutenant Governor in Council to administer the Act (“Minister”). The NBISA Act requires that six of the Board members be at the deputy head level, three be senior civil servants, plus the president of the Agency as an exofficio member. The Lieutenant Governor in Council, on the recommendation of the minister, is also able to appoint two non-civil or non-public servants as members. All appointments, with the exception of the President, are for a three-year term. The 2010-11 NBISA Board of Directors are:

Marc Léger (Chair) Mike Ferguson* (Chair of the Audit Deputy Minister, Post Secondary and Finance Committee)

Education and Labour Deputy Minister, Finance

Ellen Barry* Byron James Deputy Minister – Office of Human Resources Deputy Minister, Executive Council Office

Jean Castonguay* Louise Lemon (Secretary) Deputy Minister - Transportation President, NBISA (ex-officio)

Roger Doucet (Vice-Chair) Sylvie Levesque-Finn Deputy Minister, Education President, Service New Brunswick

Don Ferguson Dale Wilson* Deputy Minister, Health Deputy Minister, Public Safety

* Appointment to the Board of Directors was effective January 1, 2011. From May to December 2010, the Board was also comprised of the following individuals:

New Brunswick Internal Services Agency - Annual Report 2010/11 | �

David Ferguson David Johnstone former Clerk of the Executive Council former Deputy Minister, and Secretary to Cabinet Transportation

Kim MacPherson John Mallory former Comptroller, Office of the Comptroller former Deputy Minister, Finance

Carolyn McKay former Deputy Minister, Officer of Human Resources

ORGANIZATION AND PEOPLE

During the organizational design phase, the DM Steering Committee determined the functional requirements of the new organization. These functional requirements were then incorporated into the design of the NBISA organizational structure. These functions include: Service Delivery, Financial/Human Resource Management, Implementation and Deployment, Service Support/Service Experts, Client Relationship Management, Business Process Improvement, Measuring and Reporting on Performance, Communications, Change Management, Business and Strategic Development, Policy/Legislative Development, and Innovation and Risk Management.

MinisterClaude Williams

Board of Directors

PresidentLouise Lemon

CommunicationsMelissa Jewett

VP TransformationAndrea Seymour (A)

Director ServiceDevelopment

Director PMODavid Whelbourn

Director ChangeManagementCarla Calabrese

Strategy & Planning

VP Operations/COOAndrea Seymour

Director Hire to RetireMonica Ward

Director IT Service DeskAngie Milbury

Director Procure to PayDarren Caterini

Director EnterpriseServices

Gilles Boudreau

VP Agency ServicesEric Beaulieu

Director of FinanceLise Chiasson

Director Human ResourcesRay Butler (A)

Chief Technology OfficerKen Fitzpatrick

Manager, EducationPayroll Project

Director IT OperationsDrew Ingraham

Director IT ApplicationsLiz Byrne-Zwicker

Director Client RelationsJulie Mason

* Organizational Chart is current as of date of publication(A) = Acting

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Executive Management

NBISA’s Executive Management Team oversees the Agency’s day-to-day operations and provides overall strategic leadership and guidance. Reporting to the Board of Directors, the team consists of:

Louise Lemon, President

Andrea Seymour, Chief Operating Officer and Vice-President of Operations/Acting Vice-President of Transformation

Kenneth Fitzpatrick, Chief Technology Officer and Vice-President, and

Eric Beaulieu, Vice-President of Agency Services

Staffing

Prior to the deployment of staff each Part I department and agency completed an Activity-Based Analysis survey (ABA). Using the data collected, NBISA was able to determine the number of employees doing in-scope work, and to what degree. Using this information, a transfer of resources was negotiated with each department.

The employees identified through the ABA process officially became employees of the New Brunswick Internal Services Agency on April 1, 2010. By March 31, 2011, NBISA had transferred more than 260 employees to the agency’s headquarters located at Brookside Place in Fredericton. The remaining 78 employees are remotely located, providing desk-side support, regional accounts payable and payroll services.

The pie chart below provides a breakdown of agency staffing by service and program area.

Print Optimization (6)Project Mgmt. (12)

Payroll andBenefits (64)

IT Service Desk(74)

IT Infrastructure,Operations & Applications

(59) Executive and Administration (5)

Communications (1)

Agency Services (11)

Accounts Payable(106)

Bringing employees together who provide services that are common to all GNB departments and agencies, has created opportunities for:

• the creation of centres of excellence • the enhancement of skills through functional training, • connections to professional organizations, and • professional certification.


Report from theChief Operating OfficerAndrea Seymour

Over the last year, NBISA has effectively transitioned the delivery of common services from individual departments and agencies of government to a comprehensive single service delivery model.

In collaboration with all departments of government, our team successfully redesigned and commenced a rolling-wave deployment of in-scope services. We are proud that we have created repeatable, re-usable processes, informed by best practices in other jurisdictions. In accomplishing this, we have created within GNB the capability to manage complex transitional projects.

Robust frameworks for change management, project management, and project lifecycle management supplemented our collaborative approach to the service transition. This approach ensured consistency, stakeholder engagement, and created the opportunity for flexible, adaptable and scalable projects.

The Operations Division now offers Payroll and Benefits, IT Service Desk and Accounts Payable services to more than 10,500 employees in 31 government departments and agencies.

Accounts Payable (AP) Services manages the performance and overall delivery of accounts payable services to Part I government departments and agencies. The AP Services team ensures compliance with procurement rules and regulations, administers Purchase Card and iExpense processes, and generates payments to over 300,000 vendors and suppliers. The team also provides all related training and support to client organizations.

One of AP’s most notable accomplishments for the 2010-11 fiscal year was the development and launch of the Imaging and Process Management (IPM) System in September 2010. The IPM system has facilitated the delivery of AP services to Part I departments and agencies by providing electronic document routing and storage, thereby eliminating the need for paper records. IPM also integrates with the corporate Oracle e-Business Suite for payment processing.

The IT Service Desk (ITSD) provides a single point of contact for Part I government employees who experience an unplanned interruption to their computer hardware, software, or network connection or are requesting information, advice or access to other services. The ITSD team is responsible for incident management, service request fulfillment, IT asset management, IT procurement, network account and access management, and desktop operations. They provide their services both remotely and at the desk side.

By the end of March 2011, ITSD was providing support to GNB employees in over 375 locations across the province and had handled over 30,000 incidents.

6


Payroll and Benefits Services is responsible for general payroll transactions and value-added services. Transactional processing covers a minimum of the following processes: appointments; salary; pension; insured benefits and other regulatory payments; maintenance of employee records, reporting for accounting and regulatory compliance.

On April 22, 2010, Payroll and Benefits (P&B) Services became the first NBISA service to begin deploying from Part I departments to the agency, and on February 14, 2011, it became the first service to successfully complete deployment. By the end of February 2011, the 63 Payroll and Benefits staff were processing payments for 9,203 civil servants and 2,602 casual employees, and processed more than 25,000 service requests by fiscal year end. Additionally, Payroll and Benefits also processes the payroll for retirees on behalf of the Office of Human Resources. For fiscal 2010-2011, pension payments totaled approximately $455,000,000 and included payments to approximately 27,500 retirees.

The Print Optimization initiative was launched in September of 2010 to optimize the GNB print environment. The implementation of multi-function devices with print, copy, fax, and scan functions will allow GNB to achieve efficiencies, increase functionality, lessen our impact on the environment, and reduce operating costs by more than 30%.

In March 2010, Government awarded a five-year contract to Konica Minolta for the provision of print services to the New Brunswick Public Service. The deployment of over 2,100 devices to all Part I sites and NBCC/CCNB is anticipated to be completed by spring 2012. These will replace in excess of 4,500 devices.


Report from theChief TechnologyOfficerKen Fitzpatrick

Technology has been a key enabler of innovation within NBISA. Technology Services is divided into two sections: Application Services and IT Infrastructure and Operations.

The IT Application Services section is responsible for the development, maintenance and support of corporate applications that support the delivery of a variety of services to clients. Applications supported by the section include the Imaging and Process Management (Oracle IPM) system for invoice management, the Human Resource Information System (HRIS), the Genesys Payroll system, the Employee Self-Service (ESS) system, which includes the new e-Leave and online T4 systems, and Remedy IT Service Management software.

The IT Infrastructure and Operations section provides services and support to Part I of GNB, as well as other agencies and organizations in Parts II and IV of GNB. The section provides the following services:

• Network and Security Services • IT Operations and Data Centre Facilities • Infrastructure Architecture and Support • Contracts and Strategic Procurement • IT Projects

In 2010-11, NBISA designed and built a new 1100-square-foot, tier-two secure computing facility in Fredericton. The new centre is integral to a larger strategy of consolidating GNB’s existing 16 computing centers into two - the new centre and the existing data centre at Marysville Place.

Another highlight of the 2010-11 fiscal year was the awarding of a contract for the installation of a GNB-managed fiber network in the Fredericton region. The implementation of this network will provide data network capacity and redundancy at a reduced cost.

The division also renegotiated contracts with GNB’s wireless service providers to reduce the annual spend for cell phones and BlackBerry devices by $470,000 per year.

8


Report from the Vice President ofTransformationAndrea Seymour

The Transformation division of NBISA was created to lead the development of strategy and new initiatives; drive transformational change within the agency; support the identification and development of business opportunities; and foster a collaborative environment in which initiatives can rapidly advance.

Transitioning Payroll and Benefits, Accounts Payable and IT Service Desk staff and processes from 31 GNB organizations required an innovative and rigorous approach. A “rolling-wave deployment” model and a robust employee transition plan were developed to manage the transition of services and 295 staff from individual departments and agencies to NBISA. This approach helped to manage the impact of the transition on employees, and on NBISA’s client organizations.

Over the last twelve months the NBISA project teams successfully led 64 service deployments (see Appendix A); moving Accounts Payable, IT Service Desk, Payroll and Benefits, and Computing Facilities and Operations to a shared-service environment.

Transformation of services required a transformative workspace. One of the notable highlights of the past fiscal year was the design and build of the agency’s head office at Brookside Place. Developed to encourage collaboration and innovation, the offices were designed with green space guidelines in mind. Brookside Place is the first office space of its kind in the Government of New Brunswick. It now serves as a model for the design of future government office spaces.

Change Management was an integral component of the service deployment process. Using a collaborative transformation approach to change management, the Internal Services Alignment (ISA) team and subsequently the NBISA team, worked with staff from across the civil service throughout the deployment process to facilitate as smooth a transition as possible for staff moving to the agency.

In keeping with this approach, ISA held two transformation workshops with over 100 people in each, over 75 department presentations, and six strategic planning sessions. We also met monthly with Deputy Ministers, ADM’s Corporate Services and Directors of HR, IT and Finance, and answered over 130 Frequently Asked Questions. Additionally, approximately 70 staff from 20 GNB organizations participated in the project teams.

This truly collaborative effort was supported by a council of change agents consisting of representatives from each Part I government department and agency, as well as from Part II where applicable.


The Project Management Office (PMO) has been the vehicle for transformation within NBISA and is involved in four major service areas: project delivery, portfolio management, shared service delivery support and performance measurement.

The PMO played a central role in the development of NBISA’s service management model, and the development and deployment of new services. The PMO spearheaded the development of a service transition framework, by working collaboratively with business owners (see Appendix B). The framework was the foundation for managing the transition of each service from each government department and agency to NBISA. It enables the consistent delivery of future service developments and transitions to NBISA as more common services are moved to the Agency.

As part of the mandate to improve GNB processes and follow best practice, the PMO has supported professional project management within government by delivering educational programs and providing Project Management training for project staff inside and outside of NBISA. This included:

• adopting PRINCE2, a global best practice PM methodology, • training and certifying project leads, • conducting lunch-and-learn sessions in project and process management, • initiating and delivering internal training program for 24 project managers across GNB, and • sharing lessons learned and best practices with other department project managers.

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Report from theVice President ofAgency ServicesEric Beaulieu

Established following the first service deployment wave in June 2010, the Agency Services division of NBISA is responsible for delivering corporate services to the New Brunswick Internal Services Agency. The division’s work is focused on three key areas; Financial Services, Human Resources and Support Services.

Financial Services is responsible for all aspects of financial support to the organization, including the development and monitoring of revenue and expense budgets, the preparation of quarterly forecasts, financial support/advice and the production of financial statements.

Highlights from the 2010-11 fiscal year include working with Part I departments in transferring funds related to transitioned services, establishing NBISA’s financial structure and forecasting model, and finalizing the first audited financial statements.

Human Resources (HR) is responsible for employee recruitment and retention, HR management, succession planning, classification, labor/management issue resolution, performance management, HR planning, training, development opportunities, and employee program coordination.

In 2010-11, the HR group supported the transfer of staff from departments to NBISA, filled 13 regular positions, and established and filled 6 temporary-term and 14 casual positions. They also hosted Service Excellence sessions that were widely attended by all employees, as well as town hall meeting where staff had the opportunity to provide input and feedback on NBISA’s goals and overall direction.

Support Services enables the agency’s day-to-day operations. The key functions provided by Support Services are reception and mail distribution, translation/print coordination, facilities management and document management. The group also provides the secretariat function to the board of directors, coordinates the legislative process, and produces the business plan and annual report.

By late winter 2010-11, support services had nearly completed all four phases of leasehold improvements for NBISA facilities. Also of note in 2010-11 was the physical move of 200 employees to NBISA’s headquarters at Brookside Place, the establishment of the NBISA Workplace Advisory Committee (WAC) and four employee-run sub committees, and the design and launch of the employee intranet site.

New Brunswick Internal Services Agency - Annual Report 2010/11 | 11

OFFICIAL LANGUAGES

The New Brunswick Internal Services Agency recognizes its Official Languages obligations and is committed to actively offering and providing quality services to our clients in their official language of choice. During the 2010-2011 fiscal year, NBISA did not receive any complaints under the Official Languages Act.

NBISA continues to work to resolve an outstanding Official Languages complaint that was made in 2009, prior to the establishment of NBISA, related to the provincial government’s automated voicemail system. The system does not adequately meet the Government of New Brunswick’s policy on active offer as automated voicemail greetings are not bilingual. We have been actively pursuing this matter with the service provider, Bell Aliant, and are working with them to resolve the issue. Bell Aliant has committed to deliver an acceptable solution by April 2012.

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PerformanceMeasurement

Any shared-services organization is built upon a strong foundation of performance metrics and tools; and is seated in a Balanced Scorecard supported by Key Performance Indicators (KPI), Service Partnership Agreements, client satisfaction measures, and regular collaborative forums with clients.

PERFORMANCE METRICS AND TOOLS

NBISA has made great strides in this area. Service Partnership Agreements (SPA) are being signed between NBISA and client departments and agencies; the Balanced Scorecard is in the early stages of development and will be presented to the Board of Directors to be ratified in the 2011-12 fiscal year; and a schedule and commitment to hosting client forums and client satisfaction surveys are included in the SPA framework.

An important component of the NBISA vision is the drive for Continuous Service Improvement. The diagram below illustrates the program roadmap for progressing through levels of process improvement to achieve higher levels of efficiency and effectiveness.

CONTINUOUS PROCESS IMPROVEMENT

Collaboration …

. Projects … Process

Improvement

NBISA the Future

Level 2

Managed

Level 3

Standardize

Level 4

Quantitativelymanaged

Level 5

Optimized

…….

Level 1

Process Aware

Stabilization

6 – 9 Months

Transition to

NBISA

$ $ $ $ $ $ $ $ $ $ $ $ $ $

$ $ $ $ $ $ $ $ $ $

$ $ $ $ $ $ $

$ $ $ $

201220112010

New Brunswick Internal Services Agency - Annual Report 2010/11 | 1�

Level 1 Process Aware: Represents the manner in which service was delivered prior to being transitioned to NBISA.

Level 2 Managed: A process that is planned and executed in accordance with agreed upon policy, employs skilled people with adequate resources, and involves all relevant stakeholders.

Level 3 Standardized: A set of standard processes designed to meet client requirements; designed by the organization according to agreed guidelines.

Level 4 Quantitatively managed: At this level, we establish quantitative objectives for quality, process performance, and client satisfaction, and use them to help manage processes.

Level 5 Optimized: At Level 5 we continually improve processes based on an understanding of our organizational objectives and performance needs, leveraging established roles and the client relationship management (CRM) framework.

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1� | New Brunswick Internal Services Agency - Annual Report 2010/11

MovingForward

NBISA is aligned with the commitments made by the Government of New Brunswick and is poised to promote collaboration between government departments in order to drive efficiencies and share common services. We will also develop capability, skills, common roles and evaluation mechanisms to improve processes for new and existing programs. This will enable the reduction of multiple service-delivery groups in order to attain a single service-delivery model. Evaluation mechanisms and reporting will ensure this work is done in an open and transparent manner.

Projects related to process improvement and improving client service have been identified, as were enabling-technology projects and enterprise-wide application solutions. Initiatives and activities have been prioritized for the next year to assure focus upon quality service delivery to our clients.

GOVERNMENT RENEWAL

NBISA is also supporting Government objectives by focusing on the delivery of core services, accountability, performance measures, and continuous performance improvement. Additionally, the Agency will make a direct contribution to GNB’s return to a balanced budget by identifying, developing and implementing more efficient service delivery mechanisms for internal government services.


FinancialStatements

We are pleased to present the first Financial Statements for the New Brunswick Internal Services Agency, reporting a surplus of $ 1.7 M for the fiscal year ending March 31, 2011.

MAJOR BUDGET-TO-ACTUAL VARIANCE EXPLANATIONS:

Service Delivery Revenue

There was a variance of $1.7 M as a result of the elimination of Agency-related IT chargeback revenues to avoid double counting within NBISA.

Infrastructure and Applications Support

Actual expenses are lower than budget by $ 2.6 M. This is due primarily to the elimination of Agency-related IT chargeback expenditures from this program to avoid double counting within NBISA, and lower-than-anticipated program expenditures.

Operations

Expenses were lower than budget by $ 0.8 M due to delays in project implementation, primarily with print optimization and an enterprise resource planning system, and lower-than-anticipated program expenditures.

Assets 2011Financial AssetsAccounts Receivable (Note 7) 2,422,359$ Total Financial Assets 2,422,359

Liabilities Current LiabilitiesAccounts Payable and Accrued Liabilities (Note 10) 954,342 Total Liabilities 954,342

Net Assets 1,468,017

Non-Financial Assets Prepaid Expenses 196,209 Tangible Capital Assets (Note 8) 8,689,597 Deferred Capital Contributions (Note 9) (8,689,597)

Total Non-Financial Assets 196,209

Accumulated Surplus 1,664,226$

Contingent Liabilities Note 12Commitments Note 13The accompanying notes are an integral part of these Financial Statements.

Marc Léger Mike Ferguson, CAChairperson - Board of Directors Chairperson - Audit & Finance Committee

New Brunswick Internal Services AgencyStatement of Financial Position

As at March �1 2011

Revenues2011

Budget2011

ActualProvince of New Brunswick 20,031,429$ 20,031,429$ Service Delivery Revenue 14,637,653 12,979,376 Amortization of Deferred Capital Contributions 261,058

34,669,082 33,271,863

ExpensesExecutive Administration 400,000 432,845 Agency 2,409,000 2,748,394 Transformation 1,650,000 1,554,266 Infrastructure & Applications Support 16,746,602 14,165,587 Operations 13,463,480 12,706,545

34,669,082 31,607,637

Annual Surplus - 1,664,226 Accumulated Surplus - Opening - - Accumulated Surplus - End of Year -$ 1,664,226$

The accompanying notes are an integral part of these Financial Statements.

New Brunswick Internal Services AgencyStatement of Operations

For the year ended March �1 2011

2011 Actual

Net Assets at Beginning of Year -$

Changes in YearAnnual Surplus 1,664,226 Acquisition of Tangible Capital Assets (8,950,655) Amortization of Tangible Capital Assets 261,058 Deferred Capital Contributions Received 8,950,655 Amortization of Deferred Capital Contributions (261,058) Net Change in Prepaid Expenses (196,209) Increase in Net Assets 1,468,017

Net Assets at End of Year 1,468,017$

The accompanying notes are an integral part of these Financial Statements.

New Brunswick Internal Services AgencyStatement of Changes in Net AssetsFor the year ended March �1 2011

1. NewBrunswickInternalServicesAgency New Brunswick Internal Services Agency (Agency) is responsible for developing and managing the delivery

of shared services internal to government in the areas of finance, administration, human resources and information technology.

The New Brunswick Internal Services Agency Act was proclaimed and came into force May 1, 2010. The Agency is responsible for the preparation of the financial statements and the accompanying notes.

2. AccountingPolicies General These financial statements are prepared using the Agency’s accounting policies stated below, which are

based on Public Sector Accounting Board Standards (PSAB).

The financial statements presented are for a 12 month period, even though the Act came into force on May 1, 2010. This better reflects the operations of the Agency, as we have been operating as an Agency effective April 1, 2010.

The financial statements presented do not include comparative figures, as 2010-11 is the first year of operation of the Agency.

Cash and Cash Equivalents The Agency does not have a separate bank account; Agency expenses and revenues flow through the

Province of New Brunswick bank accounts.

Asset Classification Assets are classified as either financial or non-financial. Financial assets are assets that could be used to

discharge existing liabilities or finance future operations and are not to be consumed in the normal course of operations. Non-financial assets are acquired, constructed or developed assets that do not provide resources to discharge existing liabilities but are employed to deliver government services, may be consumed in normal operations and are not for resale. Non-financial assets include tangible capital assets and prepaid expenses.

New Brunswick Internal Services AgencyNotes to the Financial StatementsFor the year ended March �1 2011

Tangible Capital Assets

Amortization Rate40 years

Lease TermTerms of leaseExpected LifeExpected Life5 – 10 years5 – 15 years

5 yearsn/a

Revenue

Capital Leases (various classes)

Software Acquisition and Development

First Time Equipping of New BuildingsAssets Under Construction (various classes)

$ 30,000

Agency Expenses Paid by Other Parties

ClassBuildings

Major Equipment Motor Vehicles

Computer Hardware

Tangible capital assets are assets owned by the Agency which have useful lives greater than one year. Certain dollar thresholds have been established for practical purposes.

Tangible capital assets are reported at gross cost. Contributions received to assist in the acquisition of tangible capital assets are reported as Deferred Capital Contributions and amortized to income at the same rate as the related asset.

Cost Thresholds

Tangible capital assets are amortized on a straight-line basis over their estimated useful lives.In the year of acquisition and of disposal, one-half of the annual amortization expense will be recorded.

Thresholds and Amortization Rates

$ 100,000As per related class

$ 100,000$ 100,000

As per related class

$ 30,000

Leasehold Improvements

$ 15,000$ 15,000

Pension Expenses

Revenue is recognized on an accrual basis as earned. Amounts deemed receivable but uncollectable are recognized as bad debt expense.

Measurement Uncertainty

Regular employees of the Agency are covered by the Public Service Superannuation Plan of the Province of New Brunswick. The Superannuation Plan is a de�ned bene�t multi-employer plan under which contributions are made by both the Province of New Brunswick and the employees. Refer to the Agency Expenses Paid by Other Parties note below for further information.

Employer expenses such as Pension ($0.9 million), CPP ($0.5 million) and Retirement Allowance ($0.2 million) are paid and expensed by the Province of New Brunswick on behalf of the Agency. These expenditures and related asset/liability balances pertaining to these bene�t plans are not presented in these �nancial statements. Under the agreed operating terms of the Agency, these bene�t plan balances will remain obligations/assets of the Province and will not be assumed by the Agency.

The preparation of �nancial statements in accordance with PSAB requires management to make estimates and assumptions that a�ect the reported amounts of assets and liabilities at the date of the �nancial statements, and the reported amounts of revenues and expenses during the reporting period. The most signi�cant areas requiring the use of management estimates relate to the determination of future employee bene�ts and amortization. Actual results could di�er from those estimates.

3. Statement of Cash Flows

4. Budget

5. Financial Instrument Risk

6. Related Entity Transactions The Agency is solely owned by the Province of New Brunswick.

Year Ended 2011Accounts Receivable 2,329,359$ Deferred Capital Contributions 8,689,597$

The Statement of Operations contains the following related entity amounts:

Year Ended 2011 Revenue 33,271,863$ Expense 31,577,637 Net Revenue 1,694,226$

7. Accounts Receivable

Year Ended 2011

Accounts Receivable

Allowance for Doubtful Accounts

Net

General 93,000$ 93,000$ HST Recovery 29,982 29,982 Province of NB 2,299,377 2,299,377 2,422,359$ 2,422,359$

Potential credit risk related to accounts receivable is low due to the fact that a signi�cant portion of the receivable balance is due from provincial government entities.

The Statement of Financial Position contains the following related entity amounts:

The budget amounts included in these �nancial statements are amounts transferred from various government departments, including General Government.

The reported value of �nancial instruments which comprise accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of these instruments.

A statement of cash �ows has not been prepared as the required cash �ow information is readily apparent from the other �nancial statements.

8. Tangible Capital Assets

Year Ended 2011

Leasehold Improvements

First Time Equipping of New

Buildings

Assets Under Construction

Total

Estimated Useful Life (Years) Lease Term 5 Years As related Class

CostOpening Cost -$ -$ -$ -$ Additions 816,307 1,794,274 6,340,074 8,950,655 Disposals - - - - Closing Cost 816,307 1,794,274 6,340,074 8,950,655

Accumulated AmortizationOpening Accumulated Amortization - - - - Amortization Expense 81,630 179,428 - 261,058 Disposals - - - - Closing Accumulated Amortization 81,630 179,428 - 261,058

Net Book Value 734,677$ 1,614,846$ 6,340,074$ 8,689,597$

Opening Balance -$ -$ -$ -$ Closing Balance 734,677 1,614,846 6,340,074 8,689,597

Increase (Decrease) in Net Book Value 734,677$ 1,614,846$ 6,340,074$ 8,689,597$

9. Deferred Capital Contributions

Year Ended 2011Balance, Beginning of Year -$ Contributions Received 8,950,655 Amortized to Revenue During the Year (261,058) Balance, End of Year 8,689,597$

10. Accounts Payable and Accrued Liabilities

Year Ended 2011CurrentRegular Accounts Payables 441,616$ Salary and Bene�t Accruals 16,851 Vacation Liability 495,875

954,342$

11. Expenses by Object

Year Ended 2011 Personal Services 14,440,630$ Other Services 15,794,593 Materials and Supplies 190,738 Property and Equipment 918,634 Debt and Other Charges 1,984 Amortization 261,058

31,607,637$

Capital contributions related to the acquisition of tangible capital assets are deferred and amortized over the useful life of the related asset. The amortization of capital contributions is reported as revenue in the Statement of Operations. Deferred capital contributions represent the unamortized portion of these contributed amounts.

The changes in the balance of deferred capital contributions during the year are as follows:

12. Contingent Liabilities

Insurance

13. Lease Commitments The following are future minimum payments for leased premises and equipment for the years ending:

2012 3,445,695$ 2013 4,068,041 2014 4,068,041 2015 4,068,041 2016 2,346,283 Thereafter 1,440,758

19,436,859$

The amounts above include future minimum payments for Print devices for Provincial Government, Part 1.

The Agency does not carry general liability insurance on its assets. Any successful liability claims against the Agency and any replacement of lost or damaged property are charged to expense in the year of settlement or replacement. In management's judgement, no material exposure exists at this time as there are no known or potential litigations.


Appendix A - Diagram of Service Transition Framework

Design Build & TestClose Project

TransitionTo SSA

Readiness forService

ConferenceRoom Pilot

• Establish Service DeliveryProduce a repeatableprocess for deployment

•

Gate Reviews

April 1st

TransitionServices

Design

Planning&

Strategy

OperationalReview

Release forDeployment

Rolling Wavedeployment of groupsof departments to theSSA using therepeatable processde�ned in the Pilot.

This should be done bySSA Deployment teamwhile the ISA teammove to deliver a newservice to the SSAservice catalogue

Establish Initial Operating Capability

Deployment

Prepare for ImplementationEnabling Technology, Facilities, Infrastructure etc...

Service Implementation

Expeditors

Change Management

The Service Transition Framework provides a “script” for future deployments of new services, pro-viding for consistent deployment planning and repeatable deployment processes. The framework integrates all aspects of the transition with change management, project management and shared service deployment.

30

�0 | New Brunswick Internal Services Agency - Annual Report 2010/11

Appendix B - 2010-11 Rolling WaveDeployment Schedule

New Brunswick Internal Services Agency

Brookside Place435 Brookside Drive

Fredericton, NB E3A 8V4

Tel.: (506) 444-4600, Fax: (506) 444-3784

Documents

New Brunswick Internal Services Agency · Louise Lemon President, New Brunswick Internal Services Agency. Table of Contents ... New Brunswick Internal Services Agency - Annual Report