Report of the Auditor General
Oversight, at multiple levels, is a recurrent theme in this report. While our recommendations are specific to the organizations in this report, there are lessons to be learned for every department and board-governed agency. Examples of good oversight can be found at the following pages:
- Page 51—Alberta Health Services—Managing healthcare waste materials By assigning the responsibility for oversight of healthcare waste at all AHS sites to its Linen and Environmental Services branch, AHS implemented all four recommendations we made in 2012.
- Page 57—Athabasca University—Information technology
By developing and implementing oversight processes for IT strategic planning and project management, the university was able to implement four IT recommendations we made in 2010.
- Page 123—Universities financial statement preparation
All four universities with March year-ends (Alberta, Athabasca, Calgary and Lethbridge) continue to sustain effective processes to prepare timely and accurate financial statements. The universities prepare clear documentation and support for financial reporting conclusions that significantly enhance the universities’ financial reporting preparation and internal controls throughout the fiscal year. The universities are continuously working to improve financial reporting systems and management’s decision making ability. Continued board vigilance will ensure continued strong financial reporting systems and will also increase opportunities to use results analyses to better communicate the universities’ performance and accountability for results.
Innovation and Advanced Education—Post-secondary institutions
For-profit and cost recovery ventures (page 21)—we have concluded that the Department of Innovation and Advanced Education does not have adequate processes to oversee the unique risks that post-secondary institutions take on when they generate revenue from these ventures. The department’s oversight is necessary to ensure that each board of governors is properly overseeing its institution’s additional risks from seeking alternative sources of revenue. Such oversight will protect Albertans from unjustifiable risk and resultant cost, in relation to generating new sources of revenue.
Olds College, IT system implementation (page 29)—the college’s implementation plan has significant weaknesses in the design of its project management, business change management and senior management project oversight controls for the enterprise resource planning (ERP) project. College management cannot assure the board of governors of a successful system implementation without rectifying the weaknesses. The board is unable to provide effective oversight of the project, as it is not regularly receiving complete information on project risks, mitigation plans and whether appropriate actions are being taken. The board’s decision to approve the system going live is significantly impacted by the lack of complete information on implementation readiness.
Education—School jurisdictions (page 80)
School jurisdiction audited financial statements—in accordance with Section 19(4) of the Auditor General Act, we have compiled a summary of the results of school jurisdictions audited fiscal 2014 financial statements. Total balances for cash, cash equivalents and portfolio investments, unrestricted surplus and operating reserves, and capital reserves have increased from amounts in 2013. Reserves are unrestricted surplus amounts that school trustees have internally restricted for planned future operating or capital expenditures.
As with our fiscal 2013 summary report, we were unable to identify any analysis in the Department of Education’s annual report of the reasonableness of these balances and their correlation with future plans at the school jurisdictions to use these funds. Potential uses include performance improvement, capital asset acquisition or enhancement, and funding future operating deficits. The department and Albertans could use such analysis to hold school trustees accountable for achieving desired results from the effective use of accumulated surpluses at their school jurisdictions.
Financial statements (page 67)
The Government of Alberta prepares financial statements and makes them public to inform Albertans about the province’s financial performance. The Office of the Auditor General, under the Auditor General Act, audits the financial statements of the Province of Alberta, as well as every ministry, department, regulated fund and provincial agency, including ATB Financial, Alberta Health Services and public post-secondary education institutions.
The audit, and the auditor’s report, adds credibility to the financial statements by telling Albertans whether the financial statements are reasonable. This auditing does not mean that the auditor general examines every transaction or guarantees that the financial statements are error-free. Millions of transactions are summarized into the province’s financial statements. Audits, therefore, necessarily focus on areas of risk and on the places where errors that matter to users’ understanding of the financial statements as a whole are likely to occur.
The auditor general issued 149 unqualified auditor’s reports on financial statements in 2015 (2014–152). He also issued 19 unqualified auditor’s reports on specified financial information for certain organizations (2014–17). No qualified auditor’s reports were issued for either year.
Outstanding recommendations summary (page 17)
There is continued momentum that has reduced the number of outstanding recommendations from 278 in 2010 to 160 today. With each published report, we add to the total number of recommendations to implement, but at the same time we are seeing an increase in the number of implemented recommendations. Since October 2014 we have made 35 new recommendations and reported that 71 have been implemented. There are also fewer recommendations older than three years—reduced from 51 in 2014 to 38 in this report. We give credit to those within government organizations who have made concerted efforts to implement our recommendations and to the Standing Committee on Public Accounts for holding the government accountable for implementing our recommendations.