Annual report of the Auditor General Alberta. Office of the Auditor General.

208 Pages·1993·9.9 MB·English

by  Alberta. Office of the Auditor General

Alberta Legislature
Annual Report
of the
Auditor General
1992 - 9 3
Digitized by the Internet Archive
in 2014
http://archive.org/details/annrepalbaud1993

ISSN 0228-314X
Alberta Lcv^skit urc
Ot lice o! t h e Auditor C G eneral
Mr. R. Hierath. MLA
Chairman
Standing Committee on
Legislative Offices
I have the honour to transmit herewith my Report to the Legislative Assembly lor the fiscal
year ended March 31. 1993, to be laid before the Legislative Assembly in accordance with
the requirements of section 19(4) of the Auditor General Act.
I ( A
Auditor General
Edmonton, Alberta
December 31. 1993
TABLE OF CONTENTS
SECTION PAGE
1 INTRODUCTORY COMMENTS 1
2 AUDIT COVERAGE, OBSERVATIONS AND RECOMMENDATIONS
EXECUTIVE COUNCIL 9
TREASURY 23
ADVANCED EDUCATION AND CAREER DEVELOPMENT 45
AGRICULTURE, FOOD AND RURAL DEVELOPMENT 63
COMMUNITY DEVELOPMENT 75
ECONOMIC DEVELOPMENT AND TOURISM 77
EDUCATION 85
ENERGY 89
ENVIRONMENTAL PROTECTION 97
FAMILY AND SOCIAL SERVICES 103
FEDERAL AND INTERGOVERNMENTAL AFFAIRS 121
HEALTH 123
JUSTICE 145
LABOUR 151
MUNICIPAL AFFAIRS 153
PUBLIC WORKS, SUPPLIES AND SERVICES 157
TRANSPORTATION AND UTILITIES 159
LEGISLATIVE ASSEMBLY 165
IRRIGATION DISTRICTS 167
SECTION 12(b) AUDITS 169
Auditor General of Alberta
1 VB1 I oi CONTENTS
SECTION PAGI
3 REPORTING PROCESS. RESERVATIONS AND PUB1 K ACCOl Ms
R IMPORTING PROCESS 171
RESERVATIONS IN AUDIT REPORTS ON FINANCIAJ
STATEMENTS 172
SECTION 18 REPORT 173
PUBLIC ACCOUNTS 174
4 THE AUDIT OFFICE
LEGISLATIVE MANDATE 177
MISSION 180
ACCOUNTING PRINCIPLES AND AUDITING STANDARDS I S I
ORGANIZATION OF THE AUDIT OFFICE 183
AUDITOR GENERAL ACT 187
INDEX OF ENTITIES 195
Auditor General of Alberta
Auditor General of Alberta
Section 1
IntrodOCtOfJ ( minm ills
Report For The Year Ended March 31, 1993
This report is issued pursuant lo section l°< of the Auditor (ieneral
Act. It is my eighth annual report to the Legislative Assembh and
the fifteenth such report issued b\ the Auditor (ieneral of Alberta.
The report is tor the year ended March 31. IW.V Some of the
observations and recommendations it contains resulted from audit
work carried out since that date.
Auditor (ieneral Act The Auditor General Act requires that 1 p erform Financial audits to
provide assurance that financial statements are faith presented. In
addition to adding credibility to financial statements. I also make
recommendations to improve accounting and reporting practices, and
rectify non-compliance with legislation.
The Auditor General Act also requires me to identih systems that
could be improved. W hen the resources of my Office are directed
to systems auditing every effort is made to identih areas where
improvements can be made. This report contains recommendations
which I believe will help the government improve the systems that
relate to revenue, expenditure, assets, liabilities, and the
measurement and reporting of effectiveness.
Scope of work The scope and extent of audit work completed for 1992-93 is
described in section 2 of this report.
For the specific financial and management control systems
examined, section 2 of this report contains the significant
improvements that the systems audits indicated were necessary.
For every financial statement audited, I have issued an Auditor's
Report. Section 3 contains information on those auditor" s reports
that contained reservations.
For those transactions and activities examined in financial statement
audits, apart from the instances of non-compliance described in this
report I am satisfied that the\ complied, in all significant respects,
with relevant legislative authorities. The instances of non-
compliance reported herein should not be used as a basis for
drawing conclusions as to compliance or non-compliance with
respect to matters not examined.
Auditor General ot Albert j I
Section 1 Introductory Comments
Improving The Financial Administration Of The Province
Introduction My 1991-92 annual report was released on February 17, 1993. In it,
I stated that the government could significantly improve its
accountability by publicly defining what it proposed to do, and then
explaining what was achieved through the use of public funds. I
said that benefits would begin as soon as the process of change was
started. Even though some improvements will take several years to
plan, design, and implement fully, the key, surely, was to start. The
Wright brothers were wise to attempt to fly at Kitty Hawk. They
would never have got off the ground if they had first insisted on
designing an intercontinental passenger jet plane.
I think the analogy is relevant because measuring and reporting on
the effectiveness of Provincial programs is in its infancy. In order
to progress, everyone from a program manager to a member of the
public needs to know the cost of each service provided. Knowing
the cost of outputs is essential when budgeting services or assessing
performance. The government's financial systems need to be
improved so that costs and outputs are always linked.
I am pleased to report that the process of change has definitely
started. In my opinion, the government's action in response to my
main recommendations has been commendable.
Program effectiveness In my 1991-92 annual report, I reported that government
departments and Provincial agencies are generally not assessing and
reporting on their effectiveness. Consequently, there was very little
public information on what was intended and achieved as a result of
spending public resources.
I recommended that the government establish a system for
promoting effectiveness measurement. On May 10, 1993, the
government formally accepted this recommendation. The
government stated that "Ministers will require most provincial
agencies and Crown-controlled organizations to submit three-year
In the May 1993 budget document, the government asked the
Aupdliatnosr. " General to provide assistance in establishing benchmarks to
help all departments and agencies compare their performance against
other equivalent organizations. The government also asked the
Auditor General to conduct sector-based audits covering such areas
as health, education, social services and agriculture.
The Provincial Treasurer indicated, in his Budget Update Speech on
September 8, 1993, that departments were working on business plans
2 Auditor General of Alberta