PACC Committee Report

The Performance of the Office of the Auditor General of Canada

Performance reported for the period ending 31 March 2000 demonstrates that the Office is serving Parliament well and achieving value-for-money in its activities. These accomplishments, which are detailed in the Performance Report of the Office of the Auditor General of Canada for the period ending 31 March 2000, are too numerous to list here. Nevertheless, the Committee would like to draw attention to several highlights.

The Office has produced significant outputs. During the period described in the Report, the Office audited the financial statements of more than 90 organizations, including federal Crown corporations, territorial governments, agencies and corporations, and international organizations. In addition, the Office completed 12 special examinations of Crown corporations. The Office also produced 40 Report chapters based on its value-for-money audits. In addition, the Office has examined its own methodologies, including a review of its follow-up practices, and has established an audit committee, chaired by a senior partner of an independent audit firm, to oversee the Office’s quality and internal controls.

The outputs of the Office were put to good use. In 1999–2000, parliamentary committees held hearings on 62.5 percent of the Office’s Report chapters; this demonstrates the utility of the Office’s audit products to Parliament. Of the federal Crown corporations, agencies and other entities whose financial statements were audited by the Office, 86 percent found the audit worthwhile and to have added value to their organization. In several instances, departments and agencies agreed to implement key recommendations stemming from the Office’s value-for-money audits.

In the past, the Committee has expressed concerns regarding the extent to which departments have adopted the Auditor General’s observations and recommendations; these concerns remain undiminished.

The previous Performance Report, for the period ended 31 March1999, showed that from 1993–1997 the Office made 984 observations and recommendations. Progress had been established for 692 of them. Of these, 154 (22 percent) had been fully implemented and 245 (35 percent) had shown satisfactory progress, for a total of 57 percent either fully implemented or showing reasonable progress. Twenty-four percent (171) had shown unsatisfactory progress. The Performance Report for the period ended 31 March 2000 shows that there has been a slight improvement. This Report indicates that from 1994–1998, the Office made 1,006 observations and recommendations, or other suggestions. The Office has been able to assess the extent of progress made in response to 864 of these. Sixty percent (519) of the observations and recommendations have been either fully implemented or shown satisfactory progress. Twenty-four percent (204) have not shown satisfactory progress.

The Standing Committee on Public Accounts has recommended, in it Sixth Report (36th Parliament, Second Session), that the Office of the Auditor General provide additional detail regarding the status of recommendations and observations whose implementation is below expectations. In particular, the Committee requested that the Office include a list of departments and agencies demonstrating low rates of implementation and the major areas in which implementation has been problematic. The Office responded that it was not yet in a position to provide such information. In the interim, it had taken steps to improve its ability to track the progress departments and agencies have made in implementing recommendations, and had developed a central database to allow it to monitor that progress. The Committee maintains its interest in the eventual adoption of this recommendation contained in its Sixth Report.

Ms. Fraser informed the Committee that the Office has not yet established its own expectations with regard to adoption of its observations and recommendations, although it would prefer to see an implementation rate closer to 70 percent or higher. She indicated that the Office would like to review its methods for assessing its recommendations and the response to them. The Committee wishes to encourage the Office to proceed with this review and therefore recommends: