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Report of the Auditor General of Alberta - October 2009 Released

The Auditor General of Alberta, Fred J. Dunn, FCA, released his Report of the Auditor General of Alberta—October 2009 today. His report includes the results of five new and two follow-up major systems audits:

  • Public Agencies—Executive Compensation (page 19)—government needs to provide public agency boards of directors with adequate and appropriate guidance on executive compensation. Without well-designed, consistently applied and transparent compensation systems, boards won’t attract, retain and motivate the right people, may pay for performance not meeting expectations, and won’t be accountable for their decisions. See also:
    • University of Calgary needs to improve executive compensation processes (page 146)
    • Alberta Health Services needs to establish controls for executive termination payments (page 256)
  • Recruiting, Evaluating and Training Boards of Directors—Follow-up (page 33)—government has implemented our two 2004–2005 Annual Report recommendations on Alberta public sector principles and guidance, and evaluating board performance and reporting publicly.
  • Alberta’s Response to Climate Change—Part 2 (page 35)—Environment can make its systems to ensure facilities comply with Specified Gas Emitters Regulation more efficient. The Department needs to improve its guidance to facilities and verifiers (page 42), strengthen its offset guidance (page 46), and collect sufficient information to assess the cost-effectiveness of the Regulation (page 51). This is important because the Department needs to know whether the results achieved by the Regulation justify costs incurred by the facilities and the Department.
  • Public Affairs Bureau—Media Contracting Services (page 53)—we examined how PAB monitors media buying contract―using Highwood Communications as a case study. We found that government has adequate systems to monitor contracts, and that services paid for were received. However, PAB has other contracts that should be assessed for risk. Without a risk assessment of the contracts, PAB may be unaware of the level of risk it is taking on, which may lead to financial loss, damage to reputation or a disruption in communications to Albertans.
  • Electronic Health Records (page 59)—Health and Wellness needs to improve management of the EHR project by:
    • working with AHS and the governance committee to maintain an integrated delivery plan that aligns with the strategic plan, and improve reporting systems.
    • delivering publicly-funded EHR projects and initiatives in accordance with established standards.
    • proactively monitoring access to Netcare portal.
    • removing user access to Netcare portal when no longer needed.

    Five other provincial audit offices are concurrently auditing EHR. They will each report separately; the Office of the Auditor General of Canada will issue a joint summary report on all of the audits in 2010. An electronic health record is a means to improve health care and save money by automating the collection and retrieval of critical health care information.

  • Food Safety—Follow-up (page 87)—We followed up on 10 recommendations from our 2005–2006 Annual Report: five are repeated, progress on three is satisfactory, and two are implemented. Progress has been particularly slow in the health sector. AHS needs to improve its food inspection systems, and its automated food safety information systems. Health, Agriculture and AHS need to work together to improve food safety planning, eliminate the gaps in food safety inspections, and report on food safety in Alberta. Without adequate inspection and enforcement practices, food safety risks continue to exist.
  • Commercial Vehicle Safety (page 117)—Transportation has well-designed systems to monitor and enforce commercial vehicle safety through roadside inspections. They can improve by incorporating risk-based selection of vehicles for inspection and increasing the amount of information available for inspectors at roadside (page 124), strengthening enforcement processes (page 127), and further developing and improving their data analysis practices for use in program delivery and performance measure reporting (page 129). Without strong systems and enforcement, safer roads and targeted behaviours won’t be met.

The report also includes the results of our 180 annual financial statements and other assurance Audits. Highlights include:

  • University of Calgary—Decentralized control environment (page 151)—the University needs to make substantial improvements to its decentralized control environment. We repeated recommendations related to payroll (page 153), information technology (page 155), and journal entries (page 157).
  • Energy—Bitumen valuation methodology implementation (page 195)—Department needs to improve its monitoring of the implementation of the bitumen valuation methodology. We observed bitumen price variances resulting from differences in interpretation of bitumen valuation methodology between the Department and oil sands operators. Although no significant impact on royalties earned to March 31, 2009, there could be a significant future impact on royalties.
  • Alberta Health Services—we have made 11 significant recommendations to AHS to improve its systems. They focus on improving their systems for executive compensation, information technology, capital project management, financial reporting and financial management controls. Two are key:
    • Information technology control policies and processes (page 262)—we found many weaknesses in IT controls. AHS needs to develop an IT control framework and monitor compliance with policies.
    • AHS capital project monitoring systems (page 271)—AHS needs to improve the efficiency and effectiveness of its financial capital project monitoring and reporting systems and processes. We found a variety of monitoring processes that were inefficient, and did not enable staff to produce timely, relevant and accurate financial information on its capital projects.
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