Thank you.
Mr. Chair, I am pleased to present our spring 2013 report which was tabled in the House of Commons last Tuesday.
I'm accompanied by the assistant auditors general Neil Maxwell, Nancy Cheng, Jerome Berthelette, and Wendy Loschiuk.
Mr. Chair, we also have other members of staff with us and I may from time to time ask one of them to join us at the table with your approval.
This report reflects the broad range of activities audited by our office. It includes findings from three follow-up audits and seven new audits, as well as a summary of special examination work in crown corporations. Overall, we found many areas where the government should improve on the results it achieves with taxpayers' dollars.
Status reports present our findings from follow-up audits. In these audits, we examine whether government has made satisfactory progress on recommendations we raised in past audits.
Our first follow-up audit focused on how government evaluates program effectiveness. Evaluation is a tool to improve programs and support government policy and spending decisions through evidence-based information.
We found the government has made satisfactory progress in the way it evaluates its programs. However, we also note that despite this progress, program evaluation is still not used to its full potential to support government decision-making.
We are also reporting satisfactory progress in our follow-up audit that looked at the Canada Revenue Agency's efforts to collect unpaid tax debts. The timely collection of overdue accounts is one of the key components for preserving the integrity of the tax system.
We found that the agency has taken a number of measures to improve the way it collects tax debts. These include new collection tools and revised work flows.
The improvements the Canada Revenue Agency has made have resulted in a significant increase in the amount of tax debt being collected. However, given tax arrears of $29 billion, the agency needs to continue to work to refine and improve its tools, such as the models it uses to determine which accounts to pursue first.
In the last of the three follow-up audits we are reporting on, we found that the government has not made satisfactory progress in addressing the recommendations we made in 2007 on safeguarding government information and assets in contracting. Protecting information and assets entrusted to contractors is critical to the government's ability to prevent misuse and unauthorized access and to achieve its security objectives.
Despite a number of improvements, including a new policy on government security, significant weaknesses remain in this critical area. For example, National Defence does not meet all the requirements of the new policy, and has yet to approve a departmental security plan.
In addition, 85 of the almost 300 contracts we reviewed over five departments were missing security documentation or did not follow control procedures. We observed some files where security requirements were not identified when, based on departmental policy, they should have been.
Departments and agencies—and in particular National Defence—need to improve their practices to ensure that all security requirements are met.
Let's move now to the new audit work included in this report.
In the first of these audits, we looked at the official assistance that Canada provides to developing countries through multilateral organizations. About $3 billion of the official development assistance spent in 2010-11 was channelled through multilateral organizations. We found that responsible departments are doing a good job of working with multilateral organizations and monitoring their performance. However, we also found that reports to Parliament contain limited information on how aid is spent and on the results achieved. I am concerned that the information reported to Parliament is not giving a clear picture of the nature of spending on official development assistance.
We also looked at the government's activities to promote the prevention and control of diabetes. The government has recognized that a joint approach is required to prevent and control diabetes in Canada. The organizations tasked with implementing this approach have to ensure that the resources put at their disposal are maximizing benefits for Canadians.
The Public Health Agency has not defined how it will work with Health Canada and the Canadian Institutes of Health Research to implement and coordinate diabetes activities. The agency has not thought through what it should be trying to accomplish with the federal resources available to fight diabetes. As a result, activities remain largely uncoordinated, and their impact is unknown.
Our report on creating a historical record of Indian residential schools describes a situation where a lack of cooperation has hindered progress.
Documenting the history of Indian residential schools is an important part of the reconciliation process. At this point, with the mandate of the Truth and Reconciliation Commission running out in some 15 months, the commission and Aboriginal Affairs and Northern Development Canada have yet to agree on the work to be done. We are concerned that the lack of cooperation, delays, and a looming deadline stand in the way of creating the historical record of Indian residential schools as it was intended when this process began.
Our audit of search and rescue activities found that while the Canadian Forces and the Canadian Coast Guard have reacted adequately to search and rescue incidents, significant improvements are needed to ensure that the necessary personnel, equipment, and information system will be available in the future.
The air force and the coast guard's ability to respond to incidents has been a testament to the dedication of search and rescue crews. We are very concerned about the sustainability of search and rescue services in coming years.
In our audit of spending under the public security and anti-terrorism initiative, we found that departments and agencies submitted progress evaluations and annual reports to the Treasury Board Secretariat, but there was no monitoring of government-wide progress toward the initiative's objectives.
Between 2001 and 2009, the Treasury Board allocated about $12.9 billion to 35 departments and agencies to fund measures to enhance the security of Canadians.
We believe the government missed an opportunity to use the information it collected to generate a picture of spending and results under the public security and anti-terrorism initiative across departments.
Our audit on employment insurance overpayments identified some good practices, like using a risk-based approach and various tools to identify overpayments. However, we believe that Human Resources and Skills Development Canada is missing opportunities to recover tens of millions of dollars in overpayments each year. By improving its analysis and understanding of overpayments, Human Resources and Skills Development Canada could potentially identify more overpayments and improve on recoveries.
Our audit on advance funding to PPP Canada notes that the government is exposed to financing risks with the current arrangement of providing money to the corporation years before it is disbursed for infrastructure projects. In our view, there are approaches that would minimize the government's exposure to financing costs. The cost of financing should be considered whenever a crown corporation seeks to receive funding ahead of its disbursement needs.
As we have done for several years, this report also includes the main points from our special examination work in crown corporations.
We did not find any significant deficiencies in the corporations we examined—Farm Credit Canada, Canadian Broadcasting Corporation and Old Port of Montreal Corporation. However, we have raised some concerns about the Old Port of Montreal Corporation.
Mr. Chair, that concludes my opening statement.
We will be happy to answer any questions you may have.
