Opening Statement to the Standing Committee on Public Accounts

2010 Spring Report of the Auditor General of Canada

22 April 2010

Sheila Fraser, FCA
Auditor General of Canada

Mr. Chair, I am pleased to be here to present my 2010 Spring Report, which was tabled in the House of Commons on Tuesday, April 20. I am also presenting an overview report on the electronic health records initiative in Canada. I am accompanied by Assistant Auditors General Ronnie Campbell, Nancy Cheng and Sylvain Ricard.

Several chapters of my Report, along with the overview report on electronic health records, touch on government investments involving billions of dollars.

To provide maximum benefits, and to ensure that investments produce the anticipated results, I urge the government to plan and budget for them over the long term.

Chapter 1—Aging Information Technology Systems

The federal government relies on information technology systems to deliver programs and services to Canadians. Many of these systems are aging, and several are at risk of breaking down.

Even if systems are currently working, a breakdown could have severe consequences. At worst, some government programs and services could no longer be delivered to Canadians.

We found that the Chief Information Officer Branch of the Treasury Board of Canada Secretariat is aware that aging IT poses significant government-wide risks. However, it has not formally identified the issue as an area of importance for the government. Furthermore, it has not established or implemented government-wide strategic directions to address the issue.

The renewal and modernization of IT systems can take many years and significant investments that must be planned and budgeted for over the long term. The Treasury Board Secretariat should prepare a report on the state of aging IT systems across government and develop a plan to address it.

Chapter 2—Modernizing Human Resource Management

The Report also looks at whether the government has implemented the key changes called for under the Public Service Modernization Act of 2003.

This legislation is a complex undertaking designed to transform the way the federal government hires, manages, and supports its employees. While progress has been made, the process is still in transition and the impacts are not yet clear.

We found that while key changes required by the legislation have been made, there is limited information available on what has been achieved. This information is important to determine if results meet expectations.

Sound management of human resources is critical to an effective public service and better service to Canadians. The government needs to ensure that this initiative is successful.

Chapter 3—Rehabilitating the Parliament Buildings

We also looked at the rehabilitation of the buildings on Parliament Hill. Public Works and Government Services Canada has identified serious risks to key systems that could affect Parliament’s operations.

These buildings are part of Canada’s heritage and are critical to Parliament’s operations. The governance arrangements are hindering rehabilitation work while the buildings continue to deteriorate.

Responsibility for the Parliament buildings is split among many organizations, decision-making and accountability are fragmented, and there is a lack of consensus on priorities. These weaknesses result in delayed decisions and projects, and contribute to increased project costs and risks.

The longstanding governance problem, which we and others have raised over many years, has to be resolved. In our view, responsibility and accountability for the Parliament buildings should rest with the Senate and the House of Commons.

Chapter 4—Sustaining Development in the Northwest Territories

Let me now turn to the Northwest Territories, where sustained and balanced development depends on several key conditions.

For example, agreements with Aboriginal peoples setting out governance rights and the ownership of land and resource rights are important for environmental protection and economic development. They help provide a level of certainty and predictability for business, industry, communities, and governments.

We found that Indian and Northern Affairs Canada (INAC) has made constructive efforts to clarify these rights in the negotiation of land claims settled to date.

However, in regions where land claims are still under negotiation, INAC has not put an adequate regulatory system in place to protect the environment. Nor have Environment Canada and INAC met their responsibility to monitor the cumulative impacts of development on the environment.

The federal government has specific obligations relating to effective governance, environmental protection, and capacity building to provide for sustainable development in the Northwest Territories. Not meeting these obligations could mean missed economic opportunities, environmental degradation, and increased social problems in the territory’s communities.

Chapter 5—Scientific Research—Agriculture and Agri-Food Canada

We also looked at whether Agriculture and Agri-Food Canada is managing its research activities to meet its goals of promoting excellence in research and increasing collaboration with other research organizations.

The Department has a history of successful collaboration on individual research projects with other organizations. But the more complex collaborations we looked at were not managed well, causing a significant loss of good will among key partners.

In addition, the Department has not identified the human and financial resources needed for its strategic direction, nor the equipment and facilities it requires. Much of its laboratory and agricultural equipment is past its useful life.

The Department’s research is important to Canada’s food production and its ability to compete internationally. We found serious problems in areas that are fundamental to conducting research, such as managing funding, capital assets, and human resources.

Chapter 6—Special Examinations of Crown Corporations—2009

My Report also presents the Main Points of our special examination reports on 11 Crown corporations, issued to the respective boards of directors throughout 2009. The Main Points do not reflect events that may have occurred after our reports were issued.

In a special examination, any major weakness in a corporation’s key systems and practices that could prevent it from safeguarding and controlling its assets or managing efficiently, economically, or effectively is reported as a significant deficiency.

In three of the corporations, we found one or more significant deficiency, which we brought to the attention of the appropriate ministers. The three corporations were Canada Post, Canada Science and Technology Museum, and Marine Atlantic Inc. In two of these—Canada Post and Marine Atlantic—the deficiencies involved capital investments and related funding.

Other Report—Electronic Health Records in Canada—An Overview of Federal and Provincial Audit Reports

My Office and six provincial audit offices have carried out separate, concurrent audits of the development and implementation of electronic health records.

Electronic health records are expected to reduce costs and improve the quality of care. But this pan-Canadian initiative involves significant investments and challenges.

My colleagues and I encourage stakeholders to report comprehensively on progress made and benefits achieved. We also encourage the committees of each legislature to continue monitoring this complex initiative.

Thank you, Mr. Chair. That concludes my opening statement. We are now ready to answer your questions.