Thank you.
Mr. Chair, thank you for this opportunity to discuss chapter 6 of our spring 2012 report, which covers special examinations of crown corporations that were issued in 2011. In particular, we will be discussing the special examination of the Canadian Dairy Commission. Our full report is available on the crown corporation's website.
Joining me at the table is Dale Shier, the Principal who was responsible for the audit.
Under part X of the Financial Administration Act, we conduct periodic special examinations of crown corporations. Special examinations of crown corporations are a form of performance audit where the scope is set by law to include the entire corporation. A special examination provides an independent opinion to determine if the corporation has reasonable assurance that its systems and practices allow it to safeguard and control its assets, manage its financial, human, and physical resources economically and efficiently, and carry out its operations effectively.
We note as a significant deficiency any weakness in the systems and practices of the corporation that could prevent it from reaching its objectives. Thus our special examination reports are a source of important information that parliamentarians can use to hold crown corporations to account.
We did not note any significant deficiencies in the Canadian Dairy Commission's systems and practices. However, we did find areas for improvement.
Our report includes three recommendations. One recommendation addresses the need for the commission to improve the performance indicators that it uses to assess and report on its operations.
The other two recommendations relate to governance by the commission's board of directors. Both recommendations are driven by the small size of the board of directors. Under the commission's enabling legislation, the size of its board is set at three people, one of whom is also the chief executive officer. One of our recommendations related to governance deals with the difficulty of having the breadth of skills needed for effective governance in a board with only three members.
Our second governance recommendation deals with conflicts of interest. With a board of only three members, conflicts can cause difficulties in achieving quorum for votes. We recommended that the commission develop procedures for board members to declare conflicts of interest and for the commission to manage conflicts.
Management accepted all three of our recommendations. As the period of our examination ended in August 2010, the committee may wish to ask management what actions the commission has taken over the last two years to address our recommendations.
Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have. Thank you.