CCAF BRIEF FOR CCPAC- CCOLA PANEL DISCUSSION ON AUGUST 11, 2014: OBTAINING STATUS UPDATES/ACTION PLANS ON THE IMPLEMENTATION OF AUDITOR GENERAL

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1 CCAF BRIEF FOR CCPAC- CCOLA PANEL DISCUSSION ON AUGUST 11, 2014: OBTAINING STATUS UPDATES/ACTION PLANS ON THE IMPLEMENTATION OF AUDITOR GENERAL RECOMMENDATIONS One leading practice among some of Canada s Public Accounts Committees is to request status updates or action plans of departments and agencies that have been subject to a value- for- money, performance or systems audit by the legislative auditor. These action plans usually provide details regarding action that has been taken to date to address the audit recommendations that have been agreed to by the auditees. This can include specific actions taken, timelines for their completion and the department or individuals who are responsible for the implementation. In some jurisdictions, the information required by the PAC is conveyed to departments in a standard template; in others, it is up to each auditee to decide what information it will provide. A report of the Public Accounts Committee of the House of Commons addresses the rationale for requesting action plans/status updates from auditees: If a department is indeed serious about implementing the recommendations, then senior management should ensure that an action plan is developed; without one, senior management would not have the information needed to monitor implementation. A well- developed action plan focuses management s attention on what needs to be accomplished, by whom and when, thereby making it more likely that the necessary actions will be taken. 1 At the time of the publication of the 2013 Survey of Canadian Public Accounts Committee Practices, only five jurisdictions required action plans to be submitted by audited departments and agencies, outlining progress being taken to implement the legislative auditor s recommendations. These jurisdictions are: Canada, Nova Scotia, Nunavut, Ontario and Prince Edward Island. Since the publication of the PAC survey, one additional jurisdiction Alberta subsequently adopted the practice of requiring action plans. Thirty one percent of chairs and vice chairs who participated in the survey indicated their desire to request action plans from audited entities outlining measures to be taken to implement the legislative auditor s and/or PAC recommendations; another twenty five percent indicated that they would like to improve their existing practice of doing so. 1 House of Commons. Standing Committee on Public Accounts. 14 th Report, 2 nd Session, 40 th Parliament. Examples of practices to consider include: - Requesting a status update upon the release of the legislative auditor s reports. - Examining the status reports submitted by departments and agencies - Requesting accountability from auditees for any lack of progress.

2 Select Canadian Examples Alberta Alberta s Public Accounts Committee adopted a template entitled Status Report on OAG Recommendations in November The template is attached in Appendix B. It outlines all of the outstanding recommendations that have not yet been addressed, and are ordered chronologically from oldest to most recent. The templates sent out to departments are in PDF format, boxes are tick- able in the document, and text can be added directly to the form where indicated. A motion was passed by the committee that the templates be sent out attached to the committee's formal correspondence with invitees [witnesses] on a go forward basis. 2 Nova Scotia The Nova Scotia PAC requires that departments and agencies submit - one week in advance of a meeting - an action plan on the implementation of the recommendations contained within the Auditor General Reports. 3 The Committee recently developed an action plan template for departments and agencies to complete. The action plan template, which is attached in Appendix A, is a spreadsheet outlining recommendations of the Auditor General, the departmental responses, a description of the final expected outcome, an expected completion date and the current status. Ontario Upon tabling of the Auditor General s Annual Report, the PAC selects matters for examination. Typically, the focus is on reports from the value- for- money audits contained in the AG s Annual Report. For example, the 2014 Annual Report will typically contain between 12 to 13 chapters and the same number of follow- ups of audits from two years prior, covering different value for money audits conducted. Not all chapters are typically selected by the PAC for hearing. For those entities selected for a hearing, the Committee Clerk requests an Auditee s Status Report two weeks prior to the hearing. The Committee receives background information prepared by a researcher. The Auditor General reviews the status report and provides an opinion as to its contents, briefs the committee for a 1½ hours on the committee s selected report, and is available at PAC hearings to 2 Legislative Assembly of Alberta. Hansard, Standing Committee on Public Accounts, November 20, Legislative Assembly of Nova Scotia. Hansard, Standing Committee on Public Accounts, Wednesday, January 15, 2014.

3 respond to member questions in this regard. The Committee reviews the Auditee s Status Reports and is very active in questioning witnesses on their Status Report and the actions they have taken to date in addressing recommendations. Audited entities that the PAC chooses not to select for a hearing are also contacted. In this case, the Clerk of the Committee also requests that those Auditees that were not selected for hearings update the Committee on what actions they are taking to address the concerns raised in (the Auditor General s) reports. 4 The Members of the Committee make a decision on whether or not the Status Reports are satisfactory or if they fall short in any areas. Status Reports are reviewed by the Auditor General as well who provides advice to the Committee as needed. Prince Edward Island In April 2012, the Standing Committee on Public Accounts advised the Legislative Assembly that it would be adopting a number of best practices in order to better fulfill its mandate, including a requirements that each department referenced in the annual Report of the Auditor General to the Legislative Assembly file an action plan, within a specified time frame, with the committee, detailing how and when the department would comply with the recommendations made by the Auditor General. This practice commenced with the 2012 Report of the Auditor General to the Legislative Assembly. The committee reviewed the action plan in public hearings with the appropriate Minister and/or other witnesses as the committee determined. 5 There is no action plan template in use by the Committee; however a sample letter requesting a written update from departments is attached in Appendix C. The attached letter is sent to departments and agencies notifying them that the PAC will be considering the annual report of the Auditor General and that, as part of its consideration, the Committee hereby requests a written update from you detailing how, when and by what means the Department plan(s) to fulfill the recommendations made by the Auditor General 6 in the annual report. Quebec Once the Auditor General s report is tabled in the National Assembly, the Public Administration Committee requires the heads of the audited entities to produce, within six months of the report being tabled, an action plan regarding (the Auditor General s) recommendations. This plan must contain, in particular, structuring 4 Office of the Auditor General of Ontario Annual Report, Chapter 6. 5 Legislative Assembly of Prince Edward Island. Standing Committee on Public Accounts First Report of the Third Session Sixty- fourth General Assembly. November 23, 2012 Report of the Auditor General to the Legislative Assembly, See Appendix C

4 actions and a realistic timeline. In addition, a person in charge must be designated to oversee the implementation of these actions. 7 The action plans are reviewed by the Auditor General, who comments on the quality of the plans and relays this information to the PAC and back to the entities. This has been the practice since Should the PAC choose to convene a hearing into an issue raised in the Auditor General s report within six months of the report s tabling, auditees are required to produce the action plans two weeks prior to the date of the hearing. House of commons (Canada) Prior to March 2009, at the conclusion of a hearing into a particular chapter of the Auditor General s report, the PAC would include in its report a request that departments and agencies submit action plans to the Committee. In March 2009, the PAC passed a motion requiring departments and agencies to submit action plans within six months of the audit being tabled in the House of Commons and that departments and agencies that are invited to appear before the Public Accounts Committee to discuss the findings of an audit should, when feasible, provide an action plan to the Committee prior to the hearing. 8 Providing the action plan in advance of a hearing allows Committee members to review the action plan and to develop questions for departmental officials. 9 The House of Commons Public Accounts Committee decided not to require a template for action plans for the following reason: The Committee does not believe it is necessary, nor appropriate, for it to dictate a format for these action plans. Departments should decide what information is needed and how it should be presented. Nonetheless, the action plan should make it clear what will be done, by whom, and by when. Departments are encouraged to work with the OAG when developing their action plans, as the OAG is well- placed to comment on what actions might be most effective at addressing the weaknesses identified by the audit 10 Rather than provide a template, departments are encouraged to examine samples of other action plans from the Committee s website (see Appendix D Departmental Action Plans and Progress Reports). 7 Report of the Auditor General of Quebec to the National Assembly for Value- for- Money Audit Highlights Spring House of Commons. Standing Committee on Public Accounts. 14 th Report, 2 nd Session, 40 th Parliament, June House of Commons. Standing Committee on Public Accounts. 40th Parliament, 2nd Session, March House of Commons. Standing Committee on Public Accounts. 14 th Report, 2 nd Session, 40 th Parliament, June 2009.

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6 Appendix A Nova Scotia Action Plan on Auditor General Recommendations No. Recommendation Response to Recommendation Description of Final Expected Outcome / Result Expected Completion Date Status

7 Appendix B Alberta Standing Committee on Public Accounts Status Report on Outstanding Recommendations from the Auditor General of Alberta Organization title: Standing Committee on Public Accounts meeting date: There are no outstanding recommendations The following recommendations are outstanding Instructions: The recommendations are listed from oldest to newest. For each recommendation, place an X in the applicable boxes, add a date if applicable, and insert any comments that will be helpful to the committee (for example, provide an explanation for delays or challenges related to implementation). This recommendation is fully implemented. We advised the Auditor General that we were ready for a follow-up audit as of [Insert date]: This recommendation is not yet ready for a follow-up audit, and we have not completed an implementation plan for this recommendation OR we have an implementation plan that targets key risk areas, identifies actions and has a timeframe for implementation. Briefly comment on the implementation plan, including anticipated timing:

8 Appendix C Prince Edward Island

9 Appendix D House of Commons MOTION OF THE HOUSE OF COMMONS STANDING COMMITTEE ON PUBLIC ACCOUNTS, ADOPTED ON 5 MARCH 2009: That all departments and agencies of the federal government that have been subject to a performance audit by the Office of the Auditor General of Canada provide a detailed action plan to address the audit findings and recommendations - including specific actions, timelines for their completion and responsible individuals - to the Public Accounts Committee and the Office of the Auditor General of Canada within six months of the audit being tabled in the House of Commons; and that departments and agencies that are invited to appear before the Public Accounts Committee to discuss the findings of an audit should, when feasible, provide an action plan to the Committee prior to the hearing. Committee Report. Parliament of Canada House Publications. 14 th Report, 2 nd Session, 40 th Parliament. uage=e&mode=1&parl=40&ses=2&file=18 Departmental Action Plans and Progress Reports. Parliament of Canada House Publications. uage=e&mode=1&parl=41&ses=2

10 Appendix E Ontario Summary Status Table in Response to the Report of the Auditor General of Ontario [Title of section (Section #) of the Auditor General s Report to be inserted] [Name of Ministry or Offices to be inserted] Auditor s Recommendation Completed undertaking Outstanding undertaking (including timeline)