Government Response to the Seventh Report of the Standing Committee on Public Accounts Regarding the Evaluation Policy and the Policy on Internal Audit of the Government of Canada

 

 

Introduction

 

The Treasury Board Secretariat has considered carefully the Seventh Report of the Standing Committee on Public Accounts regarding the Evaluation Policy and the Policy on Internal Audit of the Government of Canada, tabled on June 6, 2001, and has fully responded to its 12 recommendations.

 

Responses to Recommendations of the Standing Committee's Report

 

This Response addresses each recommendation made by the Standing Committee.  In doing so, it provides a concise overview of Treasury Board Secretariat’s position with respect to each recommendation. This Response also provides information on the plans and initiatives in progress with respect to the ongoing effort to improve the practices of internal audit and evaluation in the Government.

 

 

Recommendation 1

 

That Treasury Board Secretariat actively monitor the implementation of the new internal audit and evaluation policies in departments and agencies.

 

Response to Recommendation 1

 

The Treasury Board Secretariat will monitor the implementation and effectiveness of its new policies on internal audit and evaluation. Separate Centres of Excellence for internal audit and evaluation have been established to do this as well as to provide leadership, advice and support to departments in meeting the new policy requirements.

 

The Treasury Board Secretariat, in consultation with its stakeholders, will develop appropriate frameworks to guide the monitoring and evaluation of the policies. Both Centres of Excellence are planning to conduct evaluations in two phases, one within two years of the implementation date and the second within five years of the implementation date of the policies.

 

 

Recommendation 2

 

That Treasury Board Secretariat use data gathered by the Centre of Excellence for Internal Audit and the Centre of Excellence for Evaluation to inform Parliament, in its annual report on the implementation of results-based management in the federal government (Managing for Results), of progress being made across government in implementing new policies on internal audit and evaluation. Reporting of this information should begin with the report for the fiscal year ending 31 March 2002.

 

Response to Recommendation 2

 

The Treasury Board Secretariat will monitor the implementation of its new policies on internal audit and evaluation, evaluate their effectiveness and report on them in accordance with commitments provided to that effect in the relevant frameworkscovering each policy. The intent is to provide an evaluation report on the implementation of the policies at two points in time, two years (i.e. by March 2003) and five years (i.e. by March 2006) after the effective date of the policies. The results of these studies will be reported through the most appropriate means.

 

 

Recommendation 3

 

That Treasury Board Secretariat include a discussion, in its annual report on the implementation of results-based management in the federal government (Managing for Results), of the performance of the Centre of Excellence for Internal Audit and the Centre of Excellence for Evaluation against the responsibilities of the centres as set forth in the Policy on Internal Audit and the Evaluation Policy. Reporting on this performance should begin with the report for the fiscal year ending 31 March 2002.

 

Response to Recommendation 3

 

The adoption of the new policies on internal audit and evaluation and the creation of the respective Centres of Excellence are very recent (April 2001). The impact of the policies and the results of the work being done by the Centres will take some time to materialize. The Treasury Board Secretariat is, nevertheless, committed to regularly measuring and reporting on their performance.

 

The Treasury Board Secretariat will include, within the scope of the evaluations of the new Policies, an assessment of the performance of its Centre of Excellence for Internal Audit and its Centre of Excellence for Evaluation. The timing of the reporting of these results will correspond to the timing of the broader evaluations, i.e. after the first two years of operation (by March 2003) and after the first five years of operation (by March 2006).

 

 

Recommendation 4

 

That Treasury Board Secretariat complete the evaluation frameworks that will be used to guide the formal evaluations of the effectiveness of the Policy on Internal Audit and the Evaluation Policy and submit copies to the Committee by 1 December 2001.

 

Response to Recommendation 4

 

The Treasury Board Secretariat is completing the frameworks that will be the basis upon which the implementation and the effectiveness of the respective policies on internal audit and evaluation will be evaluated. The Treasury Board Secretariat will provide copies of these frameworks to the Public Accounts Committee as soon as they have been completed.

 

 

Recommendation 5

 

That formal evaluations of the Policy on Internal Audit and the Evaluation Policy take into account the observations and recommendations of any audits performed by the Office of the Auditor General of the internal audit and evaluation functions of the Government of Canada over the next five years.

 

Response to Recommendation 5

 

In conducting the evaluation of its policies on internal audit and evaluation, the Treasury Board Secretariat will be using many sources of information. One important source will be the findings and observations from any audits of the internal audit and evaluation functions performed by the Office of the Auditor General.

 

 

Recommendation 6

 

That the formal evaluations of the Policy on Internal Audit and the Evaluation Policy assess the impact of requirements governing the public release of internal audit reports and evaluation studies and the impact of the Access to Information Act on the internal audit and evaluation functions in departments and agencies.

 

Response to Recommendation 6

 

The Treasury Board Secretariat is committed to the principles of openness and transparency inherent in the Access to Information Act. The policies on internal audit and evaluation reinforce this commitment to transparency by ensuring that reports are made available to the public with minimal formality, in both official languages.

 

The Access to Information Task Force is now examining how to modernize access to federal government information in a way that promotes open, effective, accountable government, and an informed citizenry in a knowledge society, and is consistent with the public interest and personal privacy.

 

Accordingly, the Treasury Board Secretariat will be monitoring impacts of the current Access to Information requirements as they relate to the government’s release of internal audit reports and evaluations as well as the impacts of any changes that may result from the Report of the Task Force. Such information will be assessed during the evaluations of the policies on internal audit and evaluation.

 

 

Recommendation 7

 

That Treasury Board Secretariat monitor the release, by departments and agencies, of internal audit and evaluation reports and report the results to Parliament in its annual report on the implementation of results-based management in the federal government (Managing for Results), beginning with the report for the fiscal year ending 31 March 2002. In conducting this monitoring activity, Treasury Board Secretariat should pay particular attention to, and report on, the timeliness of release, and the depth and breadth of the issues audited and evaluated.

 

Response to Recommendation 7

 

The Treasury Board Secretariat is maintaining a database of audit, evaluation and other review reports. The database is available to the public (i.e. accessible on the Treasury Board Secretariat web site) and is being used by the Secretariat as a source of information for active monitoring and for the evaluation of the policies on internal audit and evaluation. Internal audit and evaluation reports will be monitored against Policy Standards and the commitments made by departments and agencies in their annual internal audit and evaluation plans.

 

The information provided through audit and evaluation findings will also serve to inform and strengthen the government-wide framework for active monitoring and to support the Treasury Board Secretariat in its efforts to maintain an ongoing awareness of the state of management practices and controls across government.

 

 

Recommendation 8

 

That Treasury Board Secretariat regularly review the level of funding allocated to the internal audit function in departments and agencies to ensure that the function maintains its capacity to fulfil requirements set forth in the Policy on Internal Audit. Any identified deficiencies in levels of funding must be reported in Treasury Board Secretariat’s annual Performance Report.

 

Response to Recommendation 8

 

The Treasury Board has approved an additional $7.2 million for 2001-2002 and $15 million for 2002-2003 to support the internal audit function in departments, and an additional $6 million for the Centre of Excellence for Internal Audit in the Treasury Board Secretariat over this fiscal year and the next. The departmental allocation was based upon an assessment of the business cases submitted by each organization, whereby each was judged on the merits of their plans to implement the Policy on Internal Audit and to demonstrate results.

 

Deputy heads are accountable for establishing an appropriately resourced internal audit function in order to provide sufficient and timely assurance services on all important aspects of their risk management strategies and practices, management control frameworks and practices and information used for decision-making and reporting. Deputy heads are also responsible for monitoring the performance of their departments in respect of the Policy on Internal Audit.

 

The Treasury Board Secretariat is working with the internal audit community to develop a human resource strategy to support departments in their implementation of the Policy on Internal Audit. The evaluation of the policy will be carried out in two phases, the first within two years and the second, within five years of the effective date of the policy. The results of these evaluations will be made available by the Treasury Board Secretariat.

 

 

Recommendation 9

 

That Treasury Board Secretariat develop a clear, annual statement of specific government evaluation priorities that addresses strategic and horizontal issues and make that statement available to departmental evaluation units and to Parliament in its annual report on the implementation of results-based management in the federal government (Managing for Results), beginning in the fiscal year ending 31 March 2002.

 

Response to Recommendation 9

 

The Treasury Board, as a cabinet committee, regularly identifies priorities for evaluation that address strategic and horizontal issues. For example, since June 2000, programs with transfer payments have become a strong priority for evaluation under the Treasury Board Policy on Transfer Payments. Government priorities in general are reflected in departmental evaluation plans and, as noted in response to recommendation 11, departments are being encouraged to post and update these plans on their web site. The Treasury Board Secretariat is maintaining a close relationship with departments and agencies on these issues.

 

 

Recommendation 10

 

That Treasury Board Secretariat develop a mechanism for assessing departmental evaluation plans and analyses against government-wide priorities and begin to report the results to Parliament in its annual report on the implementation of results-based management in the federal government (Managing for Results) beginning in the fiscal year ending 31 March 2002.

 

Response to Recommendation 10

 

The Centre of Excellence for Evaluation intends to monitor the new Policy on Evaluation to ensure that the government has timely, strategically-focused objectives and evidence-based information on the performance of its policies, programs and initiatives to produce better results for Canadians. This monitoring will be done in accordance with commitments provided to that effect in the related Results-based Management and Accountability Framework, including the conduct of the two-year and the five-year evaluations of the Policy on Evaluation.

 

Ongoing monitoring of departmental evaluation plans will also serve to highlight high risk areas that will inform and be linked to the broader Treasury Board Secretariat strategy and approach to active monitoring.

 

 

Recommendation 11

 

That, following consultation with Treasury Board Secretariat, departments and agencies begin to include relevant evaluation plans in their reports on plans and priorities starting in fiscal year 2002-2003 and begin to include any relevant findings from those evaluations in their performance reports beginning with the reports for the period ending 31 March 2003.

 

Response to Recommendation 11

 

The Treasury Board Secretariat is encouraging departments and agencies to post and update their evaluation plans on their web sites. The Centre of Excellence for Evaluation will be requesting these plans and monitoring them on an ongoing basis.  Departmental plans for evaluation will also be accessible to Program and Policy Analysts from all branches and sectors in the Treasury Board Secretariat as part of the broader Treasury Board Secretariat approach to active monitoring.

 

The Guidelines for the Preparation of Departmental Performance Reports developed in 2001 by the Treasury Board Secretariat also encourage departments and agencies to integrate relevant evaluation findings in their annual Departmental Performance Reports with suitable references to the accessible evaluation summaries and reports. The review of the Departmental Performance Reports will help determine if there is a need for further guidance with regard to the reporting of evaluation results.

 

 

Recommendation 12

 

That Treasury Board Secretariat instruct all departments and agencies to include a list and synopsis of all internal audits and evaluations completed during the just ended fiscal year in their performance reports, beginning with the reports for the period ending 31 March 2002.

 

Response to Recommendation 12

 

The new policies and standards for internal audit and evaluation are encouraging greater transparency and accessibility to internal audit and evaluation reports. The Treasury Board Secretariat has signalled the importance of this matter through an Information Bulletin from the Deputy Comptroller General to all departments and agencies.

 

Departments and agencies are required to send copies of completed internal audits, evaluations and other reviews to the Treasury Board Secretariat whereby a synopsis is posted on the Treasury Board Secretariat web site. Departments are also being encouraged to post summaries of completed studies on their own web sites. A link to these is created and provided on the TBS web site.