PACC Committee Report

A 1998 follow-up of the 1996 audit found that there had been an overall improvement in the quality of internal auditing in the federal government and that senior managers were involved more actively in departmental audit committees. [1] The follow-up audit also found that internal audit groups had improved the adoption of audit coverage of broad scope in line with Treasury Board Secretariat and professional standards. Treasury Board Secretariat, however, had not reviewed the departmental implementation of its audit policy and standards or the effectiveness of internal audit.

Improved quality of internal audits will not have the desired effect however, unless senior managers act on their findings. The recent problems with grants and contributions administered by Human Resources Development Canada (HRDC) demonstrate, among other things, what can happen when senior management fails to appreciate the value of internal audit and does not take appropriate action on its recommendations.

A series of audits of the evaluation function in government departments has also consistently shown that as practiced, evaluation has not lived up to expectations. After its first audit, in 1977–78,the Office of the Auditor General concluded that it had found “few successful attempts to conduct program evaluations” in the 18 departments and agencies it had examined.[2] Efforts to establish program evaluation had been hindered by the lack of qualified evaluators and doubts among senior managers over the value of the function.

A second audit, in 1983, found that establishing program evaluation functions in departments and agencies had progressed. Deputy ministers were beginning to find evaluations useful despite some uncertainty over cost effectiveness. The audit showed, however, that the quality of evaluation reports needed improvement and that there continued to be a shortage of qualified evaluators. The audit also revealed that the evaluation policy did not specify the procedures to be followed in evaluating programs delivered by more than one department.

In 1993, an extensive government-wide audit found that the expectations and potential of program evaluation had only been partly fulfilled. Although progress had been made, program evaluation had not developed fully into a government-wide system. At the departmental level, the evaluations that were audited were frequently not timely or relevant. Much of the evaluation effort involved minor activities and focused on operational issues of interest to managers (for example, the suitability and efficiency of the program’s day-to-day operations) instead of program issues of interest to central agencies, ministers or Parliament (such as the program’s results). Program evaluation studies covered only a small proportion of government expenditures and the quality of evaluations was uneven. The audit revealed once more that there was no systematic approach to evaluating programs delivered by more than one department. Similar to previous reports, concerns were expressed about the availability of necessary professional skills.

A 1996 audit confirmed the persistence of shortcomings identified by earlier audits. Evaluations continued to address the needs of departmental managers and “[did] not always provide needed information on matters of broad government policy and broad expenditure allocation and [were] not always useful for accountability to Parliament.”[3] Evaluations continued to focus largely on minor activities or programs and operational issues remained the principal focus. As in 1993, the audit found that it was “still true in most cases” that evaluations “had paid little attention to whether government programs were still needed, or to the possibility of more cost-effective alternatives.”[4] Similar to the findings of previous audits, there was still no comprehensive, clear and consistent statement of government evaluation priorities that departments or Treasury Board Secretariat could use.

The most recent audit coverage of evaluation occurred in 2000. In Chapter 20 of his December 2000 Report (Managing Departments for Results and Managing Horizontal Issues for Results), the Auditor General reported that progress on his recommendations over the past four years had been unsatisfactory and that the evaluation function in the federal government “has regressed.”[5] Treasury Board Secretariat’s attention to evaluation was limited over this period and there was “a clear need to rebuild the evaluation function.”[6] Evaluation was also mentioned in Chapter 19 (Reporting Performance to Parliament) of the Auditor General’s 2000 Report. He observed that only “a small number” of departments included relevant results of evaluation in their performance reports. He also mentioned that in the United States, agencies are required by legislation to include evaluation plans in their performance plans and in their performance reports.