This Web page has been archived on the Web.

2007 October Report of the Auditor General of Canada

My Seventh Annual Report

I am pleased to present my fall 2007 Report to the House of Commons, along with the annual report of the Commissioner of the Environment and Sustainable Development on environmental petitions and sustainable development strategies. This report of the Commissioner is fundamental to the mandate that Parliament gave us in 1995, when it amended our Act to create the Commissioner's position. A Status Report devoted to follow-up audits by the Commissioner will be presented in February.

This chapter of my Report highlights two matters of special importance for good government that we observed while conducting the performance audits in this Report—sustainable development strategies (discussed further in the Commissioner's Perspective introducing his Report) and the government's use of information for managing.

In an organization as large and complex as the federal government, there is a need for consistent and unambiguous direction and guidance, including policies to achieve the government's objectives and tools to put the policies into effect. There is also a need for monitoring, to determine whether the policy objectives are being met.

Over time, the government has issued a number of policies and statements on how departments are expected to manage. It has identified several elements of good management and the tools needed to achieve them.

Sustainable development strategies are one such tool, introduced by the government to reflect Parliament's wish that departments consider the environmental impact and sustainability of their operations when developing their plans, policies, and programs.

Sustainable development strategies

In 1995, Parliament amended the Auditor General Act to require most federal departments to prepare formal accountability documents called sustainable development strategies, and table them in Parliament, at least once every three years. The strategies would let Parliament know how the departments intended to consider the social, economic, and environmental effects (the integration of these three concerns is often referred to as sustainable development) of their policies and programs when developing and implementing them. The goal was to achieve a better future for all Canadians, where government policies and programs would meet today's needs without compromising the ability of future generations to meet the needs of tomorrow. The requirement to tell Parliament how sustainable development would be achieved was seen as a strong motivation for departments to take environmental issues into account when making decisions at their management tables.

The government has the responsibility of ensuring that its departments and agencies carry out Parliament's intent. Departments have been producing sustainable development strategies every three years since 1997. Commissioners of the Environment and Sustainable Development have examined four sets of strategies over the past decade and have reported annually to Parliament on their implementation. The Commissioners' reports have consistently noted significant weaknesses in the content and implementation of departmental strategies. In his report this year, the Commissioner indicates that many of the significant weaknesses noted over the past decade persist. It is clear that the strategies are not helping departments implement sustainable development as was envisioned when the government initiated the process in 1995.

After a decade, sustainable development strategies are a major disappointment. For the most part, senior managers in departments have not demonstrated that they take the strategies seriously, and few parliamentary committees have considered them.

The government has indicated that sustainable development is a government-wide initiative, not just a departmental one. Successive governments have committed to producing a federal strategy for sustainable development that would guide the efforts of individual departments and clearly indicate what is expected of them. However, this has not yet been done.

What needs to change? In order to bring departmental strategies to life, the government needs to clearly articulate its sustainable development goals for the government as a whole and how it expects individual departments to help achieve them.

And in their scrutiny of departmental performance reports, parliamentary committees could, for example, review the progress reported there against the departments' commitments in previous sustainable development strategies and ask departments to account for any discrepancies.

The Commissioner and I call on the government to carry out a thorough review of its current approach to preparing and using sustainable development strategies. We believe that this review should consider what lessons have been learned over the four cycles of the strategies and how this tool can be better used to help achieve the government's overall sustainable development priorities.

Acquiring and using the information needed to manage well

Fundamental to the success of any organization is knowing what information it needs, getting it, and using it to manage well. Federal departments make significant investments in systems that generate huge amounts of information. The government's ability to form and carry out policies and programs that will serve the needs of Canadians relies on having the right kind of information and then using it to determine whether policy and program objectives are being met.

One fundamental source of information is the Census of Population. The federal, provincial, and municipal governments use data from the Census—a periodic snapshot of a population's size and its demographic, social, and economic characteristics—to plan their programs and make decisions. Federal transfer payments to the provinces, amounting to around $62 billion in the 2006–07 fiscal year, are also based in part on census population estimates.

We had previously reported that Statistics Canada has the appropriate processes and procedures in place to ensure the quality of the information it collects. This year, we found that it managed the 2006 Census according to these quality assurance standards and also took steps to improve the quality of information collected on hard-to-count population groups. I am pleased to note that this important source of information was managed well.

In other chapters of this Report, we note that some departments are not generating the kinds of information they need to manage well, and others are not using good information to assess and improve their performance.

Our chapter on Military Health Care shows that, although National Defence has been developing a new Canadian Forces health information system since 1999, completion is not expected until 2011 and the system currently has limited capability for assisting with the management of health care. It does not provide the data the Department could use to determine the quality of health care provided to its Regular Forces personnel—63,500 men and women on 37 military sites across Canada and abroad—and some Reservists.

Most Canadian Forces members who responded to a questionnaire from their military clinics in 2006 said they were satisfied with the care they received. However, the cost of military health care is rising, and the annual cost per military member is considerably higher than the average cost for other Canadians. National Defence lacks the information to assure itself that the levels of health care and their costs are appropriate and necessary to Canadian Forces operations.

The Department did not have the information it needed to tell us whether all its medical practitioners are appropriately licensed, certified, and trained to meet Canadian Forces requirements.

The Canada Border Services Agency has made a significant investment in automated systems for identifying high-risk people and goods before they enter Canada. It now obtains more advance information on travellers and goods entering the country. However, more effort is still needed to ensure that all of the information is complete and reliable. Better use of information could also help the Agency determine whether it is assigning resources appropriately to ports of entry, based on identified risks. Currently, the overall rate of inspection is based more on capacity than on threat and risk assessments.

The Agency has not yet assured itself that having more information available has resulted in better targeting and interception of high-risk goods and people for examination. In addition, it does not record some of the information it could be using to determine the effectiveness of its targeting and examination strategies. Without this information, the Agency cannot determine whether it is appropriately matching levels of examination activity to levels of risk.

The most well-designed policies and programs are ineffective without people to deliver them. Every government department needs to know whether it possesses the skills and competencies to deliver its programs, and what it will need in the years ahead. Across government, the number of experienced senior employees who are retiring is increasing, and when they retire, they take their knowledge and expertise with them. Some departments are not getting and using the information they need to ensure that they continue to have the people with the right skills and competencies to carry out their mandates.

An example in this Report is the Courts Administration Service. Although it has a vacancy rate of 29 percent, and 18 percent of employees will be eligible for retirement in the next five years, it has done virtually no planning to address these problems. It lacks the information that would give it a complete picture of the staff competencies and experience it possesses now and that would allow it to plan for those it will need in the future.

Conclusion

Our audits this year have found that some government departments and agencies already have and use the information they need to manage well. But others lack some basic management information or fail to use the information they have to improve their results.

It has been said that our role in auditing government amounts to looking at its activities in a rear-view mirror. But this ignores the constructive value of our work. As demonstrated again in this Report, our audits also point to the causes of problems and we make recommendations for improvement. Later, we follow up and report on the progress accomplished since our previous audit. In this way, we contribute to maintaining healthy public institutions. I hope that parliamentarians find the information in this report useful in holding the government to account for its stewardship of public funds and its delivery of services to Canadians.