1998 April Report of the Auditor General of Canada

April 1998 Report—Chapter 1

Exhibit 1.12—Examples of Opportunities for Improved Efficiency

(identified by this Office and by the government)

Cost and expenditure reduction can be attained in several ways, such as work force reductions, privatization and devolution of activities. In addition, efficiency gains, cost recovery and revenue generation can offset the need to reduce expenditures. For instance, having cost savings as a performance indicator has been shown to have a positive impact on cost effectiveness.

Examples of potential for improved efficiency reported in previous audits by our Office

• Opportunity for tens of millions of dollars in savings as part of improvement in the management of the Canada Pension Plan Disability Program, major capital projects and export development activities.
• Potential savings of hundreds of millions of dollars in holding costs, related to improvement in the government's materiel management practices, and savings in cost of travel.
• Potential for the cost recovery of expenditures, as in the case of Parks Canada canal operations.
• Allocation of additional resources to tax recovery in higher-risk areas and to combat tax avoidance.
• Opportunity to increase cost effectiveness by improving risk management associated with large systems under development, and improving use of telecommunications.
• Opportunity to generate additional savings in the millions by giving consideration to contracting-out practices and exposing internal functions to competition in such areas as infrastructure maintenance, translation and fleet management.
• Opportunities continue to exist to further simplify and/or reduce the cost of classification and job evaluation and some of the related systems and practices, such as pay administration.

Examples of potential for improved efficiency identified by the government

The government has also looked at modernizing its operations. Various deputy minister task forces looked at different aspects of public administration, such as service delivery, administrative support and addressing horizontal issues. The following are examples of efficiency issues raised:

• Improved services to clients and efficiency gains by better integrating and grouping of services using the "one-stop shopping" concept.
• Improved integration and efficiency of service delivery by the establishment of better interdepartmental and intergovernmental mechanisms and partnerships.
• Increase in the use of shared systems and practices, in particular for administrative and support systems, which could produce significant savings.
• Reinforcement of project pre-selection criteria including a potential for cost savings.
• A reduction in the number of collective bargaining groups.
• Opportunity for cost efficiency in the order of $25 million annually in pay and benefits administration, by information sharing and use of information technology.
• Estimated savings of $250 million over five years in streamlining and improving the procurement and payment process.