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Section IV—Supplementary Information

Organizational chart

Organization Chart of the Office of the Auditor General of Canada

Results chain

Performance audits contributing to the work of Parliament

In Section II—Reporting on Results, a case study illustrating how our performance audit work helps Parliament hold the government to account was presented. Below are three other case studies that illustrate the impact of our audit work.

Relocating Members of the Canadian Forces, RCMP, and Federal Public Service (November 2006 Report, Chapter 5)

Background. We conducted this audit in response to a November 2005 request by the Public Accounts Committee. Results of our audit indicated that the contracts awarded for relocating members of the Canadian Forces, RCMP, and public service were not tendered in a fair and equitable manner. The audit also found that neither the Treasury Board of Canada Secretariat nor departments had developed performance measures to demonstrate whether the Integrated Relocation Program is achieving its objectives or has realized any cost savings. The chapter also reported that Members of the Canadian Forces have been charged amounts for property management services exceeding rates established in the contract.

Result. Between December 2006 and January 2007, the Public Accounts Committee held three hearings on our chapter. In its report of May 2006, the Committee endorsed our audit and all recommendations included in the chapter, requiring departments to provide the Committee with detailed action plans by 30 September 2007 for implementing the OAG recommendations and monitoring the progress achieved in their implementation.

In its report the Public Accounts Committee also re-enforced the expectation that departments would provide the Office of the Auditor General with information necessary for us to conduct our audits. The Committee noted that "by failing to provide the Auditor General with information regarding the existence and use of a `logic model' to generate estimated business volumes ... the departments involved have contravened an important section of the Auditor General of Canada Act."

Climate Change (2006 Report of the Commissioner of the Environment and Sustainable Development, Chapters 1 to 3 [entire focus] and 4 and 5 [some elements])

Background. In 2006, the Commissioner of the Environment and Sustainable Development provided parliamentarians with a series of audits on climate change. Among other things, this report looked at the federal government's efforts to reduce greenhouse gas emissions and to adapt to the impacts of climate change. We reported that Canada is not on track to meet its obligations to reduce emissions under the Kyoto Protocol. We found that despite $6.3 billion in announced funding since 1997, there is still no government-wide consolidated monitoring and reporting of climate change performance and spending. We did note that the government has a foundation to build on with several positive programs and practices that have already reduced emissions or that hold promise to do so.

Result. Following the tabling of this report in September 2006, three different parliamentary and Senate committees held meetings to discuss our findings—the Standing Committee on Environment and Sustainable Development (3 October 2006), the Standing Senate Committee on Energy, the Environment and Natural Resources (3 October 2006), and the Standing Committee on Natural Resources (5 October 2006). As well, given this recent work, our opinion was sought by parliamentary committees on several pieces of legislation related to climate change. We appeared before the Standing Committee on Environment and Sustainable Development (5 December 2006) during its discussion of Bill C-288—an act to ensure Canada meets its global climate change obligations under the Kyoto Protocol. We also appeared before the Legislative Committee on Bill C-30—Canada's Clean Air Act.

Managing Government—Financial Information (May 2006 Report, Chapter 1)

Background. This chapter reported that the government's progress in improving financial information used for decision making remained slow and unsatisfactory. One of the main reasons cited for the unsatisfactory progress was that departments and agencies are not using accrual-based financial information as a regular management tool. Accrual financial information helps users appreciate the full financial scope of government—the resources, obligations, financing, costs, and impacts of its activities, including the costs of consuming assets over time. This more complete picture also helps legislators hold the government more accountable for the stewardship of its assets, the full costs of its programs, and its ability to meet short-term and long-term financial obligations.

More specifically, the audit found that while departments make some use of accrual-based financial information, it is limited because their budgets and appropriations are still largely based on the cash method of accounting. We concluded that the situation will likely remain unchanged until government-wide and departmental budgeting, financial reporting, and appropriations are done on a common basis.

Result. Since the tabling of our report, two different committees have issued reports on the importance of moving to accrual-based budgeting and appropriations in the federal government. The Auditor General appeared before the Standing Committee on Government Operations and Estimates three times during its study of accrual budgeting and appropriations in the federal government. These hearings led to the December 2006 Report of the Standing Committee on Government Operations and Estimates—Accrual Budgeting and Appropriations in the Federal Government. Also in December 2006, the Public Accounts Committee recommended that the Government of Canada present to Parliament for discussion and debate a model, including projected costs and benefits, on extending full accrual accounting to budgeting and appropriations.

The Treasury Board Secretariat is currently developing a model for accrual-based budgeting and appropriations. Once developed, this model, including information on implementation requirements, will be presented to Parliament for further discussion and debate.

Report on staffing

The Auditor General has received the staffing authorities of the Public Service Commission directly through the Auditor General Act. Since the Commission must report annually to Parliament for the previous fiscal year on matters under its jurisdiction, the Office of the Auditor General believes it should also report annually on its staffing.

The table below takes into account the Public Service Commission's Staffing Management Accountability Framework. It summarizes the five areas of accountability and identifies the indicators present in the Office. The framework is intended to ensure a values-based staffing system through which the principles of merit and non-partisanship are applied in accordance with the core values of fairness, transparency, and access.

Staffing: Areas of accountability and indicators

Governance: The process of exercising authority and establishing a well-defined structure and administration in order to support the achievement of desired results.
1. Roles and responsibilities in staffing are clearly defined.	The Executive Committee approved a written delegation of authority for human resources management in 2005–06.
2. The Office is resourced to deliver on its staffing priorities.	There were about 297 staffing actions in 2006–07. Two staffing officers plus an assistant met the demands. A benchmarking exercise supported the belief that these resources are sufficient.
3. The Office has implemented practices that ensure continuous learning on the subject of staffing.	The staffing officers, who must participate in a minimum of 20 hours per year of learning, have taken available training on staffing, both internally and externally. New appointees to the Management Group (directors and principals) are required to attend a full-day transition session. Issues discussed include human resources (HR) responsibilities and staffing.
4. A structure and/or mechanisms are in place to facilitate decision making by senior management on staffing issues, and enable the collaboration of all stakeholders, including bargaining agents.	The Human Resources Committee is tasked with addressing HR issues, such as the Office's promotion processes. Two members of this committee are nominated by the union. A more senior committee, the Executive Working Group on Human Resources, is tasked with overseeing larger human resource issues such as HR policies and staffing strategies. This committee is composed of five assistant auditors general (AAGs). The full Executive Committee regularly addresses issues of staffing, rotation, and succession planning.
Planning: In a staffing environment, planning is defined as a process that identifies current and future staffing needs for an organization to achieve its goals.
1. Senior management gives clear direction and sets priorities that enable values-based staffing.	Staffing needs are assessed annually by the Deputy Auditor General and the assistant auditors general. Based on these needs, and the Office's budget, full-time equivalent (FTE) positions are allocated to each AAG. The AAGs are then accountable, with the help of HR, to staff these FTE positions as necessary.
2. Human Resources planning, integrated with business planning, enables the organization to identify its current and future human resource needs.	In 2006–07, under the direction of the Executive Committee, Human Resources prepared an integrated multi-year recruitment and retention strategy. The strategy includes an analysis of internal and external business issues that will have an impact on the availability and assigning of resources.
3. Staffing is consistent with Human Resources planning and variances can be explained.	Each group within the Office has a budgeted FTE count. The Assistant Auditor General for each group is responsible for ensuring that this FTE count is fully used and not exceeded. The AAG is held accountable by the Auditor General for being over or under this level.
Policy: Appointment decisions must first and foremost adhere to the new Public Service Employment Act and other pertinent statutory instruments, including the Canadian Charter of Rights and Freedoms, Canadian Human Rights Act, Official Languages Act, and Employment Equity Act.
1. The Office implements and maintains policies that help it address significant issues in its appointment processes.	Office practices and procedures conform to all pertinent statutory instruments. In 2007–08 such practices and procedures will be formally documented. For 2006–07, all of our indeterminate appointments were completed using a competitive process. During the same period, 65.3 percent of indeterminate appointments were open to the public.
Communication: Communication ensures the integrity of the appointment process by being transparent, easy to understand, timely, and accessible, and by including the relevant stakeholders.
1. Stakeholders have access to timely staffing information, including information about staffing strategies and decisions.	All competitions are advertised in both languages internally. Competitions open to people outside the Office are advertised on our website ("Careers"). The multi-year recruitment and retention strategy is available on the Intranet.
Control: In a staffing context, control means the ongoing monitoring of information, the assessment of actual performance in relation to planned results, the correction of deviations, and the reporting of results.
1. Quality and timely human resource information is available to support staffing strategies and decisions.	A semi-annual HR report is produced detailing the number of hires, departures, and turnover rate. It also highlights reasons for departures and anticipated retirement rates. Monthly reports are produced identifying open positions and positions staffed during the previous month. Regular meetings are held between staffing officers and managers to review progress on open positions.
2. The delegated organization monitors staffing on a continuing basis.	The Director, Human Resources monitors all exceptions to staffing rules. There have been no acting appointments exceeding 12 months. Waivers are obtained from the Auditor General for all hirings at the director/principal level that do not meet language requirements. Standards for documentation of staffing files are followed. Apart from our accounting trainees, there have been only four term appointments for periods of over 12 months.

List of completed performance audits

The following is a list of the performance audits planned for in our 2006–07 Report on Plans and Priorities and the performance audits that were actually completed.

Performance audit	Included in 2006–07 Plan	Reported in 2006–07
Canada Revenue Agency's collection of tax debts	Spring 2006	√
Military recruiting and retention in National Defence	Spring 2006	√
NATO flying training in Canada	Spring 2006	√
The Canadian firearms program	Spring 2006	√
A five-year status report on Aboriginal issues	Spring 2006	√
Management of voted grants and contributions	Spring 2006	√
Acquisition of leased office space	Spring 2006	√
Management of government financial information	Spring 2006	√
National Defence's modernizing of Canada's North American Aerospace Defence (NORAD) system	Fall 2006	Tabled in 2007–08
The Royal Canadian Mounted Police pension and insurance funds	Fall 2006	√
The proper conduct of public business in public safety agencies	Fall 2006	√
Management of financial resources in Health Canada (reported as Allocating Funds to Regulatory Programs—Health Canada)	Fall 2006	√
Large information systems under development	Fall 2006	√
The government's expenditure management systems	Fall 2006	√
Monitoring of the government's progress in human resource modernization	Fall 2006	Cancelled
The British Columbia treaty process	Fall 2006	√
Implementation of the government's innovation strategy	Fall 2006	Cancelled
Use of acquisition and travel cards	Fall 2006	Tabled in 2007–08
Old age security	Fall 2006	√
Government-wide management of personal service contracts	Fall 2006	Delayed to 2008–09
The integrated relocation program	Fall 2006	√
A study of international practices of government evaluation	Fall 2006	Cancelled
Climate change—impacts and adaptation	Fall 2006	√
Federal management of climate change, including the contribution of Sustainable Development Technology Canada	Fall 2006	√
Reduction of greenhouse gases emitted during energy production and consumption	Fall 2006	√
Progress on commitments in departmental sustainable development strategies	Fall 2006	√
Environmental petitions	Fall 2006	√
Fleet management and provision of marine navigational services at Fisheries and Oceans Canada	Spring 2007	√
The Royal Canadian Mounted Police forensic laboratories	Spring 2007	*
The Canadian Space Agency and the National Research Council of Canada regulation of medical devices (This audit was reported as Management of Leading Edge Research—National Research Council of Canada)	Spring 2007	√
The federal government's protection of cultural heritage	Spring 2007	√
Passport services	Spring 2007	√
Management of the quality of health statistics	Spring 2007	Cancelled
The integrity of the social insurance number	Spring 2007	√
International tax administration	Spring 2007	√
Management of government: financial information	Spring 2007	Cancelled
√ = tabled as planned *This audit was tabled three months after the planned tabling date to allow the audit team to pursue an issue that came to our attention late in the audit.

Territorial performance audit (not included in 2006–07 Report on Plans and Priorities)	Reported in 2006–07
Report to the Legislative Assemblies of the Northwest Territories and Nunavut on the Worker's Compensation Board of the Northwest Territories and Nunavut (originally due to be tabled in spring 2006)	8 June 2006
Government of Yukon—Capital Project Planning and Delivery Property Management (originally due to be tabled early 2007)	2 Feb. 2007

Other audits tabled, but not listed as planned in the 2006–07 Report on Plans and Priorities

Performance audit (unplanned and not included in 2006–07 Report on Plans and Priorities)	Reported in 2006–07
Expenditure Management System in Departments	28 Nov. 2006
Award and Management of a Health Benefits Contract—Public Works and Government Services Canada and Health Canada	28 Nov. 2006
Protection of Public Assets—Office of the Correctional Investigator	28 Nov. 2006
Role of Federally Appointed Board Members—Sustainable Development Technologies	28 Nov. 2006
Advertising and Public Opinion Research	13 Feb. 2007

List of completed special examinations

Special examination	Completed on time	Less than 3 months late	3 months late or more
Canadian Museum of Nature		√
Canadian Air Transport Security Authority	√
Canadian Tourism Commission			√
Canada Lands Company Limited			√

Methodological endnotes

1. The Office conducts post-audit surveys for major products, including financial audits, performance audits, and special examinations. Surveys for financial audits have been conducted biennially since 2002–03, surveys for performance audits have been conducted after each tabling since 2003–04, and a survey for each special examination has been conducted since October 2002. The table below summarizes the data quality parameters for the data reported in the current performance report. The confidence intervals (CI) are calculated for a 90 percent confidence level, and assume a result of 50 percent.

Audit type	Population type	Period	Population size	Responses	Response rate	CI at 90%
Financial	Audit committee chairs	2002–03	52	30	58%	9.8%
Financial	Chief financial officers and presidents	2002–03	83	63	76%	5.1%
Financial	Audit committee chairs	2004–05	48	29	60%	9.6%
Financial	Chief financial officers and presidents	2004–05	80	59	74%	5.5%
Performance	Deputy ministers and commissioners	2003–04	103	80	78%	4.3%
Performance	Deputy ministers and commissioners	2004–05	76	54	71%	6.0%
Performance	Deputy ministers and commissioners	2005–06	57	49	86%	4.4%
Performance	Deputy ministers and commissioners	2006–07	90	75	83%	3.9%
Special Examination	Board chairs	Fourth cycle	30	21	62%	9.9%
Special Examination	Chief executive officers	Fourth cycle	34	20	69%	11.9%

2. In the spring of 2007, we surveyed parliamentarians, who were members of four key parliamentary committees at the time our reports were reviewed at those committees. The four committees were the Standing Committee on Public Accounts, the Standing Committee on Environment and Sustainable Development, the Senate Standing Committee on National Finance, and the Senate Standing Committee on Energy, the Environment and Natural Resources.

The survey was conducted in written form, with responses collected and analyzed by an independent consultant to ensure the anonymity of the respondents. In total, 47 questionnaires were sent out. A total of 24 responses were received, for a response rate of 51 percent. This provides a margin of error of +/- 14.3 percentage points, 19 times out of 20.

3. When we count the number of hearings and briefings in which we participate, we consider our appearances before all committees of the House of Commons and the Senate. The other indicator (performance audits reviewed by parliamentary committees) is a ratio of 2006–07 audits that resulted in a hearing to the total number of audits published in the same fiscal year. When calculating the number of performance audits, we considered the 3 performance audits.

To calculate the percentage, we consider all parliamentary hearings held on one audit as one hearing. A hearing can occur in a subsequent fiscal year, but it would contribute to the Office's performance for the year that the report was published. This is the case for 2005–06, raising the percentage of audits reviewed from 36 percent, as previously reported, to 48 percent.

4. This performance indicator is based on the success of departments and agencies in fully implementing our recommendations after a reasonable interval. We use a four-year interval, between the year the report is tabled and the year we ask departments to report on implementation, because our data shows that departments and agencies often need this time to complete action on our recommendations.

To determine the status of outstanding recommendations, the Office receives reports from the entity on progress made in implementing recommendations. The Office does not verify the reliability of information provided by entities for this purpose. The Office did not previously monitor recommendations from government-wide audits and from audits by the Commissioner of the Environment and Sustainable Development (CESD); therefore, they are not included in the statistics in Exhibit 13, for 2003–04, 2004–05, and 2005–06.

During 2005–06, we began monitoring recommendations directed to specific entities from government-wide audits and those from CESD reports. Recommendations not directed to a specific entity continue to be excluded from this monitoring exercise. The Office began reporting on this set of monitored recommendations in last year's performance report. This was to avoid potential confusion with figures compiled using a different methodology. A target for future years was established for the 2006–07 and 2007–08 Report on Plans and Priorities.

5. An independent consulting firm conducted a survey of Office employees. A total of 594 employees were invited to participate, and 534 employees completed the survey. The overall response rate was 90 percent. The overall margin of error for the survey was one percent, 18 times out of 20.

6. These percentages do not include employees who have been excluded from the language requirement because they will retire within three years or have disabilities that do not enable them to learn an additional language. For principals and assistant auditors general, 11 of 73 were excluded; for directors, 4 of 104 were excluded.

Website references

Many items that may be of interest and complement the reporting of our performance are available at the following websites.

Office of the Auditor General of Canada
Office of the Auditor General	www.oag-bvg.gc.ca
Sheila Fraser, Auditor General of Canada	www.oag-bvg.gc.ca/domino/other.nsf/html/00agbio_e.html
Commissioner of the Environment and Sustainable Development	www.oag-bvg.gc.ca/domino/cesd_cedd.nsf/html/menu8_e.html
Auditor General Act	laws.justice.gc.ca/en/A-17/index.html
Financial Administration Act	laws.justice.gc.ca/en/F-11/index.html
Reports to Parliament	www.oag-bvg.gc.ca/domino/other.nsf/html/99repm_e.html
Observations of the Auditor General on the Financial Statements of the Government of Canada	www.oag-bvg.gc.ca/domino/other.nsf/html/99pac_e.html
Publications	www.oag-bvg.gc.ca/domino/other.nsf/html/99menu5e.html
Practice review and internal audit reports	www.oag-bvg.gc.ca/domino/other.nsf/html/02int_e.html
External review reports	www.oag-bvg.gc.ca/domino/other.nsf/html/00qms_e.html
Sustainable Development Strategy, 2003–2006	www.oag-bvg.gc.ca/domino/other.nsf/html/200402sdse.html
Parliament
Parliament	www.parl.gc.ca
Standing Committee on Public Accounts	http://cmte.parl.gc.ca/cmte/committeehome.aspx?lang=1&parlses=381&jnt=0&selid=e17_&com=8989
Standing Committee on Environment and Sustainable Development	http://cmte.parl.gc.ca/cmte/committeehome.aspx?selectedelementid=e17_&lang=e&committeeid=10471&joint=0
Standing Committee on National Finance	http://www.parl.gc.ca/common/Committee_SenHome.asp?Language=E&Parl=39&Ses=1&comm_id=13
Government of Canada
Treasury Board of Canada Secretariat	www.tbs-sct.gc.ca
Results for Canadians: A Management Framework for the Government of Canada	www.tbs-sct.gc.ca/report/res_can/siglist_f.asp
Results-Based Management and Accountability Framework of the Modern Comptrollership Initiative	www.tbs-sct.gc.ca/cmo_mfc/resources2/RMAF/RMAF02_e.asp
TBS Management Accountability Framework	www.tbs-sct.gc.ca/maf-crg/index_e.asp
Financial Information Strategy	www.tbs-sct.gc.ca/fin/sigs/FIS-SIF/FIS-SIF_e.asp
Bank of Canada	www.bank-banque-canada.ca
Territorial Governments
Government of the Yukon	www.gov.yk.ca
Government of Nunavut	www.gov.nu.ca
Government of the Northwest Territories	www.gov.nt.ca
Professional organizations
Canadian Council of Legislative Auditors	www.ccola.ca/index_english.cfm
Canadian Evaluation Society	www.evaluationcanada.ca
Canadian Institute of Chartered Accountants	www.cica.ca/index.cfm/ci_id/17150/la_id/1.htm
CCAF-FCVI Inc.	www.ccaf-fcvi.com/entrance.html
Environmental Working Group (INTOSAI)	www.environmental-auditing.org
Financial Management Institute of Canada	www.fmi.ca
Institute of Internal Auditors	www.theiia.org
International Federation of Accountants	www.ifac.org
International Organization of Supreme Audit Institutions (INTOSAI)	www.intosai.org
United Nations Panel of External Auditors	www.unsystem.org/auditors/external.htm