Annual report of the Auditor General Alberta. Office of the Auditor General. PDF
Preview Annual report of the Auditor General Alberta. Office of the Auditor General.
Annual Report of the Auditor General of Alberta 2000-2001 ive Digitized by the Internel : A rch in 2014 http://archive.org/details/annrepalbaud2001 AUDITOR GENERAL Alberta Ms. Janis Tarchuk, MLA Chair Standing Committee on Legislative Offices I h ave the honour to transmit herewith my Report to the Legislative Assembly for the fiscal year ended March 31, 2001, to be laid before the Legislative Assembly in accordance with the requirements of section 19(4) of the Auditor General Act. This is my seventh annual report to the Legislative Assembly and the twenty-third such report issued by the Auditor General of Alberta. Peter Valentine, FCA Auditor General Edmonton, Alberta September 26, 2001 Contents Introduction 1 Report for the year ended March 3 1 , 2 00 1 2 Improving the financial administration of the Province 5 Ministry audits and recommendations 10 Public sector accounting standards 12 Disaster recovery 1 3 Acknowledgements Ministry Audits and Recommendations 15 2000-2001 recommendations 25 Analysis of 2000-2001 numbered recommendations 27 Cross-Government 47 Agriculture, Food and Rural Development 55 Children's Services 73 Community Development 79 Economic Development 8 1 Environment 93 Executive Council 97 Gaming 1 03 Government Services 109 Health and Wellness 137 Human Resources and Employment 145 Infrastructure 1 67 Innovation and Science 1 77 International and Intergovernmental Relations 1 8 1 Justice and Attorney General 187 Learning 223 Legislative Assembly 225 Municipal Affairs 233 Resource Development 243 Treasury 263 Section 12(b) Audits Past Recommendations 265 Status of past numbered recommendations 28 1 Government's response to 1999-2000 numbered recommendations 2000-2001 Annual Report i Auditor General of Alberta Who We Are and What We Do 293 Legislative auditing 299 Reservations and other information included in auditor's reports 301 Report under section 1 8 of the Auditor General Act 303 Performance report for the year ended March 31, 2001 325 Committees and Agents 327 Staff 329 Auditor General Act Auditor General of Alberta 2000-2001 Annual Report Introduction Report for the year ended March 31, 2001 Purpose of Auditor General annual reports The annual report of the Auditor General explains the scope and results of the work of the Office of the Auditor General. Our work assists the The Legislative Assembly funds our work to assist legislators, in government to improve its particular the Public Accounts Committee, to hold the government performance accountable for managing public resources. By identifying opportunities and proposing solutions for better systems and business practices, we assist government and public agencies to improve their performance. Scope and results of work There is a section for each In Ministry Audits and Recommendations we include a section for ministry in "Ministry Audits each ministry of the Alberta government. In these sections, we and Recommendations " describe the scope and results of our 2000-2001 audit work. We make our recommendations for improving the financial and management control systems we examined. Page 299 lists auditor 's I h ave issued an auditor's report for every financial statement we reports with reservations of audited. As required by the Auditor General Act, we have listed opinion (page 299) the reports that contain reservations or disclose transactions that do not have legislative authority. Compliance with the law I a m satisfied that the transactions and activities examined in financial statement audits complied, in all significant respects, with relevant legislative authorities, apart from the instances of non- compliance described at page 300. We've examined only some transactions and activities, so I c aution readers that it w ould be inappropriate to conclude that all transactions comply with the law. 2000-2001 Annual Report 1 Auditor General of Alberta Introduction Improving the financial administration of the Province Accountability "Accountability " d efined By accountability we mean the obligation to answer for the execution of one's assigned responsibilities. Accountability means reporting results compared to agreed-upon expectations. Accountable people and organizations explain any differences between their planned and actual results: how much was spent, what was delivered, and what was achieved. Through accountability, Albertans decide whether the government is doing a good job. They can examine what government provides, as well as what it spends, and assess both the costs and benefits of government action. All those who use public resources should: 1 . Set measurable goals, and responsibilities 2. Plan how to achieve the goals 3. Do the work and monitor progress 4. Report on results 5. Evaluate results and provide feedback to refine or adjust plans Ministries meet their responsibilities by using systems to plan, manage, control and measure their performance. Culture change is not There are significant and visible signs of improved accountability complete processes in Alberta stemming from the Government Accountability Act; these include, three-year business plans and ministry annual reports. Less visible and more important is the change to corporate culture that has been brought on by the new thinking that flows from improved accountability. Changing the culture takes time and requires unwavering leadership. Continued effort is needed since the culture change is not complete. I c ommend the government for its success to date, but also encourage it t o keep up the pressure. Recommendations How we determine When determining whether a matter is significant enough to bring significance to the attention of Public Accounts Committee members, ministers, other MLAs, the public, and management, I c onsider the nature and materiality of the matter relative to the individual entity and to the government as a whole. Auditor General of Alberta 2 2000-2001 Annual Report Introduction 24 numbered This report contains 88 recommendations. Of these, the recommendations have been 50 recommendations that I c onsider particularly important, which repeated need a formal government response, are numbered. Of the 50 numbered recommendations, 26 are new. The other 24 are designed to maintain focus on previous recommendations that have not yet been fully implemented. We 've used the As in previous years, we have analyzed our recommendations using accountability framework to the accountability framework to stress that it is fundamental to analyze our improving performance. The analysis shows the government and its recommendations managers where they have further to go in planning what needs to be done, doing the work, and reporting on results. Analysis of numbered recommendations Setting measurable goals, Of our numbered recommendations, 18 (last year 17) are designed and responsibilities, and to assist managers by having them focus on business planning and planning how to achieve the performance measurement. This effort includes developing goals comprehensive, timely business plans. Also, it e stablishes the performance measures that will be used in reporting the managers' results and in evaluating the performance of entities to which they have delegated work or authority. Doing the work and We have made 25 numbered recommendations (last year 19) to do monitoring progress with day-to-day business practice, and the conversion of plans into operating reality. They range from dealing with real risks to seizing opportunities to deliver services more efficiently. Reporting on results It is my job as Auditor General not only to add credibility to performance reporting, including financial reporting, but also to recommend improvements in that reporting. Therefore, 12 recommendations (last year 14) suggest ways to improve reporting on results. Evaluating results and We have not yet tried to assess the extent and quality of the providing feedback to refine evaluation of results since we have been gaining experience about or adjust plans reporting on results. Now that the government reports more on results, people should plan how to use that information. Status of past numbered recommendations The benefit of audit work is The status of past numbered recommendations is reported at in the implementation of page 265. Since the benefit of audit work is not in the recommendations recommendations, but in their effective implementation, we always follow up until they have been implemented. We now have 17 recommendations made before 1998 that have not been implemented. We have repeated 1 1 o f these as numbered recommendations and asked for an updated government response. 2000-2001 Annual Report 3 Auditor General of Alberta Introduction Deputy ministers are The basic responsibility for taking action on accepted audit responsible for implementing recommendations rests with the deputy ministers to whom the accepted recommendations recommendations were made. Resolving some issues is difficult and I a cknowledge the demand on ministry resources. I h ave seen, though, when senior people invest time, effort, and personal commitment, the chance of favourable action on a recommendation is greatly increased. This year, for example, the government and my Office found an acceptable way to allocate all significant costs to the ministries responsible for delivering programs. Reservations in auditor's reports on financial statements Some departures from GAAP Whenever I f orm the opinion that a set of financial statements have been outstanding too prepared by management does not follow Canadian generally long accepted accounting principles (GAAP), I i ssue a reservation of opinion. The number of my auditor's reports with reservations is gradually decreasing, which means the quality of financial reporting is generally improving. However, I a m concerned that there remains a nucleus of departures from GAAP that has been outstanding for too long. Implementing Recommendation No. 45 to the Ministry of Finance again Recommendation No. 45 is recommends changes to the corporate government accounting critical policies. I e ncourage the Controller of the Province, together with the senior financial officers of the ministries, to work with my staff to resolve the outstanding issues on pages 245 to 249. Government restructuring Government restructuring announced on March 15, 2001, resulted in changed responsibilities by creating several new ministries. Accountability preserved for Since the 2000-2001 fiscal year was almost over before this 2000-2001 government announcement, ministry financial statements and annual reports for reporting the year ended March 31, 2001 have been prepared as if the restructuring took place on April 1, 2 001, to provide proper accountability for the 2000-2001 fiscal year against the original business plans. This 2000-2001 annual This annual report follows the logic of reporting on the government report mirrors government ministries as they were on March 15, 2001, before the restructuring. reporting However, we have made our recommendations to the ministries that have to implement them and report on their progress to the Public Accounts Committee. Auditor General of Alberta 4 2000-2001 Annual Report
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