2018–19 Departmental Results Report—Operating context and key risks

Office of the Auditor General of Canada2018–19 Departmental Results Report

Operating context and key risks

The operating context of the Office of the Auditor General of Canada is most affected by developments in the auditing and accounting professions, and by changes in government operations.

Although we responded to a number of new auditing and accounting standards, we did not need to reallocate resources in the 2018–19 fiscal year.

There have been many changes in government operations, including significant increases in program spending, increasing complexity in the nature of government transactions, and new mandates being given to the Office. These ongoing and evolving changes in our operating context are putting a significant strain on the Office’s resources and ability to deliver quality products on a timely basis.

The following table provides further information about the Office’s key risks.

Key risks

Information about the Office’s key risks
Risks Risk response strategy Link to the Office’s core responsibilities Link to the Office’s strategic priorities

Budget and funding pressures

The Office is facing capacity pressures in a number of areas, including audit operations, audit services, and corporate services. This situation is affecting the Office’s ability to deliver essential services, deliver quality products in a timely manner, and meet compliance requirements. It is also affecting staff morale.

Actions:

  • Funding proposal was submitted to the Minister of Finance.
  • Certain reductions were made to planned programs and outputs for the 2018–19 fiscal year and beyond.
  • The Office is eliminating work that is not necessary to fulfill requirements of professional standards, legal and regulatory requirements, and internal service standards.

Risk appetite:

  • While having in place key elements of corporate governance, the Office cannot live with non-compliance with significant- and high-risk laws, policies, and regulations.
  • The Office cannot live with a failure to comply with professional standards while it seeks to eliminate work that is not essential to achieve this compliance.
  • The Office will meet all client-accepted service standards as efficiently as possible.

Measures:

  • Reduction of vacancies in approved full-time equivalents and ideal audit profiles.

Legislative auditing

To be a financially well-managed organization accountable for the use of resources entrusted to it

IT systems and security

The Office’s current information technology (IT) security controls do not reduce security risk to a level acceptable to the Office. In addition, we are facing the potential failure of some of our IT systems.

Actions:

  • A roadmap has been developed to guide maintenance and updating of all IT systems.
  • A multi-year IT security plan has been developed and is being implemented.
  • The funding proposal identifies resource needs to address IT systems and security requirements.

Risk appetite:

  • While having in place key elements of corporate governance, the Office cannot live with non-compliance with significant- and high-risk laws, policies, and regulations.
  • The Office will meet all client-accepted service standards as efficiently as possible.

Measures:

  • Reduction in delays in implementing IT roadmap.
  • Implementation of IT security plan according to schedule.

Legislative auditing

To ensure effective, efficient, and accountable Office governance and management

Enhancing value

The Office wants to enhance and demonstrate its value to Parliament and Canadians, both in the selection and conduct of individual audits, and through the type of assurance and other products it offers.

Actions:

  • Develop a plan for the performance audit practice to measure and report on the Office’s impact on improving results for Canadians.
  • Continue implementation of the attest audit (AA) vision project.
  • Complete the mandate review for special examinations.

Risk appetite:

  • Although the Office cannot live with an error on a substantive point in an audit report, it wants staff to seek ways to maximize the value we add and is prepared to live with some failures in these efforts.
  • The Office cannot live with a failure to comply with professional standards while it seeks to eliminate work that is not essential to achieve this compliance.

Measures:

  • Development of a plan to measure results in performance audits.
  • Implementation of the AA vision plan according to schedule.

Legislative auditing

To report what is working, areas for improvement, and recommendations in a manner that is understandable, timely, and fair and adds value

To ensure selection and continuance of audit products likely to have significant impact and value

Transitioning Office senior management

Although the Office believes this situation is well managed, it acknowledges that the significant changes to its senior management need to be managed effectively to ensure the continued strong oversight and management of the Office.

Actions:

  • Ongoing succession planning and talent management.
  • Appointment of six new assistant auditors general.
  • Implementation of onboarding plan to orient new senior management team.
  • Government appointment of an experienced Interim Auditor General.

Risk appetite:

  • The Office cannot live with a failure to develop a skilled, engaged, and bilingual workforce.

Legislative auditing

To develop and maintain a skilled, engaged, and bilingual workforce