Mr. Chair, thank you for this opportunity to present the results of our special examination of Atomic Energy of Canada Limited. As you mentioned, joining me at the table is Patrick Polan, the director responsible for the audit.
A special examination of a crown corporation is a type of performance audit. Specifically, a special examination determines 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.
This special examination covered the period between April 1, 2016 and January 31, 2017.
Atomic Energy of Canada Limited's mandate is to enable nuclear sciences and technology and fulfil Canada's radioactive waste and decommissioning responsibilities. It receives federal funding and delivers its mandate through long-term contracts with a private sector contractor for the management and operation of its sites. In September 2015, the corporation completed a major restructuring which led to a new operating model. The goal was to leverage the experience and capabilities of the private sector in order to enhance efficiency and effectiveness, and to contain and reduce costs and risks for Canadians over time.
This meant that the corporation would be responsible for setting priorities and overseeing the contractual arrangement and overall performance of the contractor. In our special examination, we found a significant deficiency in board renewal. The significant deficiency was related to the delays in the appointment of board members, an area that was outside the control of the corporation. During the period covered by the audit, the corporation was operating with an interim board and without a president and chief executive officer while, at the same time, developing long-term strategic plans.
Although we found the corporation had many good corporate and contract management practices, we also identified weaknesses in several areas. In particular, we found the corporation's reporting framework did not demonstrate how the corporation would measure the overall objectives of restructuring, which, as I stated earlier, were to enhance efficiency and effectiveness, and to contain and reduce costs and risks for Canadians over time. Although the corporation included some performance measures in its corporate plan, it had not developed a framework for communicating the performance of the new operating model.
We found that the board had not yet implemented a formal, systematic process for monitoring and reporting on risks. In addition, the corporation still faced challenges in acquiring a contract team with the necessary skills and competencies to monitor the new operating model. Improvements were also needed in the areas of strategic direction, communications, and compensation.
The corporation agreed with all of our recommendations, and indicated it would act to address our concerns. However, because our audit work was completed in January 2017, I cannot comment on any measures that have been taken since then.
Mr. Chair, this concludes my opening remarks.
We would be pleased to answer any questions the committee may have.
Thank you.