2011-2012 Departmental Performance Report - Supplementary Information Tables - Response to Parliamentary Committees and External Audits

Response to Parliamentary Committees

Public Transit in Canada

On September 28, 2011 the Standing Committee on Transport, Infrastructure and Communities (SCOTIC) agreed to undertake a study on public transit in Canada. The SCOTIC heard from a total of 20 organizations, including the Federation of Canadian Municipalities, the Canadian Urban Transit Association, various transit authorities and officials from Infrastructure Canada (INFC) throughout October and November 2011.

Upon completion of its study, the SCOTIC tabled in the House of Commons on February 15, 2012, its report entitled: "Study on Transit in Canada". Recognizing the benefits of transit services, the Committee recommended that as part of the new infrastructure plan that will replace the Building Canada plan after its expiry in 2014, that the Government of Canada continue to recognize the importance of transit to the economic health, quality of life and technological advancement of Canadian communities and the people who live in those communities.

Pursuant to Standing Order 109, the Committee requested that the Government table a comprehensive response within 120 calendar days. On June 14, 2012, the Government Response to the Committee's report was presented to the House of Commons. The response recognized the importance of public transit in making our communities more prosperous, safer and greener, while highlighting that primary responsibility for public transit rests with provinces, territories and municipalities. The response outlined the significant level of federal investments in public transit since 2006 and emphasized that transit will be discussed in the context of the engagement process for the development of a new long-term plan for infrastructure.

G8 Legacy Infrastructure Fund

On June 9, 2011, Mr. John Wiersema, then interim Auditor General for Canada, released a 2011 Spring report that included a chapter on the G8 Legacy Infrastructure Fund. Following the release of the report, the Standing Committee on Public Accounts (PACP) agreed to undertake a study on its finding.

Upon completion of its study, the PACP tabled in the House of Commons on March 28, 2012, its report entitled: "Chapter 2, G8 Legacy Infrastructure Fund, of the 2011 Spring Report of the Auditor General of Canada". The PACP report makes one official recommendation; that the Government of Canada ensure that all decisions on the intake and selection processes for infrastructure funds be appropriately documented.

Pursuant to Standing Order 109, the Committee requested that the Government table a comprehensive response within 120 calendar days. As the 120 deadline of July 26, 2012 occurred during the summer adjournment period, the Government response was tabled on August 22, 2012 (the first available tabling date after July 26, 2012). The Government response accepts the one recommendation made in the report, as it is consistent with the Government's priority of ensuring accountability and transparency.

Response to the Auditor General (including to the Commissioner of the Environment and Sustainable Development)

1. Audit of Public Accounts 2010-11

The Office of the Auditor General's Audit of Public Accounts 2010-11 was tabled in Parliament in December 2011.

The Audit objective was to provide support for an independent opinion on whether:

• The summary financial statements have been fairly presented, in all material respects, in accordance with the stated accounting policies of the Government of Canada, which conform with Generally Accepted Accounting Principles (GAAP), and
• These policies have been applied on a basis consistent with that of the preceding year.

There were no recommendations addressed to Infrastructure Canada; however there were two observations made, both of which were related to leave at the Executive level.

Infrastructure Canada has undertaken the following actions in response to these observations:

The Department has implemented a new process by which leave reports and forecasts are produced and distributed to Executives every trimester. This initiative provides Executives with a summary of all transactions taken, and also serves as a reminder of the vacation leave balances in excess of those allowed by the Treasury Board Directive on Executive Compensation that must be liquidated. Infrastructure Canada has also strengthened its monitoring procedures to ensure that all leave is properly recorded in a timely manner.

2. Performance Audit of Canada's Economic Action Plan (EAP) – Phase II

The Office of the Auditor General has, to date, conducted two audits of Canada's Economic Action Plan. Infrastructure Canada participated in, and was impacted by both of them. The results of the second audit (Phase II) were published in the Auditor General's Fall 2011 report, which was released on November 22, 2011.

The Audit objective was to determine whether selected federal departments and agencies monitored and reported on progress and federal spending for selected EAP programs.

The findings for Infrastructure Canada were all positive and there were no recommendations addressed to INFC.

In particular, the Auditor General (at the time, the Interim Auditor General, Mr. John Wiersema), found that Infrastructure Canada monitored the progress and spending of projects, and made appropriate adjustments in a number of cases, including extending deadlines for project completion in the case of the Infrastructure Stimulus Fund (ISF). In addition, the ISF contributed in large part to achieving the Economic Action Plan objective to spend federal resources within a two-year timeframe (i.e. by March 31, 2011).

The Auditor General's second report also outlined additional lessons learned for time-sensitive programs, noting specifically that detailed project schedules should be required and information should be collected in a timely fashion from provinces to confirm that projects are being completed as intended and that committed federal funds allocated to projects are spent.

3. Audit of Internal Audit in Departments and Agencies

The Office of the Auditor General's Audit of Internal Audit (Chapter 3 of the 2011 Status Report) was tabled on June 9, 2011. The objective of the audit was to assess the progress that the government has made in addressing the concerns raised in Chapter 1 of the Office of the Auditor General 2004 November Report.

Overall, the report noted that the government showed satisfactory progress in acting upon the commitments it made in response to the observations and recommendations of the 2004 report. More specifically, departmental audit committees were created in most large departments, and the majority of members came from outside the federal public administration. In addition, Departments have created internal audit charters that set out clear roles and responsibilities for internal audit activities.

There were no recommendations addressed to Infrastructure Canada.

4. Audit of the Expenditures for the 2010 G8 and G20 Summits (Chapter 1) – Audit of the G8 Legacy Infrastructure Fund (Chapter 2)

The 2011 Spring Report of the Auditor General of Canada included the Audit of the Expenditures for the 2010 G8 and G20 Summits (Chapter 1) as well as the Audit of the G8 Legacy Infrastructure Fund (Chapter 2). Chapter 1 outlined that Infrastructure Canada was responsible for the administration of a $50 million G8 Legacy Infrastructure Fund that funded projects in the communities of the Parry Sound–Muskoka region. This fund was covered in Chapter 2 of the Spring Report and therefore there were no observations nor recommendations addressed to INFC within Chapter 1.

The G8 Legacy Infrastructure Fund Audit objective was to examine the process for allocating federal funds for the G8 Legacy Infrastructure Fund in order to determine how the fund was established and how projects were selected.

Overall, the audit acknowledged that Infrastructure Canada set up mechanisms to administer contribution agreements for the 32 approved projects in accordance with the terms and conditions of the G8 Legacy Infrastructure Fund. It also confirmed that agreements were made in accordance with government policy and that INFC maintained project records and established project management frameworks.

While the report identified deficiencies with respect to the Parliamentary approval of program funding as well as the project selection processes and documentation related to selection; there were no recommendations addressed to Infrastructure Canada.

External Audits: (Note: These refer to other external audits conducted by the Public Service Commission of Canada or the Office of the Commissioner of Official Languages)

1. Follow-up Audit of Infrastructure Canada

In 2011-12, a Follow-up Audit of Infrastructure Canada was performed by the Public Service Commission of Canada (PSC). The Audit objective was to determine whether Infrastructure Canada has implemented corrective actions that adequately address the recommendations from the October 2009 PSC's audit report.

The 2011-12 Follow-Up Audit of Infrastructure Canada audit report is scheduled to be tabled in October 2012. As such, the results/recommendations from the Follow-Up Audit will be included in the 2012-13 Departmental Performance Report.

Background on the 2009 Public Service Commission of Canada's Audit of Infrastructure Canada

An external audit was conducted by the PSC titled Audit of Infrastructure Canada. This was a human resources audit to examine the human resources staffing practices at Infrastructure Canada. The final audit report was published in October 2009 and covered the period of January 1, 2006 to April 30, 2008. Recommendations made in the audit report required Infrastructure Canada to report back to the PSC twice a year to ensure the concerns identified in the audit were completely addressed. Infrastructure Canada has completed and successfully addressed all recommendations made in the audit report.  During the progress update provided to the Departmental Audit Committee in September 2010, all of the six management action plans were listed as completed for ARCHIVED - this audit.

2. Annual report of the Commissioner of Official Languages

Part of its Annual Report, the Office of the Commissioner of Official Languages (OCOL) issues report cards to a number of federal institutions. These report cards evaluate the strengths and weaknesses of federal institutions in terms of their various obligations under the Official Languages Act. The OCOL Report was published in October 2011 and covered the period from April 1, 2010 to March 31, 2011.

The Report stated that INFC had some good official languages practices. More specifically, funding agreements that INFC had with other levels of government included language clauses requiring that communications with the public be in both official languages. In addition, it was noted that almost all INFC positions were designated bilingual and nearly all incumbents met the language requirements of their positions.

With respect to managing official languages, it was identified that INFC should include all parts of the Act in its official languages action plan rather than focusing only on language of work.

Overall, INFC received a rating of B, which is equivalent to Good on a five point scale where A was identified as Exemplary and E as Very poor.