Mr. Chair, thank you for this opportunity to present the results of our special examination of the National Capital Commission. Joining me at the table is Margaret Haire, the principal responsible for the audit.
As you know, a special examination of a crown corporation is a type of performance audit. A special examination seeks to determine whether a crown corporation's systems and practices provide reasonable assurance that its assets are safeguarded and controlled, its resources are managed economically and efficiently, and its operations are carried out effectively.
The National Capital Commission, or NCC, owns and manages over 10% of land in the national capital region, including Gatineau Park, the Greenbelt, various urban parks, and many leased properties. The corporation also manages six official residences.
In our examination, we found a significant deficiency in the corporation's asset maintenance practices and weaknesses in its risk management practices.
We also found that the corporation had good systems and practices in the areas of governance, strategic planning, performance measurement, performance reporting, and all other national capital region operations.
In regard to asset maintenance, the corporation's data on asset condition indicated that more than one-quarter of the corporation's assets were in fair, poor, or critical condition. The corporation determined that it didn't have enough resources to carry out the work that it needed to do to restore and maintain its assets. Therefore, it had to put off maintenance on some assets.
We concluded that this was a significant deficiency, because, if the corporation's assets continue to deteriorate, the corporation might not be able to meet its mandate, and the assets could cause health and safety issues.
The weaknesses we identified in risk management practices were in two areas. First, in the corporation's overall risk management approach, the corporation didn't consistently assess its strategic and operating risks, prepare an inventory of all risks, or set risk tolerances. This made it difficult for management and the board to have comprehensive risk information to make decisions.
The board and management did not clearly describe, in the annual corporate plan presented to the responsible minister, the risk of having insufficient resources to restore, maintain, and preserve the corporation's assets. As you know, the annual corporate plan is a key way to inform the government of the corporation's issues.
The corporation agreed with all of our recommendations and prepared an action plan in response to our concerns. However, because our audit work was completed in March 2017, I cannot comment on any actions that the corporation has taken since then.
Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee members may have. Thank you.