18 March 1999
L. Denis Desautels, FCA
Auditor General of Canada
Thank you, Mr. Chairman, for giving us this opportunity to discuss our work on the Canadian Food Inspection Agency. For me, it is indeed a welcome opportunity because it marks our first meeting with the Committee during this Parliament. One of my priorities has been to find ways to serve Parliament better, and this includes assisting parliamentary committees by bringing to their attention our audit findings in areas of particular interest to them.
With me today are John Mayne, the Principal for accountability issues, who was responsible for our study on the creation of the Canadian Food Inspection Agency, and Neil Maxwell, the Principal responsible for our ongoing audit work in the Agency, including the follow-up audit of animal and plant health programs.
Because this is our first meeting, I intend in these opening remarks to touch on the varied audit work we conduct in the Agency. Let me first say a few words about our study on its creation.
The establishment of a single agency followed a long history of discussions about the benefits of consolidating the federal food inspection system, which had involved Health Canada, Fisheries and Oceans and Agriculture and Agri-Food Canada. The OAG welcomed the concept of integrating the inspection system, as our 1994 audit had pointed to duplication and a number of gaps that existed. When the Agency opened its doors on1 April 1997, a total of about $330 million and 4,500 full time equivalents had been transferred to it from the three departments.
There were many challenges in creating the Agency, including transferring program and corporate assets to it, developing a strong accountability framework, and putting in place a new human resource framework suited to the new Agency’s status as a separate employer (and outside the Public Service Employment Act since 1 April 1998.) A number of specific lessons learned in this change process were identified in our 1998 chapter.
The creation of the Agency holds important lessons to be shared with others pursuing new service delivery models, including the National Parks Agency and the Canada Customs and Revenue Agency. The objective of our study was to document these lessons.
We were particularly interested in the design of the Agency and its management and operational flexibilities. The Agency was granted these flexibilities, such as separate employer status, in order to meet its overall objectives of providing Canadians with more cost-effective and science-based federal inspection services supporting a safe food supply, enhanced access to international markets and a basis for a national food inspection system.
At the time of our study, the Agency had not made full use of the flexibilities it had been given. For example,
The Agency had also been slow in its first year in developing its performance reporting systems, an essential component of its new accountability regime.
In light of the flexibilities it has been granted, your Committee may wish to ask the Agency how well it is meeting its overall objectives and for an update on its human resource regime.
Granting the Agency new flexibilities created the need for a correspondingly strong accountability regime. A key part of this regime is the requirement that the Agency report annually on its performance. The accountability framework is also innovative in that the Auditor General is required by law to assess the fairness and reliability of the Agency’s performance information. The Agency’s first annual report, including a report on its performance and our assessment of that performance information, was tabled in October. We also submitted a report to the Minister of Agriculture. This was a learning experience for the Agency and for us.
The Agency’s accountability regime depends on its ability to provide Parliament with fair and reliable information. We are encouraged by the Agency’s efforts in reporting on its performance in its first annual report, particularly given the demands it faced in the first year of operation. But, as the Agency acknowledges, much remains to be done.
In our assessment of its performance information, we pointed to several elements that are needed to help readers of its annual report understand how well the Agency is achieving its objectives. For example, in the area of animal health, the information on import inspection gives the numbers of animals that were imported and notes that the CFIA rejected less than 1 percent. A better indication of its performance would include some measure of the accuracy or reliability of its inspections to tell the reader the extent to which the Agency was identifying non-compliance.
It will take several years of strong and visible commitment by senior management before the Agency develops results-based management and information systems and is able to provide sound information to Parliament on its accomplishments. It will also be important to report on the achievements of the overall objectives that led to the creation of the Agency, which I referred to earlier in my remarks.
You may wish to ask the Agency for an update on its progress in preparing its second annual report and discuss with the Agency how you would like to see its annual report improved. The support and involvement of Parliament and its committees is essential to successful performance reporting.
We would also appreciate hearing from the Committee how our Office could improve our assessment of performance information, which is intended to assist the readers of the Agency’s annual report.
Let me turn now to our audit of the Agency’s animal and plant health program. The audit was reported in 1996 and at that time, the program was still the responsibility of Agriculture and Agri-Food Canada. Our standard practice is to conduct a follow-up after two years to assess the status of corrective action taken by the organization. Our follow-up of the 1996 audit was reported in December 1998.
The adequacy of risk management was the key focus of our 1996 audit. We said the program was an international leader in risk assessment, but had applied it mainly to imports, not other parts of the program, and so had not set priorities and allocated resources program-wide based on relative risk. We recommended several improvements to the risk assessment process.
We also commented on the lack of performance reporting, the need to re-examine the efficiency of operations, and cost recovery.
In the December 1998 follow-up, we were generally satisfied by the degree of progress. But we found that work remained - not unexpectedly, given that our recommendations required long-term action. The initiatives that have been launched are interesting and ambitious attempts to reorient activities across all of the CFIA, such as the Agency-wide Risk-based Resourcing Project, and the Integrated Inspection System that is developing a common approach to inspection by all the Agency’s inspection programs.
You may wish to ask the Agency for an update on its progress in these areas. We also believe that the Agency should use vehicles like its annual report to report regularly on progress.
A further challenge for the Agency -- one we discussed in our April 1998 chapter on our audit of the new Federal Laboratories for Human and Animal Health in Winnipeg, Manitoba - is to rationalize its system of laboratories. We noted that the Agency was studying the level of laboratory and quarantine support services it will require in the future. We commented on the need to include the Winnipeg lab in that study. The Committee may be interested in the status of these efforts.
Last, I would like to turn to the audit work we have under way. In addition to our annual audit of the Agency’s financial statements and our annual assessment of its performance information, we are in the late stages of an audit of user charges in the Agriculture portfolio. The audit includes the Canadian Grain Commission, Agriculture and Agri-Food Canada and the Canadian Food Inspection Agency. Because I have yet to table this report - and, indeed, the audit has yet to be completed - I am not in a position to disclose our findings. But I would welcome the opportunity to hear about any concerns members of the Committee may have about user charges.
Indeed - and I will close on this point - I would welcome hearing from Committee members about any issues they think we should examine in future audits of the Canadian Food Inspection Agency.