PERFORMANCE AUDIT PROGRAM OF WORK

Transcription

1 PERFORMANCE AUDIT PROGRAM OF WORK 2018 to 2021 Office of the Auditor General of Alberta The Independent Audit Office of the Legislative Assembly of Alberta August 2018

2 VISION MAKING A DIFFERENCE IN THE LIVES OF ALBERTANS. MISSION IDENTIFYING OPPORTUNITIES TO IMPROVE THE PERFORMANCE OF AND CONFIDENCE IN THE PUBLIC SERVICE. VALUES WE ARE COMMITTED TO OUR MISSION, AND TO ACHIEVING OUR VISION. WE USE OUR VALUES TO GUIDE US IN OUR INTERNAL AND EXTERNAL RELATIONSHIPS: TRUST We earn it with everything we say and do. We are accountable for our actions. RESPECT Everyone has the right to be heard and deserves to be treated with dignity and courtesy. DIVERSITY OF THOUGHT We encourage open minds, innovative thinking and constructive challenge. TEAMWORK With integrity, we work together to generate better solutions. GROWTH We view individual success as professional growth together with a fulfilling personal life. We value both.

3 MESSAGE FROM THE AUDITOR GENERAL As Auditor General, and under the Auditor General Act, I am the appointed auditor of every ministry, department, regulated fund and most provincial agencies 150 entities in As the independent audit office of the Legislative Assembly of Alberta, we conduct audits so we can report on how well government is managing its responsibilities and the province s resources. Where necessary, we make recommendations for improvement. Our financial statement audits provide independent opinions on whether each organization s financial statements are presented fairly and are free of material errors, misstatement or omissions. Each June we issue an auditor s report on the province s consolidated financial statements, encompassing all 150 government entities. Our performance audits assess the quality of the systems designed to deliver efficient and cost effective provincial programs and services. Our role includes providing an objective and independent view on whether government has adequate systems for reporting on the results achieved using Alberta s resources. It is our performance auditing which is the subject of this document. As an organization funded by, and representing the interests of, Albertans, we believe it is important to be open about how we conduct our work. We want Members of the Legislative Assembly (MLAs) to understand our work so they can hold government accountable for implementing the recommendations we make to improve ministry processes and systems and its reporting on results. And we want Albertans to understand our work as we work for them. The Government of Alberta is a very large and complex organization and our office does not have the capacity to take on all possible audit topics. The projects we select are the result of extensive planning and consultation with stakeholders, and based on significance, level of risk and relevancy to Albertans. In April 2017, for the first time in the history of our office, we published the program of work outlining the new performance audits we intended to conduct in the following three years. The Office of the Auditor General of Alberta 3

4 Year to year, new priorities emerge, and government programs and services change. This first annual refresh of our plan, identifies new risks and potential audits, and reflects changes in the government s operating environment. Our performance audit program of work extends beyond the new audits outlined in this document. In any year we may receive requests from the Legislative Assembly or individual MLAs to examine particular government operations, processes, or transactions. Where the Office undertakes an audit in response to such requests, these reports are also tabled with the Legislature. The Office also undertakes audits on specific topics which may span several years. For example, we have established an annual rotational audit with the objective of verifying that the travel, meal, and hospitality expenses reported by the premier, ministers, associate ministers, and their staff comply with government policies. We also carry out follow-up audits, once management advises us that they have acted on our audit recommendations, to confirm that they have been implemented. Ideally, implementation by management and our follow-up reporting will be completed within three years of the original recommendation. We approach follow-up audits with the rigour Albertans expect from this office, and will repeat our recommendations if necessary. The results of follow-up audits are included in auditor general reports to complete our reporting to Albertans. Our aim is to make the best use of our resources, and choose audits of the greatest value to MLAs, the public service and the people of Alberta. We want to inform you of our plans and engage you in a conversation about what we do, so that we can focus our work in those areas which will make the greatest difference to those we serve Albertans. W. Doug Wylie FCPA, FCMA, ICD.D Auditor General of Alberta 4 PERFORMANCE AUDIT PROGRAM OF WORK 2018 to 2021

5 BACKGROUND Our Vision and Mission Our vision is to make a difference in the lives of Albertans. We do this by identifying opportunities to improve the performance of, and confidence in, Alberta s public service. A Word about Performance Audits A performance audit is an independent, objective and reliable examination of whether government undertakings, systems, operations, programs, activities or organizations are operating in accordance with the principles of economy, efficiency and effectiveness. Economy is about getting the right inputs, such as goods, services, and human resources, at the lowest cost. Efficiency is about getting the most from available resources, in terms of quantity, quality, and timing of outputs or outcomes. Effectiveness is about meeting the objectives set and achieving the intended results. What do performance audits assess? Performance audits focus on the implementation of policy and programs and the delivery of public services. They typically look at the following areas and ask the following questions:» SYSTEMS AND PROCESSES Are management systems and internal controls well designed and operating as designed?» RESULTS Are intended results being achieved? Are entities monitoring and reporting on their own performance?» COMPLIANCE Is the program or entity operating in accordance with applicable laws, policies, and specified authorities?» RISK MANAGEMENT Is the entity appropriately managing significant risks related to achieving program outcomes and safeguarding public funds?» GOVERNANCE AND OVERSIGHT Have entities established effective governance practices and regimes? Performance audits generally do not assess the merits of policy, the adequacy of program resources, or the future state of policies and programs. The Office of the Auditor General of Alberta 5

6 Focusing our Efforts PROCESS The public sector auditing environment continues to grow in complexity. Albertans expectations regarding transparency and accountability continue to rise. At all times, we are responsible for making the highest and best use of the resources entrusted to our office. We want to be confident that we are doing the most relevant and significant performance audits. Our performance audit selection process (Figure 1) includes consultation with representatives of the Deputy Ministers Council, a panel of external advisors with broad understanding of the Alberta context and public policy (see Appendix B), and the Public Accounts Committee (PAC), to develop a risk-based, multi-year performance audit program of work. These stakeholders provide sound counsel on the key risks and opportunities for improvement in the performance of the public service, looking across the Government of Alberta as a whole. FIGURE 1 PLANNING PROCESS Determine Areas of Focus Based on Assessment of Risk Allocate Resources Categorize & Prioritize Potential Audits Review with DMs, External Advisors and PAC Communicate & Publish Refresh 6 PERFORMANCE AUDIT PROGRAM OF WORK 2018 to 2021

7 Government activities can be thought of as falling into one of three categories:» The programs and services it delivers» The corporate functions which enable the delivery of programs and services» Government s performance reporting to Albertans on the results achieved for the dollars invested Within these three categories, through our consultation and engagement processes, we identified the priority areas of focus for our performance audit work. (Figure 2) FIGURE 2 PERFORMANCE AUDIT AREAS OF FOCUS Programs & Services Corporate Functions ECONOMIC DIVERSIFICATION HEALTHY AND SUCCESSFUL ALBERTANS ENVIRONMENTAL SUSTAINABILITY ENTERPRISE SUPPORTS HUMAN RESOURCES INFORMATION AND RELATED TECHNOLOGY PERFORMANCE REPORTING We selected three areas of focus in the programs and services category and three areas of focus in the corporate functions category. In developing audits in each focus area, we will concentrate on examining the efficiency and economy with which government programs, which directly serve Albertans, are delivered. Over the years our office has emphasized the importance of good performance reporting as a means of empowering Albertans and promoting greater transparency and accountability with respect to the use of public resources. We will continue to conduct audits on the government s systems to monitor and report on results. The following is a summary of the focus area and proposed audit topics for We have provided additional detail on each of these focus areas in Appendix B. The Office of the Auditor General of Alberta 7

8 Focus Areas Descriptions Potential Audit Topics ECONOMIC DIVERSIFICATION Programs that focus on diversifying Alberta s economy, including programs that:» create partnerships that support entrepreneurship and a focus on innovation,» increase access to capital,» help businesses to grow and succeed,» help communities and regions build on their economic strengths,» increase the development and adoption of Alberta innovations, and» support export development » Effectiveness of Initiatives to Diversify Alberta s Economy» Workforce Development for Indigenous People in Alberta» Tourism Investment Goals » Development of the Agriculture & Food Processing Industry » Alberta s Research & Innovation System» Workforce Demands Includes programs related to: PROGRAMS & SERVICES HEALTHY AND SUCCESSFUL ALBERTANS» education (K-12, post-secondary),» counselling, diagnosis, treatment and care, with a focus on prevention and care services for mental health disorders, substance use, nutrition, intentional injuries and chronic illness,» disability services,» child care, early childhood and community supports,» parenting and adoption,» safe, fair and healthy workplaces, and» promoting healthy and active lifestyles.» Intake & Scheduling of Publicly Funded CT & MRI Services» School Funding Formula» Family Supports for Children with Disabilities» Homelessness » Process to Manage Criminal Prosecutions» Foster Care» Physician Billing » Systems to Deliver Home Care Services to Albertans ENVIRONMENTAL SUSTAINABILITY Programs related to maintaining the ability of communities of plants, animals, micro-organisms, and their non-living surroundings to sustain themselves, and people, far into the future, including:» the capabilities that the natural environment has to maintain living conditions for people and other species (e.g., clean water and air, a suitable climate),» the aspects of the environment that produce renewable resources such as water, timber, fish, and solar energy,» the functioning of society, despite non-renewable resource depletion, and » Wildfire Management» Orphan Oil & Gas Site Management » Water Management» the quality of life for all people, and the livability and beauty of the environment. 8 PERFORMANCE AUDIT PROGRAM OF WORK 2018 to 2021

9 Focus Areas Descriptions Potential Audit Topics ENTERPRISE SUPPORTS Systems, programs and processes that support the Government of Alberta s ability to be more agile and customer focused as an enterprise including those related to:» fiscal management,» strategic planning,» oversight,» performance measurement,» capital planning,» risk management,» cross-government initiatives, and » Governance of Agencies, Boards & Commissions» Project Management Systems for the Fort McMurray Residential Facility-Based Care Centre » Emergency Preparedness » Oversight of Municipal Financial Programs and Systems» Monitoring School P3 Contracts» information sharing. CORPORATE FUNCTOINS HUMAN RESOURCES Systems, programs and processes that support the Government of Alberta s ability to ensure it has the right people, in the right jobs, at the right time, including those related to:» defining and development of organizational culture,» planning for change,» organizational design,» training and development, » Implementing Truth and Reconciliation Commission Call to Action Number 57» health and safety,» recruitment and retention, and» compensation. INFORMATION AND RELATED TECHNOLOGY Systems, programs and processes that ensure an effective control environment for information and related technology, including:» governance,» management,» enterprise architecture,» enterprise information management,» privacy, security and identity management, and» technology management » Cloud Computing » Capital Planning for Information Technology» Trusted Data» Information Technology Strategic Planning and Governance PERFORMANCE REPORTING Systems and processes that contribute to accountability for results by:» enhancing Albertans understanding and engagement,» focusing on key measures of government performance,» integrating financial and non-financial performance reporting, and» While no specific audits have been identified for this three-year period, a number of audits in this plan will consider performance reporting where we examine reporting processes of a program.» evaluating results to identify how to improve them (results analysis). The Office of the Auditor General of Alberta 9

10 Understanding the Program of Work Work on any particular audit may span more than one fiscal year. In some cases, preliminary work on the audits listed in Appendix A began in fiscal 2017/18. Some of the audits listed will be completed and reported in fiscal 2018/19. For others, work will begin in fiscal 2018/19 and be reported on in the 2019/20 fiscal year. And some of these potential audits may not progress to an actual audit, or will be configured as multiple related audits, depending on the outcome of the pre-planning work. How Will We Use the Three-Year Program of Work At this stage in the development of our multi-year performance audit program of work, the audit topics identified in this document represent high-level audit topics. Further work is required to develop the precise nature and scope of the work. We will work with the government entities involved, as well as their stakeholders, to develop our understanding of the audit area. Depending on what we learn through our planning, we may proceed with an audit or, instead, provide guidance or advice to the responsible organization. Alternatively, we may choose to postpone or cancel a proposed audit if our initial planning indicates we should use our resources elsewhere or if we identify new audit topics of greater urgency or significance. We will report to Albertans on how and why we make changes to the program of performance audit work. We will also refresh the program of performance audit work by repeating the process described above. Each year we will identify, categorize and evaluate potential audit topics. We will compare these new audits with those still in the planning stages and reprioritize our work as appropriate. Each year we will add a new Year Three slate of intended audits to our program of work. 10 PERFORMANCE AUDIT PROGRAM OF WORK 2018 to 2021

11 APPENDIX A: DESCRIPTIONS OF POTENTIAL AUDITS The performance audit delivery process begins with identification and prioritization of potential audit topics. Additional information is gathered and analyzed to confirm the value of the audits to Albertans; assuming the audit proceeds, staff then plan, execute and report on the individual audits. Some of these potential audits may not progress to an actual audit, or will be configured as multiple related audits, depending on the outcome of the pre-planning work. Through our annual process to review and refresh the Performance Audit Program of Work, eight new audits were identified to be completed over the three-year period of 2019 to The following is an overview of the when, who, what and why of these new audit topics. The Office of the Auditor General of Alberta 11

12 APPENDIX A: DESCRIPTIONS OF POTENTIAL AUDITS WHO WHAT WHY AUDIT TOPIC: Effectiveness of Initiatives to Diversify Alberta s Economy Treasury Board & Finance Economic Development & Trade Building a competitive, diverse and resilient economy is a strategic priority for the Alberta government. Four initiatives intended to diversify Alberta s economy are:» A $190 million tax credit to encourage investors to support eligible small and medium-sized enterprises in Alberta and encourage businesses to make capital investments» Investment of up to three per cent of the Alberta Heritage Savings Trust Fund directly towards Alberta s growth» Additional funding of $76 million for the Alberta Enterprise Corporation to help diversify Alberta s economy» Improved access to capital for Alberta s small and medium-sized enterprises through ATB Financial We will examine whether the responsible ministries have appropriate and reasonable procedures to measure and report on the effectiveness of these initiatives and programs. AUDIT TOPIC: Workforce Development for Indigenous People in Alberta ECONOMIC DIVERSIFICATION Indigenous Relations Labour It has been a goal of the Alberta government for close to 20 years to increase the participation of indigenous people in Alberta s workforce. Numerous strategies, initiatives and programs have been developed and implemented to achieve this result. Two ministries, Labour and Indigenous Relations, play key roles in achieving this goal. The Ministry of Labour works to ensure that Alberta has a skilled workforce and an efficient labour market to support a thriving and diverse economy. Indigenous Relations helps strengthen economic and social opportunities for indigenous people in Alberta. We will examine whether these ministries have effective processes to determine the outcomes to be achieved, design programs based on evidence of what works, measure progress, and report to Albertans on the outcomes achieved. Unless government has appropriate and effective performance measurement and evaluation systems in place, and is using the results of these to plan and manage its initiatives, there is a risk that the desired outcomes will not be achieved. Alberta continues to face labour shortages in some areas. At the same time, Indigenous people in Alberta are underrepresented in the workforce. The benefits of devising and implementing programs to enhance indigenous participation in Alberta s workforce would be positive from economic, social, and cultural perspectives. 12 PERFORMANCE AUDIT PROGRAM OF WORK 2018 to 2021

13 WHO WHAT WHY AUDIT TOPIC: Tourism Investment Goals Culture & Tourism The Ministry of Culture and Tourism supports the development and marketing of tourism experiences, products and destinations throughout the province that attract millions of visitors each year, creating jobs and further diversifying Alberta s economy. The tourism responsibilities within the ministry are assigned to the Tourism Division of the Department of Culture and Tourism and to Travel Alberta, the tourism marketing agency of the Alberta government. In 2013, the ministry and Travel Alberta prepared A Pathway to Growth: an Alberta Tourism Framework Alberta s tourism goal is Tourism in Alberta is a $10.3 billion industry by 2020, providing sustainable economic benefits to all regions of Alberta. In March, 2018, the Ministry stated that although the priorities and actions that are identified in the framework have been incorporated to influence our business and operational plans, we don t use the framework anymore to assess our progress in growing Alberta s tourism industry. Unless government has appropriate and effective performance measurement and evaluation systems in place, and is using the results of these to plan and manage its initiatives, there is a risk that the desired outcomes will not be achieved. We will examine whether the ministry has appropriate and reasonable procedures to measure and report on their progress towards meeting their tourism goals. AUDIT TOPIC: Intake & Scheduling of Publicly Funded CT & MRI Services Health Alberta Health Services Computed Tomography (CT) and Magnetic Resonance Imaging (MRI) are advanced diagnostic imaging tools that help clinicians identify and treat a wide range of medical conditions. The delivery of publicly funded CT and MRI services in Alberta is the responsibility of Alberta Health Services (AHS). Most CT and MRI exams are administered in AHS hospitals, with some contracted by AHS to private imaging facilities in the community. The use of CT and MRI has increased steadily over the last two decades in Alberta and nationally. Between and the number of publicly funded MRI scans in Alberta doubled, while the number of CT scans is up by 45 per cent. While the capacity for CT and MRI services continues to grow, wait times for these services have not shown a reduction. According to the Canadian Institute for Health Information (CIHI), Alberta has the longest CT and MRI wait times of all reporting provinces. AHS recognizes the wait time challenge, and its operational plan placed priority on maximizing appropriateness and utilization of Diagnostic Imaging Services. We will examine whether AHS has adequate systems to ensure effective and efficient intake and scheduling for the publicly funded CT and MRI services in Alberta. Effective and efficient intake and scheduling improves Albertans access to CT and MRI services, results in better quality of care provided to Albertans by supporting timely diagnosis and treatment, and improves financial sustainability of the health system by avoiding possible health complications and costs associated with delays in treatment. HEALTHY AND SUCCESSFUL ALBERTANS ECONOMIC DIVERSIFICATION The Office of the Auditor General of Alberta 13

14 WHO WHAT WHY AUDIT TOPIC: School Funding Formula Education of Alberta s children and youth is a priority of Alberta s government. Alberta Education provided approximately $6 billion in operational funding to school jurisdictions (Early Childhood Services (ECS) to grade 12) in Education The current structure of school funding in the province, under the authority of the School Act and its regulations, policies and procedures, is complex and decentralized. It is based upon two principles equitable funding for all students and regional autonomy to deliver educational programs. While school boards have discretion regarding the use of funding, they must adhere to these principles, and they are accountable to the ministry for their use of funds and for the education outcomes attained. The province must ensure its systems to fund education are efficient and effective to meet desired education outcomes. We will examine whether the ministry has efficient and effective systems to ensure School Funding Formula principles are adhered to in the delivery of ECS to grade 12 education. AUDIT TOPIC: Family Supports for Children with Disabilities Community & Social Services The Family Supports for Children with Disability (FSCD) program administered by the Ministry of Community and Social Services provides a wide range of family-centered supports and services to approximately 12,500 children and families each year. Services are meant to strengthen families abilities to promote their children s healthy development and encourage participation in activities at home and in the community. The FSCD program has been rapidly expanding in recent years, with expenditures in of $188 million. Reimbursement of support costs is set out in contracts between the parents and the department. Each contract is unique, and although guidelines exist that describe the services which can be included, the selection of the included services and the level of reimbursements is negotiated between parents and caseworkers. Unless government has appropriate and effective performance measurement and evaluation systems in place, and is using the results of these to plan and manage its initiatives, there is a risk that the desired outcomes will not be achieved. We will examine whether the ministry has processes to measure and report on the effectiveness of the FSCD program. AUDIT TOPIC: Homelessness The Ministry of Community and Social Services and the Ministry of Seniors and Housing both work to prevent and tackle homelessness and to improve housing stability for Albertans in need by integrating personal, financial and health supports with housing. Community & Social Services Seniors & Housing Every Albertan should have a home, yet many Albertans some 11,000 families and children are living on the streets and in emergency shelters. In 2008 the Alberta government established the Alberta Secretariat for Action on Homelessness, whose mandate was to develop a 10-year provincial strategic plan to end homelessness in the province. In 2013 the Alberta Interagency Council on Homelessness was formed to continue implementation of the plan. The latest report from the Council stresses the need for affordable housing in Alberta. Ending homelessness makes social and economic sense. Every $10 spent on housing and supports for chronically homeless individuals results in approximately $22 in savings related to health care, social supports, housing and involvement in the justice system. We will examine whether these ministries have efficient and economical systems to achieve the government s objectives for ending homelessness and appropriate and reasonable procedures to measure and report on the outcomes achieved. HEALTHY AND SUCCESSFUL ALBERTANS 14 PERFORMANCE AUDIT PROGRAM OF WORK 2018 to 2021

15 WHO WHAT WHY AUDIT TOPIC: Wildfire Management The Ministry of Agriculture and Forestry is responsible for the policies, legislation, regulations and services necessary for Alberta s agriculture, food and forest sectors to grow, prosper and diversify. Agriculture & Forestry Alberta is covered by about 38 million hectares of forest. Forestry is the third-largest resource-based industry in Alberta. In fiscal 2016 the Ministry of Agriculture and Forestry spent $324 million on wildfire management, primarily on fire suppression activities. The 2016 Horse River wildfire forced the evacuation of 88,000 residents from the Fort McMurray region and is the most expensive insured disaster in Canada s history, with an estimated 2,400 structures destroyed and insured damages of $3.6 billion. Research indicates that the incidence and the severity of wildfire will increase over the coming decades. Effective wildfire management contributes to fiscal sustainability, preservation of Alberta s natural resources, and reduces the risk of devastating loss from wildfires. We will examine whether the ministry s wildfire management processes are well designed, focusing on prevention. We will also examine the ministry s processes for reporting on progress implementing recommendations from recent external reviews. AUDIT TOPIC: Orphan Oil & Gas Site Management Energy/ Alberta Energy Regulator In the upstream oil and gas industry, an orphan is an abandoned well, pipeline, facility or associated site which has been investigated and confirmed as not having any legally responsible or financially able party to deal with its abandonment and reclamation. There are approximately 1,800 orphan wells, 1,100 facility sites, and 2,400 pipeline segments listed by the Orphan Well Association (OWA) as requiring remediation and reclamation as of April 2, The OWA operates under the delegated authority of the Alberta Energy Regulator, the provincial regulator of the oil and gas industry. Its mandate is to manage the abandonment of upstream oil and gas orphan wells, pipelines, facilities and the remediation and reclamation of their associated sites. Unless government has appropriate and effective systems to manage orphan oil and gas sites and pipeline segments, the province may be faced with significant financial and environmental burdens. We will examine whether the Alberta Energy Regulator has systems and processes to assess whether orphan oil and gas sites are being managed and reclaimed efficiently and economically and that the Alberta government s objectives are being met. AUDIT TOPIC: Governance of Agencies, Boards & Commissions Treasury Board & Finance Agencies, boards, and commissions (ABCs) operate at arm s length from the government but are responsible for providing a significant portion of the government s programs and services. The Alberta government currently controls about 250 distinct agencies, to which it allocates close to half of its annual operating expenditures. The Alberta Public Agencies Governance Act governs ABCs. The recently created Public Agency Secretariat collaborates with departments and public agencies to promote a consistent approach to public agency governance, recruitment and compensation. Its role is to provide clear expectations on all elements of governance including accountability for results and transparency. Setting and communicating clear policy and expectations are necessary for boards to operate at arm s-length while remaining accountable to government. We will examine whether the ministry has adequate systems and processes to ensure ABC compliance with the Alberta Public Agencies Governance Act and related governance policy and expectations. ENTERPRISE SUPPORTS ENVIRONMENTAL SUSTAINABILITY The Office of the Auditor General of Alberta 15

16 WHO WHAT WHY AUDIT TOPIC: Project Management Systems for the Fort McMurray Residential Facility-Based Care Centre Infrastructure Alberta Infrastructure aims to deliver innovative and responsible infrastructure solutions that meet current and future provincial needs. One of Infrastructure s key strategies to achieve this outcome is to continuously improve planning, project management and procurement to deliver provincial infrastructure on time, on budget and to specification. Infrastructure has several health facility capital projects totaling over $4 billion in the planning, design and construction phases, including the Fort McMurray Residential Facility-Based Care Centre. We will examine whether the ministry has project management systems to plan and manage the delivery of the Fort McMurray Residential Facility-Based Care Centre. The Fort McMurray Residential Facility-Based Care Centre is a large capital project that is important to Albertans, especially the residents of Fort McMurray. Residents should know whether Alberta Infrastructure has adequate project management systems to plan and manage the delivery of this new facility on time, on schedule and to specifications. AUDIT TOPIC: Cloud Computing Culture & Tourism Travel Alberta Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to shared computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned with minimal management effort or interaction between the user of the computing services and the service provider. Cloud computing comes with a number of advantages over traditional computing, and because of this many organizations have already transitioned their IT systems to cloud computing. Cloud computing also poses particular risks with respect to how data and information is secured. Travel Alberta, an agency of the Ministry of Culture and Tourism, transitioned its main corporate and accounting application to the cloud in early Without appropriate controls to minimize the operational risks of its cloud accounting application, Travel Alberta might not achieve its goal to minimize administrative costs and to grow the tourism economy. It is critical that personal and operational data used by the government to deliver programs and services is secure. We will examine whether Travel Alberta has appropriate processes to mitigate the risks of using a cloud environment, including an assessment of the operational and legal requirements for securing information and implementation of policies, standards and procedures to minimize security and other risks associated with cloud computing. INFORMATION AND RELATED TECHNOLOGIES ENTERPRISE SUPPORTS 16 PERFORMANCE AUDIT PROGRAM OF WORK 2018 to 2021

17 APPENDIX A: DESCRIPTIONS OF POTENTIAL AUDITS WHO WHAT WHY AUDIT TOPIC: Development of the Agriculture & Food Processing Industry Agriculture & Forestry The Ministry of Agriculture and Forestry is responsible for the policies, legislation, programs and services to support the growth, diversification and sustainability of Alberta s agriculture and forest industries, working with other Alberta government ministries. A stated outcome in the ministry s business plan is that Alberta s agriculture and forest industries are innovative, diversified and competitive. While Alberta is one of the largest primary producers in Canada, its food processing sector remains modest relative to other provinces like Ontario. For example, the revenue ratio of Ontario food processing to farm production is approximately 3:1, while Alberta s ratio is just over 1:1, a ratio that has remained unchanged for several years. We will examine whether the ministry has adequate systems and processes to support development of the agriculture and food processing industry in the province. Unless government has appropriate and effective processes to develop and implement an agri-business development strategy, it will not achieve its diversification objectives which, ultimately, will have a negative impact on Alberta s prosperity. HEALTHY AND SUCCESSFUL ALBERTANS ECONOMIC DIVERSIFICATION AUDIT TOPIC: Process to Manage Criminal Prosecutions The Ministry of Justice and Solicitor General is responsible for the prosecution of persons charged under the Criminal Code, Youth Criminal Justice Act, and provincial statute offences. Justice & Solicitor General AUDIT TOPIC: Foster Care Children s Services Currently, Alberta s criminal justice system is under considerable strain. This is due in part to an increased urgency to resolve trials promptly or risk proceedings being stayed resulting from a recent Supreme Court of Canada decision, and the increasing number of criminal charges being laid. In July 2017 it was reported that more than 1,400 criminal cases before Alberta s courts were at risk of being dismissed for violating the prosecution time guidelines. We will examine whether the ministry has processes to design, implement, and operate an efficient and economical criminal prosecution process, and whether the ministry has appropriate and reasonable procedures to measure and report on achieving its objectives. The Ministry of Children s Services is responsible for Alberta s foster care system. Foster care is a temporary placement for a child who cannot remain with his or her own family due to safety concerns. Where the care is provided by grandparents, other extended family members, and adults with whom they have a close family-like relationship, it is referred to as kinship care. The cost for the provision of foster care and kinship care is $190 million in This amount has remained fairly constant while the total number of children in these placements has decreased by over eight per cent in the last three years. Failure to ameliorate the current strains in the criminal justice system could result in a loss of public confidence and wasted resources. Albertans need to know that the department has systems to ensure the health and safety of children in the foster care system. We will examine whether the ministry is in compliance with its policies and procedures for the selection, training, and monitoring of providers in the foster care system. The Office of the Auditor General of Alberta 17

18 WHO WHAT WHY AUDIT TOPIC: Physician Billing In , the Ministry of Health paid Alberta physicians $4.2 billion (20 per cent of public healthcare expenses and nine per cent of the total provincial budget). The majority of this compensation was paid on a fee-for-service basis according to rates negotiated between the department and the Alberta Medical Association. Health The department assumes physicians fee-for-service billings are accurate and fair. The department subjects all billings to various computerized edit checks for consistency with billing rules but does not audit individual physician practices. As regulator of the medical profession, the College of Physicians and Surgeons of Alberta conducts periodic reviews of physician practices and investigates complaints from the public regarding physician conduct. There is a risk that a physician s fee for service billings may not accurately reflect the services provided to patients. Overpayments or underpayments may arise due to error, negligence, and aggressive or fraudulent billing practices. Fee-for-service compensation to physicians is a significant public sector expense. As the cost of public services continues to rise, the risk of improper payments poses an increasing threat to the sustainability of the healthcare system. We will examine whether the ministry has adequate systems to assess the risk of improper fee-for-service payments to physicians, and to ensure that appropriate action is taken to identify, recover and reduce improper payments. AUDIT TOPIC: Water Management Environment & Parks The Ministry of Environment and Parks is charged with protecting and conserving Alberta s air, land, water and biodiversity. As Alberta s communities and industries continue to grow, demand for water also increases. Effective and efficient management of water resources can reduce the risk of water shortages in both the short-term and long-term. To maintain a healthy and sustainable water supply in Alberta s complex policy environment, the department needs well functioning systems, informed by science and quality data. We will examine whether the department has efficient, economical, and effective systems to maintain and manage water resources. A healthy, secure, and sustainable water supply is essential to Alberta s future. With rising demand for Alberta s water resources as communities and industries in the province grow, there is a risk of insufficient water quantity to meet the needs of Albertans in the future. ENVIRONMENTAL SUSTAINABILITY HEALTHY AND SUCCESSFUL ALBERTANS 18 PERFORMANCE AUDIT PROGRAM OF WORK 2018 to 2021

19 WHO WHAT WHY AUDIT TOPIC: Emergency Preparedness The Alberta Emergency Management Agency, an agency within the Ministry of Municipal Affairs, leads the coordination and collaboration of emergency management partners to provide a provide-wide emergency management system that protects Albertans against hazards. Municipal Affairs Emergency preparedness refers to the capability to respond rapidly and effectively when people, property or the environment are affected by hazards. Preparedness includes planning, exercises, education and training to achieve a state of readiness for emergencies and disasters related to a wide range of weather, industrial and human-created risks. The Alberta s Emergency Management Act outlines a graduated approach to emergency response and shared responsibility by the province and local governments. Under the Act local authorities are responsible for managing the first response to an emergency event, unless the Province assumes the lead role due to a provincially declared state of emergency. Given the shared responsibility for emergency preparedness in Alberta, coordination of the emergency preparedness systems in Alberta is critical to the safety and well-being of Albertans. We will examine whether the ministry has effective processes to coordinate emergency preparedness in Alberta. Because of this interrelationship and shared responsibility between the different levels of government, the Office of the Auditor General of Alberta, and the City Auditor s Offices of the City of Edmonton and City of Calgary are each conducting independent but complimentary audits in this area. Each audit office will produce their own audit report. The independent audit reports may contribute to a summary report offering a more comprehensive examination of emergency preparedness coordination and systems in Alberta. AUDIT TOPIC: Capital Planning for Information Technology Service Alberta The Alberta government relies heavily on information and related technology (IrT) to deliver programs and services to Albertans. Having effective capital planning processes to define future IrT infrastructure needs is critical. The Ministry of Service Alberta leads capital planning for IrT. Service Alberta s capital plan includes funding over the next five years for information technology initiatives such as:» $227 million for One Information Management (IMT) enterprise priorities» $108 million for IMT critical infrastructure and enterprise planning priorities» $111 million in health information technology systems development» $367 million for health clinical information systems We will examine the ministry s processes for ensuring the Alberta government is able to define future information and related technology infrastructure needs. Information technology is critical to the effective delivery of programs and services in the Government of Alberta. As technology continues to evolve rapidly, Albertans will demand that government keeps pace and makes the best use of information and related technology. To do that, government will need an effective capital planning system. INFORMATION AND RELATED TECHNOLOGIES ENTERPRISE SUPPORTS The Office of the Auditor General of Alberta 19

20 WHO WHAT WHY AUDIT TOPIC: Trusted Data Service Alberta The Ministry of Service Alberta is charged with delivering high quality, coordinated business, financial and technology services to government ministries, while ensuring government is transparent and information is secure. The Alberta government needs complete, accurate, credible and trusted data to make well-informed decisions, identify and mitigate risks and to deliver efficient and effective programs and services. As citizens are becoming greater consumers of information, there is a need for government to achieve a balance between openness, transparency and privacy. We will examine whether the ministry has processes to ensure key government information is complete, accurate, valid and secured. Those charged with the design and delivery of government programs and services need information they can trust to manage them effectively and meet the needs of Albertans. Albertans want more transparency and oversight of data and to know what data is being used to make decisions affecting them. AUDIT TOPIC: Information Technology Strategic Planning and Governance Service Alberta The Alberta government s federated model of information technology (IT) service delivery has been in place for the last two decades. Although the model has evolved to support better sharing and collaboration among government ministries, challenges remain because each ministry is still responsible for managing the technology required to support its own programs and services. Service Alberta has been working to improve government-wide IT service delivery, in collaboration with department IT leaders. We will examine whether the ministry has processes to ensure that IT strategic planning and governance support the Alberta government s business and technology needs. Given many demands for IT investment and limited funding, it is critical for the government to have effective IT strategic planning and governance systems to continue to support and modernize government programs and services. INFORMATION AND RELATED TECHNOLOGIES 20 PERFORMANCE AUDIT PROGRAM OF WORK 2018 to 2021

21 APPENDIX A: DESCRIPTIONS OF POTENTIAL AUDITS WHO WHAT WHY AUDIT TOPIC: Alberta Research & Innovation System Economic Development & Trade AUDIT TOPIC: Workforce Demands The Alberta Research and Innovation System is overseen by the Ministry of Economic Development and Trade. It involves discovery and applied research at Alberta s universities and the Alberta Innovates corporation. Research and innovation play a significant role in economic diversification by creating and expanding value-added and knowledge-based industries, and finding solutions for major challenges such as sustainability of the health system, supply and quality of water, and carbon capture and storage. The Alberta government invests approximately $800 million annually to support research and innovation activities. We will examine whether the Alberta Research and Innovation System has efficient, economical, and effective processes to align provincially-funded discovery and applied research projects with the Alberta government s desired outcomes. Successful alignment of the Alberta government s investment in research and innovation with its business objectives is critical to the prosperity of Albertans. ECONOMIC DIVERSIFICATION Advanced Education Labour The Ministry of Labour is charged with ensuring that Alberta has a skilled workforce and an efficient labour market to support a thriving and diverse economy. To determine future labour force needs, the ministry draws upon a range of labour market information. For example, it uses supply and demand models to make 10-year projections regarding demand, supply and labour market imbalances for difference occupations. The most recent publication, Alberta s Occupational Demand and Supply Outlook , predicts that Alberta may face a cumulative labour shortage of 49,000 workers by the year Under the oversight of the Ministry of Advanced Education, post-secondary institutions also collect and analyze their own data to determine what programs and courses to provide, thereby affecting the supply of skilled workers. Alignment of Alberta s post-secondary education offerings with Alberta s labour force requirements is critical to the goal of diversifying the Alberta economy. We will examine whether Alberta s post-secondary institutions, under the oversight of the Ministry of Advanced Education, use current and projected Alberta workforce demands to align program offerings with projected changes in provincial labour force needs over time. The Office of the Auditor General of Alberta 21

22 WHO WHAT WHY AUDIT TOPIC: Systems to Deliver Home Care Services to Albertans Health Alberta Health Services Home Care is one of three key services in the spectrum of continuing care the other two are Supportive Living and Long Term Care. Publicly-funded home care provides medical and personal care services, including nursing care, managing medications, and assistance with bathing. Other services such as transportation and housekeeping are available if paid for by the patient. A patient s needs and the services they qualify for are determined through a personal assessment by a home care case manager. Alberta Health Services (AHS) is responsible for providing all publicly-funded home care services in the province. Home care services are delivered by AHS employees and 13 contracted service providers in the private and not-for-profit sectors. In 2017, AHS paid $585 million to deliver home care to a total of 105,000 Albertans, of whom 75,000 were actively receiving care at a given point in time. AHS faces a number of challenges in delivering home care, including service demands which continue to exceed funding/supply, shortages of qualified workers (particularly in rural areas), and difficulties in monitoring the provision of services by multiple providers. Home care provides vital support to achieve better health outcomes, help patients live longer at home (avoiding or delaying more expensive care), leave hospital quickly to recuperate at home, and teach family members and friends to be effective caregivers for a patient. High quality home care services are an essential component of Alberta s health care system. We will examine whether AHS has adequate systems to ensure the economy and efficiency of home care services, and whether it has adequate procedures to measure and report the on effectiveness of these services, in the context of AHS overall mandate for the delivery of healthcare services in Alberta. AUDIT TOPIC: Oversight of Municipal Financial Programs & Systems Municipal Affairs assists municipalities in providing well-managed, collaborative, and accountable local government to Albertans, including the administration of municipal grant programs and oversight of municipal property tax assessment systems. Municipal Affairs Municipal Affairs administers the Municipal Sustainability Initiative, a key funding initiative to strengthen the municipal sector and provide support to municipalities for infrastructure needs and other priorities in support of their long-term viability. Financial support is also provided to municipalities for regional collaboration initiatives, grants in lieu of property taxes on Crown properties, and other local capacity building activities. It is important that municipal financial programs are meeting their objectives and Albertans receive value from the funding granted by the province and raised directly through local taxation. We will examine whether the ministry has effective systems to oversee municipal financial programs. ENTERPRISE SUPPORTS HEALTHY AND SUCCESSFUL ALBERTANS 22 PERFORMANCE AUDIT PROGRAM OF WORK 2018 to 2021

23 WHO WHAT WHY AUDIT TOPIC: Monitoring School P3 Contracts A public-private partnership (P3) is a business model sometimes used to deliver infrastructure through contracts between the government and a private company or consortium. Infrastructure Under this model, the government engages a private contractor to design and build a project, provide some or all of the financing for the project, and operate and maintain the project over an extended period of time. The government pays the contractor over the term of the contract, subject to deductions for failing to meet contractually defined performance standards. This can result in infrastructure that is less costly over the life of the contract than tendering each element (design/build, finance, operate/maintain) separately. The government s school P3 program currently plans for 40 schools to be built over the next 32 years at a cost of over $1.5 billion. The government also has over $2 billion invested in ongoing contract monitoring activities related to P3 contracts. The Alberta government has significant, long term investments in monitoring and maintenance activities for its P3 projects. Effective monitoring of these contacts is essential to ensure government is realizing value for these investments. We will examine whether ministries have appropriate and reasonable procedures to monitor vendor compliance with contract terms and conditions to ensure all maintenance and other responsibilities are met. AUDIT TOPIC: Implementing Truth and Reconciliation Commission Call to Action Number 57 Alberta Public Service Commission Indigenous Relations In June 2015 the Truth and Reconciliation Commission of Canada (TRC) issued its summary report, including 94 calls to action. The calls to action lay out a specific roadmap for governments, organizations and Canadian civil society to reconcile with Indigenous peoples in Canada. The Government of Alberta formally, and publically, accepted the calls to action and committed to their adoption. The government also accepted the United Nations Declaration on the Rights of Indigenous Peoples (UN Declaration). In September 2017 the Government of Alberta announced its intentions to develop and deploy mandatory training on Indigenous history, treaties and the legacy of residential schools to all members of the Alberta public service, including agencies, boards and commissions. The Alberta Public Service Commission and the Ministry of Indigenous Relations are leading the initiative jointly. Concrete action to focus on identified root cause of challenges to the effectiveness of provincial programs in meeting the needs of Alberta s indigenous peoples is more than a moral imperative it has real economic implications to the province and to all Albertans. We will examine the processes put in place by the Public Service Commission and the Ministry of Indigenous Relations to develop, deploy and monitor compliance with mandatory training for all members of the Alberta public service and its agencies, boards and commissions. HUMAN RESOURCES ENTERPRISE SUPPORTS The Office of the Auditor General of Alberta 23

24 APPENDIX B: ACKNOWLEDGMENTS We would like to thank the following for their input to the process in prioritizing and preparing the three-year program of work for performance audits. First, we would like to acknowledge the members of the Deputy Ministers Advisory Panel for their input on helping identify and prioritize areas of focus and audit topics: DAVID MORHART BRAD PICKERING LORNA ROSEN ROD SKURA BEV YEE Deputy Minister, Service Alberta Deputy Minister, Municipal Affairs Deputy Minister, Treasury Board & Finance Deputy Minister, Advanced Education Deputy Ministry, Intergovernmental Relations We would also like to thank the following individuals who comprise the External Advisors Panel for their time, expertise and wise counsel: MARIA DAVID-EVANS retired from the Government of Alberta in November of 2011, where she served as Deputy Minister of Aboriginal Relations since March 13, Prior to this position, and since 1997, she held various Deputy Minister portfolios, including Children s Services, Learning, Infrastructure, and Family and Social Services. Before joining the Government of Alberta, Ms. David-Evans built her career in the public service with the City of Edmonton. Ms. David-Evans has received numerous awards for her leadership and has served as the President of the Institute of Public Administration of Canada (IPAC). JIM DINNING is a former Member of the Legislative Assembly of Alberta ( ), Provincial Treasurer and businessman. He now serves on the board of directors of a variety of Canadian companies. In June 2010, he was selected as the 12th Chancellor of the University of Calgary. Mr. Dinning sits as an advisor to Canada s Ecofiscal Commission. 24 PERFORMANCE AUDIT PROGRAM OF WORK 2018 to 2021

25 R.J. (BOB) FESSENDEN held a variety of positions at the Alberta Research Council from 1982 to Dr. Fessenden served as President of the Alberta Science and Research Authority from 1995 until 1999, when he was appointed Deputy Minister of Alberta Economic Development. From 2001 to 2008, Dr. Fessenden served as Deputy Minister in three different departments and of the Premier s Council for Economic Strategy. JOHN McGOWAN retired from the Alberta Urban Municipalities Association, effective December 31, 2015, where he served as the CEO from February 1998 through December Prior to his tenure at AUMA, he served in a variety of positions in the Alberta Public Service, finishing as Deputy Minister of Municipal Affairs. John was awarded the Lieutenant-Governor s Award for Excellence in Public Service in KATHRYN HANNAH Since becoming a nurse in 1965, Kathryn s career has taken her to clinical practice, academia, work with government, the private sector and more. Dr. Hannah was recognized with appointment to the Order of Canada for her national and international pioneering work and efforts to promote the use of information technology to enhance health care. Dr. Hannah is the President, HECS Inc.; Adjunct Professor, School of Nursing, University of Victoria; Informatics Nursing Advisor, Canadian Nurses Association & Executive Project Lead, C-HOBIC. The Canadian Nursing Informatics community and the Canadian Nurses Foundation collaborated to establish the Dr. Kathryn J Hannah Nursing Informatics Scholarship in EDDY ISAACS retired March 31, 2016 as Chief Executive Officer of Alberta Innovates Energy and Environment Solutions (AI EES) and Director General for CanmetENERGY in Devon, Alberta. Dr. Isaacs has been instrumental in promoting innovation in energy and the environment across Canada and has served as Co-Chair of the Energy Technology Working Group of the Canadian Council of Energy Ministers. A fellow of the Canadian Academy of Engineering, he serves on the boards of the Petroleum Technology Alliance of Canada and the Alberta Chamber of Resources. WILLIE LITTLECHILD, Ph.D., is a Cree chief, residential school survivor, and lawyer who has worked both nationally and internationally including with the United Nations to advance Indigenous rights and Treaties. He has also through leadership with the Truth and Reconciliation Commission raised awareness of former Canadian policies that harmed the livelihood and culture of Indigenous Canadians. Born in Alberta, Mr. Littlechild studied physical education at the University of Alberta and law at the University of New Mexico, where he continued his balance of academics and hockey. He has been awarded the Order of Canada and in 1993, the Canadian government awarded Chief Littlechild the Canada 125 Medal. Mr. Littlechild was appointed the Honorary Chief for the Maskwacis Crees and International Chief for the Treaty No. 6 Confederacy. He is a 2015 Laureate of the Indspire Awards and was recently honoured with the Alberta Award of Excellence. The Office of the Auditor General of Alberta 25

26 RAY MARTIN was born in Delia, Alberta. He attended the University of Alberta. He later attended the University of Calgary in order to earn his master s degree. Mr. Martin, a teacher by profession, was first elected to the Legislative Assembly of Alberta in 1982; he became leader of the Alberta NDP in He is currently the Edmonton Public School Board Trustee for Ward D. AL O BRIEN retired as Deputy Provincial Treasurer of the Province of Alberta in May In his 35-year career in the Alberta Public Service, Al served as Director of the Budget Bureau, Assistant Deputy Treasurer, Controller, and as Deputy Provincial Treasurer, Management and Control from 1984 to He was awarded the Lieutenant-Governor s Award for Exceptional Achievement and Distinctive Leadership in Public Administration in Alberta in 1998 and was appointed a member of the Order of Canada in KEVIN TAFT is a best-selling author, consultant, speaker, and former provincial politician in Alberta. Dr. Taft acquired extensive public policy experience between 1973 and 2000 in the Alberta government, private sector, and non-profit sector, particularly in health, energy and economic policy. He was a Member of the Legislative Assembly of Alberta with the Alberta Liberal Party from 2001 to 2012, and leader of the opposition from 2004 to We would also like to thank the members of the Provincial Audit Committee for their review and input on our work:» BARRY JAMES (CHAIR) FCPA, FCA, ICD.D» MARK ANIELSKI BA, BSc, MSc» LORI BOKENFOR LLM, LLB» RANDY HENDERSON CPA, CA, CF, ICD.D» HILARY ROSE BA, CPA, CA, CIA, CRMA» MELANEE THOMAS BA, MA, Ph.D.» THE HONOURABLE JOE CECI, Minister of Treasury Board & Finance We also thank the Members of the Legislative Assembly who serve on the Public Accounts Committee, with whom we value our working relationship in providing independent oversight of government on behalf of Albertans. And finally, we would also like to acknowledge the 150 members of the team at the Office of the Auditor General for their work in identifying and scoping the performance audits outlined in this document, and for their professionalism in completing the audit work. 26 PERFORMANCE AUDIT PROGRAM OF WORK 2018 to 2021

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28 Office of the Auditor General of Alberta 8th Floor, Street NW Edmonton, Alberta, Canada T5K 2J8 Phone: CONNECT WITH Auditor General of Alberta Office of the Auditor General of Alberta This report is available at oag.ab.ca ISSN