ARCHIVED - RPP 2006-2007
Office of the Auditor General of Canada

• Previous Page
• Table of Contents
• Next Page

This page has been archived.

Section II—Analysis of program activity by strategic outcome

Our strategic outcome and results chain

The long-term strategic outcome we seek to achieve is to contribute to better-managed government programs and better accountability to Parliament through our legislative auditing. We use a results chain to describe our strategic outcome and to show how we expect to make a difference. The results chain links what we do (conduct audits and other assessments) and what we deliver (audits, studies, opinions, information, and advice) to the results we expect to achieve in the short, medium, and long terms. It also describes the various stakeholders and their contributions to improving government operations (Exhibit 5).

Exhibit 5 — Results chain

Our performance measurement and reporting system is aligned with our results chain. We began strengthening our performance measurement and reporting during the past year in two key ways.

First, we have established external indicators that monitor the usefulness of our work:

• percentage of audited organizations that find our audits good or very good at adding value to their organization
• percentage of government central agencies and/or audited organizations that find our audits assisted in improving the quality of financial reporting
• percentage of audited organizations that take corrective action in response to qualifications and other matters contained in our audit opinions
• percentage of performance audit recommendations implemented by audited organizations after four years

In 2006–07, we will set targets and report results against these indicators for each of our four largest sub-activities. In setting performance targets, we use our past performance as a base. We seek to be realistic while challenging ourselves to achieve tangible improvements.

Second, for each of these sub-activities, we have also identified three internal performance indicators to measure the efficiency and effectiveness of our operations:

• percentage of audits produced on time
• percentage of audits produced within established budget
• conclusions of internal and external practice reviews on whether our Quality Management Framework reflects recognized standards of professional practice and is operating effectively

In 2006–07, we will begin to improve our performance measurement and reporting system to allow us to better monitor, assess, and report our performance against these indicators in the near future. The results of this work will be evident during the 2006–09 planning period.

Plans and performance targets—Legislative auditing

Our client is Parliament. We need to ensure that Parliament understands our work and considers issues in our reports, and that we understand the needs and interests of parliamentarians.

Our parliamentary strategy has four objectives:

• Communicate our messages clearly to Parliament.
• Promote the role and work of the Office.
• Ensure that our work remains relevant and useful to parliamentarians.
• Maintain the Office's credibility with Parliament.

We measure our overall success by surveying parliamentarians and monitoring parliamentary responses to our reports. In 2001–02, we surveyed parliamentarians, including those on the Standing Committee on Public Accounts and the Standing Committee on Environment and Sustainable Development, using a comprehensive methodology to take into account all aspects of our relationship with Parliament. We looked at their perception of our Office, our credibility, our performance, and issues they would like the Auditor General to address in the coming years. We found that 55 percent of parliamentarians surveyed considered our recommendations and findings to have a positive impact on their committee work.

We planned to survey parliamentarians in 2005; however, the 2004 federal election brought many new members to the House of Commons. We considered that parliamentarians needed time to familiarize themselves with our mandate and our reports. We will examine the timing of our next survey following the 2006 federal election. In light of this significant gap between surveys and the paramount importance of ensuring that we meet Parliament's needs, we are exploring other options to provide us with more timely feedback from parliamentarians.

We also monitor how our work helps Parliament hold government to account—one of the intermediate outcomes in our results chain. In our performance report each year, we present examples of Parliament considering issues of accountability, performance, compliance with authorities, and environment and sustainable development in its legislative and oversight work.

Our four major sub-activities are financial audits, the audit of the summary financial statements of the Government of Canada (public accounts), special examinations, and performance audits and studies. Our plans and performance targets for these sub-activities follow.

Financial audits and the public accounts. The Office has statutory responsibilities for the audit of the summary financial statements of the Government of Canada and the financial statements of the territorial governments; the financial audits of Crown corporations, other federal corporations, agencies, and organizations; and other financial audit and related services engagements. As a result of additions to our mandate, we will for the first time audit the Public Sector Pension Investment Board and the Canadian Race Relations Foundation during the 2006–09 planning period.

Our financial audits provide assurance that financial statements are presented fairly in accordance with Canadian generally accepted accounting principles or other relevant standards and also, in the case of the summary financial statements of the Government of Canada, in accordance with the accounting policies of the Government of Canada.

Where required or appropriate, we provide assurance that these organizations comply with the key legislative authorities that govern their activities. If issues come to our attention during our financial audit work, we recommend to management and the boards of directors improvements in areas such as financial reporting and internal controls.

We report our observations on the summary financial statements of the Government of Canada in the Public Accounts of Canada, Volume 1 and publish reports on the use of financial information and other significant issues in the Auditor General's reports to Parliament. Financial audits of Crown corporations are published annually in the statutory reports of these Crown corporations. Financial audits of territorial governments are published annually in the public accounts of the territorial governments of Nunavut, the Yukon, and the Northwest Territories. This year we will conduct more than 130 financial audit and related services engagements.

Financial audit indicators and targets
Expected results		Indicators	Type of audit activity	Actual	Target 2006–07
Support for our role and work is maintained	Our work is useful to federal organizations	Percentage of audited organizations that find our audits good or very good at adding value to their organization1	Financial audit	73%	75%
			Public Accounts		60%
	Audits provide senior management with confidence in financial information	Percentage of government central agencies and/or audited organizations that find our audits assisted in improving the quality of financial reporting2	Financial audit		67%
			Public Accounts		67%
Our work is relevant to federal and territorial organizations, departments, agencies, and Crown corporations	Organizations we audit implement our recommendations and use best practices	Percentage of audited organizations that take corrective action in response to qualifications and other matters contained in our audit opinions2	Financial audit		100%
			Public Accounts		100%
1 We conduct surveys for our annual financial audits every two years. The actual result presented is for 2003; results for 2005 are not available at the time of preparing this report. For the public accounts, we have not reported performance against this indicator in the past. 2 We have not reported our performance against these indicators in the past for our annual financial audits or for the public accounts.

Special examinations. A special examination is a form of performance audit that assesses the management systems and practices of a Crown corporation and provides an opinion on whether there is reasonable assurance that there are no significant deficiencies. Most Crown corporations require a special examination of their organization once every five years. Our special examination reports are addressed to the boards of directors of the corporations. The 2004 federal Budget proposed that Crown corporations post the reports on their Web sites and table them in Parliament.

The Office performs about 40 examinations over each five-year period (cycle). We are currently conducting the fourth cycle of special examinations of Crown corporations. In 2006–07, we will report the special examinations of the Canadian Museum of Nature and the Canadian Air Transport Security Authority.

Special examination indicators and targets
Expected results		Indicators	Target 2006–07
Support for our role and work is maintained	Our work is useful to federal organizations	Percentage of audited organizations that find our audits good or very good at adding value to their organization1	75%
Our work is relevant to federal and territorial organizations, departments, agencies, and Crown corporations	Organizations we audit implement our recommendations and use best practices	Percentage of audited organizations where qualifications or significant deficiencies contained in our audit opinions in the third cycle no longer exist in the fourth cycle	n/a2
1 We have not reported our performance for this indicator in the past. 2 There was no significant deficiency in our last report on the Canadian Museum of Nature; this will be our first special examination of the Canadian Air Transport Security Authority.

In addition to the above-noted performance indicators, we set a target to reduce the time required to conduct the current cycle of special examinations by 15 to 25 percent over the previous cycle. We will report our progress at the end of the current cycle of examinations in 2007–08.

Performance audits. Performance audits examine whether government programs are being managed with due regard for economy, efficiency, and environmental impact, and with measures in place to determine their effectiveness. These audits are published up to four times a year in the reports of the Auditor General of Canada and the Commissioner of the Environment and Sustainable Development. In 2006–07, we plan to report the findings of 37 performance audits.

In Spring 2006, we will present a status report on the progress made in implementing our recommendations in the following audits:

• Canada Revenue Agency's collection of tax debts
• military recruiting and retention in National Defence
• NATO flying training in Canada
• the Canadian Firearms Program
• a five-year status report on Aboriginal issues
• management of voted grants and contributions
• acquisition of leased office space
• management of government: financial information

In our Fall 2006 Report, our performance audits will examine

• National Defence's modernizing of Canada's North American Aerospace Defence (NORAD) systems
• the Royal Canadian Mounted Police pension and insurance funds
• the proper conduct of public business in public safety agencies
• management of financial resources in Health Canada
• large information systems under development
• the government's expenditure management systems
• monitoring of the government's progress in human resource modernization
• the British Columbia treaty process
• implementation of the government's innovation strategy
• the use of acquisition cards in travel and hospitality
• old age security
• government-wide management of personal service contracts
• the integrated relocation program
• a study of international practices of government evaluation

The Commissioner's Report, scheduled for Fall 2006, will report on the theme of climate change, including

• impacts and adaptation
• federal management of climate change, including the contribution of the Canada Foundation for Sustainable Development Technology
• reduction of greenhouse gases emitted during energy production and consumption

It will also report on

• progress on commitments in departmental Sustainable Development Strategies
• environmental petitions

The Status Report of the Auditor General, scheduled for Spring 2007, will report on actions the government has taken in response to our audit findings and recommendations. We will examine

• fleet management and provision of marine navigational services at Fisheries and Oceans Canada
• the Royal Canadian Mounted Police forensics laboratories
• the Canadian Space Agency and the National Research Council of Canada
• regulation of medical devices
• the federal government's protection of cultural heritage
• passport services
• management of the quality of health statistics
• the integrity of the social insurance number
• international tax administration
• management of government: financial information

Performance audit indicators and targets
Expected results		Indicators	Actual 20041	Target 2006–07
Support for our role and work is maintained	Our work is useful to federal organizations	Percentage of audited organizations that find our audits good or very good at adding value to their organization	54%	60%
Our work is relevant to federal and territorial organizations, departments, agencies, and Crown corporations	Organizations we audit implement our recommendations and use best practices	Percentage of recommendations implemented by audited organizations after four years	44%	50%
1 Results for 2005 are not available at the time of preparing this report.

For our performance audits, there are two additional indicators that we track.

Expected results		Indicators	Actual 2004–051	Target 2006–07
Parliament and federal organizations are engaged in the audit process	Parliamentary committees engage in hearings or briefings on issues we report	Percentage of performance audits reviewed by parliamentary committees	52%	60%
Parliament holds government to account	Parliament endorses our recommendations through its committees	The Standing Committee on Public Accounts explicitly endorsed our performance audit recommendations in its reports	72%	75%
1 Results for 2005–06 are not available at the time of preparing this report.

In the past, we reported our performance against a further indicator: the percentage of commitments departments and agencies reported meeting in their sustainable development strategies. The quality of their reporting has led us to question the reliability of the percentage reported. Last year we began to develop a new approach to monitoring the commitments and will report on progress in the future.

Plans and performance targets—Supporting initiatives

The Office organizes its other initiatives, which support its program activity, under three categories: providing a respectful workplace, operating more effectively, and working collaboratively.

Providing a respectful workplace

We provide a respectful workplace in which employees in our diverse workforce can strive for excellence and realize their full career potential. Our values of a respectful workplace, trust and integrity, and leading by example define how we conduct our work and ourselves (Exhibit 3). In addition, the Office strongly supports and integrates in all of its human resource activities the staffing values of competency, representativeness, non-partisanship, fairness, equity, transparency, flexibility, affordability, and efficiency.

Our first objective is to provide a work environment where employees are satisfied and engaged. The Office surveys employees every two years to evaluate its performance and identify opportunities for improvement. An action plan is developed to address the survey results. The current action plan is focussed on achieving more effective communication of audit methodology, people management, and internal meetings. We are also addressing internal accountability through improved internal management reporting, new staff scheduling tools, and increased delegation. Our target is to maintain our high level of employee satisfaction.

The Office currently has three additional objectives for providing a respectful workplace, with their own indicators and targets. These objectives will be met through our training and recruitment activities.

Objectives	Indicators	Actual 2004–05	Targets 2006–07
Provide a workplace environment where employees are satisfied and engaged	Percentage of employees who believe that the Office is either an above-average place to work or one of the best places to work	70%1	70%
Promote a bilingual workplace	Percentage of employees in bilingual regions who will meet our language requirements by March 2007	53%	100% of our assistant auditors general and principals
		55%	75% of our directors
Assemble a workforce that represents the Canadian population	Representation as a percentage of workforce availability for the four designated groups:
	women	105%	100% for each designated group
	people with disabilities	108%
	Aboriginal peoples	74%
	members of visible minorities	68%
Ensure that qualified, capable employees are available to carry out our mandate	Number of entry level positions available annually	18	20
	Percentage turnover of audit professionals	8%	10%
1 The survey result is from 2004; we survey employees every two years.

Operating more effectively

Benchmarking our audit services. As part of our efforts to improve the way we work, we undertook a benchmarking study in 2005 to compare the level of resources we use to deliver our Audit Services (as well as service delivery expectations) with other organizations of a similar size and nature. The study concluded that, apart from two areas (Knowledge Management and Communications), the Office delivers its Audit Services at a comparable cost to corporate services in other public sector organizations in Canada and elsewhere.

Our above-average investment in Knowledge Management is part of a longer-term strategy to improve how we take advantage of electronic and printed resources to give our staff access to the knowledge and tools they need to do their work. Our additional investment in Communications reflects the nature of the Office's business, the wider array of services offered, and the requirement to report in a bilingual environment, unlike some of the other organizations in the benchmarking study.

We undertook this study to identify opportunities to improve the way we operate. As a result, we will examine possibilities for improved efficiencies in areas such as Finance, Human Resources, and Professional Practices. Action plans to investigate possible productivity gains in these areas are being developed.

Team structure and workload. The Office also conducted a study in 2005 of audit team structure and workload distribution to determine if our audit teams are organized in the most effective manner and if our workload is reasonably distributed across the senior managers. As a result of our findings, new team structures and general management expectations for our senior managers have been developed and communicated to all staff.

Comptrollership capacity assessment. As part of our commitment to the government's comptrollership initiative, we conducted a comptrollership capacity assessment in 2003–04. The Office developed a three-year action plan to address opportunities for improvement identified in the assessment, which is available on our Web site. The action plan includes initiatives to improve practices in seven areas, including risk management, information management, integrated financial management systems, and management information and reporting. We are mostly on target in completing the action plan.

Working collaboratively

We work collaboratively with legislative auditors, federal and territorial governments, and professional organizations.

Federal and territorial governments. We work collaboratively with federal and territorial governments on a range of issues and initiatives to improve accountability and public sector management. In the Yukon, the Northwest Territories, and Nunavut, we work with government officials and territorial corporations' managers on issues of mutual concern, improvements to systems and processes, and improvements to public accountability.

Provincial audit offices. The Canadian Council of Legislative Auditors (CCOLA) comprises the 10 provincial legislative auditors and the federal Auditor General. We participate in a number of its committees and working groups, including the Strategic Issues Group, the Performance Reporting and Auditing Group, and the Health Study Group. CCOLA's objectives are to

• share information and experience on matters of mutual concern
• develop audit methodology and professional practices
• improve the quality and performance of legislative auditing in Canada, and
• collaborate with provincial legislative audit offices on issues that are cross jurisdictional.

Canadian professional organizations. The Office staff is involved in many professional organizations in Canada. The Canadian Institute of Chartered Accountants (CICA) researches current business issues and sets accounting and assurance standards for business, not-for-profit organizations, and government. The Office is represented on the Public Sector Accounting Board of CICA (which sets accounting standards for the Canadian public sector) by the Deputy Auditor General and on the Auditing and Assurance Standards Board, where one of our assistant auditors general is vice-chair.

International professional organizations. International accounting and auditing standards are influencing Canada's public and private sector standards. Setting of accounting and auditing standards is shifting from the domestic to the international arena. The Office plays an active role in shaping these standards, particularly as they relate to the public sector. Key international organizations include the International Organization of Supreme Audit Institutions (INTOSAI) and the International Federation of Accountants.

As Chair and Secretariat of INTOSAI's Working Group on Environmental Auditing (WGEA), the Office supports WGEA members by organizing meetings and conferences, and maintaining the WGEA Web site. Fifty-five national audit offices are members and many more are now doing environmental audits based on the guidance developed by the working group. Over the next two years, the WGEA will continue to develop environmental auditing tools for supreme audit institutions (SAI), support training and information exchange, and encourage collaborative audit work on environmental issues.

The Auditor General will continue to chair the Sub-committee on Independence of SAIs, which reports to the Professional Standards Committee of INTOSAI. The sub-committee will draft a charter and guidelines on SAI independence, present a report on the results of case studies that test adherence to core principles on independence, and develop an awareness and communications program.

The Fellowship Program. The CCAF-FCVI Inc.'s International Audit Office Assistance Program (Fellowship Program) was established in 1980 to help strengthen performance auditing in national audit offices. Funded by the Canadian International Development Agency, the program brings auditors from national audit offices to Canada for nine months of training in performance auditing. Next year the Office will train five fellows from developing countries.

• Previous Page
• Table of Contents
• Next Page