Introduction

Thank you for the warm introduction and the opportunity to discuss with you today the changing work of my Office.

In my presentation today, I plan to focus on:

• what we do and for what purpose;
• why we need to change or reposition and what we are doing to do so; and
• recent and upcoming initiatives and reports.

My presentation is about 20-25 minutes. After, if you have questions, I will do my best to answer them.

After 11 years as an auditor general in two provinces, I continue to learn in so many circumstances that providing independent, credible and evidence-based information on public sector performance is fundamental to public confidence in our institutions of government.

At this time in particular, BC legislators must demonstrate a rigorous public scrutiny of government performance – public confidence in our institutions of government demand and deserve no less.

Unfortunately, credible cost and performance information is not yet available.

• The government, for example, does not yet use a complete financial planning and reporting framework
• Past service plans and reports include incomplete information on the costs and intended results of programs or on whether the information provided is reliable
• In addition, resources are allocated within key programs without knowing whether government has the capacity to deliver the programs and services promised

As a result, legislators and, thus BC citizens, are being asked to make or support decisions without complete information, without knowing whether the information provided is reliable, and without knowing whether government has the capacity to deliver the programs and services promised.

This is particularly worrisome at a time when major decisions are being made to change how government business is carried out.

What we do

As the Auditor General, I am an officer of the Legislative Assembly.

I am appointed by an all-party committee which has the responsibility to recommend to the Assembly – unanimously – a person to be the Auditor General for a term of 6 years. I have now held this position for 20 months.

I can be removed from Office through a vote in the Legislative Assembly  –  as far as I know, this has never happened in Canada.

I report to the Assembly. My reports – which are public – are automatically referred to a standing committee of the Assembly which has the responsibility of dealing with the contents of my reports in meetings open to the public.

Public scrutiny is a key to the success of and public confidence in our institutions of government.

In general, the role of an Auditor General is to help all legislators and, thus, all citizens, hold the government accountable for its use of public resources and for its management of the considerable responsibilities entrusted to government.

We entrust much to our institutions of government!

I have an Office of about 90 people with a wide range of professional credentials and experience – we are a small office compared to say Alberta and Saskatchewan – so we must ensure we are diligent in deciding what to do and rigorous in ensuring we do our work well.

We have access to all parts of government, to all types of information, and we decide what to report and when. And, our report are public documents.

Our goals and objectives

The goal of our Office is to encourage government to provide legislators and BC citizens with the best information possible for assessing the performance of government.

Our objective is that legislators and the public receive relevant, reliable and understandable information on the planned and actual results of government, and on how well government is managing the key risks it faces in achieving its planned results.

We want to make a difference by contributing to accountable and well-performing government. Valued for making a difference is our vision.

Personally, I will be satisfied if four and one half years from now there is less concern and debate focused on government mismanagement, and more debate and focus on the key policy issues faced by legislators and government – which is where the debate should be focused.

The outcome I pursue is a healthier debate of policy alternatives in the context of a growing public confidence that no matter which policy alternative is chosen it will be well managed by the government of the day! So, four years from now, please invite me back to discuss whether I think there has been progress.

In our work, we have four key strategies which can be thought of as our lines of business and for which we allocate our resources and energies.

We examine financial statements to ensure they present reliable measures of such key items as surplus or deficit – I expect there will be significant pressure on accounting issues during the next few years in the context of promised surplus/deficit targets by government.

We review the quality of the broader performance information provided by government to legislators and the public in the form of government performance plans and reports.

We assess how well government manages the key risks it faces in achieving its planned results – I look forward to reviewing the government’s service plans to be tabled on February 19^th to determine the extent to which risks are identified, and plans to mitigate are described.

And, we help legislators make use of performance information in their scrutiny of government.

Recent work of our Office has focused on such risks as:

• The extent to which we are prepared for earthquakes, provide children a safe learning environment and safeguard our drinking water sources
• The extent to which government monitors risks related to credit unions and trust companies
• The degree to which governments in BC are prepared for wild fires spreading to communities
• Governance and financing issues related to public transit in the lower mainland – TransLink
• The quality of information provided to legislators in government performance plans and reports

In addition, each year we sign off on the government’s financial statements which include the financial results of many, many organizations – For the year ended March 31, 2001 – those statements report a surplus of $1.5 billion compared to $30 million the year before.

Our current work includes examining:

• The work environment of the public service and the extent to which those elements associated with quality service actually exist
• The information used by government when allocating resources to regional health authorities
• And, the information technology management practices of one large ministry using a portfolio management model

In addition, we will soon be tabling a report that sets out our understanding of key financial and economic trends.

Our findings, conclusions and recommendations do make a difference. Most of recommendations have been supported by legislators and implemented by government particularly so in the last two years.

Our reports can be found at our website – www.bcauditor.com

We need to reposition

Even with much valuable work done or in the works, we must reposition.

Much change is taking place that directly affects the information and assurance needs and demands of our customers and stakeholders. These changes challenge what we do – and are taking place in a time frame that will test our capacity to manage.

Rigorous public scrutiny is particularly important now.

Government is changing what it does and how it delivers programs. This is occurring at a time of difficult financial pressures, economic uncertainty, and unusual political party representation.

During the next few years, earning public confidence will therefore require legislators to demonstrate rigorous and objective public scrutiny of the performance of government.

Organizations undertaking significant change are open to risks that need to be managed and mitigated.

The government plans to reduce the size of the public service. This has the potential to reduce management capacity at a time when management needs to deal with the complexity of significant change.

Alternative service delivery methods such as contracting out and public/private partnerships also require managers to acquire new skills to deal with risks associated with these new arrangements – to ensure public policy goals are achieved efficiently.

We are repositioning

We are repositioning our work significantly. And, we are trying to do so in a manner that builds on our strengths, manages our risks, and adheres to our values.

Several positive changes are taking place that should lead to a more effective public scrutiny of government performance.

George Morfitt helped set the stage for these changes - for example:

Provincial legislators and the government of the day have finally endorsed a move to a performance management and accountability framework that focuses on measurable results, outcomes and costs. New legislation has been put in place to reinforce this expectation and to make it a sustainable one.

From now on, government performance or service plans and reports are to be made public in a timely manner with ministers signing off as to their responsibility and, thus, accountability.

Legislators demanding that the service plans of every government organization be tabled on budget day (February 19^th) is a major step toward a more meaningful public scrutiny of the performance of government.

These steps represent a significant breakthrough in terms of the direction and focus of future public sector management.

Bringing this new direction to life will require significant leadership, perseverance and hard work from all of us.

The government’s financial plan and financial report are to adhere to generally accepted accounting principles which will lead to, for the first time, a complete accounting of planned and actual results for the health and education sector.

No doubt sectoral financial statements and performance reports are on the horizon – I certainly will be pushing for such reports.

There is a growing convergence of accounting standards in the public and private sectors in Canada and Internationally.

In Canada – we have the opportunity to advance public sector accounting practices in a manner that builds on the best thinking and practices within the public and private sectors in Canada and internationally.

Another leading edge development is that, as a public sector community, we are close to reaching agreement on general principles for performance reporting.

This agreement will represent a significant step forward and is being reached within the context of the CCAF (formerly known as the Canadian Comprehensive Auditing Foundation).

At the Legislature, Standing committees of legislators have been assigned responsibility for reviewing the performance plans and results of key parts of government including Crown corporations. This has never happened before!

In the next year, I expect that there will be a new Auditor General Act that sets out more clearly our responsibility as the auditor of all government, provides clear authority to examine the management practices of those organizations that receive public money, minimizes the extent to which a government of the day can interfere with the management of our office, and demands significant accountabilities from our office to legislators.

These changes set the stage for a move towards a system of government decision making and accountability that focuses on measurable performance expectations – a new era indeed!

These changes are also accompanied by significant policy shifts and restructuring during a time of tremendous financial pressures.

We are likely to see – government focusing more on policy development and performance management and less on delivering programs – a government focusing on results or outcomes rather than rules and second guessing, a government that takes risks when delegating authority for program delivery decisions or when exploring program delivery alternatives.

Significant risks will emerge that might not be well identified, discussed or well managed.

However, such a sea change is more likely to be successful at a time of financial pressure because that’s when decisions that are long over due are made about the role of government and about program delivery alternatives.

The work of internal and external performance management advisers and assurers will be even more important.

What we are doing to reposition

We are repositioning our Office in the context of our key long-run goal and in the context of several key measurable objectives.

As I said earlier, our key externally focused long-run goal is that legislators and the public have the best information possible for assessing the performance of government.

Our objectives focus on the information government provides and uses to guide its planned and actual results, and to managed the key risks it faces in achieving its planned results.

Within our office, we are rethinking our priorities and are putting in place new ones, we are refocusing our organization by building on our strengths, and we are putting in place a stronger sense of urgency including the premise that to be credible we must walk our talk.

On the rethinking our priorities front, we are moving forward a work program that focuses on:

• The relevance, reliability and understandability of the summary financial planning and performance information published by government – constant vigilance will be required;
• The governance, accountability and risk management practices within the health and education sectors – where large amounts of public money is spent;
• Risk management of large capital projects and complex information systems – where risks abound;
• The management of risks to our environment – a key interest of all BC citizens; and
• We plan to support the move towards results-focused management and accountability at every opportunity.

In addition, we plan to examine the extent to which government puts in place effective mechanisms to manage and deliver essential programs and services during a significant organizational change.

And, we plan to examine whether new service delivery arrangements ensure government and legislators know the services expected to be delivered through non-government organizations are delivered.

On refocusing our own organization, we are

• Flattening our decision making to be more responsive including a key sector focus;
• Integrating our financial and operational audit expertise to help us better assess broader performance reports and risk management issues;
• Strengthening the extent to which we examine and provide assurance to legislators on government risk management practices;
• Moving to more of an oversight role with respect to the financial statements of individual public sector organizations; and
• Developing stronger working arrangements with other legislative audit offices across Canada.

On the walk the talk front, we are

• Challenging our practices through self-assessment using the criteria we develop for our risk management audits;
• Strengthening our own public performance reporting; and
• Strengthening our access to competencies to align with our priorities.

Closing

We have much work to do but the purpose is worthwhile.

We want government managers, legislators and the public to have the best information possible for assessing the performance of government.

I want to see more public confidence in our institutions of government.

I know a rigorous public scrutiny of government performance is fundamental to public trust and confidence in our institutions of government.

That scrutiny requires independent, credible and evidenced-base information and assurances.

There is much work to do in what no doubt will be a demanding and challenging ‘new era’.

Thank you – that ends my formal presentation – now – if you have questions, I will do my best to answer them.

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