2013 Spring Report of the Auditor General of Canada Message from the Auditor General—Spring 2013

2013 Spring Report of the Auditor General of Canada

Message from the Auditor General—Spring 2013

I am pleased to present my Spring 2013 Report to Parliament. Our audit work assists parliamentarians in holding government to account for its management of resources and for the results achieved.

We serve Parliament through various types of performance auditing:

New audit work

Our performance audits are independent, objective, and systematic assessments of how well government is managing its activities, responsibilities, and resources. We assess whether activities are managed economically and efficiently, achieve their intended results, and demonstrate due regard to their impact on the environment.

This report includes new performance audit work covering the following government activities:

The report identifies a number of areas where resources are not being managed economically and efficiently. For example, our chapter on Employment Insurance overpayments identifies the need for a comprehensive analysis of overpayments because Human Resources and Skills Development Canada is missing opportunities to collect tens of millions of dollars. Our chapter on advance funding to PPP Canada for the P3 Canada Fund notes that the government is exposed to financing costs with the current arrangement of providing money to PPP Canada years before it is disbursed for infrastructure projects. We also found that diabetes prevention and control activities are fragmented and poorly coordinated, so the government is not making the most of the resources that are devoted to this important health issue.

We also identify areas where the government could achieve better results for Canadians. Our chapter on creating a historical record of the Indian residential school system describes a situation where a lack of cooperation has hindered progress. Aboriginal Affairs and Northern Development Canada and the Truth and Reconciliation Commission have been unable to agree on what work needs to be done and how. With just over a year remaining in the Commission’s mandate, the Commission and the Department need to resolve their disagreements in order to finalize the historical record as envisioned, and, ultimately, support the goal of reconciliation.

Our audit of search and rescue activities found that while National Defence and the Canadian Coast Guard have responded adequately to air and marine search and rescue incidents, significant improvements are needed to continue providing the necessary personnel, equipment, and information systems.

Status Reports

Status Report audit work is devoted to reporting whether the government’s progress in response to our previous audits has been satisfactory or unsatisfactory. We select previous audits for follow-up based on their significance, and we examine areas where government has made commitments in response to our recommendations. We sometimes devote entire audits to this work, or we follow up on selected recommendations and also carry out new performance audit work.

These follow-up reports are our opportunity to provide parliamentarians with information on whether previously identified problems have been resolved. Where they have not, the reports provide a vehicle for parliamentarians to pursue matters with the responsible government departments. Where the departments have made satisfactory progress, the reports provide assurance that things are on track and confirm that our audits do have an impact. Even where progress is satisfactory, parliamentarians can play an important role by their persistence in pursuing issues until they are fully resolved.

In concluding whether or not satisfactory progress has been made overall, we take into account the complexity of the original issues, the time elapsed since the previous audit, what kind of actions have been taken, and whether those actions address the most significant issues.

The overall results we arrive at are not a grade for government as a whole; areas selected for follow-up work usually represent particularly complex, high-risk, or long-standing issues.

This report includes follow-up chapters reporting the status of government action in the following previously audited areas:

We found satisfactory progress in two of the three areas. “Satisfactory progress” does not necessarily mean that a problem has been fully resolved. For example, our status report on evaluating the effectiveness of programs notes that while progress has been satisfactory, evaluations are still not fully serving the decision-making process as intended.

Progress has been unsatisfactory overall in the area of security in contracting. Despite a number of improvements, including a new policy on government security, significant weaknesses remain. For example, National Defence falls short of policy requirements and has yet to develop a departmental security plan. Many contracts we examined in several departments also had incomplete or missing security documentation, or did not follow control procedures, which resulted in contracts being awarded before all appropriate security clearances were completed.

Parliamentarians have expressed a strong interest in our follow-up work, and departments have told us they appreciate public acknowledgement when they make satisfactory progress or resolve problems previously identified.

Performance audits conducted by the Commissioner of the Environment and Sustainable Development

Amendments to the Auditor General Act in 1995 created the position of Commissioner of the Environment and Sustainable Development. This position has enabled us to better serve Parliament by considering environmental effects when determining what to report to the House of Commons.

We conduct performance audits to determine whether activities designed to respond to federal environment and sustainable development policies are being implemented effectively and are delivering results. This work is reported to Parliament by the Commissioner. He also reports annually on the environmental petitions process. In addition, he reports on the extent to which federal departments and agencies are contributing to meeting the targets set out in the Federal Sustainable Development Strategy and meeting the objectives contained in their departmental sustainable development strategies.

In his most recent report, presented in February 2013, the Commissioner expressed his concern that environmental protection is not keeping pace with resource development. For example, the offshore petroleum boards and their federal partners are not prepared to deal with a major spill from offshore oil and gas development in the Atlantic, should they need to step in. And Canada is moving too slowly toward its commitment to meet international targets for establishing marine protected areas to preserve biodiversity in our oceans. The Main Points for the Fall 2012 Report of the Commissioner of the Environment and Sustainable Development are provided in an appendix at the end of this section of the Report.

This was the last report of the current Commissioner, Scott Vaughan. He has accepted a position as president and CEO of the International Institute for Sustainable Development. We thank him for the valuable contribution he has made as Commissioner, and we congratulate him on his new position. His knowledge, insight, and commitment are sure to serve the Institute well.

Special examinations of Crown corporations

Similar in many ways to a performance audit, a special examination looks at whether a Crown corporation has systems and practices in place to ensure that its assets are safeguarded and controlled, its resources are managed economically and efficiently, and its operations are carried out effectively. If we find a major weakness in systems or practices that would compromise this assurance, we report a significant deficiency. Our reports also provide information and recommendations about other opportunities for improvement, even where we find no significant deficiencies.

Under the Financial Administration Act, we report to Boards of Directors rather than directly to Parliament, and Boards are required to make our special examination reports public.

Parliamentarians have an interest in the operations of Crown corporations because the corporations play a role in achieving government policy objectives. Both the House of Commons Standing Committee on Public Accounts and the Standing Committee on Government Operations and Estimates have held hearings on our special examination reports.

For the past several years, we have provided Parliament with an annual summary of our special examination work in Crown corporations. We continue this practice in Chapter 11 of this Report. The chapter includes the Main Points from each of the special examination reports.


Our performance audits take us into a wide range of government activities that are important to Canadians. The objective information they provide can be used by parliamentarians to scrutinize government spending and performance, and press for change where it is needed.


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