Opening Statement to the Standing Committee on Public Accounts

Canadian Firearms Program
(Chapter 4 - May 2006 Status Report of the Auditor General)

26 September 2006

Sheila Fraser, FCA
Auditor General of Canada

Thank you, Mr. Chair, for inviting me to discuss the audit of the Canada Firearms Centre. With me today is Peter Kasurak, Senior Principal of the public safety team who was responsible for this audit.

I would like to take this opportunity to provide the Committee with an overview of our findings related to the operation of the Firearms Program.

This audit was a follow-up to our 2002 audit of the cost of the Canadian Firearms Program. We were unable to complete our 2002 audit because the financial information that was available was unreliable and did not fairly represent the net costs of the program. This year, we are able to report that the Centre had made satisfactory progress in addressing our recommendations—with the exception of accounting errors made in recording the costs of its new information system (CFIS II).

This Committee and others have already conducted extensive hearings on our reports regarding the accounting errors and the implications of these errors to Parliament's control of the public purse. I will therefore focus on our other findings.

As you know, the government has announced changes to the program subsequent to our audit. The most significant changes involve the transfer of the Canadian Firearms Program to the RCMP and the introduction of legislation to abolish the long-gun registry. My comments today take these changes into account, but we, of course, have done no audit work since we reported in May of this year.

We found that the Firearms Centre had made substantial progress in setting up a separate agency and in addressing operational and contracting problems. However, I also found some problems had yet to be addressed. The most important of these were:

• reporting program performance to Parliament;
• the accuracy of information in the Registry;
• and ongoing difficulties with the new information system called CFIS II.

Reporting program performance

In general, the reporting of performance information to Parliament had improved since our 2002 audit. At the time of our 2006 audit, much more information was being provided. However, we found reporting remained at the most basic level for reporting results. The Centre had not set any performance targets and had provided few examples of program outcomes. In addition, the Centre's performance reports contained errors, which significantly overstated its improvements in the timely processing of licensing and registration applications.

Accuracy of Registry information

To support police and reduce risks to public safety, the accuracy of information in the Registry is vital. We found the information in the database to have significant quality problems:

• Address information for firearms owners was frequently wrong.
• Verification frequently determined that information on the weapon's action, make or serial number was wrong.
• Only half of the 1.2 million restricted weapons listed in the old Restricted Weapons Registration System had been re-registered. Information on these firearms was not updated, despite the knowledge that many of the old records were incorrect. Accuracy of the data regarding these weapons is a problem which remains to be resolved.
• The Centre did not know the status of 62 percent of the firearms that had their registration certificates revoked over a three-month period in 2005.

Difficulties with CFIS II

The Centre has had continuing difficulties managing its registry information system. CFIS I—its first attempt—cost almost $190 million by March 2005, including operations and maintenance costs. While initial estimates of the system's costs were in the order of $13 to $20 million, the extent of the cost overrun is difficult to estimate because development and operational costs were not separated. A key factor causing cost escalation was the attempt to develop the system before legislation and regulations were finalized.

In 2001, the Centre determined that a new information system was required—CFIS II—but repeated the error of attempting to build the system before legislative and regulatory changes had been completed. CFIS II also experienced serious overruns, including delay costs of $30.6 million when the Centre put the project on hold. At the time of our audit, CFIS II was more than two years late in being implemented, was still incomplete and had cost about $90 million.

Mr. Chairman, the RCMP is now responsible for the management of the program and for keeping Parliament informed of its progress. As the Firearms Centre had agreed to our recommendations and proposed corrective actions, this Committee might wish to obtain renewed commitment to the undertakings made by the Centre regarding our report.

Mr. Chair, this concludes my opening statement. We would be pleased to answer your Committee's questions.