PACC Committee Report

RECOMMENDATION 1

That the Office of the Auditor General conduct a thorough review of its methods of assessing its recommendations and observations, including their impact, and rates and timeliness of adoption, and report the results and conclusions in its Performance Report for the period ending 31 March 2002.

Although it is difficult to determine the savings that flow from the work of the Office, it is clear that savings are available, provided that departments and agencies pay close attention to audit recommendations and observations. In his introduction to the Office’s most recent Performance Report, former Auditor General Desautels indicated that:

Even though it is difficult, we are trying to estimate the money that government operations may have saved at least in part because of our work and our recommendations. For example, following our 1997 audit of fiscal equalization payments, the government amended the equalization formula. This change will reduce federal government spending by approximately $350 million annually.[1]

The savings to the Government of Canada — and to the taxpayers who fund its activities — from this one example alone far exceed the annual cost of funding the Office of the Auditor General. While Ms. Fraser expressed some reservations about using cost savings as an indicator of the Office’s performance, the Committee believes that there is value in continuing to include examples of cost savings when they occur. The Committee therefore recommends:

RECOMMENDATION 2

That the Office of the Auditor General pursue efforts to estimate the money that government operations may have saved, directly or indirectly, as a result of the work and recommendations of the Office, and that it report these instances as examples in its annual Performance Report.

In its Sixth Report (376th Parliament, Second Session), the Committee also called for several changes to the content and format of the Office of the Auditor General’s Performance Report. It is gratifying to learn that the Office has already made many of these changes and is in the process of implementing others. This positive response demonstrates that the Office is attentive to the wishes of parliamentarians. The Committee also believes that this response shows what can, and should occur when standing committees of the House of Commons make their preferences known with regard to departmental performance reports and reports on plans and priorities.

The Committee has one lingering concern, despite its appreciation of the changes that are being made. In general, reports on plans and priorities should state clearly what departments, offices, and agencies intend to do. Performance reports should then indicate whether departments, offices, and agencies accomplished what they set out to do. This requires a clear link between one set of documents and the other. However, based on its examination, the Committee is not completely satisfied that this linkage has been clearly established in the Office of the Auditor General’s Report on Plans and Priorities and its Performance Report. The Committee is encouraged by the Interim Auditor General’s agreement with this observation and recommends:

RECOMMENDATION 3

That the Office of the Auditor General of Canada further clarify and strengthen the links between it objectives and planned activities, as stated in its annual Report on Plans and Priorities, and the activities it has completed and the outcomes it has achieved, as reported in its annual Performance Report.

The Committee also observes that the Office reports the number of hours spent on the individual audits that it performs but that no information is provided on how those hours compare to planned expenditure of time. The Committee believes that it would be useful to have this information and notes that the Interim Auditor General agrees. It therefore recommends:

RECOMMENDATION 4

That, in its annual Performance Report, the Office of the Auditor General begin to show actual hours spent on individual audits compared against budgeted hours.