Alberta Treasury - News Release - 7-Oct-98 - Government responds to Auditor General's Annual Report

Newsrelease

October 7, 1998
Edmonton, Alberta

Government responds to Auditor General's Annual Report

The provincial government's initial responses to the Auditor General's 1997-98 Annual Report are attached. These responses focus on the numbered recommendations for Executive Council and Treasury that deal with government-wide issues.

The government's full response to all numbered recommendations will be provided when all departments have had a chance to review the recommendations and forward their feedback.

- 30 -

For further information, please contact:

Shannon Taylor
A/Director of Communications
Alberta Treasury
(780) 427-5364

Hal Danchilla
Special Advisor to the Provincial Treasurer
Alberta Treasury
(780) 427-8809

Government's Initial Response to the Executive Council and Treasury Recommendations in the Auditor General's 1997-98 Annual Report

Following are the numbered recommendations for Executive Council and Treasury in the Auditor General's 1997-98 Annual Report. The government's initial response to these recommendations that address government wide issues is also provided. The government's full response will be provided later this fall.

Auditor General's Observations	Government's Response
Comments on Accountability
The Auditor General makes several observations supporting Alberta's "new public accounts". "For the first time, ministry annual reports have been made public as part of the Public Accounts. This accomplishment is a significant milestone in the government's journey to become more open and accountable …" "Albertans now have the most informative set of public accounts in Canada." "Ministry annual reports are now a solid foundation to build even more informative reports". The Auditor General also makes some comments on where the government could improve ministry reporting and encourages the government to take action. "In simple words, I am asking the government to give Albertans the clearest picture of all the assets and liabilities, and all the revenues and expenses, for which the government is ultimately responsible."	The re-engineering of Alberta's public accounts is a significant achievement that the government is proud of. The government thanks the Auditor General for his support and assistance over the last few years in getting to this stage. As the Auditor General points out, there are still some areas where further refinements may be appropriate. The government will continue to review and consider the Auditor General's suggested improvements. The government's response to several recommendations related to Treasury provide more specific comments.

Auditor General's Observations

Government's Response

Comments on Accountability

The Auditor General makes several observations supporting Alberta's "new public accounts".

"For the first time, ministry annual reports have been made public as part of the Public Accounts. This accomplishment is a significant milestone in the government's journey to become more open and accountable …"

"Albertans now have the most informative set of public accounts in Canada."

"Ministry annual reports are now a solid foundation to build even more informative reports".

The Auditor General also makes some comments on where the government could improve ministry reporting and encourages the government to take action.

"In simple words, I am asking the government to give Albertans the clearest picture of all the assets and liabilities, and all the revenues and expenses, for which the government is ultimately responsible."

The re-engineering of Alberta's public accounts is a significant achievement that the government is proud of. The government thanks the Auditor General for his support and assistance over the last few years in getting to this stage.

As the Auditor General points out, there are still some areas where further refinements may be appropriate. The government will continue to review and consider the Auditor General's suggested improvements.

The government's response to several recommendations related to Treasury provide more specific comments.

Executive Council Recommendations
1.	It is recommended that in each year's planning, a greater emphasis be placed on creating the third year of the government and ministry business plans.	Accepted in principle. The government will explore practical ways of putting increased focus on the third year.
2.	It is recommended that ministries provide a longer-term context for business planning by setting and communicating longer-term strategies. It is further recommended that ministries share proposed business plans amongst one another early in the planning process.	Accepted. The ministry business plans are already strategic documents since they provide a long-term context in terms of their statements of Vision, Mission, Core Businesses, and Goals. The sharing of business planning information across ministries is already occurring informally. Further refinements may be considered.
3.	It is recommended that targets set in business plans in relation to goals be reviewed to ensure that they are challenging and attainable.	Accepted. This is one of the functions of the Standing Policy Committee's business plan review process.
4.	It is recommended that the government business plan elaborate on key cross government initiatives and that relevant ministry business plans more clearly demonstrate their ministry's respective contribution.	Accepted. Elaboration of key cross government initiatives is already found in other public documents (e.g., "People and Prosperity") and efforts will be made to elaborate more in the government business plan. Ministries are being guided to identify their contribution to these initiatives more clearly.
5.	It is recommended that ministry business plans include forecast information on factors which could significantly impact the successful implementation of their business plans.	Partially accepted. This information is currently being provided for consideration during the government's business plan development process. Published business plans focus on strategic direction and reflect all the government's policy decisions with material economic or fiscal implications. Not all of the detailed information used in preparing these plans would be of interest to users of the published business plan.
6.	It is recommended that all ministry business plans provide information on a common set of components and that the plan's financial information be presented in a form similar to the rest of the plan.	Partially accepted. A common set of business plan components is already provided. Financial information in a ministry's business plan is provided on its unique program structure. This is an appropriate and meaningful basis of financial reporting in business plans.
7.	It is recommended that ministries ensure their client satisfaction survey methods produce valid and reliable results. It is also recommended that standards be developed for reporting survey information.	Accepted.
8.	It is recommended that the Office of the Chief Information Officer work with ministry chief information officers and other relevant government organizations, such as Disaster Services, to identify remaining Year 2000 risks to the Province and to develop appropriate plans to mitigate these risks.	Accepted. The Office of the Chief Information Officer, in conjunction with Alberta Disaster Services, Emergency Preparedness Canada and the Department of National Defence, is working with government ministries and private sector industries to review emergency preparedness planning issues relative to potential consequences arising from Year 2000 risks.
Treasury Recommendations
41.	It is recommended that the Treasury Department management initiate changes to the corporate government accounting policies in order to eliminate the reservations in auditor's reports on department and ministry financial statements.	Partially accepted. In some cases plans are underway to address the matter (e.g. allocation of Teachers' Pension Plan liabilities and expenses to the Ministry of Education). In other cases the issues raised by the Auditor General require further review (e.g., timing of recognition of certain grants). The response to recommendation #44 provides comments on the reporting entity matter.
42.	It is recommended that the Department of Treasury develop a methodology to allocate all significant costs to the entities responsible for delivering outputs.	Accepted in principle. The practical issues related to implementing this recommendation are currently under review.
43.	It is recommended that the Department of Treasury develop strategies to improve year-end reporting processes for ministries and agencies.	Accepted. Activities are already underway to address this recommendation.
44.	It is again recommended that the Province's consolidated financial statements be prepared in accordance with generally accepted accounting principles for the summary financial statements of a government.	Accepted in principle. The government believes it is already preparing the Province's consolidated financial statements in accordance with generally accepted accounting principles. However, the Auditor General suggests school boards, post-secondary institutions and regional health authorities should be included in the government's reporting entity. The government's fundamental belief is that the existing government reporting entity best represents the government's primary responsibilities and accountabilities for setting policy direction, setting performance expectations and providing funding. The government does not see itself involved directly with the delivery of the services these entities provide. The government values its existing relationships with these autonomous entities. While the Auditor General indicates changes to these relationships are not a precondition to consolidation, in the government's view the reality is these relationships would change substantially if these entities were considered part of "government" and consolidated. This matter has been an issue in the Auditor General's annual reports for many years. In view of the divergent views between government and the Auditor General and the fact that other jurisdictions in Canada have not reached a consensus about the reporting entity, resolution of the issue is not imminent.
45.	It is again recommended that the Department of Treasury report the actual results to date for revenues, expense and surplus on the accrual basis in the quarterly report's Consolidated Fiscal Summary.	Accepted. 1998-99 first quarter update included certain items on an accrual basis (e.g. non-renewable resource revenue). Plans are underway to move to full accrual accounting as soon as practicable.
46.	It is recommended that the Department of Treasury develop a business plan for the Investment Management Division.	Accepted. A draft business plan has been prepared.

Return to: Alberta Treasury News Releases - | - Alberta Treasury Home Page - | - Government of Alberta Home Page