(Chapter 5—Financial Management and Control—National Defence - Spring 2009 Report of the Auditor General)
Ottawa, 12 May 2009—While National Defence has taken steps to improve financial management and control, its systems and practices do not adequately support financial decision-making for the medium or long term, says Sheila Fraser, the Auditor General of Canada, in her Report tabled today in the House of Commons.
“National Defence has a yearly budget of $19 billion and manages more than $33 billion in equipment, inventory, and real estate around the world,” said Ms. Fraser. “It needs more highly developed financial management practices to meet the demands of its complex operations.”
The Report notes that the Department’s financial decisions can have an impact on its ability to meet defence obligations in the future. The audit found that while the Department has the basic elements of financial management and control, its information systems and practices do not provide senior management with timely and accurate financial information to support decision-making for the long term.
The audit also found that National Defence lacks a corporate business plan that aligns its operations with its investments and the Canada First Defence Strategy. In addition, it does not yet integrate risk management in its planning and financial management activities and there was no evidence that senior decision-makers are routinely briefed on the status of key risks. As a result, they lack the information needed to ensure that resources are allocated to managing risks that could affect National Defence objectives.
“In addition to better information, senior management at National Defence needs to be more involved in financial management,” said Ms. Fraser. “It will take strong leadership and commitment to make the necessary changes.”
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The chapter “Financial Management and Control—National Defence” is available on the Office of the Auditor General of Canada website.
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