Government Transfers to Societies—Yukon

Opening Statement to the Yukon Legislative Assembly Standing Committee on Public Accounts

Government Transfers to Societies—Yukon

(2017 March Report of the Auditor General of Canada to the Yukon Legislative Assembly)

28 May 2017

Michael Ferguson, Chartered Professional AccountantCPA, Chartered AccountantCA
Fellow of the Order of Chartered AccountantsFCA (New Brunswick)
Auditor General of Canada

Mr. Chair, I am pleased to be in Whitehorse today to discuss our report on government transfers to societies in Yukon. This report was tabled on March 6th of this year in the Yukon Legislative Assembly. Joining me today is Casey Thomas, the principal responsible for the audit.

This audit focused on whether selected departments managed a sample of government transfers to societies according to key legislative, policy, and administrative requirements. The government uses transfers to societies to fund a wide range of services and programs for Yukon’s citizens, in areas such as mental health, athletics, and community facilities.

In the 2014–15 fiscal year, the government provided about $40 million to about 300 of the 730 active societies registered in Yukon.

When transferring funds to societies, departments must follow two policies. However, we found that the two policies failed to define some basic concepts and contained some contradictions. In our opinion, this could result in inconsistent funding decisions and the inequitable treatment of societies that request funding.

For example, although both policies allow the government to provide operational funds to societies, the activities that qualify for funding are different under each policy. One policy allows operational funds to pay for expenses such as rent or employee salaries, and the other does not.

We also found that departments did not always comply with the requirements of the policies for providing government funds to societies, including instances where departments should have issued contracts for services instead of providing government transfers. These arrangements are subject to different requirements to maintain fairness and accountability for public funds.

For example, when the government receives goods or services in return for resources, it must classify the agreement as a goods and services contract rather than as a government transfer. In 8 of the 53 transfers we looked at, the government received a direct benefit from the funding it provided to societies. For example, one society received 5,000 dollars to install signs and perform maintenance on government-owned swimming pools.

Effective risk management helps departments know where to focus their attention. We found that for about 60 percent of the transfers we looked at, departmental officials had not documented the risk assessments.

The government provides transfers to societies to help them reach specific goals. It is important for departments to know whether the money was spent to help reach these goals. We found that the Department of Economic Development and the Department of Energy, Mines and Resources assessed whether societies had reached their intended goals. The Department of Community Services did not always do so.

An evaluation policy would help departments measure, evaluate, and report on performance. However, we found that the Executive Council Office had not developed a corporate evaluation policy.

Addressing the issues raised in our audit will allow the government to improve its management of government transfers to societies that support services and programs for the citizens of Yukon.

Mr. Chair, this concludes my opening statement. We would be happy to answer any questions the Committee may have. Thank you.