auditor general for local government report nov18 · 2019. 2. 6. · auditor general for local...

AuditorGeneralforLocalGovernmentActandOfficeReview

(2012-2017)

KellyD.DanielsNovember2018

AuditorGeneralforLocalGovernmentActandOfficeReview–(2012-2017) 2

TableofContentsExecutiveSummary....................................................................................................................................3Background....................................................................................................................................................6ContextfortheReview...................................................................................................6

History............................................................................................................................6

ImplementationoftheLegislation.............................................................................6

PurposeandMandate....................................................................................................8

Governance....................................................................................................................9

AboutPerformanceAuditing........................................................................................10

ReviewMethodology...............................................................................................................................11KeyFindings,InterviewInputandSurveyResults..........................................................................13BestPracticesScan.......................................................................................................13

InterviewswithKeyIndividualsandStakeholders.......................................................13

SurveyResultsofEightLocalGovernmentsAuditedSince2015..................................17

SurveyResultsof25AuditedLocalGovernments Since 2012......................................19

SurveyResultsofNon-AuditedLocalGovernmentsinBC............................................21

Conclusions..................................................................................................................................................25Recommendations....................................................................................................................................27TotheMinistryofMunicipalAffairsandHousing........................................................27

TotheAGLGOfficeandAuditCouncil..........................................................................27

Appendices:

I. TermsofReference–RoleandTasks

II. ListofPerformanceAuditedLocalGovernments

III. BestPracticesScan–LocalGovernmentPerformanceAuditing

IV. SurveyResultsofEightLocalGovernmentsAuditedSince2015

V. SurveyResultsof25AuditedLocalGovernments

VI. SurveyResultsofNon-AuditedLocalGovernmentsinBC


ExecutiveSummary

Thefive-year2012-2017reviewoftheAuditorGeneralforLocalGovernmentAct(the“Act”)andtheAuditorGeneralforLocalGovernment(AGLG)office,requiredbylegislation,wasconductedthroughaseriesofinterviews,abestpracticesscan,andthreedifferentsurveysoflocalgovernmentsacrossBC.Thisapproachwasdesignedtodetermine:

• theperceptionoftheefficiencyandeffectivenessoftheoffice,

• thedegreetowhichthefindingsoftheperformanceauditreportswerebeingimplementedbylocalgovernmentsthatwereaudited,and

• theextenttowhichalllocalgovernmentsintheprovincewereusingtheperformanceauditreportsandPerspectivesbooklets(i.e.,bookletsidentifyingbestpracticesfoundfromperformanceaudits)tomakechangestopolicyorpracticesintheirjurisdictions.

Inthebeginning,theofficeoftheAGLGsufferedsignificantlyfrom:

• overpromisingthenumberofauditsitcouldcompleteinthefirstyear,

• staffthatwasunfamiliarwithlocalgovernmentoperations,and

• majorconcernswithrespecttothestrategicdirectionoftheoffice.

AftertheTrumpyreviewin2015andthedepartureofthefirstAGLGthatsameyear,anumberoflegislativeamendmentsandtheappointmentofastronginterimAGLGstartedtheturn-aroundintheeffectivenessandefficiencyoftheoffice.ThepermanentappointmentofthecurrentAGLGcontinuedtostrengthentheoperationandthereputationoftheoffice.Thelocalgovernmentsthatweresurveyedafter2015indicatedamarkedimprovementinhowtheyexperiencedtheprocessandgeneraleffectivenessoftheAGLGoffice.

TwentyinterviewswereheldwithstakeholdersoftheAGLGthatincludedmembersoftheAuditCouncil(i.e.,thebodythatoverseestheAGLGoffice),provincialgovernmentstaff,AGLGstaff,UnionofBritishColumbiaMunicipalitiesmembers,LocalGovernmentManagementAssociation,andGovernmentFinanceOfficersAssociation,aswellasanumberofprivatesectorinterests.

Oneoftheissuesraisedduringtheinterviewswasthehighaveragecostperperformanceaudit.Performanceauditsrangefrom$40,000to$300,000nottakingintoaccountoverheadcosts.Thecostsvarydependingonthesizeofcommunity,complexityoftheservicebeingaudited,andscopeoftheaudit.Iftheannualbudgetofapproximately$2,500,000isdividedsimplybytheannualaverageoffiveaudits,thecostperauditis$500,000.

AuditorGeneralforLocalGovernmentActandOfficeReview–(2012-2017)

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Itisdifficulttoquantifyvalueformoney.LocalgovernmentshavenottrackedsavingsfromefficienciesorreductionsinriskfromimplementingrecommendationsintheauditreportsorPerspectivesbooklets.However,asignificantnumberoflocalgovernments,boththosebeingauditedandthosethathavenotbeenaudited,receivevaluefromtheAGLGdocuments.Whilevalueformoneymaynotbeanissueforlocalgovernment,becausetheProvincefundstheAGLGoffice,theProvincewillhavetoaddresstheissueindeterminingthefutureoftheoffice.Thethreesurveysthatwereconductedallhadstrongreturnrates.Thesurveyofauditedcommunitieshadareturnrateof68%,thesurveyofalllocalgovernmentsnotauditedhadaresponserateof58%,whilethesurveyoftheeightcommunitiesauditedsince2015hada50%responserate.Thecriticalfindingsfromthesesurveyswere:

1. Ofthelocalgovernmentsthatrespondedtothesurveyandhadaperformanceauditcompletedintheirorganization:

a. 71%felttheybenefitedamediumtohighdegreefromtheaudits,

b. 76%felttheywereontrackwithimplementingtherecommendationsfromtheperformanceauditreports,and

c. 76%felttheywouldimplement80%to100%oftherecommendations.

2. Ofthelocalgovernmentsrespondingtothesurveythathadnotbeenaudited:

a. 86%indicatedthatsomeoneintheirorganizationhadreadaperformanceauditreportorPerspectivesbooklet,

b. 71%ofthosewhoindicatedthatsomeoneintheirorganizationhadreadaperformanceauditreportorPerspectivesbooklethadincorporatedpracticesormadechangestopolicyfoundinthesedocuments,and

c. 53%ofthelocalgovernmentsrespondingtothesurveyindicatedthattheyusetheperformanceauditreportsand/orPerspectivesbookletstodoacomparativecheckonsimilarservicesthattheyprovide.

Thefundamentalquestiontoanswerinthisreviewiswhethertheperformanceauditsaresignificantlyaidinglocalgovernmentsinimprovingthedeliveryofserviceandprovidingaccountabilityandvalueformoneytothecitizensoftheircommunities.Thesurveyresultsleavelittledoubtthattheperformanceauditrecommendationsarebeingimplementedinorganizationsbeingauditedandthattheseorganizationsbelievethattheyareimprovingthedeliveryofservicestheyprovide.Inabroadercontext,theperformanceauditsandPerspectivesbookletsarebeingreadbyamajorityofthelocalgovernmentsthathavenotbeenauditedandmanyoftheseorganizationsareincorporatingpracticesorchangingpolicyasaresultofthesedocuments.


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Thatbeingsaid,morecouldbedonebytheofficeoftheAGLGtocontinuetoimproveitsserviceandtoincreaseitscredibilitywithlocalgovernments.Localgovernmentsreportthatonerousamountsofstafftimearerequiredtosupporttheauditprocess.Thiscanbeaparticularburdenonsmall-to-medium-sizelocalgovernmentsthatarealreadyfeelingthestrainofoperatingwithscantresourcesandhighexpectationsforservice.Thereisalsoasensefrommanyoftheselocalgovernmentsthattherecommendationsfromtheperformanceauditsareoftenunrealisticforthemtoimplementgiventheirsize,shortageofstaffandlimitedfinancialresources.Alternativestoacomprehensiveauditthatstillprovidevalueandassistancetotheselocalgovernmentsneedtobeexplored.TheconclusionofthisreviewistoretaintheofficeoftheAGLG.Anumberofrecommendationsaremadetostrengthentheoffice,providefurtherinputbylocalgovernmentsintotheAGLGprocess,andtosupportthepursuitofexcellenceinlocalgovernancebythemunicipalitiesandregionaldistrictsservingthepeopleofBritishColumbia.


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Background

ContextfortheReviewLegislationcreatingtheofficeoftheAuditorGeneralforLocalGovernmentcameintoforceinApril2012.Part5,section29providedforareviewoftheActandthefunctioningoftheofficeaftertheActhadbeeninforceforfiveyears.TheMinistryofMunicipalAffairsandHousing(MMAH)createdaWorkingGroupmadeupofthePresidentandExecutiveDirectoroftheUnionofBritishColumbiaMunicipalities(UBCM),arepresentativefromtheLocalGovernmentManagementAssociation(LGMA),andthreemembersfromMMAH,includingtheAssistantDeputyMinisterwhofunctionedastheChair.TheroleoftheWorkingGroupwastoprovideinput,suggestionsandadvicetotheconsultantthroughoutthereviewprocessandprovidefeedbackonthefinalreport.TheroleandtasksrelatedtothetermsofreferenceforthereviewcanbefoundinAppendixI.

HistoryTheofficeoftheAuditorGeneralforLocalGovernmentwasestablishedwiththeadoptionoftheAuditorGeneralforLocalGovernmentAct.Thegovernmentofthedaypromised,withoutpriormeaningfulconsultationwithlocalgovernment,tocreateanAGLGoffice.Opinionsweredividedoverthecreationoftheoffice.TheBCChamberofCommerceandBCChapteroftheCanadianFederationofIndependentBusinesswelcomedtheannouncementandsawitasapositiveresponsetopolicypaperstheyhadpreviouslydevelopedcallingforthecreationofsuchanofficetoprovideoversightofincreasingtaxationandspendingbylocalgovernmentsacrosstheprovince.TheUnionofBritishColumbiaMunicipalities,ontheotherhand,sawitasanunnecessaryexpense,aninstitutioncreatedwithoutadequaterationaleorconsultationforasystemofgovernmentthatalreadyhadsignificantoversightandcontrols.TheywroteinareportatthetimethatlocalgovernmentsinBritishColumbiaare“heavilyreliantonstatutorylimitationsimposedbytheProvince,andProvincialoversightroles,includingtheInspectorofMunicipalities.”TheUBCMmembershiphaspassedresolutionscallingfor“theProvincetoeliminatetheAuditorGeneralforLocalGovernmentduetothefactthattherequirementsofsuchanofficearealreadymetunderexistinglocalgovernmentlegislationandregulations.”

ImplementationoftheLegislationTheProvincedecidedtoenhancethefunctionalindependenceandaccountabilityoftheofficebycreatingitasastandaloneentityratherthanhousingitwithinanexistingministryorwithintheofficeoftheAuditorGeneral.WhiletheAuditCouncilhasanoversightroleoftheoffice,theofficeisultimatelyaccountabletotheMinister.


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ThefirstAuditorGeneralforLocalGovernmentwasappointedinNovember2012andcommencedherdutiesinJanuary2013.Anambitiousagendawassetpromising18reviews,sixeachonthreetopics,thatwouldbecompletedthenextyear.Infact,onlyoneperformanceauditwasreleasedin2014andbymid-2015onlyfourreportshadbeenreleased.InMarch2015,theAGLGwasrelievedofherdutiesandMr.ArnvanIerselwasappointedActingAuditorGeneralforLocalGovernment.TheAuditCouncilannouncedanindependentreviewoftheAGLGtobeconductedbyMr.ChrisTrumpy.

Thereviewwasto:

• assessthegovernancestructureoftheAct,includingtheinteractionbetweentherolesoftheAGLGandtheAuditCouncil,

• assesstheorganizationalstructureandauditplanningprocessoftheoffice,and

• recommendbenchmarksforthefutureauditplanningprocesses.

Thereportresultedinfivemajorrecommendationareasaswellasrecommendationsforlegislativeandregulatoryamendmentsthatwouldprovideclarityandcertaintyongovernanceissues.InApril2015,priortothereleaseoftheTrumpyreport,UBCMdecidedtoconductitsownsurveyoflocalgovernments,focusingon“mattersofprocessandgeneraleffectivenessoftheAGLGratherthantheefficacyofauditfindingstodate.”Thisfocuswastakenbecauseonlythreeauditshadbeencompletedatthetimeofthesurvey.ThesurveyrevealedthatmostlocalgovernmentssurveyedfoundtheAGLGoffice“uninformedwithregardtolocalgovernmentoperations,failedtomeetdeadlines,appearstobedisorganizedandmishandlesinformationshared…”InSeptember2015,Mr.GordonRuthwasannouncedasthenewAuditorGeneralforLocalGovernmentandcurrentlyholdsthisposition.Todate,theAGLGhascompleted26performanceauditson25communities(AppendixII)andhasreleasedfivePerspectivesbookletsfocusingonbestpracticeslearnedasaresultoftheperformanceauditsintheareasof:

• ImprovingLocalGovernmentProcurement

• PolicingServicesPerformanceAssessment

• AssetManagementforLocalGovernments

• OversightofCapitalProjectPlanningandProcurement

• ImprovingLocalGovernmentEmergencyManagement


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PurposeandMandateTheAGLGActstipulatesthefollowing:

Purposeandmandate

3 (1) Thepurposeoftheauditorgeneralistoconductperformanceauditsoftheoperationsoflocalgovernmentsinordertoprovidelocalgovernmentswithobjectiveinformationandrelevantadvicethatwillassistthemintheiraccountabilitytotheircommunitiesforthestewardshipofpublicassetsandtheachievementofvalueformoneyintheiroperations.

(2) AperformanceauditconductedunderthisActbytheauditorgeneralconsistsof

(a) areviewoftheoperationsofalocalgovernment,astheoperationsrelatetoamatterorsubjectspecifiedbytheauditorgeneral,toevaluatetheextenttowhich

(i) theoperationsareundertakeneconomically,efficientlyandeffectively, (ii) financial,humanandotherresourcesareusedinrelationtothe

operationswithdueregardtoeconomyandefficiency, (iii) theoperationsareeffectiveinachievingtheirintendedresults,or (iv) proceduresestablishedbythelocalgovernmentaresufficientforthe

localgovernmenttomonitortheeconomy,efficiencyandeffectivenessofthoseoperations,and

(b) recommendationstothelocalgovernmentarisingfromthereviewreferredtoinparagraph(a).

(2.1) InplanningandconductingaperformanceauditandinpreparingaperformanceauditreportunderthisAct,theauditorgeneralmustcomplywiththeauditingorassurancestandardsorguidelinesorpartsthereof,ifany,asadoptedbyregulation.

(3) Theauditorgeneralmayidentifyanddevelopandpublishorotherwiseprovideinformationaboutrecommendedpractices,arisingfromaperformanceaudit,thattheauditorgeneralconsidersmaybeapplicableorusefultootherlocalgovernments.

(4) Theauditorgeneral,ifpermittedbyregulation,may,onrequestofalocalgovernmentandinaccordancewiththeregulations,enterintoanagreementtoconductaperformanceauditoftheoperationsofthelocalgovernmentthatrelatetoamatterorsubjectthatisspecifiedintheagreement.

(5) IncarryingoutthepowersanddutiesunderthisAct,theauditorgeneralmustnotcallintoquestionthemeritsofpolicydecisionsorobjectivesofalocalgovernment.

(6) Theauditorgeneralmaynotactasanauditorunder

(a) Division2ofPart6oftheCommunityCharterorasthatDivisionappliestoaregionaldistrictundersection377(1)oftheLocalGovernmentAct,


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(b) section60(1)oftheGreaterVancouverSewerageandDrainageDistrictAct,

(c) section24oftheGreaterVancouverWaterDistrictAct,

(d) sections230to235BoftheVancouverCharter,or

(e) aprescribedenactmentrelatingtothefinancialauditofalocalgovernment.

GovernanceAsignificantaspectoftheAGLGistheindependencefrombothprovincialandmunicipalgovernments.WhiletheActestablishesthattheAGLGmustadheretotheProvince’scoreadministrativepoliciestherearecharacteristics,notedinAGLGdocuments,thatreflectthegovernancerelationshipoftheAGLG:

• TheLieutenantGovernorinCouncilofficiallyappointstheAuditorGeneralontherecommendationoftheMinisterofMunicipalAffairsandHousingwhoconsiderstherecommendationoftheAuditCouncil.

• TheLegislatureallocatesthebudgetoftheAGLGthroughaseparatevotedappropriation.

• TheAGLGhassolediscretiontoselecttheauditsthattheofficecarriesout,subjecttotheannualserviceplan.

• Theofficeissuesreportsandrecommendationswithoutministerialorothergovernmentapprovals.

• TheofficefunctionswithprofessionalindependenceandadherestoCPACanadaauditingstandards.

TheAuditCouncilisauniqueaspectoftheAGLGlegislationthatfillstheaccountabilityrolerequiredofanysuchoffice.TheAuditCouncilisresponsibleforreviewingandmonitoringtheperformanceoftheAuditorGeneralapartfromanumberofresponsibilitiesthatarelistedintheActincluding;

• recommendingtheappointmentoftheAGLGandthesuspensionorremovaloftheAGLG,

• commentingon,orrecommending,variousaspectsoftheroleoftheAGLG,

• commentingonchangestotheannualserviceplan,

• commentingonauditreports,and

• disseminatinginformationaboutthepracticesdevelopedintheperformanceaudits.

TheAuditCounciliscurrentlymadeupoffiveindividualswithdiversebackgrounds.Therearethreememberswhohaveexperienceinlocalgovernment,oneisaretiredlocalgovernmentadministratorandtwohaveservedaselectedofficials.


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AboutPerformanceAuditingAnumberofcities,statesandcountriesareimplementingperformanceauditingprogramsofoneformoranother.PerformanceauditsconductedbytheAGLGareguidedbyprofessionalstandardsestablishedbytheAuditingandAssuranceStandardsBoard.Theyaredifferentfromfinancialauditsthatalllocalgovernmentsarerequiredtoconductannually.Performanceaudits,alsoknownasvalueformoneyaudits,reviewlocalgovernmentoperationstoevaluatetheextenttowhichoperationsareundertakeneconomically,efficientlyandeffectively.Theyareintendedtoassistlocalgovernmentsinbeingaccountabletotheircommunitiesandhelpthemachievevalueformoneyintheiroperations.TheAGLGofficedevelopsathree-yearauditplanbasedonresearchandconsultationthatincludes:

• anenvironmentalandmediascan,

• aperformanceauditplanningsurveyoflocalgovernmentChiefAdministrativeOfficers(CAOs),

• interviewswithAuditCouncilmembersandelectedofficialsandCAOsfromacrosssectionoflocalgovernmentsacrosstheprovince,

• inputfromcorrespondencereceivedfromstakeholders,

• requestsforauditsfromlocalgovernments,and

• aperformanceauditplanningworkshopwithvariousstakeholdergroupsincludinglocalgovernment.

TheAGLGconsidersallofthisinputtoidentifyandpriorizeaudittopicsforinclusionintheauditplanforthenextthreeyears.Individuallocalgovernments,thatwillbethesubjectofanaudit,areselectedbasedontheimportanceofthesubjectmattertothelocalgovernment’soperationsandtoachieveagoodcrosssectionoflocalgovernmentsbasedonsizeandgeographiclocationaroundtheprovince.TheAGLGofficewillmakeinitialcontactwithanylocalgovernmentselectedforanauditandthenwillfollowupwithanin-personmeetingtoansweranyquestionsthelocalgovernmentmayhaveabouttheauditprocessandtodiscusstheobjectivesoftheperformanceaudit.Initialinterviewswithkeylocalgovernmentofficialsandotherauditfieldworkactivitiesfollow.Theplanningandexecutionofeachperformanceauditmaybedifferentdependingonthelocalgovernment’sapproachtoprogramdelivery,complexityoftheaudittopicandsizeofthelocalgovernment.Attimes,AGLGauditstaffmaybringinsubjectmatterexpertstoassistwhentheydonothavetherequiredexpertiseorresourcesin-house.


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ReviewMethodologyThemethodologyforthereviewfocusedaroundcollectingdataprimarilyinfivedistinctareas:

1. Abestpracticesscanoflocalgovernmentperformanceauditingprograms

TheMinistryofMunicipalAffairsandHousingconductedascanofapproachestoperformanceauditingacrossCanada,theUnitedStates,Australia,NewZealandandtheUnitedKingdom.Thepurposewastoobtainknowledgefromthesecountriesontheextentofperformanceauditingintheirjurisdictionandtounderstandtheirapproachestoperformanceauditing.

2. Interviewswithkeyindividualsandstakeholderorganizations

Interviewswereheldwith20stakeholderswithknowledgeofthecreationoftheAGLGlegislationandofficeaswellasthepurposeandmandateoftheAGLG.IntervieweesincludedindividualsfromorganizationssuchastheAGLGAuditCouncil,AGLGstaff,UBCMexecutive,aUBCMBoardmemberwhowasnotamemberoftheWorkingGroup,MinistryofMunicipalAffairsandHousingstaff,andanumberofstakeholderorganizations,suchastheLocalGovernmentManagementAssociation,GovernmentFinanceOfficersAssociation,CanadianFederationofIndependentBusiness,andColumbiaInstitute–CenterforCivicGovernance.

Thefocusoftheinterviewswastodetermine:

• whetherthemandateandroleoftheofficeisappropriate,

• iftheofficeisachievingtheobjectives,

• themandateandpurposeassetoutinthelegislation,

• ifthereareenoughtoolsinthelegislationtoallowtheofficetodoitsworkeffectively,

• ifthereareareasinthelegislationthatneedtobebroadened,

• iftheroleandmandateoftheAuditCouncilareeffectiveandappropriate,

• ifchangesshouldbemadetotheroleoftheAuditCouncil,

• iftheProvinceisreceivinggoodvalueformoneyfromtheworkoftheoffice,and

• wheretheAGLGshouldfocusitseffortsinthenextthreetofiveyears.


3. Asurveyoftheeightlocalgovernmentsthathadgonethroughaperformanceauditafterthe2015UBCMsurvey

In2015,UBCMconductedasurveyoflocalgovernmentsthathadbeenauditedorwereintheprocessofbeingaudited.ThissurveyfocusedonmattersofprocessandgeneraleffectivenessoftheAGLG.Forthisreview,asimilarsurveywasadministeredtotheeightlocalgovernmentsthathadbeenauditedsincethe2015UBCMsurveytodetermineiftheirexperienceswerethesameordifferentfromthatofthefirst17localgovernments.

4. Asurveyofall25localgovernmentsthathaveparticipatedinperformanceauditssincethecreationoftheofficein2012

Thissurveyfocusedondeterminingthevaluethatlocalgovernmentsderivefromtheperformanceauditsandwhethertheyimplementtherecommendationsinthereports.

5. AsurveyofalllocalgovernmentsinBritishColumbiathathavenotparticipatedinaperformanceaudit(164localgovernments)

ThissurveyfocusedonhowawarelocalgovernmentsareoftheAGLGoffice,theperformanceauditreportsandthePerspectivesbooklets.Ofparticularinterestwaswhetherlocalgovernmentshadreadthematerialfromtheofficeandhadmadechangestopoliciesorimplementednewpracticesasaresultoftherecommendationsinthosedocuments.

Thereviewprocesswasintroducedtolocalgovernmentsthroughanintroductoryletterexplainingthereasonforthereviewandtheprocesstobefollowed.LettersweresenttotheMayor,ChairorChiefofthelocalorFirst NationgovernmentandtheChiefAdministrativeOfficerindicatingthatasurveywouldbeforwardedtotheirjurisdictionandafollow-upemailindicatedthatthesurveysweretobefilledoutbytheCAO.

Thesurveyswereconstructedinsuchawaytoprovideasquantifiabledataaspossible.ItwasfeltthattheCAOwastheindividualmostlikelytohavetheinformationbeingaskedforinthesurvey.TheletterwassenttotheMayor,ChairorChiefsotheywereawarethatthereviewandsurveywerebeingundertaken.


KeyFindings,InterviewInputandSurveyResults

BestPracticesScanAsacomponentofthereview,theMinistryofMunicipalAffairsandHousingconductedascanofselectedjurisdictionsaroundtheworldtofindoutabouttheirauditstructuresandpractices(AppendixIII).ThecountrieswereCanada,UnitedStates,Australia,NewZealandandtheUnitedKingdom.

ThescanfoundthattherearenoauditstructuresacrossCanadaorworldwideliketheAGLG.Thereis,however,awiderangeofperformanceauditfunctionsinplaceforlocalgovernmentsinthesecountriesasjurisdictionsintroducedifferentwaystohelplocalgovernmentachievevalueformoneyintheservicestheyprovide.InCanadaandtheUnitedStates,largercitiesgenerallytaketheinitiativetoestablishauditorgeneralofficesorinternalauditdepartments.IntheUnitedKingdomandNewZealand,thenationalgovernmentcarriesoutthefunctionoftheauditorgeneral,whileinAustraliastategovernmentsareprimarilyresponsible.

Injustabouteveryjurisdictionsurveyed,smallercommunitiesarenotrequiredtoundergoperformanceaudits.InCanada,otherthanBC,theonlyjurisdictionwithaprovisionforauditingsmallercommunitiesisQuebec,whichin2018passedlegislationthatbroadenedthemandateoftheCommissionMunicipalduQuebectoincludecommunitieswithpopulationsbetween10,000and100,000.

Acommoncharacteristicinmostsystemsisthefocusonidentifyingbestpracticesandassistinglocalgovernmentthroughtrainingopportunitiesandtheprovisionofresourcedocuments,self-assessmenttools,on-linetraining,etc.

KeyFinding:

1. Thereisageneralmove,orrecognition,bythejurisdictionscanvassedtowardprovidingsomeformofperformanceauditingandbestpracticesresourcetoassistlocalgovernmentsincontinuallyimprovingvalueformoneytothecitizensintheircommunitiesfortheservicestheyprovide.

2. TheAGLGActandofficeareunique,amongallthejurisdictionscanvassed,intheiraccountabilityandfunctionalindependencestructureaswellastheirabilitytoconductperformanceauditsonverysmalllocalgovernments.

InterviewswithKeyIndividualsandStakeholdersInterviewswereheldwithadiverserangeofindividualsandorganizations.This,ofcourse,resultedinjustaswidearangeofopinionsandattitudesabouttheofficeandlegislation.However,commonthemesemergedthat,whilenotindicatingaunanimousopinionamongtheinterviewees,weresupportedbythemajorityofpeopleinterviewed.


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a. HowtheAGLGofficeconductstheirbusiness

ThemostconsistentopinionexpressedwasthattheAGLGofficeisnowoperatingefficientlyandeffectivelyandwasseenasunderstandingandfollowingthemandateofassistinglocalgovernments.Therearestillissuesrelatedtohowtheydotheirworkbut,forthemostpart,respondentsarehappierabouttheapproachinthelasttwoandahalfyearsthantheywereinthefirsthalfoftheAGLGoperation.Aconcernwasraisedthat,ifthecurrentAGLGleavestheoffice,thephilosophyandapproachoftheofficemightchangeinanegativeway.

b. AGLGisoperatingwithintheroleandmandateasstatedinthelegislation

Theconsistentviewintheinterviewswasthat,sincetheTrumpyamendmentstothelegislationin2015,theAGLGhassufficientscopeandauthoritytoconducttheworkthatwasoriginallyenvisionedandthattheyareoperatingwithintheirroleandmandate.TheTrumpyreportrecommendationshaveallbeenimplemented.

c. RoleandmandateoftheAuditCouncil

TheAuditCouncil’sroleandmandateareseenasappropriateandadequatetomaintaintheoversightanddirectionrequired.However,itwasfeltthattheAuditCouncilcouldspendmoretimesupportingtheworkoftheAGLG,byexplainingtheworktheAGLGofficedoesandtheroleoftheAuditCouncil,atlocalgovernmentandprivatesectorfunctionsandevents.

d. Currentreportingstructureandlegislationareappropriateandworking

TheimportanceofthecurrentstructurethatallowsforfunctionalindependencefromgovernmentsandaccountabilitytotheAuditCouncil,anon-governmentbodymadeupofprivatecitizens,wasconsistentlystressedthroughouttheinterviews.ThisstructureisalsooneofthefundamentalcharacteristicsthatmaketheAGLGunique.Itwasnotonlyseenasextremelyimportanttothecredibilityoftheofficeamonglocalgovernmentsbutwasfoundtobefunctioningwellandrequiringnochangesoramendments.

Asnotedearlier,withonlyafewminoramendments,thelegislationappearstobeappropriateandfunctional.

e. Concernthattheaveragecostperauditishigh

ItistheobjectiveoftheAGLGthattheofficeconductsapproximatelyfivetosixauditsperyear.Thisresultsinanaveragecostofapproximately$400,000to$500,000peraudit.Individualauditscancostbetween$40,000and$300,000ofdirectcostswhennottakingintoaccountoverheadoftheoffice.Thisalsodoesnottakeintoaccountcoststhatthelocalgovernmentincursinstafftimetosupporttheaudit,estimatedbyonesmall-to-medium-sizecommunitytobebetween$25,000and$30,000.

ManyintervieweeswereconcernedaboutthevalueformoneyoftheAGLGoffice.Itisdifficulttoquantifythevaluewhenthereisnodatatoindicatemoneysaved,


orefficienciesgained,byimprovementstoservicefromaperformanceaudit.Anumberoflocalgovernmentsareimplementingchangestopolicyorpracticesasaresultofperformanceauditscompletedinotherorganizations,whichincreasesthevalueformoney.(Thesurveyfindingsofallnon-auditedlocalgovernments(AppendixVI)suggestthisisasignificantnumberoflocalgovernments.)

Thevalueformoneycanbefurtherimprovediffindingsintheauditsandbestpracticespublicationscanbeusedmorebyotherorganizations,suchastheLocalGovernmentManagersAssociation,GovernmentFinanceOfficersAssociation,LocalGovernmentLeadershipAcademy,andBCWaterandWastewaterAssociation,toenhancetheirtrainingprograms.ThisisinfacthappeningtoaminordegreealreadybuttheAGLGofficecouldestablishstrongerworkingrelationshipswiththeseorganizationsandcollaboratewiththemmoreoftentoensuretheirtrainingprogramsareuptodatewiththemostcurrentbestpractices.Thisnotionwastestedandsupportedbymanyinterviewees.

Intheend,theProvincewillneedtobesatisfiedwiththevalueformoneyrealizedbythefinancialsavingsandefficienciestoauditedcommunities,savingstonon-auditedlocalgovernmentswhoimplementrecommendationsfromtheAGLGpublications,andvaluefromincreasedcollaborationswithBCprofessionalassociations.

f. AGLGstaffinterviewsTheAGLGandstaffsuggestedanumberofchangesthattheyfeltwouldimprove theirabilitytofunction.Whilenotalloftheproposedchangesaresupportedin thisreview,therewereanumberofsuggestionsthatdomeritconsiderationfor implementation:

• RemovetherequirementwithinthelegislationfortheDeputyAGLGtobea CharteredProfessionalAccountant(CPA).TherequirementfortheDeputytobeanauditorundertheBusiness CorporationsActisinconsistentwithprovincialandfederallegislationfor similarauditoffices.Thisinclusionlimitssuccessionopportunitiesandisnot neededaslongastheAGLGisrequiredtobeaCPA.

• RequiretheMinistertoconsultwithUBCMonfutureamendmentstotheAGLG Act.

• IncludearequirementforarevieweveryfiveyearsforboththeActandoffice.

Theselasttwoproposedamendmentswouldhelptodispelsomelocalgovernments’residualconcernsregardingthecreationoftheoffice.


SuggestionsthatwerenotsupportedatthistimebecausetheywouldfundamentallychangethenatureoftheAGLGmandatewere:

• Providingfortheabilitytocomebacktoalocalgovernmentinthreetofiveyearsandreviewtheirprogressinimplementingtheauditrecommendations.

• Theabilitytoincludenon-localgovernmentagencies,suchasimprovementdistricts,whenthatagencyprovidesaportionoftheservicebeingaudited.

g. Concernthat,whenthecurrentAGLGleaves,theofficemightreverttothepreviousstyleofauditingphilosophyandapproach

Whilethelegislationhasbeenstrengthenedtofocusontheroleofassistinglocalgovernments,therewasasuggestionforthecreationofafoundationdocumentthatwouldstrengthentheintentofthelegislationbyprovidingapracticaltoolthatwouldgivefurtherlifetothetone,philosophyandapproachrequiredoftheoffice.ThedocumentcouldconfirmthevaluesandrelationshiptheAGLGofficewouldberequiredtomaintainwithlocalgovernment.Itwouldbeadocumentcreatedthrough,andagreedto,byajointeffortoftheMinistry,AGLGofficeandAuditCouncil,UBCMandLocalGovernmentManagementAssociation.TherearesimilardocumentsclarifyingotherrelationshipswiththeMinistrythathaveproventobeeffectiveandvaluabletoolsinmaintainingrelationshipsbetweenentities.

KeyFindings:

1. Theapproach,performanceandprofessionalismoftheAGLGofficehaveimprovedsignificantlyinthelasttwoandahalfyearsascomparedtothefirsttwoandahalfyears.

2. TheaccountabilitystructureandindependentnatureoftheAGLGisacriticalcharacteristicthatmustberetainedifitistobeseenascrediblebylocalgovernments.

3. TheroleandmandateoftheAGLG,asdefinedinthelegislation,isappropriateforthetimebeingwithonlyafewminorchangesproposed.Theofficecouldcontinuetofocusonimprovingitsapproachandcredibilityamonglocalgovernmentsoverthenextthreetofiveyears,notlooktoexpandingitspowerandauthorities.

4. TheAuditCouncil’sroleandresponsibilitiesareappropriatetoprovidethenecessaryoversightoftheAGLG.TheycouldfocusonsupportingtheAGLGmore,byexplainingtheworktheAGLGdoesandtheroleoftheAuditCouncil,atkeyfunctionsandevents.

5. ThelegislationissufficientforboththeoperationoftheAGLGofficeandAuditCouncil,butamendmentscouldbemadeto:

a. removetherequirementfortheDeputyAGLGtohaveaCPAdesignation,


17

b. includearequirementfortheofficetoconsultwithUBCMonlegislationchanges,and

c. requireareviewoftheActandofficeeveryfiveyears.

6. Thevalueoftheperformanceauditstothelocalgovernmentthatwasauditedisonlyonefactortobetakenintoconsiderationwhendeterminingthevalueformoneyoftheaudititself.Twootherconsiderationsaffectthevalue.OneisthatotherBClocalgovernmentsusetheperformanceauditstoamendtheirpracticesandpolicies.TheotherisforthebestpracticeslearnedintheseperformanceauditstobeasignificantresourcetoBCprofessionalassociationsandotherorganizationstokeeptheirtrainingprogramscurrent.

7. AfoundationdocumentshouldbedevelopedbetweentheMinistryofMunicipalAffairsandHousing,AGLGofficeandAuditCouncil,UBCMandLocalGovernmentManagementAssociationconfirmingtherelationshipandapproachtheAGLGofficewillmaintainwithlocalgovernmentindoingtheirwork.

SurveyResultsofEightLocalGovernmentsAuditedSince2015TheeightlocalgovernmentssurveyedhadnotbeensurveyedbeforebyUBCM.Surveyswerecompletedby50%orfourlocalgovernments.ThecompletesurveyandresponsescanbefoundinAppendixIV.Theresponsesindicatedadramaticturn-aroundinthewaythesecommunitiesexperiencedtheperformanceauditprocessandtheconductofAGLGstaff.The17localgovernmentsoriginallysurveyedbyUBCMinMarch2015foundtheauditprocesstobelong,staffaskedrepeatedlyforthesameinformation,andstaffhadapoorunderstandingoflocalgovernmentandtheaudittopic.Therespondentsalsofeltstronglythattheauditscompleted,uptothedateofthesurvey,didnotcontainvaluableinformationthathavebeenusedbytheirlocalgovernmenttoimprovetheirprocessesandprocedures.Itwasgenerallyanegativeexperience.Only12%ofthelocalgovernmentssurveyedindicatedthattheauditreportcontainedvaluableinformationusedbytheirlocalgovernmenttoimproveprocessesandprocedures.TheSeptember2018surveyillustratesadifferentpicturewiththefourrespondentsindicatingamorepositiveexperienceandamuchhigherlevelofsatisfactionwithprocess.


TheMeanfromKeyQuestions (on scale of 1 to 5, with 1 being low and 5 being high).

Theyalsofeltstronglythattheauditresultscontainedvaluableinformationthathasbeenusedbythemtoimproveprocessesandprocedures.

Thefindingsoftheauditspublishedtodatecontainedvaluableinformationthathavebeenusedbyourlocalgovernmenttoimproveourprocessesandproceduresrelativetotheaudittopic.

5.00 4.75

3.75 3.75

Communicatedinaprofessionalandrespecmulmanner

Wasaccessibleandrespondedtoquesnonsinanmelymanner

Demonstratedunderstandingoflocalgovernmentgenerally

Demonstratedunderstandingwith

regardtotheaudittopic

50% 50%

0% 0% 0%0%

10%

20%

30%

40%

50%

60%

StronglyAgree Agree Neutral Disagree StronglyDisagree


KeyFinding:

TherehasbeenasignificantimprovementintheprocessandgeneraleffectivenessoftheAGLGsince2015whenthelegislationwasamendedandseniorleadershipchangedattheAGLGoffice.

SurveyResultsof25AuditedLocalGovernmentsThesurveyofthe25localgovernmentsthathavehadaperformanceauditconductedontheirorganizationsince 2012 achieveda68%returnrate.Thissurveyfocusedonthevalueoftheperformanceauditstotheirorganizationsandwhetherornottheywereimplementingtherecommendations.ThecompletesurveyandresponsescanbefoundinAppendixV.

Theresultsindicatedthat71%oftherespondentsfeltthattheybenefitedfromtheperformanceaudittoamoderatetohighdegree.

Onascaleof1to5,with1beinglowand5beinghigh,towhatdegreedoyoubelieveyourlocalgovernmenthasbenefitedfromtheperformanceaudit?Respondents:17

ThecommentsfromCAOs,whilegenerallysupportiveoftheauditfindings,weresomewhatmixed.Theyhighlightedthat,forsomeofthesmallerlocalgovernments,therecommendationswerenotappropriatefortheorganizationsizeandbudgetrestrictions.Thenotionofalessonerousauditprocess,particularlyforsmallercommunities,wassuggested.Thesignificantamountofstafftimerequiredtosupporttheauditteamwasalsoraised,particularlyforsmallercommunities.Asmentionedpreviouslyinthisreport,onesmall-to-medium-sizecommunityestimatedtheircostinstafftimetobebetween$25,000to$30,000.Anothercommunitykeptadetailedlogof

17.65%

11.76%

23.53%

35.29%

11.76%

0%

5%

10%

15%

20%

25%

30%

35%

40%

1(3) 2(2) 3(4) 4(6) 5(2)


hoursspentbystafftosupporttheauditteam.Stafflogged148.75hours,whichissignificantforasmallcommunityororganization.Generally,thepredominantcommentswerepositive,suchas:

• therecommendationswereveryhelpfulinimprovingourpracticesandincreasingtransparency

• theseauditsarerequiredandprovideavaluableservicetolocalgovernments

• thisisaveryhelpfulprogramwhichprovidesalotofopportunitytofindvalueandincreaseservicedelivery

• wasgreattohaveanexternalsourcelookatourpracticeandgiverecommendationsforimprovement

Localgovernmentsalsoappearedtobetakingstrongstepstoimplementtherecommendationsfromtheaudits.Seventy-sixpercentindicatedtheywereontrackwiththeimplementationoftheactionplansthatareappendedtoallperformanceauditreports.IsyourlocalgovernmentontrackwiththeimplementationofyourActionPlan?Respondents:17

Seventy-sixpercentoftherespondentsindicatedtheyexpecttoimplement80%to100%oftherecommendations.Theprimaryreasonsgivenfornotimplementingalltherecommendationswere“otherbudgetpriorities”and“insufficientstafftime”toanequaldegree.

76.47%

23.53%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Yes(13) No(4)


Approximatelywhatpercentageoftherecommendationsdoyouexpecttoimplementovertime?Respondents:17

KeyFindings:

1. Astrongmajorityoflocalgovernmentsrespondingtothesurveyindicatedamoderatetohighlevelofbenefitreceivedfromtheperformanceaudit.

2. Astrongmajorityoflocalgovernmentsrespondingtothesurvey(76%)indicatetheyareontracktoimplementtherecommendationsfromtheperformanceaudits.

3. 76%ofthelocalgovernmentsrespondingtothesurveyexpecttoimplement80%to100%oftherecommendations.

4. Issueswereraisedregardingtheamountofstafftimerequiredtosupporttheauditteamandthatrecommendationsaresometimesnotscaledtothesizeofthelocalgovernment.

SurveyResultsofNon-AuditedLocalGovernmentsinBCAsurveywasconductedofthe164localgovernmentsinBCthathavenotbeenaparticipantinaperformanceaudit.Aresponserateof58%(or95ofthe164localgovernments)wasachieved.ThecompletesurveyandresponsescanbefoundinAppendixVI.ThissurveyfocusedondeterminingtowhatextenttheselocalgovernmentshadreadtheperformanceauditreportsandPerspectivesbookletsandiftheyusedtherecommendationsandbestpracticesfromthesedocumentstochangepoliciesorimplementnewpractices.

47.06%

29.41%

17.65%

5.88%

0.00%0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

100%(8) 80%to99%(5) 60%to79%(3) Lessthan60%(1) 0%(0)


Eighty-sixpercentoftherespondents(or82localgovernments)indicatedthatsomeoneintheirorganizationhadreadaperformanceauditreportorPerspectivesbooklet.Oftheselocalgovernments,71%indicatedtheyhadimplementedpracticesfoundinthesedocuments.

Tothebestofyourknowledge,hasanyoneinyourorganizationreadaperformanceauditreportorPerspectivesbooklet?Respondents:95

Ifyes,pleaseadviseifyourlocalgovernmentincorporatedpracticesormadechangestopoliciesfoundinperformanceaudits,Perspectivesbookletsorboth.Respondents:58

86.32%

13.68%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Yes(82) No(13)

34.48%

10.34%

55.17%

0%

10%

20%

30%

40%

50%

60%

PerformanceAudits(20) PerspecnvesBooklets(6) Both(32)


Whilenoteveryoneusesthedocumentstoimplementpoliciesandpractices,53%indicatetheyusedtheperformanceauditreportsorPerspectivesbookletstodoacomparativecheckonsimilarservicestheyprovide.

Ninety-one percent of local governments responding indicated they have not considered requesting a performance audit. Of the local governments that provided a reason why they had not considered requesting a performance audit, 57% indicated “insufficient staff time” as the primary concern, 20% indicated “a negative community perception” being a deterrent, and 17% not knowing they could ask. (Note: While all 95 local governments responded to the question, only 86 indicated the reason)Ifyourlocalgovernmenthasnotconsideredrequestingaperformanceauditbeconductedinyourorganization,whynot?Respondents:86(Somerespondentsselectedmorethanoneoption.)

Almost50%oftheCAOsansweringthesurveytooktimetoaddadditionalcomments.Ofthecommentsreceived,63%werepositiveandsupportiveinsomeformoftheworkoftheAGLG,suchas:

• keepupthegreatwork

• somegoodinformationthatisboththoughtprovokingandacatalystformakingchange

• wehavefoundgreatvalueinthereportandbookletsbothatanelectedofficialandstafflevel

• veryinformationalandrelevant

17.44%

11.63%

56.98%

19.77%

31.40%

0%

10%

20%

30%

40%

50%

60%

Didn'tknowwecould(15) Don’t'needone(10) Insufficientstaffnme(49) Neganvecommunitypercepnon(17)

Other(27)


24

Oftheremaining37%,concernswereraisedaboutthelackofscalingoftherecommendationstofitsmallercommunitiesoroutrightrejectionoftheneedfortheoffice,suchas:

• therecommendationsarenotscalableandthereforenotapplicabletosmallcommunities

• wefeelthisinstitutiontoberedundantandnotuseful

• haven’treceivedmuchvaluefromthem

• localgovernmentsdonotneedmorereportsonwhattheyshoulddogivenlimitedresources

KeyFindings:

1. 86%ofthelocalgovernmentsrespondingtothesurveyindicatedtheyhadreadtheperformanceauditreportsorPerspectivesbookletsandofthose71%(58outof82answeringthisquestion)indicatedtheyhadmadechangestopolicyorpracticesfromtherecommendationsinthedocuments.

2. 53%oflocalgovernmentsansweringthesurveyindicatedtheyusedtheAGLGdocumentstodoacomparativecheckonsimilarservicestheyprovide.

3. ThemajorityofcommentsreceivedfromCAOsabouttheofficewerepositiveandsupportiveofthevalueoftheoffice.

4. Staffresources,scalabilityoftherecommendations,andgeneralnegativitytowardsthecreationoftheofficefromtheoutsettendtobetheoverridingthemesfromthosewhospeaknegativelyabouttheAGLGoffice.

5. ThereisoftenanegativeperceptioninthecommunitywhentheAuditorGeneralforLocalGovernmentcomesintoanorganizationtoperformaperformanceaudit.


25

ConclusionsGoodreturnratesfromallthreesurveys,andclearthemescomingoutofthebestpracticesscanandtheinterviews,resultedinclearfindingsfromallfivedatacollectionareassupportingthefollowingconclusions:

• TheAGLGismeetingitsroleandmandateasestablishedintheAct.

• TheAuditCouncilismeetingitsroleandmandateassetoutintheAct.

• Therecommendationsinthe2015Trumpyreporthavebeenimplemented.

• TheofficeoftheAGLGhadatumultuousfirsttwoandahalfyearsofoperationbut,undernewleadershipandwithlegislativechangesmadein2015,ithasexperiencedapositiveturnaroundintheprocessandgeneraleffectivenessoftheoffice.

• Localgovernmentsthatarerecipientsofaperformanceauditbenefittoasignificantdegreefromtheauditfindingsandrecommendations.

• Actionplanscreatedbylocalgovernmentsfromtherecommendationsinperformanceauditreportsareontrackandthemajorityoftherecommendationswillbeimplemented.

• Localgovernmentsthathavenotbeenauditedaregenerallyreading,andmanyareimplementing,recommendationsfoundintheperformanceauditreportsandPerspectivesbooklets.

• ManylocalgovernmentscomparetheservicestheyprovidewithbestpracticesfoundintheperformanceauditreportsandPerspectivesbooklets.

• TheaveragecostperauditperformedbytheAGLGisseenasveryhigh.

• Thevalueformoneyrelatedtotheperformanceauditisimpossibletoquantify.Itisimproved,however,bythehighpercentageoflocalgovernments,boththosethathavebeenauditedandthosethathavenotbeenaudited,utilizingthedocumentstoimprovetheirservices.

• Theamountofstafftimerequiredtosupporttheauditprocessisseenasonerous.

• TheAGLGshouldconsiderrebrandingtheoffice,whileretainingtheAuditorGeneralforLocalGovernmentname,tosomethinglikeAuditorGeneralforLocalGovernment–CenterforContinuousImprovementtocounteractthenegativeperceptionofbeingaudited.

• Smallercommunitiesoftenfindtherecommendationsnotscalabletotheresourcesandsizeoftheircommunity.

• TheAGLGneedstocontinuetofocusonitscoremandateoverthenextthreetofiveyearsinsteadofexpandingitsroleanyfurther.


26

• ThereisstillanegativefeelingtowardstheAGLGofficeamongmanypoliticiansandCAOsbecausetheAGLGActwasimposedonlocalgovernmentswithoutmeaningfulconsultationpriortothedecisiontoestablishtheoffice.

Thefundamentalquestiontoanswerinthisreviewiswhethertheperformanceauditsaresignificantlyaidinglocalgovernmentsinimprovingthedeliveryofserviceandprovidingaccountabilityandvalueformoneytothecitizensoftheircommunities.Thesurveyresultsleavelittledoubtthattheperformanceauditrecommendationsarebeingimplementedinorganizationsbeingauditedandthattheseorganizationsbelievethattheyareimprovingthedeliveryofservicestheyprovide.Inabroadercontext,theperformanceauditsandPerspectivesbookletsarebeingreadbyamajorityofthelocalgovernmentsthathavenotbeenauditedandmanyoftheseorganizationsareincorporatingpracticesorchangingpolicyasaresultofthesedocuments.

Thatbeingsaid,morecouldbedonebytheofficeoftheAGLGtocontinuetoimproveitsserviceandtoincreaseitscredibilitywithlocalgovernments.Localgovernmentsreportthatonerousamountsofstafftimearerequiredtosupporttheauditprocess.Thiscanbeaparticularburdenonsmall-to-medium-sizelocalgovernmentsthatarealreadyfeelingthestrainofoperatingwithscantresourcesandhighexpectationsforservice.Thereisalsoasensefrommanyoftheselocalgovernmentsthattherecommendationsfromtheperformanceauditsareoftenunrealisticforthemtoimplementgiventheirsize,shortageofstaffandlimitedfinancialresources.Alternativestoacomprehensiveauditthatstillprovidevalueandassistancetotheselocalgovernmentsneedtobeexplored.

TheconclusionofthisreviewistoretaintheofficeoftheAGLG.Anumberofrecommendationsaremadetostrengthentheoffice,providefurtherinputbylocalgovernmentsintotheAGLGprocess,andtosupportthepursuitofexcellenceinlocalgovernancebythemunicipalitiesandregionaldistrictsservingthepeopleofBritishColumbia.


Recommendations

TotheMinistryofMunicipalAffairsandHousing1. That,inconsiderationofthedegreetowhichtheAGLGperformanceauditsare

beingusedbybothlocalgovernmentsthathavebeenauditedandthosethathavenotbeenaudited,theAuditorGeneralforLocalGovernmentofficeberetained.

2. ThattheAuditorGeneralforLocalGovernmentActbeamendedto:

a. deletetherequirementfortheDeputyAuditorGeneralforLocalGovernmenttobeanindividualwhoisauthorizedundersection205oftheBusinessCorporationsActtoactasanauditor,

b. requirethereviewoftheAuditorGeneralofLocalGovernmentActandofficeeveryfiveyears;and

c. requiretheMinistertoconsultwiththeUnionofBritishColumbiaMunicipalitiesonamendmentstotheAct.

3. ThatafoundationdocumentbedevelopedbetweentheMinistryofMunicipalAffairsandHousing,UnionofBritishColumbiaMunicipalities,LocalGovernmentManagementAssociation,AuditCouncilandAuditorGeneralofLocalGovernmentthatwouldoperationalizethepurposeandmandateoftheAGLGtoprovidelocalgovernmentswithobjectiveinformationandrelevantadvicethatwillassistthemintheiraccountabilitytotheircommunitiesforthestewardshipofpublicassetsandtheachievementofvalueformoneyintheiroperations.

TotheAGLGOfficeandAuditCouncil1. ThattheAuditorGeneralforLocalGovernmentandAuditCouncilexplore

differentapproachestoprovidingperformanceaudits,particularlyforsmaller communities,thatwouldnotrequireonerousstafftimetosupportthe auditteam.

2. ThattheAGLGconsiderre-brandingtheorganizationtoemphasizeitsmorepositiveroleofassistinglocalgovernmentsintheirpursuitofcontinuousimprovementofservicedelivery.

3. ThattheAGLGofficebroadenitsreachtolocalgovernmentprofessionalassociations,suchastheBCWaterandWasteWaterAssociation,LocalGovernmentManagementAssociation,GovernmentFinanceOfficersAssociationandLocalGovernmentLeadershipAcademy,tocollaborateonbestpracticeslearnedintheperformanceauditsbeingincorporatedintotrainingopportunitiesprovidedbytheseorganizations.

AppendixIAuditorGeneralforLocalGovernment

LegislatedFiveYearReview

TERMSOFREFERENCEAGLGREVIEW-CONSULTANT

Purpose:

ConductthelegislatedfiveyearreviewoftheOfficeoftheAuditorGeneralforLocalGovernment(AGLG)andAuditorGeneralforLocalGovernmentAct(theAct)withoversightbyaworkinggroupofMinistrystaffandlocalgovernmentstakeholders.ThereviewwillculminateinareportwithfindingsandrecommendationsfortheMinisterofMunicipalAffairsandHousingtoconsider.

Scope:

SpecificallytheconsultantwillundertakeareviewoftheAGLGandtheActthatassessesthefollowingtwoareasandrelatedquestions:

2012-2017ChronologicalReview:

• Theaccomplishmentstodatecomparedtotheobjectivesofthe2012legislation(understandingthehistoryofthecreationoftheAGLG);

• TheimplementationoftheTrumpyrecommendations;• Theeffectivenessofthe2015amendmentstotheAct;and• RoleoftheAuditCouncilandAGLGOfficeinsupportingthemandatetodate.

OptionsforChange:

• Optionsandrecommendationswillbedeterminedbasedonthefindingsoftheconsultant’sreview.

Roleandtasks:

Aconsultantwillbehiredthroughacompetitiveshortrequestforproposal(SRFP)process.TheendproductthattheconsultantwillbeexpectedtoproduceisareportwiththefindingsofthereviewandrecommendationsfortheMinisterofMunicipalAffairsandHousing.ThereportwillbereviewedandfinalizedbytheworkinggrouppriortobeingpresentedtotheMinister.ToundertakethereviewandproducerecommendationsfortheMinister,theconsultantwill:

• BecomefamiliarwiththestructureandfunctionsoftheOfficeoftheAGLGandAuditCouncil(thiswillincludereceivingbackgroundinformationandinputfromtheworkinggroupandtheMinistry);

• Receiveinput,suggestionsandadvicefromworkinggroupmembersthroughoutthereview;• Conductinterviews,andifnecessary,surveyswithrelevantstakeholders,suchastheAGLG,

AGLGstaff,theAuditCouncil,theAuditCouncilSecretariat,theMinisterofMunicipalAffairsandHousing,MinistryofMunicipalAffairsstaffandlegalcounsel,UBCMandclientlocalgovernments;

• ReviewtheAGLGlegislation(thismaybedoneindirectlythroughtheinterviewprocess);

Appendices Page 1

• ReviewAGLGdocumentssuchasperformanceauditreports,perspectiveseriesbooklets,annualserviceplansandannualreports;

• Incorporateabestpracticesjurisdictionalscanintothefindings(thiswillbecompletedbyMinistrystaff);

• Reportbacktotheworkinggrouponfindingsandreceiveinputpriortopresentingthefinalreportandrecommendations;

• IncorporateworkinggroupinputandfinalizeareportwithrecommendationsfortheMinister.

ConsultantSkills/Experience:

• Experienceinprovidingresearchandanalysisonlegislationandpolicyrelatedtogovernment.• Experienceusingdatacollectionmethodssuchasinterviewsandsurveys.• Experienceindraftingupreportsforthepublicsector.• Experienceinprovidingadviceandrecommendationstoseniorexecutiveandelectedofficials.• Understandingofperformanceauditingandthelocalgovernmentsystem.

Approximatetimelines:

Task TimingWorkingGroupmeeting–finalizetermsofreferenceandworkplan Mid-AprilSRFPfinalized JuneConsultantretainedandbriefedaboutrole JulyConsultantconductsinterviews(andsurveysifnecessary) July-AugustWorkingGroupmeeting–consultantpresentspreliminaryfindings OctoberWorkingGroupmeeting–reviewdraftreportandrecommendations NovemberReportfinalized November/December

Deliverablesandoutcomesoftheconsultant’swork:

TheresultsofthereviewwillbepresentedinareportwithrecommendationsfortheMinistryandinvolvedstakeholders,includingtheworkinggroup.

Appendices Page 2

AppendixII

PERFORMANCEAUDITEDLOCALGOVERNMENTS

LocalGovernment YearAuditCompleted

ThosesurveyedbyUBCM:1. CityofRossland 2014and20152. ComoxValleyR.D. 20153. CityofDawsonCreek 20154. CorpofDelta 20155. CityofMerritt 20156. CityofNewWestminster 20157. DistrictofNorthVancouver 20158. CityofPortAlberni 20159. DistrictofSechelt 201510. CityofSurrey 201511. DistrictofWestVancouver 201512. CityofVernon 201513. CityofCampbellRiver 201614. CityofWilliamsLake 201615. Fraser-FortGeorgeR.D. 201616. CityofCranbrook 201617. CityofRevelstoke 2016

ThoseAuditedSince2015Survey:18. CityofNelson 201619. DistrictofSquamish 201620. R.D.ofOkanagan-Similkameen 201721. DistrictofTofino 201722. DistrictofPortEdward 201723. CityofFernie 201724. TownofSidney 201825. CityofKelowna 2018

Appendices Page 3

BestPracticesScan–LocalGovernmentPerformanceAuditing AppendixIII

Introduction

ThereareanumberoflocalgovernmentperformanceauditstructuresacrossCanadaandtheworld,rangingfromCityAuditorsGeneraltostateresponsibilityforlocalgovernmentauditing;however,thereisnootherauditbodywithasimilarstructure,roleandmandateastheAGLG.AspartofalargerreviewoftheAGLG,thispaperoutlinesanumberofthelocalgovernmentperformanceauditstructuresandpracticesfoundacrossCanada,theUnitedStates,Australia,NewZealandandtheUnitedKingdom.Althoughthepaperprimarilyexploresperformanceauditingandbestpractices,italsotouchesontheauditingoflocalgovernmentfinancialstatements(attestauditing)insomejurisdictionswhererelevant.

Jurisdictions

CANADA

OverviewandTrends

OutsideofBC,localgovernmentperformanceauditingisdealtwithatthelocalgovernmentlevel.TherearenoprovincialauditstructuresinCanadasimilartotheAGLG.Somemunicipalities,suchasTorontoandHalifax,arerequiredbylegislationtoappointaninternalmunicipalauditorgeneraltoconductperformanceaudits.Othermunicipalities,suchasWinnipegandOntariomunicipalitiesareempoweredtoappointamunicipalauditorgeneral,butarenotrequireto.Theseinternalauditfunctionsaredistinctfromtheauditingofmunicipalannualfinancialstatements,whichisconductedbyanexternalauditor,asrequiredformostmunicipalitiesbyprovinciallegislation.

ResearchconductedbytheCanadianAuditandAccountabilityFoundationfoundthatofthe58municipalitiesinCanadawithpopulationsgreaterthan100,000,about70percenthavesometypeofauditfunction.Thesefunctionsvarysignificantlyfromonemunicipalitytothenextandgenerallyfallintooneofthreemodels:Internalaudit,AuditorGeneral,andhybrid(characteristicsofboth).Municipalauditorsgeneralaregenerallyempoweredorrequiredbyprovinciallegislation,reporttocouncil(mostoftenthroughanauditcommittee),andprovideassuranceservicestohelpmunicipalcouncilssafeguardpublicassets,complywithpoliciesandlegislation,andimproveoperations.MunicipalauditorsgeneralinQuebecarealsoresponsibleforauditingtheirmunicipality’sfinancialstatements.Auditfunctionsareprimarilyfoundwithinlargermunicipalities;few,ifany,smallermunicipalitiesinCanadahavetheirownauditfunction.In2014,astudywasconductedontheextentofperformanceauditinginmajorcitiesinCanadaandtheUnitedStates.Surveysweresentouttocityauditorsinallmajorcities(populationsgreaterthan150,000)intheUnitedStatesandCanada,alongwithseveralsmallercities.Surveyswerecompletedby126auditfunctionsandfollowupinterviewswereconductedwith36auditleadersfromthesecities.ThemainfindingfromthissurveywasthatcityauditorsinCanadiancitiesspend10%lesstimeonperformanceauditingthantheirAmericancounterparts.TheaveragetimespentbyrespondentsinCanadais48%,comparedto58%intheUnitedStates.Additionally,25%ofCanadianrespondentsreportedspendingonly10%oftheirtimeonperformanceauditing.

Appendices Page 4

BestPracticesScan–LocalGovernmentPerformanceAuditing

Theprimarybarrierstoperformanceauditingidentifiedbythisstudywereinadequateformaleducation,insufficientfundingandalackofaffordabletraining.Otherbarriersidentifiedbythereportwerealackofprovinciallegislation,alackofcitybylaws,andimmaturegovernanceandperformancereportingprocesses.Additionally,thestudyfoundthatsmallcitiesexperiencemorebarrierstoperformanceauditingandneedadditionalsupportthanlargercities.

Alberta

InAlberta,generalizedlegislativeauthorityenablesAlberta’slocalgovernmentstoappointamunicipalauditorgeneral.EdmontonandCalgaryhaveemployedthisauthoritytosetupmunicipalauditorgeneralofficesthatprovideinternalauditservicesincludingperformanceauditing.LegislationtocreateamunicipalauditorgeneralofficeresponsibleforcarryingoutrandomauditsofmunicipalitiessimilartotheAGLGwasintroducedin2009.Thislegislationwassubsequentlydroppedinfavourofotheraccountabilitymeasures,suchasenhancingaccesstomunicipalfinancialinformation,whichthegovernmentbelievedwouldmeettheintentofthebillwithoutthecreationofanewbody.

CalgaryestablisheditsownCityAuditor’sOfficein2004forthepurposeofprovidingvaluetoitscouncilandseniormanagementthroughobjectiveassuranceandinsightintotheeffectivenessandefficiencyofgovernance,riskmanagementandinternalcontrolprocesses.TheOfficeisaccountabletocouncilandsubjecttooversightbytheauditcommittee.ExamplesoftopicsthattheOfficehasconductedauditsofincludetheeffectivenessofcorporatesuccessionmanagementprocesses,procurementandtransitfares.

Edmonton’sOfficeoftheCityAuditorwasestablishedin1977andcurrentlyhas15staffandabudgetof$2.6million.Edmonton’sCityAuditorisappointedbyitscouncilandprovidesanumberofauditservicesincludingcomprehensivereviewstodeterminewhetheradepartment,serviceorprogramoperatesefficiently,effectivelyandeconomically,andwhetherrisksareminimized.

Saskatchewan

Saskatchewan’slegislationdoesnotcontainaprovisionfortheappointmentamunicipalauditorgeneralorcityauditor.Thelegislationdoes,however,includeaprovisionthatenablesthepublictopetitionforamunicipalitytoconductamanagementorfinancialaudit,uponreceivingsupportfromone-thirdofthevotingresidentsinthatmunicipality.Thepurposeofafinancialauditistodetermineinstancesoffraud,unauthorizedtransactions,andnon-compliancewithstatutesandbylaws.Thepurposeofamanagementauditistoreviewifamunicipality’soperationsareundertakeneconomically,efficientlyandeffectively,andproposessolutionstoanyissuesidentified.Thisauthorityisnotusedoften,buthasbeenusedasrecentlyasMarch,2018.

TohelpmunicipalitiesassessthesustainabilityoftheiroperationsandfindareasforimprovementtheGovernmentofSaskatchewan,inconsultationwiththemunicipalsector,developedtheMunicipalGovernmentSustainabilitySelf-AssessmentTool.Althoughthisisnotanauditingfunction,thistoolprovidesmunicipalitieswithaninformalresourcetohelpthemassesstheirownperformance.ThetoolisaninteractiveMicrosoftExcelworkbookthatasksmunicipalitiestoprovideanswerstoanumberofscenario-basedandquantitativequestions.Thetoolcollatestheanswersfromthequestionstoprovidemunicipalitieswithsustainabilityscoresineightareas:governance,administrationfinanceandfinancialmanagement,servicedelivery,publicsafety,infrastructure,demographicsandeconomictrends,andpartnerships.

SaskatoonistheonlymunicipalityinSaskatchewanwithanidentifiedmunicipalauditfunction.Themunicipalitydoesnothaveamunicipalauditorgeneral,butinsteadhasaCorporateRiskDivision

Appendices Page 5


responsibleforoverseeingtheinternalauditfunctionofthemunicipality.TheDivisionworkswithcontractedauditorsresponsibleforevaluatingtheeffectivenessofriskmanagement,controlandgovernmentprocesses.

Manitoba

InManitoba,allmunicipalitiesareempoweredtoappointamunicipalauditorgeneral,exceptfortheCityofWinnipeg,whichisstatutorilyrequiredtoappointone.Winnipeg’sCityAuditorisappointedbyitscouncil,reportstoitscouncilthroughanauditcommitteeandisindependentoftheCity’spublicservice.ThemandateoftheWinnipegCityAuditorincludesreviewingtheperformanceoftheCity’soperationswithrespecttoeconomyandefficiency;examininginternalcontrols,compliancewithlegislationandbylaws;andprovidingadviceandassistanceinthedevelopmentofperformancemeasures.TheCityalsohasa24-hourfraudandwastehotlinethatisavailabletoallcitizensandisoperatedbyanindependentthirdparty.

TheAuditorGeneralofManitobaalsohasalimitedmandateforauditingmunicipalities.Themandateprimarilyincludesrespondingtocitizenconcernsanddoesnotincludeperformanceauditing.Forexample,theRuralMunicipalityofLacduBonnetwasauditedbytheAuditorGeneralofManitobain2013followingallegationsofpooradministrativepractices.Priortothis,fourotherauditswereconductedonruralmunicipalitiesdatingbackto2002.TheOfficereportedthatdespitethesefiveauditsandon-goingtrainingandinformationprovidedbytheManitobagovernmenttomunicipalities,between2011and2013,about23%ofthecitizenconcernsforwardtotheOfficeinvolvedmunicipalities.

TheAuditorGeneralofManitobaalsoprovidesbestpracticeguidesonauditcommitteesandinternalauditing;however,thesearegeneralpracticesforallorganizationsandarenotspecifictomunicipalities.

Ontario

InOntario,theCityofTorontoisrequiredtoappointanauditorgeneralandallothermunicipalitiesareempoweredtoappointone.Ontario’slegislationrequiresmunicipalauditorgeneralstoreporttocouncilandprovidesthemwithresponsibilityforassistingcouncilandtheadministrationinholdingthemselvesaccountableforthequalityofstewardshipoverpublicfundsandachievingvalueformoneyinmunicipaloperations.Thisisprimarilydonethroughperformanceandcomplianceauditing.

InadditiontoToronto,someofthelargermunicipalitiesinOntariohaveimplementedauditorgeneraloffices,largelywithmixedsuccess.BothOttawaandTorontoestablishedtheirauditorgeneralofficesintheearly2000s.Thesetwoofficesalsooperate24-hourfraudandwastehotlineprogramswhichareaccessibletocitystaffandthepublic.

OthermunicipalitiesinOntariowhichhaveestablishedinternalauditfunctionsinclude:

• Sudbury:Establishedamunicipalauditorgeneralofficein2009whichisstillinoperation.TheOfficewasvacantforoneyearbetween2014and2015whenthepreviousauditorgeneraltookaleaveofabsencetorunformayor.

• YorkRegion:Doesnothaveamunicipalauditorgeneralbuthasaninternalauditservicesbranchwhichwasestablishedin2000.Thebranchisheadedbyadirectorthatreportstoanauditcommitteeandcouncil.Since2005,theAuditServicesBranchhasprovidedauditservicestosixofthesmallermunicipalitieslocatedwithintheYorkRegiononafeeforservicebasis.

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• Windsor:Hadamunicipalauditorgeneraluntil2012whenthethenauditorgeneralwasfiredwithoutcausebycouncil.Sincethen,auditingserviceshasbeenprovidedbyanexternalcontractor.ThereiscurrentlyapubliccampaignrequestingmunicipalcandidatestoproclaimtheirsupportforanauditorgeneralforWindsor.Todate,nineoutof60candidateshavesignedon.

• Markham:Hireditsfirstauditorgeneralin2008;howeverthepersonleftthepositionforanotherjobin2009andthepositionremainedvacantuntil2015.Theauditorgeneralroleisnowbeingfilledbyanindependentaccountancyfirm.

• Hamilton:Doesnothaveanauditorgeneraloffice,buthasaninternalauditdepartmentthatprovidesauditservices,includingvalueformoneyaudits.

• Oshawa:Councilremovedtheirauditorgeneralin2013followingascathingauditreportthatallegedthecitymanagerofmisleadingcouncilonthepurchaseofland.Alawyerwashiredtoinvestigatetheauditandclearedthecitymanagerofwrongdoingandquestionedtheauditorgeneral’scredibility.TheauditorgeneralinquestionwashiredbySudburyin2015.

Inadditiontomunicipalauditorgeneralofficesorinternalauditfunctions,in2006theProvinceofOntarioinitiatedtheOntarioMunicipalBenchmarkingInitiative(OMBI).ThepurposeofOMBIwastoidentifyanddevelopperformancemeasures,captureperformancedata,andanalyzeandbenchmarkresultsinordertoidentifybestpracticesofserviceefficiencyandqualityinOntariomunicipalities.

In2016,OMBIwasformallychangedtotheMunicipalBenchmarkingNetworkCanadatoreflecttheinclusionofmunicipalitiesfromoutsideofOntario.Therearenow16Canadianmunicipalitiesfromsixprovincesinvolvedintheorganization.Everyyear,theorganizationpublishesaPerformanceMeasurementReportsharingandcomparingtheperformanceofparticipatingmunicipalitiesacross37serviceareas—everythingfromaccountspayabletodrinkingwater.Participatingmunicipalitiesusethedatatosupportcouncildecisions,setpolicy,informreviews,evaluateprograms,supportbudgetrecommendations,identifytrends,anddevelopdatadashboards.

Quebec

InQuebec,legislationrequiresalllocalgovernmentswithpopulationsofover100,000toappointamunicipalauditorgeneral,whosemandateincludefinancial,legal,regulatoryandvalueformoneyauditing.ThislegislationwasintroducedinQuebectostrengthenmunicipalaccountabilityandtransparencyfollowingtheamalgamationofanumberofsmallermunicipalitiesintolargemunicipalities.Therearecurrently10municipalitiesinQuebecwithpopulationsover100,000.

InApril2018,QuebecadoptedlegislationthatexpandedthemandateoftheCommissionmunicipalduQuébec(CMQ)withrespecttomunicipalauditing.TheCMQwascreatedin1932tocontrolandmonitorthefinancesofmunicipalities,schoolboardsandfactories.The2018amendmentsprovidetheCMQwithresponsibilityforconductingperformanceauditsinmunicipalitieswithpopulationsbetween10,000and100,000.Priortothis,theCMQonlyconductedperformanceauditsonmunicipalitieswithpopulationsoflessthan10,000andtheperformanceauditsofmunicipalitieswithapopulationbetween10,000and100,000wasconductedbyanexternalauditor(alsoresponsibleforauditingfinancialstatements).

EachmunicipalitythattheCMQhasperformanceauditingresponsibilityfor,mustundergoaperformanceauditonceeverytwoyears.Additionally,thosemunicipalitieswithpopulationsofover

Appendices Page 7


100,000may,byresolution,requesttheCMQtoconductaperformanceauditontheirownauditorgeneral.

NovaScotia

AmunicipalauditorgeneralofficewasproposedforNovaScotiain2011.TheproposedplanfortheOfficewas:theministerwouldappointthemunicipalauditorgeneralontherecommendationoftheUnionofNovaScotiaMunicipalities,theprovincewouldpaytheauditorgeneralandstaff,NovaScotia’s55municipalitieswouldcoverthecostofoperatingtheofficeandeachmunicipalitywouldhavetopayforavalue-for-moneyauditonceeveryfouryears.TheOfficewasnevercreatedandtheplanwasshelvedfollowingaprovincialelection.

AlthoughamunicipalauditorgeneralofficewasneverrealizedforNovaScotia’smunicipalities,theCityofHalifaxhasitsownauditorgeneraloffice,asrequiredbytheHalifaxRegionalMunicipalityCharter.TheOfficewasestablishedinSeptember2009andisresponsibleforassistingthecouncilandthemunicipaladministrationinholdingthemselvesaccountableforthequalityofstewardshipofpublicfundsandforachievingvalueformoneyinoperations.TheHalifaxAuditorGeneralreportstocouncilandcanholdthepositionforamaximumofsevenyears.

NewBrunswick

ThereisnolegislativeprovisionforamunicipalauditorgeneralinNewBrunswick.TheCityofMonctonhasitsowninternalauditofficeheadedbyaninternalauditorthatreportsfunctionallytothecitycouncilandadministrativelytothecitymanager.Theroleoftheinternalauditoristoexamineandevaluatetheeconomy,efficiencyandeffectivenessoftheCity’sgovernance,riskmanagement,systemofinternalcontrol,performancelevelsindeliveringmunicipalservicesandprogramsandmakeinvestigationsintosuspectedfraudulentactivitiesandotheractsofmisconduct.Similartootherinternalauditfunctionsormunicipalauditorsgeneral,theCity’sinternalauditordoesnotaudittheCity’sfinancialstatements,asthisfunctionisconductedbyanexternalauditor.

PrinceEdwardIsland(PEI)

InDecember2017,newlegislationcameintoforcethatrequiresmunicipalitieswithmorethan$50,000inannualbudgetedexpenditurestoappointanexternalauditortoproduceyearlyfinancialstatementsbyApril2020.ThereisnorequirementinPEIforamunicipalitytoappointanauditorgeneralorundertakeperformanceauditing.

PEI’slegislationalsoenablestheMinistertoappointapersontoaudittheaccountsofamunicipalityorcauseaninspectionintothemanagement,administrationoroperationofamunicipality.ThecostsofanauditorinspectionorderedbytheMinisteraretobebornebythemunicipality.Nodataisavailableonwhetherornotthispowerhasbeenexercised.

AssemblyofFirstNations

InJuly,2016theAssemblyofFirstNationsandIndigenousandNorthernAffairsCanadasignedamemorandumofunderstandingtoresearchanddevelopproposalsandrecommendationsforthedesignofanewfiscalrelationshipbetweenFirstNationsandtheGovernmentofCanada.Aspartofthisprocess,considerationisbeinggiventoanewaccountabilityregimethatwouldestablishnewFirstNationsinstitutions,includingaFirstNationsAuditorGeneral.TheCanadianAuditandAccountabilityFoundation(CAAF)conductedresearchtoconsiderthepotentialrolesandrequirementsforaFirstNationsAuditorGeneralstructure.ThestudyfocusedontheestablishmentofsingleFirstNations

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AuditorGeneral.TheresearchsuggestedthataFirstNationsAuditorGeneralcouldbemandatedtocarryouttwoprimaryfunctions:

• Providingcapacity-buildingresourcestoFirstNationsleadersandmanagersthathelpdemonstrateaccountabilityandimprovethemanagementoffinancialandhumanresourcesandcommunity-basedprograms.Aresourcecentrecouldbedevelopedtoprovideguidance,training,supportandcapacitybuildingresourcestohelpFirstNationscitizensholdtheirgovernmentstoaccount.

• Conductingperformance,complianceandfinancialaudits.Primarilyperformanceauditsbecausetheyhavethegreatestpotentialtodriveimprovementstosocio-economicoutcomes.Theseauditswouldfocusoneconomy,efficiencyandeffectivenessofpoliciesandprogramsandservices.

TheCAAFresearchexaminedtheAGLGasoneofitsreferencepointsbecauseitisauniqueinstitutioninBCthatprovidesperformanceauditingacrosstheProvinceandisresponsibledirectlytolocalgovernments.SmallmunicipalitiesinCanadagenerallydonothavetheirownauditfunction,anditwouldbeimpracticaltohaveaFirstNationsAuditorGeneralofficeforeachFirstNations,thereforeasimilarstructuretotheAGLGmaybeaviableoption.

AUSTRALIA

InAustralia,performanceauditingoflocalgovernmentsisprimarilydealtwithatthestatelevel.Ofthefourstates(excludingAustraliaCapitalTerritory)andthreeinternalterritoriesinAustralia,sixhavesomeformofstateorterritorylocalgovernmentauditingfunctionthatincludesperformanceauditing(orexaminations)oflocalgovernments(seetablebelow).Theinclusionoflocalgovernmentperformanceauditingunderthepurviewofastateauditor-generalhasbeenarecenttrendinAustralia,withfiveofthesejurisdictionsassumingthisfunctionwithinthelast10years.

State/Territory AuditingFunction Yearofeffect

NewSouthWales

Stateauditor-generalistheauditoroflocalgovernmentsandmandateincludesperformanceaudits. 2016

SouthAustraliaStateauditor-generalcanexaminetheaccountsoreconomyandefficiencyoflocalgovernmentsorlocalgovernmentprograms(similartoaperformanceaudit).Itisnottheauditorforlocalgovernments.

2013

Queensland Stateauditor-generalistheauditorforlocalgovernmentsandmandateincludesperformanceaudits.

2011(performance

audits)

Tasmania StateAuditor-Generalistheauditorforlocalgovernmentsandmandateincludesperformanceaudits. 2008

Victoria StateAuditor-Generalistheauditorforlocalgovernmentsandmandateincludesperformanceaudits. 1995

WesternAustralia

Byfiscalyear2020/2021alllocalgovernmentswillbeauditedbythestateauditor-generalandmandateincludesperformanceaudits. 2020/2021

NorthernTerritory

Thestateauditor-generaldoesnothaveamandateforlocalgovernments. N/A

Appendices Page 9


NewSouthWales

In2016-17theAuditOfficeofNewSouthWales’smandatewasexpandedtoincludelocalcouncilsandincludestheauthoritytoconductsectorwideperformanceaudits.ThischangewaspartofabroaderlocalgovernmentreformagendabytheNewSouthWalesGovernmentaimedatcreatingamodernsystemoflocalgovernmentwithstrongperformingcouncils.Sincethismandatewasintroduced,theOfficehasconductedlocalgovernmentperformanceauditsonshareservices,fraudcontrolsandfor2018-19isplanningtocompleteauditsonwastemanagementandstaffimplications.Performanceauditsaregenerallyconductedonasampleoflocalcouncilsoralllocalcouncils;theyarenotconductedonindividuallocalcouncils.

TheNewSouthWalesauditofficedeveloped“betterpracticesguides”upuntil2015onstategovernmenttopics.Nobetterpracticesguideshavebeen,orareplannedtobedevelopedforlocalgovernments.

AlocalnewsarticlereportedthatLocalGovernmentNewSouthWales,anorganizationrepresentinglocalcouncils,applaudedthefirstlocalgovernmentperformanceauditbytheAuditOfficeofNewSouthWales.Theauditrecommendedthatresidentsbegivenmoredetailedinformationabouthowlocalcouncilsspendtheirmoneyandwhattheyreceiveforit.Theorganizationsaidthattheyhadbeenwaitingyearsforreformfromthestategovernmenttosetahigherbarforlocalgovernmentreporting.

SouthAustralia

In2013,themandateoftheGovernmentofSouthAustralia’sAuditor-GeneralDepartmentwasexpandedinrelationtolocalgovernmentstoallowtheAuditor-Generaltoexaminetheaccounts,economyandefficiencyoflocalgovernmentsorlocalgovernmentprojects.Theseexaminationsaregenerallyconductedoneitheraspecificlocalgovernmentprojectormultiplelocalgovernmentsforaspecifictopicsuchasindemnityschemesorgovernance.

InJune2016,aParliamentaryCommitteereportrecommendedthatcouncilsbesubjecttoathoroughauditingprocessundertheauspicesoftheAuditor-General;howeverthisdidnotcometofruition.TheAuditor-GeneraldidnotthinktherewasagreatadvantagetotheAuditor-Generalauditingalllocalgovernmentaccountsinthewaythatanexternalauditorwould.Todate,theAuditor-Generalisonlyresponsibleforconductingspecificlocalgovernmentexaminations.

Queensland

InQueenslandtheAuditor-GeneralistheexternalauditorforlocalgovernmentsinQueensland.Since2011,themandateoftheAuditor-Generalincludesperformanceauditstodetermineiflocalgovernmentobjectivesarebeingconductedeconomically,efficientlyandeffectivelyandincompliancewithrelevantlaws.Localgovernmentauditsarepaidforbythelocalgovernmentthatisaudited.Examplesofauditstodateincludemanaginglocalgovernmentrates,feesandcharges;forecastinglong-termsustainabilityoflocalgovernmentsandtrafficmanagementsystems.Auditsaregenerallyconductedonasampleoflocalgovernmentsorasurveyofalllocalgovernments.

Tasmania

TheTasmanianAuditor-GeneralhasasimilarroletotheQueenslandandNewSouthWalesAuditors-General.TheAuditor-Generalcanconductfinancial,complianceandperformanceauditsonlocalgovernments.Examplesofauditsincludecompliancewithlegislation,bushfiremanagement,roadmanagementinlocalgovernmentsandfraudinlocalgovernments.Auditsaregenerallyconductedonall29Tasmanianlocalgovernmentsorasampleoflocalgovernments.

Appendices Page 10


Inadditiontofinancial,performanceandcomplianceaudits,theTasmanianAuditOfficealsooffersanexcelspreadsheettolocalgovernmentstohelpthempreparetheirfinancialstatements.TasmanianlocalgovernmentlegislationalsorequiresallTasmanialocalgovernmentstoestablishandmaintainanauditpanel.Theauditpanelprovidesanindependentmechanismtoreviewcouncilprocessesanddecisionmaking.Asuccessfulauditpanelprovidesassurancethatcouncildecisionsaremadeintheinterestofthecommunity,withparticularattentiontopropermanagementpracticesandcompliancewithlegislationandpolicy.

Victoria

TheVictorianAuditor-General’sOfficehashadresponsibilityforlocalgovernmentauditing,includingperformanceauditingsince1995.LocalgovernmentperformanceauditsconductedbytheOfficedeterminewhetheralocalgovernmentisperformingeffectively,economicallyandefficientlyandincompliancewithallrelevantlegislation.Since1999theOfficehasconducted62localgovernmentaudits.Performanceaudittopicsincludewastemanagementbymunicipalcouncils,landuseanddevelopment,managementoflocalroadsandperformancereportinginlocalgovernment.TheOfficehasalsopublishedselectbestpracticesmaterialssuchasbestpracticesforinternalfinancialreporting.

InadditiontotheworkthattheVictorianAuditor-General’sOfficeconducts,LocalGovernmentVictoria,adivisionintheVictoriaStateGovernment,providesanumberofbetterpracticeguidesforlocalgovernments.Someoftheseguidesareproducedwithoversightby,orwithsupportfrom,theAuditor-General`sOffice.ExamplesofbetterpracticeguidesdevelopedbyLocalGovernmentVictoriaincludeplanningandreporting,modelbudgetsandassetmanagement.

WesternAustralia

WesternAustraliaisthemostrecentAustralianjurisdictiontoplacetheauditingoflocalgovernmentsunderthepurviewofthestateauditor-general.ThenewlegislationrequiresalllocalgovernmentstobeauditedbytheAuditor-Generalby2020/2021,primarilybyanexternalfirmunderthesupervisionoftheAuditor-General.Thelegislationalsoplacesanobligationonlocalgovernmentstopublishtheirannualreportsonline.Additionally,iftheAuditor-Generalreportsanysignificantmattersarisingthroughaperformancereport,theauditedlocalgovernmentisrequiretoreporttheactionsithastakentoaddressthisissuetotheMinisterandpublishacopyofthereportonline.ThefirstplannedperformanceauditbytheOfficeislocalgovernmentprocurementtodeterminewhetherlocalgovernmentshaveestablishedpoliciesandproceduresforprocurementofgoodsandservicesandwhetherthereiseffectiveoversightandcontrolofprocurementactivities.

NEWZEALAND

InNewZealandtheControllerandAuditor-Generalistheauditorforeverypublicentity,includinglocalgovernments.TheAuditor-General’smandateincludesperformanceauditsonlocalgovernmentsandauditingofthedraftandfinallong-termstrategicplansoflocalgovernments.PerformanceauditshavebeenconductedonNewZealand’slocalgovernmentssincethe1960sdespitetheabsenceofamandateuntil1977todoso.TheAuditor-Generalemploysstaffintwodifferentoffices:

• OfficeoftheAuditor-General:responsiblefortheoverallplanningandreporting,andcarriesoutperformanceaudits,specialstudiesandinquiries.Thisofficehasitsowndedicatedlocalgovernmentauditteam.

Appendices Page 11


• AuditNewZealand:responsibleforcarryingoutannualauditsontheAuditor-General’sbehalf.PrivatesectoraccountingfirmswillalsocarryoutannualauditsontheAuditor-General’sbehalf.

TheOfficehasconductedanumberofauditsonlocalgovernmentsinNewZealand.Sometimestheseauditsassessalllocalcouncils,othertimesauditsareaninquiryintoaspecificlocalgovernmentfollowingconcernsraisedbythepublic.TheOfficehasalsoproducedauditdocumentsthataresimilartoalessonslearnedorbestpracticesguidethroughtheassessmentofspecificlocalgovernments.AreasthattheAuditor-Generalhasconductedperformanceauditsonincludeinsuringpublicassets,monitoringtheuseofwaterforirrigation,conflictofinterest,andfundingandmanagementchallengesofwaterandroads.

UNITEDSTATES

WashingtonState

TheOfficeoftheWashingtonStateAuditorGeneralisrequiredtoexaminethefinancialaffairsoflocalgovernments.TheOfficeisresponsibleforauditingmorethan3,000localgovernments.ArangeofauditsareconductedbytheOfficeincluding:

• Performanceaudits:evaluationsoftheeffectiveness,economyandefficiencyofpublicservices,atboththestateandthelocallevel.

• Accountabilityaudits:asseshowlocalgovernmentsmanage,useandsafeguardpublicresources.Itevaluateswhetherthereisreasonableassurancethelocalgovernmentadheretoapplicablestatelaws,regulationsanditsownpoliciesandprocedures.

• Financialaudits:determinesiflocalgovernmentfinancialstatementsareaccurateandcomplete.

• Singleaudits:conductedonlocalgovernmentsthatspend$750,000ormoreinfederalfinancialassistanceannualtodeterminewhetherlocalgovernmentshavecompliedwithfederalcompliancerequirements.

TheOfficealsoissuesaccountingandreportingrequirementsforlocalgovernmentsandcollectsandreportstheirrevenuesandexpenditures.ThisinformationisprovidedthroughtheLocalGovernmentFinancialReportingSystem.Thedatainputtedintothissystemallowsfortrendanalysis,identifyingredflagsinfinancialareasoridentifyingcomplianceareasforlocalgovernments.

Inadditiontoauditing,theOfficeperiodicallyproducesspecialreportsonspecificlocalgovernmentissuessuchas“LocalGovernments:ImprovingTransparencyandAccountability”.MostoftheperformanceauditsconductedbytheOfficearefocusedonlargestate-levelprograms,sotohelplocalgovernmentssolveproblems,reducecostsandimprovethevalueoftheirservices,theycreatedtheLocalGovernmentPerformanceCentre.Thiscentrebringstheperformancemanagementlessonstolocalgovernmentthroughtraining,toolsandtechnicalassistance.Someofthetoolsofferedthroughthecentreinclude:

• Freetrainingtolocalgovernmentelectedofficials,managersandstafftoimproveperformance,financialmanagement,customersatisfactionandtransparency(boththroughscheduledclassesandspecifictrainingtothelocalgovernment).

• AnonlinetraininglibrarywitheLearningcoursescoveringtopicssuchascapitalassetsmanagementandfraud.

Appendices Page 12


• LeanAcademy:Offerstrainingtolocalgovernmentemployees,sotheycanlearnleanprocessesandimprovementtechniqueswithpeersfromsimilarorganizations.AcademyworkshopsareusuallythreedaysoftrainingonLeantechniquesfollowedbyaone-weekworkshopanalyzingtheirprocesses.Followingthistraining,onecountywasabletoreducethetimeittakestoissueasinglefamilyhomeconstructionpermitfrom31daysto9.

• FinancialIntelligenceTool:Isanonlineinteractiveprogramthatdisplayshistoricalfinancialinformationinatrendformat,withgraphsandchartsthatallowforeasyanalysis.

NewYorkState

InNewYorkState,performanceauditingisconductedbytheOfficeoftheNewYorkStateComptroller’sDivisionofLocalGovernmentandSchoolAccountability.Localofficialsuseauditfindingstoimproveprogramperformanceandoperations,reducecostsandcontributetopublicaccountability.Auditsaregenerallyconductedaboutaspecifictopicinasinglelocalgovernment,similartoperformanceauditingbytheAGLG.Examplesoftopicsincludeinternalcontrolsoverthetreasurer’soffice,budgetreasonability,internalcontrolsovercapitalprojectsandcommunitydevelopmentactivities.Performanceauditobjectivescanvarywidelybutgenerallyincludeanassessmentofprogrameffectiveness,economyandefficiency,internalcontrol,complianceandprospectiveanalysis.

TheOfficealsoprovidesanumberofonlineresourcesforlocalgovernmentstohelpthemachievevalueformoney.Forexample,theOfficehaspostedaseriesof‘costsavingideas’resourcesforlocalgovernments.Twenty-twodocumentsonvaryingcostsavingtopicssuchashowtoreduceenergycostsandcostsavingsincapitalplanningandmanagementhavebeenpreparedandpostedonline.Onlineresourcesalsoincludeanumberoflocalgovernmentmanagementguidesontopicssuchasstrategicplanning,seekingcompetitioninprocurementandcapitalassets.

NavajoFirstNation

TheNavahoFirstNationhasitsownauditorgeneral,whichreportsdirectlytotheBudgetandAuditCommitteefortheFirstNationandispoliticallyappointedbytheSpeakeroftheNavajoFirstNationCouncil.ThepositionandresponsibilitiesoftheAuditorGeneralareestablishedundertheNavajoNationCode.TheOfficeoftheAuditorGeneralisresponsibleforprovidingindependentandobjectiveassessmentsoftheNavajoNationprograms,enterprisesandpoliticalsubdivisions.TheOfficeconductsperformanceauditsofgovernmentprograms,departmentsandentitiesandfinancial-relatedauditsoftheinternalcontrolsstructureandaccountingsystemschapters(complianceandfraudinvestigations).

Thisofficeisnotspecificallyresponsibleforconductingperformanceauditsoflocalchapters;however,localchaptersarerequiredtoadoptandoperateafivemanagementsystemincludesaccounting,procurement,filing,personnelandproperty.TheOfficeisresponsibleforreviewingthe chapters’fivemanagementsystempoliciesandprocedures.Thereviewincludesobtaininganunderstandingoftheinternalcontrolpoliciesandproceduresestablishedbythechapters’fivemanagementsystem,evaluatingthedesigneffectivenessoftheinternalcontrolproceduresanddeterminingwhethersuchprocedureshavebeenplacedinoperation.Uponcompletionandgovernancecertification,thesuccessfulNavajoNationchapterisdelegatedgovernmentalauthoritywithrespecttolocalmatters.

CitiesintheUnitedStates

SimilartoCanada,thereareanumberofcitiesintheUnitedStatesthathaveindependentauditoffices,manyofwhichconductperformanceaudits.Forexample,theCityandCountyofDenver,ColoradohasanAuditor’sOfficeandAuditServicesDivisionwhichconductindependentperformanceauditsofCityagencies,programsandcontracts.TheDivision,undertheleadershipoftheelectedAuditor,is

Appendices Page 13


responsibleforkeepingresidentsinformedabouttheactivitiesoftheCityandCountygovernment.TheroleoftheAuditorwasamendedin2008toenhancetheindependentstandingandauthorityoftheAuditorinconductingitswork.In2011,theDivisionissued17performanceauditreports.

TheCityofSanDiegoalsohasanindependentOfficeoftheAuditorGeneralwhichreportstoanauditcommitteeanditscouncil.ThemissionoftheOfficeistoadvanceopenandaccountablegovernmentthroughaccurate,independent,andobjectiveauditsandinvestigationsthatseektoimprovetheeconomy,efficiency,andeffectivenessoftheSanDiegoCitygovernment.In2017theOfficeconducted16performanceaudits,oneproceduresreviewandsevenfraudhotlineinvestigations.

ExamplesofadditionalcitiesintheUnitedStateswithauditfunctionsincludePortland,Oregon;SanAntonio,Texas;LasVegas,Nevada;Nashville,Tennessee;Honolulu,HawaiiandSeattle,Washington.

UNITEDKINGDOM

England

In1983theAuditCommissionwasestablishedasastatutorycorporationintheUnitedKingdomresponsibleforappointingauditorstolocalgovernments.In2015theAuditCommissionwasclosedtoreducegovernmentspendingandanewlocalauditandaccountabilityframeworkforlocalpublicbodiesinEnglandwasintroduced.OversightforlocalgovernmentauditswasmovedfromtheAuditCommissiontotheFinancialReportingCouncil,aprivatesectorbody,newmandatorytransparencyrequirementswereinstitutedforsmallerlocalauthoritiesinplaceofroutineaudits,andlocalgovernmentsweremaderesponsibleforappointingtheirownauditors.ThechangesalsoencouragedafocusonvalueformoneybyenablingtheNationalAuditOfficetoundertakevalueformoneyexaminationsrelatingtothematicissuesfacedbylocalpublicbodies.

NorthernIreland

InNorthernIreland,everylocalgovernment’sfinancialstatementsmustbeauditedbyanexternalauditorassignedbytheDepartmentforCommunities,withtheconsentoftheComptrollerandAuditorGeneralforNorthernIreland.TheDepartmentmaydesignateamemberoftheNorthernIrelandAuditOfficeasthelocalgovernmentauditor.ThelocalgovernmentauditorisrequiredtocarryoutitsworkinaccordancewiththeCodeofAuditPractice.

Inpreparingitsannualfinancialstatements,localgovernmentsarerequiredtoprepareAnnualGovernanceStatementswhichcoverarrangementsandinternalcontrolsforsecuringeconomy,efficiencyandeffectivenessintheuseofresources.Localgovernmentauditorsareresponsiblefordeterminingiflocalgovernmentshavethepropercontrolsinplacetosecureeconomy,efficiencyandeffectivenessandforevaluatingcouncilperformanceimprovementsystems.Ifthelocalgovernmentauditordeterminesitisappropriate,theycanconductaspecialinspectionintoacouncil’sperformanceimprovementresponsibilities.Theresultsofthelocalgovernmentauditorsworkisreportedtolocalcouncilmembersandlocalgovernmentbodies.

Wales

InWales,theAuditorGeneralforWalesisresponsibleforauditinglocalgovernmentsthroughtheWalesAuditOffice.TheOfficeauditsthefinancialaccountsofcouncils,reportsonhowservicesarebeingdelivered,assesseswhethervalueformoneyisbeingachievedandcheckshowtheyareplanninganddeliveringimprovements.AnannualassessmentofeachcouncilisconductedbytheOfficeeveryyear,

Appendices Page 14


inadditiontoamorein-depthCorporateAssessmenteveryfouryears.AnnualImprovementReportsarepreparedforeachcouncileveryyearthatcommentongovernance,improvementandperformanceplanningandreportingarrangements.

TheAuditorGeneralforWalesalsoundertakesaprogrammeoflocalgovernmentstudiesthatfocusonasingleissueorpolicyareaandreviewtheperformanceanduseofresourcesbypublicbodiesacrossWales.Forexample,arecentstudyassessed“Howlocalgovernmentsmanagedemand–homelessness”.Thestudyincludedauditfieldworkoffivelocalgovernments,asurveyofcitizens,websiteanddocumentreviews,interviewsandanalysisofdataandexpendituresonhomelessnessservices.Topicsslatedforfuturestudiesincludeusingdataeffectively,howwelldopublicservicesprovideservicestoruralcommunitiesandvalueformoneyofplanningservices.

Scotland

TheAccountsCommissionisthepublicspendingwatchdogforlocalgovernmentsinScotland.Itholdscouncilsandvariousjointboardsandcommitteestoaccountandhelpsthemimprove.ItoperatesimpartiallyandindependentlyofcouncilsandoftheScottishGovernment,andmeetsandreportsinpublic.AuditsareundertakenbyAuditScotland’sAuditServicesGrouporbyprivatefirms,onappointmentbytheAuditCommission.

InScotland,achieving“bestvalue”isastatutorydutyforlocalauthorities,suchascouncils.Bestvalueisaboutensuringthatthereisgoodgovernanceandeffectivemanagementofresources,withafocusonimprovement,todeliverthebestpossibleoutcomesforthepublic.AuditScotlandauditslocalauthoritiesagainsttherequirementsforbestvalueandproducesbestvaluereportsandperformanceauditreports.Tosupporttheauditprocess,ithasalsopublishedtoolkitsontopicsincludingfinancialmanagement,communityengagement,riskmanagementandpublicperformancereporting.

SummaryofFindings

AlthoughtherearenoauditstructuresacrossCanadaorworldwideidenticaltotheAGLG,thebestpracticesscanindicatesthatinternationally,thereareanumberofmechanismstosupporttheprovisionofservicesbylocalgovernmentstomaximizetheirservicesandprograms.PerformanceauditsareanauditingtoolthatareusedbyanumberofjurisdictionsaroundtheworldandCanadatohelplocalgovernmentsachievevalueformoneyandincreasetheeffectivenessoftheservicesthattheyprovide.

Thescanhasdemonstratedawiderangeofauditingfunctionsforlocalgovernments.InCanadaandtheUnitedStates,thereareanumberofcitiesthathavetakentheinitiativetoestablishauditorgeneralofficesorinternalauditdepartmentstoconductperformanceauditsandhelpholdcouncilandtheadministrationaccountabletotheircitizens.Inotherjurisdictions,suchasAustraliaandtheUK,thisfunctionisprimarilycarriedoutbyastateornationauditorgeneral.Mostoftenthesejurisdictionsalsoprovidefinancial,complianceandauditingforlocalgovernments.

Inadditiontoprovidingauditingservices,anumberofauditorgeneralofficesprovidetoolsandbestpracticematerialtohelplocalgovernmentsmaximizetheirefficiencyandeffectiveness.Forexample,theStateofWashingtonhasdevelopedasuiteoftoolsandresources,includingonlinetrainingandLeanWorkshopstosupportlocalgovernments.AnotherexampleistheStateofVictoria,AustraliawheretheVictorianGovernmentprovidesresourcemanualstolocalgovernmentsthroughtheLocalGovernmentDepartmentinpartnershipwiththeAuditor-General’sOffice.TheGovernmentofSaskatchewanis

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anotherexampleofajurisdictionthatprovideslessformalperformancesupporttolocalgovernmentsthroughitsMunicipalGovernmentSustainabilitySelf-AssessmentTool.

Theresearchhasalsopointedtoagapinperformanceauditingbysmallerlocalgovernments.AnumberofthelargercitiesinCanadaandtheUnitedStateshavetheirowninternalcapacity(orrequirement)todevelopauditorgeneralorinternalauditofficestoconductperformanceandcomplianceaudits.Therewerenoexamplesofsmallmunicipalitiesundertakingthistypeofworkontheirownbehalf.Australianstatesandterritoriesappeartoaddressthisgapandensureconsistencyinlocalgovernmentauditingbyplacingtheresponsibilityforlocalgovernmentauditswiththestateorterritoryauditorgeneraloffice.TheCAAFresearchalsopointstothechallengesinestablishingauditofficesforallFirstNations’communitiesbyproposingtheestablishmentofasingleFirstNationsAuditorGeneral,similartotheAGLGmodel.

Inconclusion,thereareanumberofperformanceauditingmechanismsandarrangementsinplaceacrossCanadaandtheworldtosupportlocalgovernmentsinachievingvalueformoneyandprovidingtransparencyandaccountabilitytotheircitizens.Thesestructurescanvarylargelybyjurisdiction.Performanceauditingisalsooftenviewedbyjurisdictionsasapositivetooltohelpsupportlocalcouncilsandadministrationsinprovidingqualityservicesandaccountabilitytotheircommunities.

Appendices Page 16

Appendix IV

SurveyResultsofEightLocalGovernmentsAuditedSince2015

September2018

(Pleasenotethatsomesectionshavebeenremovedforconfidentialitypurposes.)

Appendices Page 17

Audit Scope and Information Requests 4. Did the AGLG define the scope of work for the audit topic selected for yourlocal government?

5(a). Did the AGLG request scope changes during the course of the audit?

100.0 %

0.0 % 0.0 %

20.0 %

40.0 %

60.0 %

80.0 %

100.0 %

Yes No

All (Mean:1.0, Deviation:0.0) (Responses:4 / 8 (50%))

0.0 %

100.0 %

0.0 %

20.0 %

40.0 %

60.0 %

80.0 %

100.0 %

Yes No


Appendices Page 18

5(b). If scope changes were requested by the AGLG, how many requests were made?

6. Were there repetitions in requests for information made by the AGLG?

0.0 %

0.0 %

0.0 %

0.0 %

0.0 % 20.0 % 40.0 % 60.0 % 80.0 % 100.0 %

1

2

3

More than 3.


0.0 %

100.0 %

0.0 %

20.0 %

40.0 %

60.0 %

80.0 %

100.0 %

Yes No


Appendices Page 19

7. The purpose of the AGLG as stated in the Auditor General for LocalGovernment Act is as follows: to conduct performance audits of theoperations of local governments in order to provide local governments withobjective information and relevant advice that will assist them in theiraccountability to their communities for the stewardship of public assets andthe achievement of value for money in their operations. Were the informationrequests of the office in keeping with the stated purpose of the AGLG office?

100.0 %

0.0 % 0.0 %

20.0 %

40.0 %

60.0 %

80.0 %

100.0 %

Yes No


Appendices Page 20

Local Government Capacity 8. Did the AGLG discuss and consider in advance the local staff andresources that would be required to comply with the audit?

9(a). Did your local government keep records of the staff time and other resources necessary to comply with the audit?

100.0 %

0.0 % 0.0 %

20.0 %

40.0 %

60.0 %

80.0 %

100.0 %

Yes No


0.0 %

100.0 %

0.0 %

20.0 %

40.0 %

60.0 %

80.0 %

100.0 %

Yes No


Appendices Page 21

9(b). If yes, please provide the number of staff hours that have been required to fulfill AGLG audit requests to date. (All)

9(c). If no, please provide an estimate of the number of staff hours that have been required to fulfill AGLG audit requests to date. (All)

• approx 10 hours

• 60-70 staff hours

• 250

• 250

10. How many staff members made contributions to the AGLG audit processfrom your office?

75.0 %

0.0 %

0.0 %

25.0 %

0.0 % 20.0 % 40.0 % 60.0 % 80.0 % 100.0 %

1-5

6-10

11-15

More than 15


Appendices Page 22

Timeliness 11. Did the AGLG propose a timeline for the audit?

12. Was the timeline adhered to?

100.0 %

0.0 % 0.0 %

20.0 %

40.0 %

60.0 %

80.0 %

100.0 %

Yes No


75.0 %

25.0 %

0.0 %

20.0 %

40.0 %

60.0 %

80.0 %

100.0 %

Yes No


Appendices Page 23

13. If the timeline to complete the audit was extended, please select reasons from the following list to describe why that was so:

13. If the timeline to complete the audit was extended, please select reasons from the following list to describe why that was so: - Other. Please describe. (All)

• Timeline was slightly lengthened, however not significantly. I believe it was done due to the amount of information to compile, assess and report on.

0.0 %

0.0 %

0.0 %

100.0 %

0.0 % 20.0 % 40.0 % 60.0 % 80.0 % 100.0 %

Lack of capacity to respond in a timely way to AGLG information requests.

Changes to audit scope.

Changes to AGLG staff or contractors involved in the audit.

Other. Please describe.


Appendices Page 24

AGLG Office Communicated in a professional and respectful manner

(1 = Worst, 5 = Best)

Was accessible and responded to questions in a timely manner


0.0 % 0.0 % 0.0 % 0.0 %

100.0 %

0.0 %

20.0 %

40.0 %

60.0 %

80.0 %

100.0 %

1 2 3 4 5


0.0 % 0.0 % 0.0 %

25.0 %

75.0 %

0.0 %

20.0 %

40.0 %

60.0 %

80.0 %

100.0 %

1 2 3 4 5


Appendices Page 25

Demonstrated understanding of local government generally


Demonstrated understanding with regard to the audit topic


0.0 % 0.0 %

25.0 %

75.0 %

0.0 % 0.0 %

20.0 %

40.0 %

60.0 %

80.0 %

100.0 %

1 2 3 4 5


0.0 % 0.0 %

25.0 %

75.0 %

0.0 % 0.0 %

20.0 %

40.0 %

60.0 %

80.0 %

100.0 %

1 2 3 4 5


Appendices Page 26

General Comments The findings of the audits published to date contained valuable information that have been used by our local government to improve our processes and procedures relative to the audit topic.

(1 = Strongly Disagree, 5 = Strongly Agree)

16. Please provide suggestions to improve the effectiveness of the AGLG in the conduct of audits. (All)

0.0 % 0.0 % 0.0 %

50.0 % 50.0 %

0.0 %

20.0 %

40.0 %

60.0 %

80.0 %

100.0 %

1 2 3 4 5


5

4.75

3.75

3.75

1 1.5 2 2.5 3 3.5 4 4.5 5

Communicated in a professional and respectful manner

Was accessible and responded to questions in a timely manner

Demonstrated understanding of local government generally

Demonstrated understanding with regard to the audit topic

All

Appendices Page 27

Overall means

4.5

1 1.5 2 2.5 3 3.5 4 4.5 5

The findings of the audits published to date contained valuable information that have been used by our local government to improve our processes and procedures relative to the audit topic.

All

4.31 4.5 4.41

1

1.5

2

2.5

3

3.5

4

4.5

5

All

Appendices Page 28

Means of the divisions in order of magnitude

4.5 4.31 4.41

1

1.5

2

2.5

3

3.5

4

4.5

5

All

Appendices Page 29

AppendixV

ReviewoftheAuditorGeneralforLocalGovernmentSurveyofAuditedLocalGovernments

Since 20121) Onascaleof1to5,with1beinglow, 3 being medium and5beinghigh,towhatdegreedoyoubelieveyour local government has benefited from the performance audit? Respondents: 17

2) IsyourlocalgovernmentontrackwiththeimplementationofyourActionPlan?Respondents:17

17.65%

11.76%

23.53%

35.29%

11.76%

0%

5%

10%

15%

20%

25%

30%

35%

40%

1(3) 2(2) 3(4) 4(6) 5(2)

76.47%

23.53%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Yes(13) No(4)

Appendices Page 30

3) Approximatelywhatpercentageoftherecommendationsdoyouexpecttoimplementovertime?Respondents:17

4. IftheanswertoQuestion3islessthan100%,whataretheprimaryreasons?Respondents:9(Somerespondentsselectedmorethanoneoption.)

47.06%

29.41%

17.65%

5.88%

0.00%0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

100%(8) 80%to99%(5) 60%to79%(3) Lessthan60%(1) 0%(0)

55.56% 55.56%

22.22% 22.22%

0%

10%

20%

30%

40%

50%

60%

OtherbudgetprioriEes(5) InsufficientstaffEme(5) SomerecommendaEonsnotrelevant(2)

Other(2)

Appendices Page 31

5. Ourlocalgovernmentwouldparticipateinasecondperformanceauditonadifferenttopicifwewereasked.Respondents:17

11.76%

35.29%

29.41%

23.53%

0.00%0%

5%

10%

15%

20%

25%

30%

35%

40%

Stronglyagree(2) Agree(6) Don'tknow(5) Disagree(4) Stronglydisagree(0)

Appendices Page 32

AppendixVI

ReviewoftheAuditorGeneralforLocalGovernmentSurveyofNon-AuditedLocalGovernments

1. IsyourlocalgovernmentawareoftheperformanceauditreportsandPerspectives

bookletspublishedbytheAGLGoffice?Respondents:95

2. Tothebestofyourknowledge,hasanyoneinyourorganizationreadaperformanceaudit

reportorPerspectivesbooklet?Respondents:95

95.79%

4.21%

0%

20%

40%

60%

80%

100%

120%

Yes(91) No(4)

86.32%

13.68%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Yes(82) No(13)

Appendices Page 33

3. Ifyes,pleaseadviseifyourlocalgovernmentincorporatedpracticesormadechangestopoliciesfoundinperformanceaudits,Perspectivesbookletsorboth.Respondents:58

4. HasyourlocalgovernmentusedtheperformanceauditreportsorPerspectivebookletsto

doacomparativecheckonsimilarservicesthatyouprovide?Respondents:95

34.48%

10.34%

55.17%

0%

10%

20%

30%

40%

50%

60%

PerformanceAudits(20) PerspecEvesBooklets(6) Both(32)

52.63%

47.37%

44%

45%

46%

47%

48%

49%

50%

51%

52%

53%

54%

Yes(50) No(45)

Appendices Page 34

5. Hasyourlocalgovernmentconsideredrequestingaperformanceauditbeconductedinyourorganization?Respondents:95

6. Ifnot,whynot?Respondents:86(Somerespondentsselectedmorethanoneoption.)

9.47%

90.53%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Yes(9) No(86)

17.44%

11.63%

56.98%

19.77%

31.40%

0%

10%

20%

30%

40%

50%

60%

Didn'tknowwecould(15) Don’t'needone(10) InsufficientstaffEme(49) NegaEvecommunitypercepEon(17)

Other(27)

Appendices Page 35

auditor general for local government report nov18 · 2019. 2. 6. · auditor general for local...

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