Thank you, Mr. Speaker. The Standing Committee on Government Operations is pleased to provide its Report on the Review of the Status

Report of the Auditor General of Canada on the Northwest Territories Legislative Assembly and commends it to the House.

Introduction

The Standing Committee on Government Operations held its public review on the Status Report of the Auditor General of Canada on March 26 and 27, 2012.

The standing committee thanks the Auditor General of Canada, Mr. Michael Ferguson, and his staff for their work in preparing the report and assisting the committee with its review. The committee also thanks the vice-president of the Workers’ Safety and Compensation Commission, the president of the NWT Housing Corporation, the NWT comptroller general, the deputy ministers of Finance, Transportation, Public Works and Services, and Education, Culture and Employment and their staff for their attendance and participation.

Role of the Auditor General of Canada in the NWT

The office of the Auditor General of Canada is a vital source of independent and authoritative advice for the Northwest Territories Legislative Assembly.

The Auditor General conducts two main kinds of audits in the Northwest Territories: financial audits and performance audits. Financial audits answer the question: Is the government keeping proper accounts and records and presenting its financial information fairly? Performance audits answer broader questions: Are programs being run with due regard for economy, efficiency and environmental impact? Does the government have the means to measure their effectiveness?

Since 2006, the Auditor General has conducted six performance audits in the Northwest Territories. Completed audits include:

• workers’ compensation, June 2006;

• public housing and home ownership programs,

February 2008;

• contracting for goods and services, June 2009;

• education in the Northwest Territories, May

2010;

• health programs and services, March 2011;

• management of the Deh Cho Bridge Project,

March 2011.

A performance audit of income security programs is currently underway. The Legislative Assembly Standing Committee on Government Operations is mandated to review the reports of the Auditor General of Canada and make recommendations to the Government of the Northwest Territories. The committee’s goal is to help the Legislative Assembly hold the government accountable. Members look for efficiencies, best practices and

gaps, with the intent of improving services to the people of the Northwest Territories. The objective information and advice of the Auditor General are essential tools in Members’ scrutiny of government spending and performance.

The Status Report of the Auditor General of Canada

The status report conveys the results of a follow-up audit which examined the government’s progress in addressing selected recommendations from the first four of six completed performance audits. Audit work was completed on August 31, 2011, and a report was tabled in the Legislative Assembly on February 14, 2012.

The audit focussed on the implementation of recommendations concerning:

• administration of the claims process of the Workers’ Safety and Compensation Commission;

• management of public housing and home ownership programs, and the strategic planning process for the NWT Housing Corporation;

• contract

administration with the departments

of Finance, Transportation and Public Works and Services; and

• program monitoring and reporting by the Department of Education, Culture and Employment.

All the program areas covered in this audit have an impact on the lives of NWT residents, in terms of our economy, society and quality of life.

The standing committee is pleased to report that overall, the Auditor General addressed the GNWT’s progress in acting on the selected recommendations as satisfactory. The committee will review progress in each of the areas audited later in this report.

GNWT-Wide Barriers to Effective Program Management

First, however, Members wished to express concern over the Auditor General’s observation, stated in the preface, that the Government of the Northwest Territories faces serious barriers to effective management across programs.

Effective program management requires that:

• performance indicators and program standards

are established;

• performance is measured and monitored

against standards; and

• issues are identified and action taken to improve

programs.

The Auditor General found three key barriers to sound program management, not just for one

program or department, but for most of the GNWT programs and organizations over the last six years. These barriers are:

• inadequate information to manage programs

and make decisions;

• insufficient monitoring of third-party program

delivery; and

• an absence of detailed action plans clearly

setting out how and when organizations intend to implement recommendations made in the audit reports.

Inadequate information to manage programs and make decisions

The Auditor General found that the GNWT’s ability to manage its programs is hampered by a lack of data and by the poor quality of the data collected. As stated in the report, the Auditor General believes GNWT senior managers realize the importance of gathering high quality information on a regular basis. However, pressures to deliver as many programs as possible to as many clients as possible predictably result in pouring scarce dollars and person years into programming instead of into databases, performance monitoring and program evaluation.

The committee understands the pressure on the government to “do anything, but do something.” Members consider, however, that there is little sense in putting more money into a program without good evidence that the resources will achieve objectives.

The Auditor General concludes and the committee concurs that GNWT organizations must make a sustained effort to improve the quantity and quality of data collected.

Insufficient monitoring of third-party delivery

Almost half of GNWT expenditures are allocated to third parties through grants and contributions. Third parties, including, among others, health, education and housing authorities, deliver most services in regions and communities.

The standing committee supports this highly decentralized model of program delivery. Members believe that local and regional organizations, with local and regional boards, are in the best position to understand and respond to residents’ needs in a geographically vast and culturally varied territory.

The committee agrees, nevertheless, that GNWT organizations that delegate program delivery to third parties should regularly monitor their performance. This is the only way to make sure the third parties are following GNWT policies and program standards, including standards for data collection and reporting.

The committee, therefore, concurs with the Auditor General that the GNWT must consistently monitor third-party program delivery.

An absence of detailed plans to implement agreed recommendations

In spite of GNWT commitments to implement recommendations of previous audits, the Auditor General often did not find detailed plans showing how and when the government would take action. Without consistent action plans, it is difficult for the standing committee to assess the government’s progress in implementing agreed recommendations.

When issues have been identified by the Auditor General and the GNWT has committed to address them, the GNWT organizations must provide detailed plans, with actions and time frames for implementing the agreed recommendations.

Need for a coordinated response to government-wide barriers

The barriers to effective program management identified by the Auditor General are government-wide. They must be addressed if the GNWT is to improve programs and services to residents within the current framework of fiscal restraint. The standing committee is well aware that the government cannot report inefficient, ineffective or inequitable programs and services.

Members point out that the Premier is publically mandated to “increase and improve interdepartmental planning, coordination and communication in support of cross-departmental goals and priorities.” Further, one of the 17th Assembly’s cross-departmental government goals is “effective and efficient government.”

The committee also notes that the audits covered in the status report were not financial audits, typically referred to the Department of Finance, but the performance audits, similar to the program reviews for the program review office within the Department of Executive.

The standing committee, therefore, recommends that the Premier and the Department of Executive review the February 2012 Status Report of the Auditor General of Canada and report back to the committee on how the three GNWT-wide barriers to effective program management identified in the report will be strategically addressed.

The committee wishes to stress, again, that the Premier and the Department of Executive should play a major role in coordinating the response of the GNWT-wide findings to the Auditor General’s performance audits and addressing systemic issues.

Recommendation 1

The Standing Committee on Government Operations recommends that the Premier and the Department of Executive:

• review the February 2012 Status Report of

the Auditor General of Canada;

• coordinate the government’s response; and

• propose solutions to overcome the three

government-wide barriers to effective program management identified by the Auditor General.

Members recently received confirmation in the House from the Premier that the Department of Executive will coordinate the response to government-wide findings of the Auditor General’s performance audits. The committee understands that the Department of Executive will work with the Department of Finance and the Refocusing Government Committee of Cabinet to review the report and propose solutions to the identified barriers. Members look forward to receiving the results.

Now I will pass the floor to my colleague, the deputy chair of the committee and Member for Frame Lake, Ms. Bisaro.