2002 April Report of the Auditor General of Canada

In future programs of this type, the project approval process should be based on a more streamlined approach, with delegation of authority for approvals based on risk and level of expenditure (paragraph 17.42).

The approval process has been streamlined, but the risk management framework is incomplete.

In future programs of this type, the government should ensure that project selection criteria are clearly defined and that persuasive information and analyses are available and have been assessed to support recommendations for project approval (17.50).

In future programs of this type, the government should clearly define the coverage of the term "infrastructure." If that coverage allows for support of projects involving private sector partnerships and other private sector linkages, the government should ensure that program guidelines specifically address related implications (17.56).

The coverage of "infrastructure" has been clearly defined. However, the guidelines for private sector partnerships do not adequately address related implications.

In future programs of this type, the government should ensure that there are safeguards to limit the substitution of program expenditures for expenditures that would otherwise have been undertaken by the programs' partners. (17.65)

The Treasury Board Secretariat indicated that substitution is not occurring. Clear funding criteria have been established. They are intended to accelerate infrastructure development that may have already been planned.

In its Performance Report, the Treasury Board Secretariat should provide Parliament with information on the employment effects of the Canada Infrastructure Works Program that clearly sets out its sources and limitations (17.72).

Infrastructure Canada's objectives do not include short-term job creation. It is tracking measurable benefits at the project level. However, information on projects was not available for the 2001 Performance Report.

In future programs of this type, the government should ensure that agreements among partners make adequate provision for rigorous and timely compliance audits. Such provisions should clearly assign responsibilities among partners, and specify the coverage, timing, and reporting of audits, along with resource levels to be allocated to the compliance audit function (17.81).

In future programs of this type, the government should ensure that project proposals are assessed to provide an adequate level of assurance with respect to technical feasibility and financial requirements (17.87).

In future programs of this type, the government should ensure that

• environmental assessments are completed early enough to be taken into account in the project planning and approval process;
• necessary mitigation measures are clearly identified; and
• a system for obtaining assurance of the implementation of mitigation measures is in place (17.94).

The Treasury Board Secretariat should clearly identify and communicate the essential elements of an effective governing framework for new governance arrangements and provide departments with consistent guidance on its use when they design and implement new arrangements.

The framework should provide for

• appropriate reporting to Parliament and the public on the extent to which the arrangement has achieved its federal public policy purpose and on the expenditure and investment of federal moneys and the stewardship of federal assets;
• effective accountability mechanisms to ensure that adequate and appropriate evaluation and audit regimes are established;
• adequate transparency of important decisions on the management and operations of the arrangement; and
• protection of the public interest so that delivery of the federal objective adheres to essential and traditional values of public sector administration (paragraph 23.46).

As our audit was completed, the Treasury Board Secretariat approved a policy that covers most of the elements of the governing framework presented in this chapter.

However, until the policy has been promulgated, we are unable to assess whether it communicates the essential elements of the governing framework or whether the Secretariat has provided consistent guidance to departments.

The Treasury Board Secretariat should

• collect and make available more complete information on the types and extent of use of new governance arrangements that federal departments and agencies create;

• develop an evaluation framework and, after an appropriate period, evaluate the use of new governance arrangements as tools of public policy. The Secretariat should communicate the findings government-wide and report a summary of the evaluation to Parliament; and

• gather information on lessons learned and good practices identified in new governance arrangements, and communicate this information to government managers (23.51).

At the time of our audit, work on a partial response, through a database was incomplete.

Departments sponsoring collaborative arrangements should provide for the reporting of timely, appropriate, and credible information to Parliament and the public on the extent to which the arrangements have accomplished their federal policy objectives, and at what cost. They should ensure that

• expectations about what the arrangement and each of its partners are to accomplish are stated in clear and concrete terms; and
• agreement is reached on the collection and sharing of reliable and compatible data (23.64).

Some departments are reporting performance information to Parliament, but generally in an ad hoc manner

Before entering into collaborative arrangements, departments should carry out an assessment of prospective partners' ability to deliver their part of the arrangements. Departments should also ensure that the arrangements include dispute resolution mechanisms and identify the actions that can be taken in the event that partners in the arrangement do not fulfill their responsibilities (23.70).

Not assessed

Sponsoring departments, before entering collaborative arrangements, should agree with their partners on appropriate evaluation plans and an external audit regime that includes, as appropriate, financial, compliance, and value-for-money audits of the arrangements, co-ordinated as required with the legislative audit offices of the governments involved (23.74).

In the new collaborative arrangement of Infrastructure Canada that we examined, provision is made for evaluation and financial, compliance, and value-for-money audits. However, the audits are not co-ordinated with legislative audit offices.

Departments entering into collaborative arrangements, especially with partners in the private or the voluntary sector, should ensure that there are clear provisions for transparency among the partners in the arrangement (23.79).

The collaborative cases examined in the audit did not make adequate provision for transparency, with the exception of Infrastructure Canada.

Departments entering into collaborative arrangements, especially with partners in the private or the voluntary sector, should ensure that the arrangements make clear provision for protection of the public interest and, in particular, for procedures to deal with stakeholder and public input and citizen grievances (23.84).

A few collaborative arrangements have made improvements in this area.

When creating delegated arrangements, sponsoring departments should clearly specify what the arrangements are to achieve, identifying measurable outcomes and timetables as well as concrete outputs. The departments should ensure that the capacity exists to measure the extent to which objectives have been achieved under the arrangement (23.94).

A few delegated arrangements have made improvements in this area.

Sponsoring departments should ensure that timely and credible information on the performance of their delegated arrangements and, where appropriate, audited financial statements of the entities involved are provided to Parliament and the public (23.97).

Most delegated arrangements have put provisions in place.

Sponsoring departments should ensure that, where appropriate, the design of delegated arrangements provides for

• formal mechanisms and guidance to resolve disputes with partners;

Half of the delegated arrangements have put related provisions in place.

• means to deal with non-performance and termination of the arrangement;

• periodic program evaluations, the results of which are reported through ministers to Parliament;

Most arrangements make provision for evaluations, but few report them to Parliament.

• consideration of value-for-money audits; and

• independent assessment of the fairness and reliability of the performance information tabled in Parliament (23.106).

When creating delegated arrangements, sponsoring departments should provide for reasonable standards of disclosure in the areas involving a federal public purpose; the standards should reflect public sector standards of access to information. Appropriate provision should be made for legitimate concerns of personal privacy and commercial confidence (23.110).

Sponsoring departments should ensure that delegated arrangements include mechanisms to facilitate public consultation, make specific provision for relevant public sector values in the corporate culture, and establish appropriate mechanisms for redress of citizen complaints (23.116).

Most delegated arrangements have put related provisions in place.

Where existing new governance arrangements have inadequate provisions or practices for accountability and good governance, sponsoring departments should identify opportunities to negotiate appropriate improvements (23.121).

A few delegated arrangements have identified such opportunities for improvement.

The government should begin a process of consultation with Parliament and the public on how to reconcile new governance arrangements with accountability to Parliament and how to formalize the participation and accountability of independent parties involved in the achievement of federal objectives. (23.125)

Agriculture and Agri-Food Canada should provide further guidance to the [provincial] councils, in particular by defining and presenting the logic underlying the objectives, principles, guidelines, and criteria established by the Department. It should also work with the councils to develop better means of sharing experience and good practices (paragraph 24.17).

The shortcomings identified in 1999 included the lack or unclear nature of certain policies and a gap in guidance to provincial councils in a few areas related to the federal objectives, principles, guidelines, and criteria. Since 1999, the Department has closed policy gaps and provided additional guidance.

The Department should implement better means of ensuring that parliamentarians and the public have access to performance information collected by the program (24.19).

To help address reporting responsibilities, annual performance reports from each council are required. These have been received and are posted on the Department's Web site along with the Fund's performance framework.

The Department has been planning to increase the project data posted on its Web site since the Fund's inception. Some technical challenges as well as private and public legal issues have delayed this measure.

Although reporting to the public and Parliament through the posting of council performance reports and the Fund's performance framework has increased transparency, we noted that over the last two years there are still some deficiencies. In particular, the reporting on the Fund in the 2001-02 Report on Plans and Priorities is problematic.

The Department informed us that the next such report would provide more information on the Fund.

The Department should consider and formalize a long-term strategy for its relationship with councils, including considering the merits of using the councils to deliver other programs (24.21).

The Fund was established as an innovative model of third-party delivery. It allows industry councils in each province to decide how to best support agricultural adaptation. To ensure accountability, the government built several accountability mechanisms into the Fund. It requires that federal objectives, principles, guidelines, and criteria be respected and that performance information be provided.

The Department should incorporate the use of a capabilities assessment tool in its monitoring of program delivery by Canadian Adaptation and Rural Development councils (24.28).