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Report of the Auditor General of Alberta

 

AUDITOR GENERAL’S MESSAGE

The Office of the Auditor General serves the Legislative Assembly and the people of Alberta. Our mandate is to examine and report publicly on government’s management of, and accountability practices for, the public resources entrusted to it. Under the Auditor General Act, the Auditor General is the auditor of all government ministries, departments, funds and provincial agencies. Our audit work focuses on areas that improve governance and ethical behaviour, safety and welfare of Albertans, and security and use of the province’s resources.

In this report, we report on our audits of the Office of the Public Trustee; controls over expenses related to purchasing card transactions, expense claims and other travel expenses at Alberta Health Services; and the reporting of selected payments to MLAs. We also include our latest report card on post-secondary institutions and a commentary on the province’s fiscal updates.

There are 28 new and five repeated recommendations to government in this report. The repeated recommendations have been made because we do not believe there has been sufficient action taken to implement our previous recommendations.

Health—AHS Controls Over Expense Claims, Purchasing Card Transactions and Other Travel Expenses (page 21)

Albertans are entitled to assurance that public servants are not rewarding themselves at public expense. Recently there has been increased public disclosure of the travel, meal and hospitality expenses incurred by the public service.

We believe that public disclosure is useful, but Albertans need more. Albertans need assurance from those who have oversight of the public institutions they fund that the organization has a well-designed and functioning framework to control expenses. Those with oversight responsibility must be able to assert publicly that their organization’s policies and procedures ensure it reimburses expenses only if there is a business purpose and regard for economy—in other words, the expenses are a cost-effective use of Albertan’s resources.

Our recommendation to Alberta Health Services is designed to help AHS back up its public assertion.

Human Services—Office of the Public Trustee (page 33)

The Office of the Public Trustee is entrusted with protecting and managing the property of deceased persons, represented adults and minors when there is no one else to act on their behalf. These are some of Alberta’s most vulnerable citizens. We were asked by the Department of Justice to audit the files of the OPT when it had determined through an internal investigation that senior trust officer had misappropriated trust funds. While our audit did not find other instances of misappropriation, it did determine that the OPT does not have adequate systems or controls in place to ensure its client files are being properly administered; there is sufficient rigour in its internal audit function; and its trust officers are performing their duties competently and acting in the best interests of their clients. Further, we found that there is improper segregation of duties between trust administration and financial services, which increases the risk that improper payments could go undetected.

Enterprise and Advanced Education—Report on Post-secondary Institutions (page 57)

This is our third report card on post-secondary institutions. The first was released in our March 2012 Report and the second in our October 2012 Report. These report cards were prepared in response to institutions requesting a means of differentiating themselves from their peers. In this report card we note that, while some institutions have made positive gains, there is still work to be done by others. The challenge will be for the boards of these latter institutions and the Minister, who have oversight responsibilities, to ensure there are adequate financial control environments in place. Albertans expect their post-secondary institutions to operate effectively.

FEBRUARY 2013 RECOMMENDATIONS

We conducted our audits in accordance with the Auditor General Act and the standards for assurance engagements set by the Canadian Institute of Chartered Accountants.

This report contains 28 new recommendations and five repeated recommendations. The repeated recommendations were made because in our judgement, taking into account the complexity of the matter and the action planned by management, progress was insufficient.

As part of the audit process, we provide recommendations to government in documents called management letters. We use public reporting to bring recommendations to the attention of Members of the Legislative Assembly. For example, members of the all-party Standing Committee on Public Accounts refer to the recommendations in our public reports during their meetings with representatives of government departments and agencies.

We believe all of the recommendations in this report require a formal public response from the government. In instances where a recommendation has been made to a boardgoverned organization, we expect the organization to implement the recommendation and report back to its respective government ministry as part of proper oversight of the organization. By implementing our recommendations, the government will significantly improve the safety and welfare of Albertans, the security and use of the province’s resources, or the governance and ethics with which government operations are managed.

Reporting the status of recommendations

We follow up all recommendations and report their status in our public reports. The timing of our follow-up audits depends on the nature of our recommendations. To encourage timely implementation, and assist with the timing of our follow-up audits, we require a reasonable implementation timeline on all recommendations accepted by the government or the entities we audit that report to the government. We recognize some recommendations will take longer to fully implement than others, but we encourage full implementation within three years. Typically, we do not report on the progress of an outstanding recommendation until management has had sufficient time to implement the recommendation and we have completed our follow-up audit work.

We repeat a recommendation if we find that the implementation progress has been insufficient. We report the status of our recommendations as:

  • Implemented—We explain how the government implemented the recommendation.
  • Satisfactory progress—We may state that progress is satisfactory based on the results of a follow- up audit.
  • Progress report—Although the recommendation is not fully implemented, we provide information when we consider it useful for MLAs to understand management’s actions.
  • Repeated—we explain why we are repeating the recommendation and what the government must still do to implement it.
  • Changed circumstances—If the recommendation is no longer valid, we explain why and remove the recommendation from our outstanding recommendation list.
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