The government is still too slow at improving its financial information
Chapter 1, May 2006 Report of the Auditor General
Ottawa, 16 May 2006—The government's progress in improving financial information used for decision making remains slow and unsatisfactory, according to the Auditor General of Canada Sheila Fraser, in her Status Report tabled today in the House of Commons. In addition, some departments and agencies still have to address long-standing weaknesses in their internal financial controls.
"The federal government handles billions of our tax dollars every year. To do this well, it needs good financial information," said Ms. Fraser. "I am disappointed that departments and agencies have been slow to improve the quality of their financial information, and I regret having to repeat this year after year."
The report notes some improvements in internal financial controls and in the number of senior financial officers with professional accounting designations. The chief reason for the unsatisfactory progress in improving financial information, however, is that departments and agencies are still not using accrual financial information as a regular management tool. The audit found that while departments make some use of accrual-based financial information, it is limited because their budgets and appropriations are still largely based on the cash method of accounting. Accrual accounting is a method that records expenses as goods or services are consumed and records revenues in the period to which they pertain, not when cash is paid or received.
The report also states that departments and agencies have been slow to correct weaknesses that previous audits found in key financial systems and controls. The Auditor General expects that the Office of the Comptroller General—which continues to promote improvements to financial information and internal controls—will keep monitoring the progress of departments and agencies in responding to her previous recommendations.
"Until departments and agencies address our long-time concerns about internal financial control, the quality of financial information that they use for many of their key decisions is at risk," said Ms. Fraser.
The Auditor General's Status Report, first released in 2002, is one of the reports from the Office of the Auditor General tabled each year in the House of Commons. It follows up on the government's progress in addressing recommendations from previous reports. The Auditor General concludes that progress is either satisfactory or unsatisfactory, taking into account the complexity of the issue and the amount of time that has passed since the original audit.
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The chapter "Managing Government: Financial Information" is available on the Office of the Auditor General of Canada Web site.
Information:
Julie Hébert, Communications
Tel.: (613) 952-0213, ext. 6292
E-mail: communications@oag-bvg.gc.ca
