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Auditor General’s February 2016 Report Cites Need for Government Systems and Process Improvements

EDMONTON, FEBRUARY 10, 2016—Alberta’s Auditor General Merwan Saher provided details on his office’s recent work. The audits identify opportunities to improve the performance of and confidence in the public service. The Report of the Auditor General of Alberta—February 2016 includes a total of one repeated and 15 new recommendations to government.
 
Report Highlights
Information Management—Identifies four instances in which real or potential deficiencies in the governance or management of information and related technology may jeopardize critical energy sector infrastructure, hamper efficient and economical cash management, create privacy risks or threaten the delivery of student programs and services. Also, the report cites an instance (Drinking Water follow-up) in which increased attention to information management has helped improve program efficiency and effectiveness.
 
Accumulated Surpluses—Reports on the growth of surpluses within the Office of the Public Guardian and Trustee (page 33) and the Victims of Crime Fund (page 43). Both entities provide assistance to vulnerable Albertans. Although the reason for the growing surplus in each case is different, both organizations have failed to assess whether they are achieving their desired results and whether the growth in these surpluses can be justified to Albertans.
 
Managing Royalty Reduction Programs (page 15)—Royalty reduction programs are designed to increase the amount of oil and gas recovered using new technologies and processes. Although the Department of Energy knows and reports the amount of the royalty reduction ($1.4 billion annually), it does not report on the amount of actual royalties it recovers or other value derived through these programs. Without annual evaluation and reporting on its royalty reduction programs, the department is not telling Albertans whether the programs are working.
 
IT Security for Industrial Control Systems (pages 23 and 27)—Examines the roles of Alberta government departments and regulators in overseeing the risk to Albertans from unsecured industrial control systems (ICS) in Alberta’s electrical and oil and gas industries.
 
In the case of the electrical industry, auditors found the Alberta Utilities Commission fulfilled its role and followed its processes, as required by regulation, to adjudicate and approve the IT security standards recommended by the Alberta Electric System Operator.
 
In the case of the oil and gas industry, auditors found the Department of Justice and Solicitor General assessed the threat of attack on Alberta’s oil and gas industry through ICS and concluded that it is low. However, no Alberta government entity has assessed the impact of an attack. The auditor general’s recommendation to the Department of Energy and the Alberta Energy Regulator is designed to enable both to be able to assert that oil and gas operators are properly mitigating those risks to protect Albertans.
 
Disaster Recovery Program Transition (page 55)—The lesson to be learned here is not to transition a program in the midst of dealing with a large natural disaster.
 
While the decision to move program delivery from a contracted service provider to the Department of Municipal Affairs might have been sound, the timing was not. The department did not have the capacity to re-design the program delivery model and implement a new IT system. The few project managers and dedicated resources the department had working on the transition were also dealing with the 2013 southern Alberta disaster.
 
The office’s opinion is that once the department has completed implementing its transition work plan, Alberta will have in place a more effective and efficient disaster recovery program.
 
Cash Management within the Government of Alberta (page 71)—Calls for the Department of Treasury Board and Finance, with the support of the Treasury Board Committee and Deputy Ministers’ Council, to lead the transformation and modernization of the province’s cash management systems. The report sets out the opportunities to improve the economy and efficiency of cash management with a payback of reduced debt and interest and administrative costs.
 
Drinking Water Follow-up (page 91)—The Department of Environment and Parks has implemented the one outstanding recommendation (improve drinking water information systems) from a 2006 audit of the systems to manage drinking water. Systems reporting capacity has improved and meets users’ needs. An enhanced system for drinking water inspections helped improve the program efficiency and effectiveness. The department eliminated overlapping systems and implemented an effective process that ensures forms are up to date.
 
Post-secondary Report Card (page 95)—An update on the status of financial reporting and internal control environments within Alberta’s publicly funded post-secondary institutions (with the exception of the four universities with March year ends, which were reported on in October 2015).
 
Most institutions have adequate internal controls and processes over financial reporting. The challenge they face is to sustain their control environments. Six institutions joined the University of Alberta in having no outstanding recommendations at the end of their fiscal year.
 
A copy of the report and list of the recommendations can be found below.
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