Report of the Auditor General - July 2013
JULY 9, 2013—In his Report of the Auditor General of Alberta—July 2013 released today, Auditor General Merwan Saher includes the office’s findings in new and follow-up audits. There are 15 recommendations to government in this report. Of particular note are the following new audits:
Aboriginal Relations—Systems to Assess First Nations Development Fund Grants
The First Nations Development Fund is a lottery grant program available exclusively to First Nations in Alberta. It is supported by a portion of revenues from government-owned slot machines in Alberta First Nation casinos. In February 2012, the Enoch Cree Nation applied for a grant of $317 million over seven years to refinance and operate the River Cree Resort and Casino. We examined whether the department’s systems to assess the eligibility of the Enoch Cree Nation grant application were followed and were consistent with the FNDF grant program and grant agreement. We also included other First Nations’ projects during the audit and concluded that improvements could be made to the department’s systems.
We found that the department has a process to make informed decisions on funding uses; however, it did not always follow the process. We also found that the department needs to formalize and communicate its interpretation of eligible uses of grant program funds. Further, the department needs to consistently monitor and correct non-compliance with grant agreements.
Consistent and appropriate eligibility decisions by the department on these grant applications will give Albertans, particularly First Nations members, confidence that the grant program supports social, economic and community projects that enable First Nation communities to fully participate in Alberta’s economy.
Enterprise and Advanced Education—Collaborative Initiatives Among Alberta’s Post-secondary Institutions
The government wants Alberta’s 26 post-secondary institutions to collaborate—a goal referred to as Campus Alberta. The goal is to provide accessible and affordable learning opportunities for students, to avoid duplication and to reduce overall costs.
We examined three non-academic collaborative initiatives to assess if the institutions had well-designed systems to plan, govern, implement and sustain them. We found institutions do not clearly understand how the Minister of Enterprise and Advanced Education’s wants to achieve the Campus Alberta goals.
Senior management at institutions lack a clear understanding of the department’s strategic direction for Campus Alberta and of how specific initiatives fit. This confusion is because the department and institutions do not have a clear structure for their collaborative relationships, and do not have a collective strategic or business plan for collaboration. There are no performance measures or targets for financial and non-financial reporting to determine if collaboration is working.
Without well-designed systems in place the department and institutions will not achieve the potential within Campus Alberta.
Enterprise and Advanced Education—Medicine Hat College International Education Division
Since 2001, Medicine Hat College has sought to bring an international focus to its campus. The International Education Division offers courses at campuses in other countries and seeks to draw international students to its campus in Medicine Hat.
We examined the college’s systems to deliver, evaluate and report on the division’s cost effectiveness. We found that the college does not have effective systems to deliver and manage the risks of international programming. The division operated independently and largely outside the college’s control systems. Board oversight of international education has failed.
Municipal Affairs—Systems to Deliver Affordable Housing Grants
In 2007, the Alberta Affordable Housing Task Force recommended the government increase capital resources for affordable housing supply. In September 2011, the Department of Municipal Affairs reported it had met its objective of approving funding for the development of 11,000 affordable housing units for low-income Albertans. In total there was an investment of $2.2 billion—$1.1 billion from the department plus another $1.1 billion from partnerships with municipalities, non-profit groups and the private sector.
We examined the department’s systems to plan, award, monitor, report on and evaluate the two affordable housing grant programs it operates. We found that the department could have better aligned grant eligibility criteria with the programs’ objectives; did not document its awarding process well enough; and has not sufficiently monitored grant recipients to ensure they comply with their obligations. We also found the department does not have an evaluation strategy for its affordable housing grant programs. The questions that should be answered are: what impact did the programs have on overall provincial demand for affordable housing; was the supply targeted at the right segments of the population and in the right locations; and was value for money achieved?
Treasury Board and Finance—The Budget for Financial Reporting Purposes
Because the fiscal approach and scope of activities used in Budget 2013 is different from the accounting standards that will be used to prepare the province’s 2013-2014 financial statements, a comparison will be difficult to explain and understand as complicated adjustments and modifications will be required.
The Department of Treasury Board and Finance has informed us that it intends to construct a budget for financial reporting purposes that will be included in the province’s 2013-2014 financial statements.