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Section II—Reporting on Results

Our priorities for the 2010–11 fiscal year

The Office of the Auditor General identified three strategic priorities for the 2010–11 fiscal year:

• Integrating changes to professional standards
• Updating and strengthening the design and implementation of the Office Quality Management System (QMS)
• Improving resource allocation and project management

During the year, we began addressing the first two priorities together, under our Renewal of Audit Methodology (RAM) project.

Successfully implementing our Renewal of Audit Methodology project

Our RAM project responds, in part, to the significant changes in international and Canadian auditing standards and to the introduction of International Financial Reporting Standards (IFRS) in 2011. The project also responds to

• internal practice review findings,
• feedback from practitioners, and
• recommendations from the international peer review of the Office, which was completed in 2010, about the design and implementation of our QMS.

The objective of the project is to provide our staff with the tools, training, and change management support they need to conduct high-quality audits. This project will

• renew our audit methodology,
• establish a sustainable process for ensuring that our methodology remains current, and
• update the design and documentation of our Quality Management System.

As of 31 March 2011, we were on track to meet our deadline for implementing this project, except in one area related to our financial audit practice. In that practice, we have made the necessary changes to ensure that our methodology is fully compliant with the new Canadian Auditing Standards, and we have provided the necessary training. However, our plans to put in place additional guidance and provide related training will be implemented by 31 December 2012, one year later than originally planned. This delay is due to the fact that there was more material than originally anticipated, which meant more time was needed to adapt it to our Office practices. In all other areas and product lines, we are on track to meet our 31 December 2011 target date.

Improving resource allocation and project management

We have been working to improve our ability to complete our audits on budget, our main measure of efficiency in this area since 2008. We raised our target for this measure to 80 percent, beginning in the 2010–11 fiscal year.

In the 2010–11 fiscal year, we met our on-budget targets for individual performance audits, but we did not meet them for financial audits or special examinations. We will be taking additional steps to improve accountability for the costs of individual audits in our financial audit practice and will be taking further action to encourage the territories to improve the timeliness and quality of their financial reporting.

Our Audit Resource Planning and Career Management Team continues to facilitate the allocation of audit staff to projects. We monitor the perceptions of staff regarding their assignments. In our most recent employee survey (in 2010), 77 percent of respondents told us that their job makes good use of their skills and abilities.

Other challenges and initiatives

Funding

In light of the recent fiscal climate, we did not seek additional funding in the 2009–10 and 2010–11 fiscal years. Rather, we sought opportunities to reduce our expenses and redeploy auditors within the Office. We worked within our existing funding levels and completed the year with a small lapse of funds.

Sustaining our capacity

We have made the orientation and integration of new staff a key activity of our Office, as a way of promoting retention and engagement. Based on the results of detailed research and analysis carried out in the 2009–10 fiscal year, we identified best practices that could be applied more consistently, and we recommended areas for improvement. The Human Resources Committee monitored implementation of the recommendations in the 2010–11 fiscal year.

Official Languages

The Office demonstrates its commitment to maintaining a bilingual culture through a variety of initiatives:

• We maintain four full-time instructors who offered 9,000 hours of training in the 2010–11 fiscal year, mostly on a one-on-one basis.
• As a part of our three-year Official Languages Plan, we renewed our training program in order to increase the number of student hours. The Office has increased the number of group classes and has added elements such as “maintenance classes,” diagnostics, and structured web-based training for all employees at all language levels.
• We offer regular cultural awareness activities such as lunch time French-language films.
• We have an Official Languages sub-committee with representatives from all parts of the Office.

Performance highlights by product line

Indicators of impact

We measure our impact and performance for our three main product lines:

• Financial audits of Crown corporations, territorial governments, and other organizations
• Performance audits and studies of departments and agencies
• Special examinations of Crown corporations

The following sections summarize the results for each of these products during the 2010–11 fiscal year.

Financial audits of Crown corporations, territorial governments, and other organizations

Financial audits answer the following questions:

• Are the annual financial statements of Crown corporations, the federal and territorial governments, and other organizations presented fairly?
• Are these entities complying with their legislative authorities?

Our work adds value for key users of our reports and the organizations we audit. To understand the value of our financial audits, we survey the chairs of audit committees, and other bodies responsible for the oversight of financial reporting, and the senior managers in the organizations we audit. The surveys are available on our website.

Our target is for 90 percent of responses from audit committee chairs to indicate that they find that our audits add value. In the 2010–11 fiscal year, an average of 81 percent of responses were “agree” or “strongly agree” for the five statements used to measure value added.

Exhibit 2 shows the trend in responses from audit committee chairs. We conducted surveys in the 2002–03 and 2004–05 fiscal years. There were no surveys conducted in 2006 or 2007. We began annual surveys in the 2008–09 fiscal year. This year, we note the decline in the result and we will monitor the trend in the future.

Exhibit 2—Financial audits add value for audit committee chairs

[text version]

For the percentage of responses from senior managers of Crown corporations and large departments who “agree” or “strongly agree” that our financial audits add value, our target is 80 percent. On average, 89 percent of responses from senior managers surveyed in the 2010–11 fiscal year indicate that they agreed or strongly agreed that financial audits add value (Exhibit 3).

Exhibit 3—Financial audits add value for senior managers

[text version]

Key users of our reports and the organizations we audit respond to our findings. For our financial audits, we monitor the corrective action taken by the organizations we audit in response to modifications contained in our audit reports. Our indicator is the percentage of modifications that are addressed from one report to the next. While we do not control whether organizations respond to these, our target is that they address them all. In the 2010–11 fiscal year, 8 out of 31 (26 percent) of the modifications we issued in the 2009–10 fiscal year were addressed.

Exhibit 4 summarizes the modifications in the audit reports we issued in the 2009–10 and 2010–11 fiscal years.

Exhibit 4—Modifications issued in the audit reports for the 2009–10 and 2010–11 fiscal years¹

Fiscal year	Number of audit reports that contained modifications	Total number of modifications	Auditing Reservations	Accounting Reservations (GAAP departures)	Compliance Reservations	Number of “other matters”*	Modifications issued in prior year addressed in current year (%)
2009–10	12	31	8	1	22	0	28%2
2010–11	21	33	10	1	19	3	26%
1 In our financial audit reports, there are four types of modifications that can be presented: reservations related to financial accounting issues, reservations regarding auditing issues, reservations related to compliance-with-authorities issues, and “other matters.” Financial accounting reservations report departures of a significant monetary value from the requirements of the applicable financial reporting framework. Auditing reservations report situations where the auditor is unable to obtain sufficient appropriate audit evidence, for example, when the entity did not maintain proper books and records. Compliance with authorities reservations report instances of entities not complying with relevant authorities’ legislation, for example, failing to prepare a Corporate Plan or financial statements within a specified time frame. * Our reports may also include ”other matters,” for example, comments concerning an organization’s financial sustainability or ability to fulfil its mandate. Since the 2008–09 fiscal year, we have included “other matters” in the calculation of this performance indicator. 2 This number has been restated due to a change in calculation. Beginning in the 2010–11 fiscal year, only those reports that were issued in the current fiscal year have been included in the calculation. Previously, reports where the work was completed, but the report not yet issued, were also included.

In the 2010–11 fiscal year, two of the auditing reservations were denials of opinion and eight were scope limitations. The denials of opinion were for the 2007–08 and 2008–09 financial statements of the Reserve Force Pension Plan. The accounting reservation was for a departure from Generally Accepted Accounting Principles (GAAP) in the Qulliq Energy Corporation. Of the nineteen reservations relating to issues of non-compliance with authorities requirements, eleven involved late tabling of annual reports or financial statements, two were for late or non-filing of corporate plans and six were for various other non-compliance issues. These modifications arose in the following jurisdictions:

• The Northwest Territories (2)
• Nunavut (10)
• Yukon (2)
• Federal entities (5)

Performance audits and studies of departments and agencies

Performance audits and studies answer the following questions:

• Are federal government programs well managed?
• Have they been run with due regard to economy, efficiency, and their environmental effects?
• Does the government have the means to measure their effectiveness where it is reasonable and appropriate to do so?

In the 2010–11 fiscal year, we completed 26 performance audits, a list of which is in included in Section III—Supplementary Information.

Key users of our reports are engaged in the audit process. While many parliamentary committees draw on our work, the Office’s main relationship is with the Standing Committee on Public Accounts. The Commissioner of the Environment and Sustainable Development usually appears before the House of Commons Standing Committee on Environment and Sustainable Development.

We monitor the level of involvement of parliamentary committees by tracking the number of audits reviewed by committees. We also assess the committees’ level of interest in our reported findings by looking at how frequently they ask us to appear before them to further elaborate on our findings. Our appearances before committees assist parliamentarians in fulfilling their oversight role and provide us with the opportunity to increase awareness and understanding of the issues raised in our reports. Parliamentary committees continue to be well engaged in the audit process. Parliamentary committees reviewed 62 percent of our performance audit reports. This is a slight decrease from last year but is consistent with the four-year average since the 2007–08 fiscal year. We participated in 46 committee hearings and briefings over the 128 parliamentary sitting days. This is higher than last year and is consistent with the average in previous years.

Our work adds value for the key users of our reports. We periodically survey the members of four key parliamentary committees that review our reports:

• The House of Commons Standing Committee on Public Accounts
• The House of Commons Standing Committee on Environment and Sustainable Development
• The Senate Standing Committee on National Finance
• The Senate Standing Committee on Energy, the Environment and Natural Resources.

In the 2010–11 fiscal year, the Office did not survey parliamentary committees, because the federal election was called during the time we would normally conduct these surveys.

This year, for the first time, we also surveyed members of the territorial legislatures that review our reports. While the feedback we received was consistently positive, the number of responses does not allow us to draw conclusions about whether the results are representative of all members surveyed.

Our work adds value for the organizations we audit. Since the 2003–04 fiscal year, after tabling a performance audit report in Parliament, we have surveyed senior management of the organizations that we audited. Our target is to have 70 percent of the responses from senior management indicate that they “agree” or “strongly agree” that our performance audits add value for them. For audits completed in the 2010–11 fiscal year, an average of 74 percent of responses from senior managers indicated that they “agree” or “strongly agree” that our audits add value. This result exceeded our target and exceeded the five-year average (Exhibit 5).

Exhibit 5—Performance audits add value for senior management

[text version]

Key users of our reports and the organizations we audit respond to our findings. Our indicator of impact for performance audits is the percentage of recommendations that departments substantially or fully implement within four years of the recommendations being issued. Our target for this indicator is 75 percent.

For the past three years, we have reported on this indicator using the self-assessments that departments and agencies provide to us. We are currently assessing whether to continue to use this data for future performance reports. In the meantime, we are using the findings in our status reports.

In our status reports, we follow up on previous audit topics of particular significance, not on a representative sample of past recommendations. We tabled our most recent status report in June 2011, and we found satisfactory progress in 62 percent of the 42 recommendations we examined. These recommendations related to six topics. We concluded that for these six topics, overall progress was satisfactory in two. The lower result for overall progress reflects the relative importance of individual recommendations in addressing the broader issues. In 2009, our status report found satisfactory progress in 56 percent of the 41 recommendations issued and for five of the seven topics. While government acts on many of our recommendations, others require further effort by departments. We will be discussing with departmental chief audit executives opportunities to improve the implementation and monitoring of our performance audit recommendations.

Special examinations of Crown corporations

A special examination of a Crown corporation answers the following question:

Do the systems and practices used by Crown corporations provide reasonable assurance that assets are safeguarded and controlled, that resources are managed economically and efficiently, and that operations are carried out effectively?

In the 2010–11 fiscal year, we reported on the special examinations of the four corporations listed in Section III—Supplementary Information.

In 2008, the Office began publishing a chapter presenting the main points of all special examinations, and we will continue to present this information in our annual Report to Parliament. Chapter 7 of our 2011 Spring Report, Special Examinations of Crown Corporations—2010, presents the main points of the special examination reports that were issued to the boards of directors of the audited Crown corporations in 2010 and that have since been made public. Two of the reports identified significant deficiencies. One of them, on the Freshwater Fish Marketing Corporation, identified more than one significant deficiency, related to governance, strategic planning, and risk management as well as certain operational areas, including human resource management and capital asset management.

Legislation states that we should bring the information in our reports to the attention of the appropriate ministers and Parliament, when we deem it necessary. For example, we do this when we find certain types of significant deficiencies, such as those related to mandate or governance issues that only the federal government can address or to problems that have previously been reported but continue to occur. We also report issues to the appropriate minister involving specific risks that, in our opinion, the minister needs to be aware of. We chose to bring the report on the Freshwater Fish Marketing Corporation to the attention of the appropriate minister.

Our work adds value for the key users of our reports and the organizations we audit. To understand the value of our special examinations to the users of these reports and the organizations we audit, we survey board chairs and chief executive officers. The number of survey respondents is small, corresponding with the number of special examinations we complete each year. For the four special examinations we carried out in the 2010–11 fiscal year, we received responses from one board chair and four representatives of senior management. Due to the small number of respondents, detailed results are not presented. However, we do follow up if issues are raised or where opportunities arise to improve our performance. Over the past five years, the feedback we have received has been positive and consistent with our targets.

Key users of our reports and the organizations we audit respond to our findings. We monitor the corrective action taken in response to significant deficiencies reported in our special examinations. Our indicator is the percentage of significant deficiencies that are addressed by the organizations we audit between examinations. Our target is 100 percent.

One of the four special examinations that we completed in the 2010–11 fiscal year had a significant deficiency reported in the previous special examination. This significant deficiency was addressed by the Crown corporation.

Sustainable development activities and environmental petitions

Sustainable development activities. Under the Kyoto Protocol Implementation Act, the Commissioner of the Environment and Sustainable Development is required to provide Parliament with a report every two years that includes an analysis of Canada’s progress in implementing its climate change plans and in meeting its obligations under Article 3, paragraph 1, of the Kyoto Protocol.

Chapter 2 of the 2009 Spring Report of the Commissioner of the Environment and Sustainable Development was our first report under the Kyoto Protocol Implementation Act. Our second report has been completed and was scheduled to be tabled in the Commissioner’s Spring 2011 Report. However, due the May 2011 federal election, the tabling of this report was postponed until fall 2011.

In June 2010, the Commissioner provided the Minister of the Environment with comments on the government’s federal sustainable development strategy, as is required under the Federal Sustainable Development Act (2008). The Commissioner commented on various aspects of the draft strategy, including whether the targets and implementation strategies can be assessed. He concluded that the draft strategy relies on existing mechanisms and government processes to promote more transparency and accountability. He also found that the strategy’s lack of specific measurable targets and performance indicators will make it difficult for Environment Canada to provide Parliament with a comprehensive and objective assessment of the government’s progress as it is required to do under the Act.

Environmental petitions. The 1995 amendments to the Auditor General Act require that we monitor and report annually to Parliament on environmental petitions received from Canadians. The Commissioner reports on the quantity, nature, and status of petitions received and on the timeliness of ministers’ responses. The annual report on environmental petitions was included in the Commissioner’s 2010 Fall Report, which was tabled in Parliament in December 2010.

In the 2010–11 fiscal year, the Office received 21 environmental petitions. Ministers delivered 96 percent of responses to petitions on environmental matters within the 120-day time limit, compared with 91 percent in the 2009–10 fiscal year.

The Office’s audit work continues to be informed by issues raised in environmental petitions. This includes specific petition topics as well as common themes such as the adequacy and objectivity of the science used in policy-making and standard-setting.

Organizational performance

We measure and manage our performance as an organization in a number of ways. The following section describes our key performance objectives, measures, and targets and how we performed in the 2010–11 fiscal year.

Delivering work on time and on budget

On time. We completed the majority of financial audits of federal Crown corporations (96 percent) on time, but we did not meet our target of 100 percent. The audits of the First Nations Statistical Institute and the National Arts Centre were not completed on time. Financial audits of other federal organizations with a statutory deadline also had a 96 percent completion rate. The audit of the Canadian Polar Commission was reported one month late.

Completing audits of federal organizations without a statutory deadline on time can be more challenging as these entities are not always ready to be audited before our deadline—150 days after the end of the reporting period. Nonetheless, in the 2010–11 fiscal year, all of these audits were completed on time, exceeding our target of 80 percent.

Territorial financial audits present some unique challenges, including entity management not being adequately prepared for our audits. In the 2010–11 fiscal year, we completed 31 percent of these audits on time. This is lower than in the 2009–10 (64 percent) and 2008–09 (48 percent) fiscal years and falls well below our target of 60 percent. We have begun discussions at senior levels in the territories to raise our concerns and will be taking further action to encourage the territories to improve the timeliness of their financial reporting.

The Office determines when individual performance audit reports will be tabled in the House of Commons, so there are no statutory deadlines for these reports. However, we communicate to the House of Commons Standing Committee on Public Accounts our planned tabling schedule for performance audits for the coming fiscal year. In the 2010–11 fiscal year, 92 percent of the Office’s performance audits were on time, which exceeded our target of 90 percent.

In our 2010–11 Report on Plans and Priorities, 24 performance audits were listed as being planned for tabling during the 2010–11 fiscal year, and 22 performance audits were tabled as planned. One of two exceptions, “Assessing Cumulative Environmental Impacts,” was postponed. The second report, “Education in the Northwest Territories-Department of Education, Culture, and Employment,” was scheduled to be tabled in April 2010; but, because the Legislative Assembly in the Northwest Territories was not in session at that time, it was delivered in May 2010, still within the 2010–11 fiscal year.

Three additional performance audits were tabled in the 2010–11 fiscal year, which had not been included in our 2010–11 Report on Plans and Priorities. The first audit was of the Public Sector Integrity Commissioner and was tabled in December 2010. The others were territorial audits carried out in the Northwest Territories, and both were tabled in early March 2011.

A list of all of the audits tabled in the 2010–11 fiscal year is included in Section III—Supplementary Information.

All four of the special examinations that we included in our 2010–11 Reports on Plans and Priorities (RPP) were delivered as planned, on or before the statutory deadline. A list of special examinations completed in the 2010–11 fiscal year is included in Section III—Supplementary Information.

Exhibit 6 shows the trends in our performance for producing our reports on time.

Exhibit 6—Percentage of audits completed on time

[text version]

On budget. For all of our audits, being “on budget” means completing the audit in no more than 115 percent of the budgeted hours for the audit. This recognizes that factors outside the control of the audit team, such as client readiness and the number and complexity of issues identified, can affect time spent on an audit. It also reflects the balance we want to establish between assuring we do quality work and meeting our budgets.

In the 2010–11 fiscal year, the Office increased its on-budget targets to 80 percent. Our results for the year are mixed: We met our target for performance audits, but the results for financial audits and special examinations were below the targets we had set (Exhibit 7).

Exhibit 7—Percentage of audits completed on budget

[text version]

In our financial audit practice, 32 percent of individual federal audits (74 percent in the Northern territories) exceeded their budgets by more than 15 percent. While for the majority of our audits, our on-budget performance has been improving over the past four years, we are disappointed with this result. In particular, we were unable to sustain the significant gains we made last year, when we delivered more than 85 percent of our financial audits on-budget. Nearly half of the budget overruns were in our smaller audits, which had original budgets of less than 600 hours. For our financial audit practice as a whole, we were 9.8 percent over budget. This year saw the implementation of new auditing and accounting standards in Canada which contributed to our result.

Our results for completing financial audits of territorial organizations on budget decreased to 26 percent in the 2010–11 fiscal year—well below our performance target of 80 percent. These organizations continue to face unique challenges related to the availability of financial management and accounting expertise. In our discussions with territorial officials, we will also be emphasizing the need to improve the quality of their financial reporting processes.

While we have made changes to strengthen internal accountability for managing group level budgets, we need to take additional steps to improve accountability for the cost of individual audits.

Two of the four completed special examinations exceeded their budgets. In one case, we found a number of significant deficiencies and issued a highly critical report. Although we were aware that there could be issues, we had not budgeted sufficiently for the extent of work that was required to prepare and finalize the report in support of that opinion. In the second case, we marginally exceeded the budget, because we allocated staff to other priority work.

Ensuring our audit reports are reliable

Our audit work is guided by a rigorous methodology and a quality management system (QMS). Annual internal reviews and periodic external peer reviews provide the Auditor General with opinions on whether our audits are conducted in accordance with professional standards and on whether our QMS is appropriately designed and effectively implemented. Annual internal reviews also conclude on whether the opinions and conclusions contained in our audit reports are appropriate. We report publicly on the results of these reviews in order to provide assurance to members of Parliament and the public that they can rely on the opinions and conclusions contained in our audit reports. Our QMS is based on professional standards and Office policies. It provides auditors with steps that they must follow during their audits and ensures that these audits are conducted according to professional standards and Office policies. External reviews conducted by the provincial institutes of chartered accountants conclude on whether we are following professional standards and meeting their requirements for training chartered accounting students.

Internal practice reviews

Each year, we conduct practice reviews of our financial audits, special examinations, and performance audits by assessing their compliance with our QMS and with professional standards.

In the 2010–11 fiscal year, we completed 19 practice reviews:

• Eleven of financial audits
• Six of performance audits
• Two of special examinations

In all but one case, we found that the opinions and conclusions expressed in our reports were appropriate and supported by proper evidence. For the one exception, the audit team was required to add documentation to the audit file and provide their rationale for the audit conclusion reached. We also found that four audits were in full compliance with our QMS and that eleven had only one or two areas that needed improvement. In the four remaining files, we identified a number of areas where our QMS could have been implemented more rigorously.

These results demonstrate an improvement over last year. The Office is continuing to implement the RAM project to strengthen the design and implementation of our QMS.

We also followed up on previous practice review and peer review observations and recommendations. We found that the Office has made good progress in addressing recommendations from previous practice review reports as well as those from the international peer review that was conducted in the 2009–10 fiscal year. Based on the work performed, we concluded that 70 percent of the recommendations have been implemented. The outstanding recommendations will be reviewed again in subsequent follow-ups.

External reviews

Through peer reviews of the Office, conducted by other national legislative audit offices, we periodically seek independent assurance that our QMS is suitably designed and is operating effectively to produce independent, objective, and supportable information that Parliament can rely on to examine the government’s performance and hold it to account.

A peer review was conducted in the 2009–10 fiscal year that encompassed all three of our main audit practices, as well as key services that directly support audit operations. The results were presented in our performance report for last year. The Office has committed to requesting an external peer review at least once during each Auditor General’s ten-year mandate.

A second type of external review is conducted by the provincial institutes of chartered accountants, who review our compliance with professional standards and our training of chartered accounting students. Two reviews were conducted in the 2010–11 fiscal year, which concluded that the Office was following professional standards and was meeting the training requirements.

Internal audits

We also audit our management and administrative practices, to assure the Auditor General that the Office is complying with government policies and its own. These internal audits also provide managers with assessments and recommendations, and when they are completed, the results are published on our website. The list of internal audits and reviews completed in the 2010–11 fiscal year is in Section III—Supplementary Information.

In the 2010–11 fiscal year, we finalized an internal audit of hospitality spending within the Office. The findings indicated that the Office is in compliance with its hospitality policy. There is an adequate control framework in place to ensure that hospitality expenditures are in accordance with those requirements outlined within the policy.

Providing a respectful workplace

Our values for creating a respectful workplace are trust, integrity, and leading by example. These values define how we conduct ourselves and carry out our work. In addition, the Office strongly supports the values of competency, representativeness, non-partisanship, fairness, employment equity, transparency, flexibility, affordability, and efficiency.

The Office includes these values in all of its human resource activities. In addition, since 2005, 50 percent of manager performance pay has been tied to people management skills.

The Office has set four objectives for providing a respectful workplace, each with its own indicators and targets:

• Provide a workplace environment where employees are satisfied and engaged
• Promote a bilingual workplace
• Assemble a workforce that represents the Canadian workforce
• Ensure that qualified, capable employees are available to carry out our mandate

Satisfied and engaged employees

The Office conducted its most recent employee satisfaction survey in May 2010. While results continue to be very positive overall, the Office has implemented a number of initiatives in response to staff recommendations. We recognize that maintaining employee engagement can be particularly challenging during periods of economic restraint.

Our new Respectful Workplace Policy introduces the concept of, and provides examples of, disrespectful behaviour in the workplace. The policy provides clear descriptions of individual responsibilities and accountabilities, to help to ensure that discrimination and harassment are not present in the Office. The policy also outlines informal and formal complaint resolution processes for addressing interpersonal issues. The launch of the new policy in March 2011 was a significant advancement in helping to ensure that the workplace is free from discrimination and harassment. We expect to provide both employees and management the opportunity to further discuss how the Office can continue to maintain a respectful and considerate workplace environment.

Our Human Resource team provides information sessions throughout the year on a wide range of people management policies and protocols to ensure consistency in the communication and understanding of best practices within the Office.

A bilingual workforce

Bilingual capacity in the management group has remained consistent with 84 percent of our senior management group (assistant auditors general and principals) meeting the language requirements of their positions in 2011, compared with 85 percent in 2010.

In 2011, 73 percent of directors met the language requirements for their positions, compared with 77 percent (restated from 84 percent due to a change in calculation method) in 2010. This decline can be attributed to reductions in our language training as well as an atypical attrition in bilingual directors over the past year.

A representative workforce

We are proud to announce that we have achieved 100-percent representation in all four Employment Equity groups: Aboriginal people, visible minorities, people with disabilities, and women. Our Employment Equity Committee organizes numerous events throughout the year to build awareness of diversity issues and mark special occasions for our various communities.

Retention rate

The Office’s retention rate has remained stable at 89 percent, slightly below our 90 percent target. The Office continues to focus on minimizing turnover in specific target groups, especially in the accounting field. Currently, our central audit resource planning and career management team facilitates the allocation of staff to projects and supports audit community members in their professional development through assignment rotation and mentoring programs. The Office has begun to implement changes to our orientation and integration programs to ensure that employees can more effectively move between teams. We are also reviewing our exit interview process in order to more effectively capture information that can then be incorporated into our human resource planning efforts.

The Office is investing in the renewal of our training and development programs. We are doing so both in response to changes in auditing standards and as part of our commitment to continuous learning and organizational excellence. Our strategic alliance with a major accounting firm has allowed us to share knowledge and resources, and we are using many of their insights and lessons learned to develop a curriculum that is tailored to our audit community.

Financial performance

Our 2010–11 budget was $102.6 million. This amount consisted of the $85.1 million provided in Main Estimates, $13.7 million for services provided by other government organizations without charge, and $3.8 million provided in Supplementary Estimates and other adjustments.

In the 2010–11 fiscal year, parliamentary appropriations provided totalled $88.3 million (Exhibit 8). The $88.3 million comprised the $85.1 million in Main Estimates and a further $3.8 million in Supplementary Estimates and adjustments and transfers, less $0.6 million related to cost containment measures.

Exhibit 8—Voted and statutory appropriations

		2010–11 ($ millions)
Vote # or statutory item (S)	Vote or statutory wording	Main Estimates	Appropriations provided	Appropriations used
15	Program expenditures	75.1	78.8	76.6
(S)	Contributions to employee benefit plans	10.0	10.1	10.1
	Cost containment measures		(0.6)
	Total	85.1	88.3	86.7

The Office used $86.7 million of the parliamentary appropriations provided, which resulted in a lapse of $1.6 million in the 2010–11 fiscal year ($4.4 million in the 2009–10 fiscal year). As part of the year-end adjustments, the Office will be reimbursed an additional $2.7 million for parental and severance payments, which will increase the amount that can be carried forward to the 2011–12 fiscal year. Like government departments and agencies, the Office may carry forward lapsed amounts and adjustments of up to five percent of its operating budget (based on Main Estimates program expenditures) into the next fiscal year, subject to parliamentary approval.

Our international contribution

Our international strategy guides our international activities and positions the Office to meet future opportunities and challenges. The strategy has four goals:

• Contribute to the development and adoption of appropriate and effective professional standards
• Share knowledge among audit offices
• Build capabilities and professional capacities of audit offices
• Promote better managed and accountable international institutions

Contributing to the development and adoption of appropriate and effective professional standards

The Office plays an active role in shaping professional auditing standards, particularly as they relate to the public sector. Office employees participate in various task forces of the International Auditing and Assurance Standards Board to help revise and develop International Standards on Auditing.

The Office is also a member of the Professional Standards Committee’s Subcommittee on Financial Audit Guidelines of the International Organization of Supreme Audit Institutions (INTOSAI). This subcommittee supports and contributes to the development of high-quality guidelines that are globally accepted for auditing financial statements in the public sector.

Sharing knowledge among audit offices

Office employees participate in various INTOSAI committees, including the

• Subcommittee on Performance Audit,
• Working Group on Information Technology Audit,
• Working Group on Environmental Auditing,
• Working Group on Value and Benefits of Supreme Audit Institutions,
• Subcommittee to Promote Increased Capacity Building Activities Among INTOSAI Members,
• Working Group on Public Debt, and
• Task Force on the Global Financial Crisis.

The Office, represented by the Auditor General, assumed the chair of the Professional Standards Committee’s Subcommittee on Accounting and Reporting of INTOSAI in November 2007.

Building capabilities and professional capacities of audit offices

The Office is helping to build capacity in audit institutions in French sub-Saharan Africa, through partnerships with the Canadian International Development Agency (CIDA) and two executing agencies. We also provide training to auditors from other national audit offices through the International Legislative Audit Assistance Program for Improved Governance and Accountability of the Canadian Comprehensive Auditing Foundation. This CIDA-funded program, which was established in 1980, brings auditors from other national audit offices to Canada for 10 months of training in performance auditing, accountability, and governance.

Promoting better managed and accountable international institutions

Working with Foreign Affairs and International Trade Canada, the Office successfully bid to become the external auditor of the International Labour Organization for a four-year term, effective in 2008. The Office is funded through our appropriation for this work. Fees charged to recover the direct costs for this audit are non-respendable and are deposited to the Consolidated Revenue Fund. In past years, the Office was also the external auditor of a number of United Nations organizations.

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