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2000 October Report of the Auditor General of Canada

October 2000 Report—Chapter 16

Exhibit 16.1—Recommendations of Our 1995 Chapter on Revolving Funds

November 1995 Chapter 24

Office of the Auditor General Recommendations

Treasury Board Secretariat Response

24.57 Treasury Board should provide additional guidance in its policies, or in some other appropriate vehicle, on the general organizational relationship between the unit operating a revolving fund and the host department.

Within the existing government framework, consisting of legislation, regulations and Treasury Board policies, this recommendation will be taken into account when the next revisions to the revolving fund policy are made.

24.65 Treasury Board should strengthen the criteria for granting revolving funds and for periodically assessing and reaffirming their continued appropriateness.

This recommendation will be taken into account when the next revisions to the policy are proposed.

24.70 Treasury Board should adopt Generally Accepted Accounting Principles as the standard financial accounting measure for all revolving funds.

The Treasury Board Secretariat recognizes the importance and usefulness of Generally Accepted Accounting Principles, and this recommendation will be taken into account when the next revisions to the policy are proposed.

24.77 Treasury Board should require that units using revolving funds adopt a form of annual reporting that includes financial statements, performance reporting using an established available framework and a comprehensive "Management Discussion and Analysis" section. These reports should be submitted to Treasury Board and be available for public scrutiny.

The Treasury Board Secretariat recognizes the usefulness of this recommendation, and it will be given full consideration when the next revisions to the policy are proposed.

24.84 Treasury Board should issue guidelines for independent validation of disclosed information on revolving funds that calls attention specifically to compliance with authority as well as to the fairness of the financial statements, and that identifies who carried out the validation.

The Treasury Board will take this recommendation into account when the next revisions to the policy are made.

24.93 Treasury Board Secretariat should consider alternative strategies and approaches for oversight of revolving funds.

Independent of the funding mechanism chosen for an activity, the government considers and implements alternative strategies and approaches for oversight as appropriate. Examples are provided in the recent publication "Framework for Alternative Program Delivery".

24.99 Treasury Board staff should assess how best to build the appropriate capacity needed to support better use of revolving funds and accrual accounting.

The Treasury Board Secretariat agrees with this recommendation, and had already taken steps prior to the commencement of the audit to achieve these ends.