A performance audit is an independent, objective and systematic assessment of how well government is managing its activities, responsibilities and resources.
The Office of the Auditor General of Canada conducts about 30 performance audits a year in federal departments and agencies. The Auditor General Act gives it considerable discretion to determine what areas of government to examine when doing such audits.
We may decide to audit a single government program or activity (such as pesticide regulation), an area of responsibility that involves several departments or agencies (such as the protection of cultural heritage), or an issue that affects many departments (such as security of information technology).
Given the vast number of government activities, choosing topics for performance audits is a complex and challenging exercise. It requires good knowledge of government and its component organizations, as well as a high level of professional judgement. Because choosing topics well is essential to producing reports that are useful to Parliament, the Office puts considerable effort into this process.
The Office of the Auditor General of Canada begins planning its program of audits several years in advance. We conduct a thorough risk analysis and identify the areas that are most significant and relevant to Parliament. We also take into account such practical issues as the availability of financial and human resources.
In determining what to audit, we focus on areas in which federal organizations face the highest risk. Examples of high-risk areas are those that cost taxpayers significant amounts of money or that could threaten the health and safety of Canadians if something were to go wrong. The Office may also consider a topic area significant if it has the potential for improving government results (such as financial management and control) or if it is of great interest to parliamentarians and Canadians (such as national security). The Office pays particular attention to requests for audits from parliamentary committees; however, the ultimate decision about what to audit rests with the Auditor General.
The Auditor General does not audit topics that fall outside the Office’s mandate. Examples are all policy decisions, which are the prerogative of Parliament and government, and any areas under the exclusive jurisdiction of provincial or municipal governments.
The Auditor General’s performance audit reports contain recommendations that can serve as a springboard to lasting and positive change in the way government functions. Follow‑up audits may be conducted to determine whether the government has made satisfactory progress in implementing the Office’s recommendations. The results of follow-up audits are published in an annual Status Report.