Report on Performance

Overview of Ministry Goals and Linkage to Government Strategic Goals

The ministry has established five strategic goals to guide it towards realizing its vision to be the centre of excellence for revenue and debt collection in government. These goals reflect the ministry's vision, mission, governing principles, commitment to continuous improvement and priorities.

The following table presents the linkages between the government strategic goals and the goals, objectives and performance measures of the ministry.

Report on Results

The ministry undertakes performance measurement and reporting to assess performance against established targets, inform decision-making processes and communicate progress towards ministry goals. The following section contains detailed information on the ministry's performance during 2004/05 based on the performance targets established in the 2004/05 – 2006/07 Service Plan⁷. The performance measures presented reflect critical aspects of ministry performance and are a sub-set of data collected and reported internally by the ministry.

Performance results presented are for the fiscal year unless otherwise noted. Performance is monitored throughout the fiscal year, generally on a monthly basis. This allows the ministry to implement required operational changes in a timely manner. The ministry reviews performance measures on at least an annual basis to ensure measures continue to provide meaningful information, are representative of performance and reflect ministry priorities. Measures are replaced where and when appropriate, balancing the need for reliable information with reasonable cost. Performance targets are based on past performance trends, government priorities and a focus on continuous improvement balanced by available resources.

Currently, the ministry is working with partner organizations to develop customer service standards related to the ministry's Taxpayer Fairness and Service Code. The ministry will report publicly on the performance service standards identified. In addition, the ministry is identifying new performance measures that will result from its alliance with EDS Advanced Solutions, Inc. (EAS). They will be included in the ministry's 2006/07 — 2008/09 Service Plan.

For information on data methodology see Appendix E.

Ministry Performance Measures Overview

Following is an overview of the ministry's performance, presented by ministry goal, for 2004/05 and the previous two years. In 2004/05, the ministry exceeded, met or mostly achieved the targets established for 15 of 18 of its key performance measures.

Further detail on 2004/05 performance results is provided following this summary table.

Measure	2002/03	2003/04	2004/05	2004/05	Performance
Goal 1: Maximize voluntary compliance.
Percentage of ministry revenue received without enforcement action.	96.1%	95.7%	97.8%	97.2%	Mostly achieved target* (p.30)
Percentage of client-initiated electronic payments.	58%	57.7%	63%	58.8%	Missed target (p.31)
Percentage of on-time tax payments.	85%	82.4%	85%	84%	Mostly achieved target (p.31)
Goal 2: Collection of all outstanding amounts owed to government.
Incremental revenue.	$410.2M ($308.2M)1	$479.3M ($353.3M)1	$240M	$330.7M ($251.8M)1	Exceeded target (p.33)
Debt collections.	$229M	$206.8M	$298M	$337.5M	Exceeded target (p.34)
Number of audits performed.	194,104	184,441	170,000	187,749	Exceeded target (p.35)
Annual tax assessment per audit position.	$1.1M ($632,000)1	$924,000 ($646,000)1	$525,000	$889,000 ($667,000)1	Exceeded target (p.36)
Average payment recovered per collection position.	$4.9M	$4.3M	$2.2M	$2.8M	Exceeded target (p.36)
Percentage of total government accounts receivable more than 90 days overdue.	40%	40%	40%	35%	Exceeded target (p.37)
Goal 3: Fair, efficient and equitable administration that meets customers needs.
Elapsed time from receipt of appeal to final decision.	11.4 months	11.7 months	11.4 months	12.0 months5	Mostly achieved target (p.39)
Meet annual regulatory reduction target from a baseline of 13,640 requirements2.	Reduce regulations by 8%	Reduce regulations by 13%	0% increase over June 2004 baseline	11,377	Exceeded target (p.41)
Goal 4: Continuous performance improvement and accountability.
Receipt to deposit turnaround time.	New measure in 2003/04	3 days	2 days	2 days	Met target (p.43)
Cost per transaction.	New measure in 2003/04	$0.82	$0.83	$0.68	Exceeded target (p.43)
Cost to collect $1 of debt.		New measure in 2004/05	$0.07	$0.05	Exceeded target (p.44)
Risk Maturity Model.4		New measure in 2004/05	Level 1	Level 2	Exceeded target (p.44)
Goal 5: Highly skilled, motivated and innovative employees.
Percentage of employees with Employee Development and Learning Plans.	76%	95%	85%	93%	Exceeded target (p.46)
Percentage of employees satisfied with training and development opportunities.	65%	73%	73%	79%3	N/A (p.46)
Employee morale.	76%	78%	78%	82%3	N/A (p.46)

Goal 1: Maximize voluntary compliance.

Voluntary compliance is the foundation of the taxation system in British Columbia. It is the most efficient and effective way of collecting revenue owed to government. Voluntary compliance means that individuals and businesses meet their tax obligations without the need for audit, enforcement or collection action. Improvements in voluntary compliance result in increased revenue available to support government strategic goals and vital government programs.

Core Business Areas

Revenue Programs, Revenue Services, Executive and Support Services.

Objective 1: Maximize use of new electronic technologies to facilitate ease of transactions.

This objective supports voluntary compliance by maximizing the use of electronic processes to facilitate payment of financial obligations to government. Electronic payment systems are designed to be faster, easier to use and more cost effective than manual payment processing systems. It is expected that voluntary compliance will increase as payment options are expanded.

Objective 2: Quality services that promote and respond to customers' needs by assisting customers understand their obligations and entitlements, and pay the correct amount on time.

This objective supports voluntary compliance by responding to customers' needs for information by making it easier for them to identify and understand their entitlements and financial obligations to government. The ministry supports this objective through a variety of customer service initiatives. It is expected that taxpayers who fully understand and accept their obligations are more likely to meet them.

Key Strategies

The ministry seeks to maximize voluntary compliance through the following strategies:

• Helping British Columbians to better understand their tax obligations by providing clear, complete, accurate and timely information. This includes information sessions, timely statutory interpretation and ruling services, and educational materials that provide British Columbians with a clear understanding of their obligations, due dates, methods of filing and payment, and contact information for questions. In addition, taxpayers can telephone or email the ministry with tax-related questions.
• Making it as easy as possible to comply with obligations. To facilitate ease of payment, the ministry is working to provide taxpayers with expanded options for making payments electronically.
• Improving access to online information that clarifies tax and debt obligations, and improving and increasing channels of payment for businesses and individuals.

Performance Measures and Results

Percentage of ministry revenue received without enforcement action.

Importance

This is an overall measure of the ministry's success in meeting Goal 1 - maximizing voluntary compliance. This measure reports on the percentage of revenue that is identified by the ministry or self-assessed by individuals and businesses, without audit intervention. Successful revenue collection depends on voluntary payment of financial obligations balanced by audit, enforcement and collection activities. Seemingly minor increases in performance translate into the potential for millions of dollars in voluntary payments.

Explanation of Performance

The target established for 2004/05 was mostly achieved. The target was set based on estimates of total and incremental revenue (see p.33) and reflects the anticipated balance between the two. During 2004/05, the revenue that the ministry administered through voluntary compliance increased to $11.7 billion from $10.72 billion in 2003/04. Despite this increase, and a decrease in incremental revenue, 97.2 per cent of total revenue was identified without enforcement action. This is slightly below the target of 97.8 per cent due to the ministry's stronger than anticipated performance in audit assessments.

This performance represents a small percentage increase over past years but a significant increase in voluntarily identified revenue. This result was supported by the ministry's customer outreach and public information services. The ministry conducted public information sessions across the province, in addition, over 11,000 individuals and businesses received tax information updates by subscribing to the ministry's online service.

The ministry expects continued increases in the proportion of revenue identified without enforcement action over the next three years as customers become more aware of their financial obligations and incremental revenue decreases. The ministry's key strategies for improving compliance include information, education and awareness services, electronic filing availability, and audit and enforcement activities.

Percentage of client-initiated electronic payments received by the ministry.

Importance

This measure tracks the replacement of physical payments (cheques, cash or bank drafts) with electronic payments through the percentage of revenue received electronically. It provides a reasonable indication of the success of ministry e-service initiatives by monitoring the public's use of the suite of electronic options available for tax and other payments. If these initiatives are successful, it would be expected that a greater proportion of revenue is received electronically.

Explanation of Performance

Of the $12.81 billion in direct payments to the ministry in 2004/05, $7.53 billion (58.8 per cent) was received electronically. While the number of electronic payments increased from 3,081,000 in 2003/04 to 3,252,000 in 2004/05, much of this increase was small dollar value payments that do not greatly impact this performance measure.

During 2004/05, the largest percentage of revenue received electronically came from tax revenue and debt collection payments; 68 per cent of this revenue was received electronically. This reflects enhanced outreach to municipalities and taxpayers regarding electronic payment options. However, this was offset by lower than expected use of electronic payment options for Medical Service Plan premiums and resource revenues which constitute a significant proportion of overall revenue (34 per cent). Only 40 per cent of these revenues were received electronically and as a result the ministry target was not achieved.

Future targets look to continuous improvement in the amount of revenue received through electronic options. This will be accomplished by increasing the number of electronic options available to customers, focusing education and awareness programs on areas of lower participation, and identifying and removing barriers, where possible, to the use of electronic payment options.

Percentage of on-time tax payments.

Importance

This measure reports on the percentage of payments made on or before their legislated due date. It provides a reasonable indication of taxpayers' understanding of their financial obligations and their willingness to comply. If customer service initiatives are successful, it is anticipated that the percentage of on-time tax payments will increase as more taxpayers understand their responsibilities and the legislative requirements of the tax system.

Explanation of Performance

Of the over one million tax payments received by the ministry in 2004/05, almost 891,000 (84 per cent) were received on or before their legislative due date. This represents a significant improvement over that achieved in 2003/04, and mostly meets the 2004/05 target. The ministry's performance was impacted by the lower percentage of customers submitting on‑time nil returns (53 per cent). The ministry has been less successful in encouraging taxpayers to submit returns when they do not owe revenue to the Province (nil returns), although this is important information for the ministry in keeping customers' accounts current. The on-time return rate for taxpayers who were obligated to make a payment for the reporting period was 89 per cent.

Future years' targets have been calculated based on the elimination of nil returns and will focus on the on-time payment of taxes owed to the Province. It is anticipated that the provision of improved public information and seminars dealing with the application and administration of tax statutes and the responsibilities of taxpayers will result in an increase in on-time tax payments.

Goal 2: Collection of all outstanding amounts owed to government.

The ministry undertakes audit, enforcement and collection activities to recover outstanding monies owed to government. These activities assist in identifying monies owed, educate taxpayers and debtors about their obligations, ensure amounts owed are collected and deter customers who might otherwise avoid paying. The educational and deterrent effects of these activities also contribute to increasing voluntary compliance (Goal 1). Audit, enforcement and collection activities also promote fairness and equity by leveling the playing field for the vast majority of British Columbians who voluntarily comply with their financial obligations and ensure that funds are available to pay for vital government programs.

Core Business Areas

Revenue Programs, Revenue Services, Executive and Support Services.

Objective 1: Government receives the revenue it is due.

This objective focuses on identifying revenues owed to British Columbians through the ministry's audit program. The audit program undertakes compliance and enforcement activities to ensure individuals and businesses are meeting legislated requirements and to ensure a level playing field for taxpayers.

Objective 2: Government receives the debt recoveries it is due.

The ministry undertakes collection activities to obtain repayment of outstanding amounts owed to British Columbians. The ministry's efforts result in payment of a wide variety of tax and non-tax overdue receivables which provide funding for government programs. If successful, it is anticipated that the ministry will contribute to a reduction in the amount of government receivables that are more than 90 days past due.

Key Strategies

To recover outstanding monies owed to British Columbians and to promote fairness and equity in the tax system, the ministry seeks to identify and collect all outstanding amounts when a taxpayer fails to meet their obligations, either willfully or due to an error, through the following strategies:

• Audits and investigations. The ministry ensures the audit program is adequately resourced and focuses its efforts on areas at highest risk of non-compliance. In addition, the ministry continues to improve the timeliness of assessment practices. Audits vary from the review of grant claims, tax expenditures and exemptions and compliance with legislation, to the examination of financial records and legal documents. A substantial number of audits are performed outside of the province to ensure British Columbia businesses are not at a tax disadvantage compared to their out-of-province counterparts operating in the province.
• Collection processes. The ministry focuses resources on the debt collection function and continually improves revenue recovery tools and approaches to ensure collection functions operate as effectively as possible. The ministry has entered a new alliance with a private sector service provider to further enhance the effectiveness of revenue and debt collection administration (see p. 9).

Performance Measures and Results

Incremental revenue.

Importance

Incremental revenue is the amount of revenue, primarily from taxes, identified as owed to government as a result of ministry intervention. It is a measure of the ministry's success in identifying these amounts owed to government through audit, compliance, and enforcement activities. The identification of incremental revenue contributes to the recovery of outstanding amounts owed to government and is a measure of the ministry's success in meeting Goal 2.

Explanation of Performance

The ministry exceeded its target for incremental revenue. The ministry sets annual targets based on the best information available at the time. Through the year it explores new or emerging opportunities and focuses its resources in areas where risk of revenue loss is greatest. The ministry's achievement of its incremental revenue target is due to a number of factors, including the variability of some revenues, certain extraordinary revenues and success in assessing revenues through focused attention on areas at a higher risk of non-compliance.

In 2004/05, extraordinary revenues included greater than anticipated recoveries in corporation capital tax, personal and corporate income tax residency allocations (ensuring individuals and businesses working in the province pay appropriate taxes to the Province) and oil and gas validations (ensuring correct royalties are paid on oil and gas extracted). In addition, the ministry recorded lower than anticipated revenue refunds related to taxpayer requests. Extraordinary incremental assessments have declined due to the success of previous years' efforts that have resulted in the identification of outstanding revenues in areas of highest risk of non-compliance.

Incremental revenue is anticipated to decrease over the next three years. This is due to changes in the tax regime (e.g., phase out of the corporation capital tax for general corporations), the wrap-up of special compliance projects, and improvements to billing and collection processes that will increase taxpayers' awareness of their financial obligations which should result in increased voluntary compliance. The ministry will continue to focus audit and enforcement activities on areas assessed at higher risk of non-compliance.

Debt collections.

Importance

This measure reports on the amount of debt recovered through the ministry's debt collection activities. This is a measure of the ministry's success in collecting on its portfolio of overdue accounts. Debt collection contributes to the recovery of revenue owed to government and is a measure of the ministry's success in meeting Goal 2.

Explanation of Performance

The ministry exceeded its debt collection target. In part, this reflects the relationship between the amount of incremental revenue assessed by the ministry and the level of debt collection activity the ministry undertakes. Higher than anticipated incremental revenue leads to more active debt collection to recover outstanding amounts owed to government. The ministry has focused on the earlier identification of outstanding revenue, on the prompt notification of those with outstanding financial obligations and on more effective collection processes. In addition, the ministry has dedicated additional resources to collection activities and focused new resources on collection portfolios with larger outstanding accounts receivable. The ministry's overall success in debt collection also reflects the current strength of the provincial economy as more of those with outstanding amounts owed to government are better able to meet their obligations. The ministry has reduced accounts receivable by $60 million compared to 2003/04.

Over the next three years, more effective business processes supporting the consolidation of debt portfolios, the consistent application of early intervention across collection portfolios and the transfer of debt portfolios from other ministries to the Ministry of Provincial Revenue will positively impact debt collection. Over time, the trend will be one of decline as outstanding debt is collected and voluntary compliance increases.

Number of audits performed.

Importance

This measure reports on the number of audits performed under the tax and royalty statutes that the ministry administers. The number of audits performed provides an indication of the level of activity that the ministry is undertaking to support this objective. Maintaining an extensive audit program allows the ministry to identify and collect outstanding amounts owed to government.

Explanation of Performance

The ministry exceeded the target of 170,000 audits. This result reflects the ministry's continued efforts to ensure adequate auditing across the broad spectrum of tax statutes the ministry administers. Performance in 2004/05 is in line with achievements in the past two years.

The ministry anticipates a slight decrease in the number of audits to be performed over the next three years due to the reallocation of some auditors to portfolios requiring increased effort. This reallocation will provide an opportunity for auditors to focus on other areas of non-compliance.

Annual tax assessment per auditor.

Importance

This measure reports on the average amount of incremental revenue generated by each audit position. It is a reasonable indication of the effectiveness of the audit program in targeting audit and enforcement activities on areas of non-compliance. The identification of incremental revenue supports the collection of all outstanding amounts owed to government.

Explanation of Performance

The ministry exceeded its target. Within the ministry, there is a wide variance in the assessment per audit position based on the type of audit performed. Overall, the assessment per audit position reflects the fact the ministry exceeded its incremental revenue target. Performance in 2004/05 is on par with that of the past two years.

Average payment recovered per collection position.

Importance

This measure reports on the average debt recovery per collection position. It is a measure of the effectiveness of the ministry's collection operations. The average recovery per collection position demonstrates the balance between the resources the ministry dedicates to its collection program and the revenue that the program recovers for government. When the ministry meets or exceeds its target for this measure, it is an indication that the debt collection program is operating effectively, supporting the collection of all outstanding amounts owed to government.

Explanation of Performance

The ministry exceeded the target for average payment recovered per collection position. However, despite higher debt recoveries than realized in the past three years, average payment recovered per collection position declined due to an increase in the number of collection positions during the fiscal year.

As voluntary compliance increases over time and outstanding debt is collected, the average recovery per collection position will continue to decline. Beginning in 2005/06, this measure will address only tax collection recoveries as performance of the ministry's private sector contractor in relation to non-tax debt collection will be reported as part of the ministry's overall debt collection target.

Percentage of total government accounts receivable more than 90 days overdue.

Importance

This measure reports on the percentage of debt owed to government that is over 90 days past due. Debt collection success tends to decrease as the debt ages. Therefore, the ministry and government as a whole work to reduce the percentage of government accounts receivable that are more than 90 days past due. Collection of aged debt should lead to improved debt recovery and reduced bad debt expenses. Currently, the ministry is either accountable for, or manages, a portion of the total government accounts receivable over 90 days overdue.

Explanation of Performance

The success the ministry achieves in reducing the overdue debt under its administration contributes to improvement in the overall provincial performance.

The ministry's accounts receivable represent $87 million of the $2.4 billion in total government accounts receivable ($118 million of $2 billion in 2003/04). Ministry accounts receivable over 90 days past due totalled $64.5 million in 2004/05 a decrease from $89.4 million in 2003/04. Both total ministry accounts receivable and the proportion more than 90 days past due have improved over the last year. See page 34 for a discussion on debt collection.

The ministry also manages, on behalf of other ministries, an additional $838.1 million in accounts receivable ($868 million in 2003/04). Of these accounts receivable, $648.4 million were more than 90 days overdue in 2004/05 ($586 million in 2003/04) reflecting the fact that the ministry receives all of these portfolios for collection when they are more than 90 days overdue, with the exception of Medical Service Plan premiums and forest receivables. The increase in accounts receivable more than 90 days overdue reflects primarily an increase in Medical Service Plan premium accounts receivable.

The development of the new revenue management system will support improvements to billing and collection processes that will increase taxpayers' awareness of their financial obligations. These improvements coupled with the consolidation of debt portfolios and the consistent application of early intervention across collection portfolios should result in increased voluntary compliance and a decrease in outstanding receivables.

The percentage of total government accounts receivable more than 90 days past due in 2004/05 was 35 per cent. This is an improvement from 40 per cent in 2003/04.

Goal 3: Fair, efficient and equitable administration that meets customers needs.

The ministry is committed to meeting customers' needs by improving the regulatory and administrative frameworks for revenue and debt collection. This will ease the administrative burden on customers, enhance the business climate within British Columbia and improve ministry efficiency.

Core Business Areas

Revenue Programs, Revenue Services, Executive and Support Services.

Objective 1: Improve the tax appeals process for administrative fairness and due process.

This objective, key to attaining Goal 3, reflects the ministry's commitment to provide taxpayers with a fair and timely resolution to their appeals of tax assessments. A number of tax statutes allow taxpayers to appeal an assessment, a rejected refund, or a decision of the commissioner or administrator. This objective speaks to meeting taxpayers' expectations regarding the timeliness of service they will receive from the ministry.

Objective 2: Reduce legislative and administrative requirements and streamline procedures.

The ministry is committed to streamlining and simplifying the taxation system in support of the government deregulation and regulatory reform initiative (a New Era commitment). Reducing the legislative and administrative burden for ministry customers is a key focus for the ministry. Since the start of the deregulation program in June 2001, the ministry's efforts have resulted in a significant reduction in the amount of information required of taxpayers. This work improves customer service, reduces the cost of doing business by making it easier, faster and more efficient to deal with government, and enhances ministry efficiency.

Key Strategies

The ministry works to provide fair and equitable administration through the following strategies:

• Reducing tax appeal backlogs. During 2004/05, the ministry implemented a project to reduce the backlog of outstanding appeals to an average age of less than 6 months by the end of the fiscal year. Additional resources were committed to the appeals management process and streamlined work processes have been implemented to address the backlog.
• Reducing regulatory burden. The government goal was to decrease regulations across ministries by one-third between June 2001 and June 2004. The ministry target was modified to reflect the ministry commitment to implement all achievable regulatory reductions by the end of fiscal 2003/04; a target of 21 per cent. Further reductions of a regulatory nature were determined to not be possible without potentially compromising the integrity of the tax system and jeopardizing government revenue. In June 2004/05, the regulatory baseline was re-established as a 'go forward' baseline for the next three-year period. The ministry is committed to maintaining this baseline over the next three-year period.
• Forms consolidation. For 2004/05, the ministry focused on maintaining the June 2004 regulatory baseline. The ministry continued to focus on meeting customers' needs by exploring regulatory reduction opportunities through forms consolidation, and it continued to monitor and review new forms to ensure that as few new regulatory requirements as possible were introduced.

Performance Measures and Results

Elapsed time from receipt of appeal to final decision.

Importance

This measure reports on the average time taken to resolve tax appeals over the course of the fiscal year.

The average elapsed time from the receipt of an appeal to final decision is a measure that enables the ministry to track its success in providing timely resolution to taxpayer appeals. The length of time required to resolve an appeal varies depends on such factors as the complexity and facts of the case, and availability of all relevant information.

Initial work with business organizations to establish customer service standards related to the Taxpayer Fairness and Service Code has identified that businesses support measuring and reporting on the timeliness of the tax appeal process.

Explanation of Performance

The elapsed time from the receipt of an appeal to final decision was 12 months in 2004/05. It reflects the ministry's conscious decision to resolve older appeals, which resulted in an increase in the average time to resolve an appeal. However, the ministry made significant progress in reducing the backlog of appeals and is now well positioned to meet its goal for timeliness. This was achieved through the allocation of additional resources and the streamlining of administrative procedures. The ministry will continue to monitor the incoming volume of appeals to ensure the allocation of adequate resources to support timely resolution of appeals.

The ministry has improved its performance on a number of fronts. It has decreased the overall age of outstanding appeals, decreased the number of outstanding appeals and significantly increased the number of appeals resolved, comparing 2004/05 to previous years (see Figure 4). The ministry achieved these improvements despite receiving more new appeals in 2004/05 than in either of the past two fiscal years⁸.

In the 2005/06 – 2007/08 Service Plan, the ministry has set challenging targets that will require the elapsed time from the receipt of an appeal until a final decision to be reduced from the current target of 11.4 months to 6.0 months in 2005/06, 5.0 months in 2006/07 and 4.5 months in 2007/08. These aggressive targets respond directly to taxpayers' expectation of timely service.

Figure 4: Comparison of Appeal Administrative Process Measures, 2002/03 – 2004/05.

Meet annual regulatory reduction target.

Importance

The ministry is committed to both regulatory reform and customer service. As part of its dedication to customer service, the ministry works to make its processes as simple, streamlined and customer-friendly as possible. This measure reports on the change in the number of regulations from the baseline set in June 2004.

Explanation of Performance

During 2004/05, the ministry continued to monitor the introduction of new forms to ensure that as few new regulatory requirements as possible were introduced. The ministry was able to balance required regulatory additions with decreases in regulatory requirements in other areas. This allowed the ministry to maintain the regulatory baseline.

The ministry is developing a plan for comprehensive staged reviews of all operational areas over the next three years. These reviews will consider regulatory reform of existing legislation, regulations, policy and forms, and identify regulatory reduction opportunities.

Annual reporting of performance on deregulation and regulatory reform is made to the Regulatory Reform Office, Ministry of Small Business and Economic Development, based on a June to June reporting period. Due to this reporting cycle and the length of the spring legislative session, the ministry may not always be able to meet the baseline by fiscal year end, but is still able to meet its commitment to maintain a zero per cent increase on a June to June basis.

For further information on the ministry's deregulation and regulatory reform initiatives see page 48.

Goal 4: Continuous performance improvement and accountability.

The ministry continues to strive for improved performance and customer service. Adopting creative and innovative solutions will improve operations and enable the ministry to better achieve its business objectives. This goal supports the achievement of all ministry goals.

Core Business Areas

Revenue Programs, Revenue Services, Executive and Support Services.

Objective 1: Continuously improve and simplify work processes.

To move towards its goal, the ministry is focused on providing maximum benefit to the public through continuous improvement of its business processes. Maintaining effective and efficient business processes allows the ministry to better meet its objectives in all areas of its business operations.

Objective 2: Develop and implement a risk management plan.

Enterprise risk management refers to the culture, processes and structure that are directed towards the effective management of potential opportunities and adverse effects. A successful risk management program includes the assignment of necessary resources, and the development of required skills, tools and techniques to improve decisions taken in conditions of uncertainty. This objective is consistent with government direction which specifies that each ministry is responsible for developing and implementing risk management plans as part of its service plan, programs and operations. The explicit consideration of both adverse effects and opportunities faced by an organization during key planning and decision-making processes enhances its potential for success in meeting business objectives.

Key Strategies

The ministry is committed to continually improving the efficiency of its business processes. This commitment extends throughout the ministry's operations and was reflected in a variety of initiatives over the last year. This included projects to improve customer service (for example, reduce the backlog of taxpayers' appeals and the turnaround time to provide a tax ruling) and improve internal operations (for example, modernize filing systems and improve data integrity).

The ministry has sought to implement efficient business solutions while maintaining effectiveness and meeting business objectives through the following strategies:

• Realizing efficiencies through an integrated, streamlined business and systems environment that enables consolidated revenue management across government. The ministry has also increased the use of electronic processes that reduce ministry costs and has adopted leading revenue administration and management practices.
• Risk management. The ministry is enhancing its risk management techniques. This includes the identification of key risks and mitigation strategies.

Performance Measures and Results

Reduce current receipt to deposit turnaround time.

Cost per transaction

Importance

The ministry has identified two measures that are reasonable indicators of organizational efficiency. The receipt to deposit turnaround time tracks the duration between when a physical payment (cheques, cash or bank drafts) is received and when it is deposited to the government's account. This is a measure of the efficiency of the ministry's cash management processes. Decreasing the deposit turnaround time demonstrates improvements to these processes and reduces the foregone interest income to government.

The ministry is also committed to reducing transaction costs. To track progress in this area, the ministry collects transaction cost and volume data and reports on the cost per transaction. When the cost per transaction decreases, it is an indication of increased efficiency.

Explanation of Performance

As of March 31, 2005, the ministry met its target to deposit payments within two days of receipt for payment processing.

The ministry has successfully reduced its cost per transaction over the last year from $0.82 in 2003/04 to $0.68 in 2004/05. This represents improved efficiency in payment processing as the total cost for transaction processing was held relatively constant while a significantly larger number of transactions were processed.

In 2005/06, the ministry will explore new methods of measuring the efficiency of cash and transaction management processes, given business process reviews currently underway as a result of the ministry's alliance with EAS.

Cost to collect $1 of debt.

Performance Measure	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	Performance
Cost to collect $1 of debt		New measure in 2004/05	$0.07	$0.05	Exceeded target

Importance

The ministry is committed to maintaining efficient processes and procedures to collect debt owed to government. The ministry calculates and reports on the cost to collect $1 of debt. Decreasing costs indicate that the ministry's collection processes and procedures are becoming more efficient and effective.

Explanation of Performance

The ministry exceeded its target for cost to collect $1 of debt. The ministry's success in reducing the cost to collect $1 of debt is primarily due to higher debt recoveries while maintaining relatively stable costs to the ministry.

Risk maturity model.

Performance Measure	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	Performance
Risk Maturity Model		New measure in 2003/04	Level 11	Level 2	Exceeded target

Importance

The ministry uses the "Risk Maturity Model" as a basis for assessing its progress in developing organizational awareness of risk and the integration of risk management techniques into its operational activities. The Risk Management Branch, Ministry of Finance, recommends this assessment model. Sound business practices include effective risk management and the incorporation of risk awareness and treatment into business processes. Developing a risk management approach to delivering on ministry revenue and debt administration responsibilities will enhance the potential for success in meeting established goals, objectives and performance targets.

Explanation of Performance

The ministry exceeded its target to progress to Level 1 in the Risk Maturity Model by the end of fiscal 2004/05. The ministry's self-assessment of its progress, compared to the criteria of the Risk Maturity Model, indicate that the majority of requirements for a Level 2 rating have been met. This means that ministry risk management processes are under development and are becoming established and repeatable. The ministry made significant progress on the integration of risk management into the planning processes for major initiatives and projects. For example, all information management and information technology projects undertaken by the ministry that have a budget or duration beyond certain thresholds ($50,000, or sixty person days of effort) require a risk assessment to be completed as part of the project planning process. Projects over $400,000 are required to submit bi-monthly reports that include an assessment of the risk, its severity and the ability to manage the risk.

In future, the ministry will continue to focus its efforts on improving the integration of risk management practices within the organization. The ministry will proactively identify both the threats and opportunities that potentially could impact its success and address specific areas of high risk. The ministry is currently working to integrate the development of risk management plans into strategic and operational planning processes. Risk management techniques will also continue to be applied to specialized areas including financial risk, occupational safety and health, and business continuity.

Goal 5: Highly skilled, motivated and innovative employees.

As an organization committed to ongoing excellence, the ministry relies on the strengths, skills and commitment of its employees. Recognizing this, the ministry endeavors to create a culture of excellence and learning, with staff development focused on key competencies, leadership and learning development, and succession planning.

Core Business Areas

Revenue Programs, Revenue Services, Executive and Support Services.

Objective 1: Foster a work environment that encourages motivated and creative employees.

Fostering a work environment that encourages motivated and creative staff is dependent on maintaining high levels of skills, knowledge and morale. The establishment of individualized employee development and learning plans is a key component of a supportive and innovative working environment.

Key Strategies

To meet its goals and successfully deliver its services, the ministry relies on its employees. Ministry strategies for enhancing the skills, motivation and performance of its staff include:

• Creating a culture of excellence and learning with employee development focused on key competencies.
• Addressing succession issues.
• Monitoring employee morale and responding to associated issues.

Performance Measures and Results

Percentage of employees with Employee Development and Learning Plans.

Employee satisfaction with training and developmental opportunities.

Employee morale.

Importance

Under this goal, the ministry has identified performance measures to assess its effectiveness in developing highly skilled, innovative and motivated employees whose dedication to excellence is the foundation for achievement of business objectives.

Achieving the ministry vision requires employees to have high motivation and morale, combined with the knowledge and skills to be successful in their position. They also need to understand how their performance and development contributes to the achievement of ministry goals and business objectives. To support employees to meet work and career goals, the ministry requires that each permanent employee, who has been in their position for six or more months, has an individualized Employee Development and Learning Plan (EDLP). This plan identifies the required competencies for the position the employee holds, evaluates the employee's level of knowledge and skill, determines areas where training is required, and provides a training plan identifying priorities for training and career development. At the same time, the EDLP database helps to establish branch, division and ministry-wide training priorities to support the efficient expenditure of training funds.

The ministry tracks its success in identifying and filling training needs by monitoring the percentage of employees with EDLPs. It also uses an annual employee survey to determine levels of employee morale, and satisfaction with training and development opportunities.

Explanation of Performance

The ministry achieved its 2004/05 target with 93 per cent of permanent employees, in their position for six or more months, having an EDLP. This was accomplished through the ministry's commitment to the creation of a culture of excellence and learning, and encouraging the participation of managers and staff in the process.

In 2005/06, the ministry plans to have EDLPs completed for 100 per cent of permanent employees who are in their position for six or more months. The ministry will also be introducing a performance plan component to the existing EDLP process that will identify the work an employee is accountable for and how it links to the ministry's Service Plan goals and objectives. This performance component is intended to complement the robust employee training and development program currently in place.

This year, the ministry participated in the new government-sponsored employee survey. The survey added new questions on employee engagement to the existing questions on morale and training. The result is better information on both job satisfaction and employee commitment to the organization. This information will improve the ministry's ability to identify priority activities to meet Goal 5 in the coming years.

Changes to the response scale for the employee survey allowed a neutral response this year, resulting in an inability to make a direct comparison with the previous years' results. However, the ministry can conclude that the overall percentage of employees indicating a level of dissatisfaction with questions on training and morale has declined compared to last year (see Table 4). This result may, in part, reflect the ministry's continued support for employee development and training. The ministry has increased training expenditures over the past three years from an average of $376/FTE to $546/FTE.

Table 4: Comparison of Selected Employee Survey Results, 2004/05 and 2003/04.

	Disagree/	Change from 2003/04	Neutral	Agree/
Training
2004/05	21%	-6%	30%	49%
2003/04	27%		N/A	73%
Morale
2004/05	18%	-4%	25%	57%
2003/04	22%		N/A	78%

Deregulation and Regulatory Reform

The ministry is committed to streamlining and simplifying the revenue management system to ease the administrative burden on taxpayers in support of the government deregulation and regulatory reform initiative. The ministry will also review the province's tax system to identify potential reforms that would maintain or enhance British Columbia's tax competitiveness.

The ministry has eliminated 2,100 regulatory requirements (as of March 31, 2005) since the start of the deregulation program in June 2001. The ministry's efforts have resulted in a significant reduction in the amount of information required from taxpayers. Work has been done to improve customer service by streamlining reporting requirements and making the completion of required forms easier. Forms have been revised, reporting requirements combined and unnecessary forms eliminated. This improves customer service, reduces the cost of doing business with government by making it easier, faster and more efficient to deal with government and enhances ministry efficiency. See the Report on Results section (p. 41) for further discussion on deregulation targets.

The ministry's forms will continue to be monitored and reviewed to maintain the benefits that have been achieved over the last three years. New forms will only be introduced after careful scrutiny to ensure that as few new regulatory requirements as possible are introduced. The ministry will continue to focus on implementing customer service improvements by streamlining reporting processes and forms.

The ministry has also focused efforts on regulatory reform. For example, in 2004/05 the ministry introduced the International Financial Activity Act, replacing the former International Financial Business (Tax Refund) Act. This work modernizes the legislation and expands both the list of financial activities that qualify for corporate tax refunds and the program to all areas of the province. This legislation sets the stage for renewed growth in the international financial business sector in the province and supports the ministry's commitment to make British Columbia an attractive place for business to invest. Response from the business community has been positive.

The ministry has identified other opportunities for regulatory changes that will result in improved customer service. For example, over the next three years, the ministry will develop and implement regulatory changes that will ensure the application of consistent policies and procedures for both grace period variances and interest rate schedules used for the calculation of interest on the late payment of financial obligations. This work will reduce confusion, and increase fairness and equity for taxpayers.