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2000 October Report of the Auditor General of Canada
Foreword
I am pleased to present the October volume of my 2000 Report. Bound with this Foreword are the Main Points of 8 separately issued chapters:
10. Transport Canada - Airport Transfers: National Airports System
11. Human Resources Development Canada - Grants and Contributions
12. Values and Ethics in the Federal Public Sector
13. Assessment of Financial Management Capabilities in Departments
14. Canadian International Development Agency - Managing Contracts and Contribution Agreements
15. Health Canada - First Nations Health: Follow-up
16. Follow-up of Recommendations in Previous Reports
In the first two volumes of my Report each year, it has been my practice to highlight in the Foreword some common themes in the chapters that follow. Specific comment on the results of individual audits I normally reserve for my annual chapter, Matters of Special Importance. However, the issues surrounding grants and contributions warrant particular mention here. While this Report deals with those issues as reflected in our recent audit at Human Resources Development Canada, our work in various departments back to 1977 has identified persistent shortcomings that we continue to find each time we examine grant and contribution programs.
The proper management of grants and contributions is an essential part of good public administration in the federal government. There are large amounts of public funds involved and they should be spent only with great care and appropriate levels of control.
I find our audit observations in Chapter 11 on grants and contributions at HRDC disturbing in the light of good public administration principles. Our work confirmed the findings of the Department's 1999 internal audit, and more. We found breaches of authority, improper payments, limited monitoring, and approvals that had not followed established procedures. Beyond the immediate corrective action it has taken, HRDC needs to make today's extraordinary effort tomorrow's routine and fundamentally change its day-to-day approach to the delivery of grants and contributions.
Our audits have revealed other instances of weak financial management and control related to grants and contributions. Chapter 14, for example, points out weaknesses in CIDA's management of contribution agreements.
Touching also on the need for improvements in financial management, Chapter 10 on our audit of airport transfers highlights the importance of proper financial analysis for decision making and careful oversight to protect federal assets.
Experience has shown repeatedly that as departments focus on improving their services to Canadians, they must balance that objective with the fundamentals of financial management and control. Chapter 13 sets out the results of an assessment of financial management capabilities across a number of departments. We found gaps between current expectations for financial management and the existing capabilities of departments.
It is clear from the work reported in these chapters that the challenges still to be met in improving financial management are substantial.