FINDINGS AND RECOMMENDATIONS
Matters from prior audits: Estimation processes—-repeated
In 2014 we recommended that the department improve its financial reporting processes to ensure estimates are reasonable and reliably supported. We repeated this recommendation in 2015.
We found in 2014 that the department did not have processes in place to assess the unique and complex nature of certain estimates. The department did not have processes to ensure that management had gathered all information relevant to making a reasonable estimate to account for the cost of the 2013 Alberta flood. We found during our 2015 follow-up that the department had improved gathering new information on flood costs. However, the department did not formally analyze if new information it received throughout the fiscal year changed estimation methods and assumptions applied in the original cost estimate. The department also did not document, using up-to-date information, its analysis and conclusions throughout the year on required contingencies and costs eligible for federal disaster recovery program assistance.
We again repeat our recommendation as department management cannot support with documented evidence that it analyzed and concluded on the reasonableness of estimates throughout the fiscal year.