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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
AuditorGeneralforLocalGovernmentActandOfficeReview–(2012-2017) 3
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.
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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.
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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.
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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,
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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.
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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,
AuditorGeneralforLocalGovernmentActandOfficeReview–(2012-2017)
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.
AuditorGeneralforLocalGovernmentActandOfficeReview–(2012-2017) 18
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
AuditorGeneralforLocalGovernmentActandOfficeReview–(2012-2017) 19
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)
AuditorGeneralforLocalGovernmentActandOfficeReview–(2012-2017) 20
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)
AuditorGeneralforLocalGovernmentActandOfficeReview–(2012-2017) 21
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)
AuditorGeneralforLocalGovernmentActandOfficeReview–(2012-2017) 22
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)
AuditorGeneralforLocalGovernmentActandOfficeReview–(2012-2017) 23
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)
AuditorGeneralforLocalGovernmentActandOfficeReview–(2012-2017)
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.
AuditorGeneralforLocalGovernmentActandOfficeReview–(2012-2017)
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.
AuditorGeneralforLocalGovernmentActandOfficeReview–(2012-2017)
26
• ThereisstillanegativefeelingtowardstheAGLGofficeamongmanypoliticiansandCAOsbecausetheAGLGActwasimposedonlocalgovernmentswithoutmeaningfulconsultationpriortothedecisiontoestablishtheoffice.
Thefundamentalquestiontoanswerinthisreviewiswhethertheperformanceauditsaresignificantlyaidinglocalgovernmentsinimprovingthedeliveryofserviceandprovidingaccountabilityandvalueformoneytothecitizensoftheircommunities.Thesurveyresultsleavelittledoubtthattheperformanceauditrecommendationsarebeingimplementedinorganizationsbeingauditedandthattheseorganizationsbelievethattheyareimprovingthedeliveryofservicestheyprovide.Inabroadercontext,theperformanceauditsandPerspectivesbookletsarebeingreadbyamajorityofthelocalgovernmentsthathavenotbeenauditedandmanyoftheseorganizationsareincorporatingpracticesorchangingpolicyasaresultofthesedocuments.
Thatbeingsaid,morecouldbedonebytheofficeoftheAGLGtocontinuetoimproveitsserviceandtoincreaseitscredibilitywithlocalgovernments.Localgovernmentsreportthatonerousamountsofstafftimearerequiredtosupporttheauditprocess.Thiscanbeaparticularburdenonsmall-to-medium-sizelocalgovernmentsthatarealreadyfeelingthestrainofoperatingwithscantresourcesandhighexpectationsforservice.Thereisalsoasensefrommanyoftheselocalgovernmentsthattherecommendationsfromtheperformanceauditsareoftenunrealisticforthemtoimplementgiventheirsize,shortageofstaffandlimitedfinancialresources.Alternativestoacomprehensiveauditthatstillprovidevalueandassistancetotheselocalgovernmentsneedtobeexplored.
TheconclusionofthisreviewistoretaintheofficeoftheAGLG.Anumberofrecommendationsaremadetostrengthentheoffice,providefurtherinputbylocalgovernmentsintotheAGLGprocess,andtosupportthepursuitofexcellenceinlocalgovernancebythemunicipalitiesandregionaldistrictsservingthepeopleofBritishColumbia.
AuditorGeneralforLocalGovernmentActandOfficeReview–(2012-2017) 27
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
BestPracticesScan–LocalGovernmentPerformanceAuditing
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
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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
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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.
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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.
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• 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.
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• 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
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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,
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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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BestPracticesScan–LocalGovernmentPerformanceAuditing
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
All (Mean:2.0, Deviation:0.0) (Responses:4 / 8 (50%))
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.
All (Mean:0.0, Deviation:0.0) (Responses:0 / 8 (0%))
0.0 %
100.0 %
0.0 %
20.0 %
40.0 %
60.0 %
80.0 %
100.0 %
Yes No
All (Mean:2.0, Deviation:0.0) (Responses:4 / 8 (50%))
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
All (Mean:1.0, Deviation:0.0) (Responses:4 / 8 (50%))
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
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
All (Mean:2.0, Deviation:0.0) (Responses:4 / 8 (50%))
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
All (Mean:1.75, Deviation:1.3) (Responses:4 / 8 (50%))
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
All (Mean:1.0, Deviation:0.0) (Responses:4 / 8 (50%))
75.0 %
25.0 %
0.0 %
20.0 %
40.0 %
60.0 %
80.0 %
100.0 %
Yes No
All (Mean:1.25, Deviation:0.43) (Responses:4 / 8 (50%))
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.
All (Mean:4.0, Deviation:0.0) (Responses:1 / 8 (13%))
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
(1 = Worst, 5 = Best)
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
All (Mean:5.0, Deviation:0.0) (Responses:4 / 8 (50%))
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
All (Mean:4.75, Deviation:0.43) (Responses:4 / 8 (50%))
Appendices Page 25
Demonstrated understanding of local government generally
(1 = Worst, 5 = Best)
Demonstrated understanding with regard to the audit topic
(1 = Worst, 5 = Best)
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
All (Mean:3.75, Deviation:0.43) (Responses:4 / 8 (50%))
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
All (Mean:3.75, Deviation:0.43) (Responses:4 / 8 (50%))
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
All (Mean:4.5, Deviation:0.5) (Responses:4 / 8 (50%))
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