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Federal Accountability Action Plan, April 2006

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Strengthening the power of the Auditor General

Delivering on our commitments

  • New powers for the Auditor General to audit individuals and organizations that receive federal money
  • Ongoing departmental reviews of granting programs enshrined in law
  • An independent blue-ribbon panel to identify barriers to access for recipients of government grants and contributions programs

The federal government spends some $26 billion per year on grants and contributions to individuals, companies, and non-governmental organizations.

Why we are doing this

One of the most important roles of Parliament is to hold the government to account for its use of taxpayers’ dollars. To do this effectively, parliamentarians need objective and fact-based information about how well the government raises and spends public funds. The Auditor General is an independent and reliable source of such information. The Auditor General audits federal departments and agencies, most Crown corporations, and many other federal organizations; reports up to four times a year to the House of Commons on matters that the Auditor General believes should be brought to the attention of the House; and testifies on audits before parliamentary committees.

The Federal Accountability Act will introduce the following changes:

  • The Act will give the Auditor General authority to inquire, at his or her discretion, into the use of funds that individuals, institutions, and companies receive under a funding agreement with any federal department, agency, or Crown corporation. See footnote 5
  • It will require that the Government include in funding agreements with recipients provisions that support Auditor General audits. More specifically, funding agreements will:
    • prescribe that recipients maintain records with respect to federal funding provided;
    • create a contractual right for the Auditor General to inquire into the use of funding provided; and
    • require that recipients provide information and records to the Auditor General on request.
  • The Act will provide immunity for the Auditor General from criminal and civil proceedings, and protection from being a compellable witness, for actions taken in the performance of his or her statutory duties.
  • It will require that every department review, at least once every five years, the relevance and effectiveness of each ongoing grants and contributions program for which it is responsible. Grants or contributions to individuals, corporations, and non-government organizations account for $26 billion in annual transfer-payment spending. The Treasury Board will determine the scope of these reviews, how they are approached, and when departments will submit reports to the Treasury Board of Canada Secretariat.

In addition, we will introduce the following measures:

  • We will ensure that the Office of the Auditor General has adequate resources to fulfill its mandate. The Auditor General is one of five Agents of Parliament currently participating in a two-year pilot project in which an all-party Parliamentary Advisory Panel considers the funding requests of Agents prior to a final Treasury Board decision on their budgets. This process gives Parliament a greater role and respects the independence of Agents of Parliament, while allowing the Treasury Board of Canada Secretariat to provide input on panel recommendations. The Government will work with the House Leaders to continue this pilot process, the results of which will inform longer term decisions on the means of ensuring adequate funding for the Office of the Auditor General.
  • We will continue to respond publicly to the Auditor General’s recommendations and ensure that independent departmental audit committees monitor the implementation of corrective action plans.
  • We will establish an independent blue-ribbon panel with a mandate to:
    • review the draft policy on transfer payments, along with its directives and related departmental practices;
    • identify barriers to access for recipients of government grants and contributions programs and recommend changes to policies and practices to ensure that Government delivery of those programs is fair, economical, and efficient;
    • give consideration to eliminating legislative barriers and constraints; and
    • report to the President of the Treasury Board by December 2006.
  • We will issue a new policy on transfer payments to reflect recommendations stemming from both the Auditor General’s May report on voted grants and contributions and the blue-ribbon panel.
  • We will look for ways to reduce the number of financial management policies to clarify roles and responsibilities and institute a more coherent set of requirements. We will mandate a committee of deputy ministers, including the Secretary of the Treasury Board and the Comptroller General, to consult with stakeholders and:
    • review and bring forward recommendations to strengthen and streamline Treasury Board financial management policies;
    • identify where unnecessary or unproductive policy or legislative requirements exist and recommend basic principles of management accountability and transparency for the policies;
    • give consideration to eliminating legislative barriers and constraints;
    • recommend measures, including training strategies, so that the Government has the skilled financial experts it needs to ensure effective financial control and accountability; and
    • report to the President of the Treasury Board on its findings and recommendations by December 2006.
  • We will examine the entire suite of Treasury Board policies. This initiative will aim to reduce the number of Treasury Board policies by more than half, clarify the management responsibilities and accountabilities of ministers and deputy heads, and clarify the responsibilities of functional experts. The renewed policies will also establish clear compliance requirements and consequences.

What this means for Canadians

These changes will give Canadians reassurance that their government is using their tax dollars wisely. They will strengthen the role of the Auditor General as an independent and reliable source of information about government spending. To maximize the use of taxpayer money, the Government will ensure that it roots out non-performing or irrelevant programs. Finally, these measures will enhance the ability of Canadians and organizations to access government programs and services, and ensure that third parties that receive federal funding are not faced with an unnecessary administrative burden.

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