2006 May Status Report of the Auditor General of Canada

The tax debt continues to grow

8.28 The Canada Revenue Agency should identify and collect the data it needs to analyze the makeup of its tax debt and to develop better collection strategies.
(8.18–8.27)

The Agency agrees that understanding the makeup of tax debt is an important factor in developing its strategies, although the Agency's efforts have resulted in increased collector productivity since 1994. In addition, the Agency has exceeded important program delivery commitments made to the Treasury Board, as noted in this chapter.

The Agency has taken important steps to increase its capacity in the area of tax debt research by launching the Agency's Integrated Revenue Collections (IRC) project, which is developing advanced data-warehousing and data-mining capabilities. In addition, the Agency has set up a team within its organization dedicated to conducting debt management research. These initiatives will support the horizontal approach to compliance research across the Agency. The Agency is taking important steps to ensure that the IRC project is being managed in accordance with accepted project management practices. Some deliverables have already been released, such as the All Revenue Tables.

Management lacks important information on performance

8.41 The Canada Revenue Agency should significantly improve its management information to make it complete and comprehensive. It should develop reliable techniques and information sources to determine on a regular basis the results of its collection efforts and use that information to guide its decision making for each of its major collection modes and actions.
(8.29–8.40)

The Agency agrees that improvements are needed to enhance its management information systems—improvements that are currently being addressed through its Integrated Revenue Collections project. However, the Agency believes that the performance indicators it has established for its collections program appropriately reflect program activities, including write-offs.

The Agency continues to review its performance indicators in order to ensure their accuracy and appropriateness. This review is in line with the OAG's annual performance assessment on the fairness and reliability of the program information described in the Agency's Annual Report to Parliament.

The Agency continues to manage uncollectible accounts in accordance with the procedures that were favourably reviewed by the Auditor General in 2002.

Risk management is deficient

8.52 The Canada Revenue Agency should establish a more comprehensive automated risk-scoring system for tax debts, update the risk scores on an ongoing basis, and use the risk scores to prioritize workload throughout the collections process.
(8.42–8.51)

The Agency agrees. Additional investments in risk management systems are needed, and are being made, to realize the full potential of the Agency's collections program and to address the continued growth in accounts receivable. The Agency's Integrated Revenue Collections project is focussed on addressing both past and current concerns raised by the Auditor General with respect to risk assessment and file management, in addition to the above-mentioned management information system improvements.

Efficiency improvements needed

8.65 The Canada Revenue Agency should minimize the number of collectors who work on each account, record their collection actions in a more systematic way, and improve the case management tools they have at their disposal.
(8.53–8.64)

The Agency agrees. The Agency will undertake an initiative to identify file management inefficiencies and improve the effectiveness of collector actions on case inventories.

The Agency will build on process improvements it has made, such as the national collections call centre and national pools, to further improve its file management. More specifically, the Integrated Revenue Collections project will improve the case management tools available to perform all Agency collection activities.