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Auditing Transfer Payment Programs
Office of the Auditor General of Canada
Ronnie Campbell, CMA
Assistant Auditor General of Canada
November 6, 2006
Office of the Auditor General of Canada
Canadian audit model
Westminster-style parliamentary
democracy modelled after that of the
United Kingdom
Parliament of Canada needs reliable
and fact-based information in
fulfilling its oversight role
Office of the Auditor General of Canada
The Auditor General of Canada
Sheila Fraser, appointed Auditor
General of Canada in 2001
Appointed for a ten-year term
Auditor General is an agent of
Parliament
National audit office is part of the
legislative branch
Office of the Auditor General of Canada
The Auditor General’s authority
comes from Parliament
Parliament granted the Office of the
Auditor General of Canada with
specific powers and responsibilities,
which are spelled out in the Auditor
General Act, the Financial
Administration Act (FAA), and many
other statutes.
Office of the Auditor General of Canada
About our audit office
Budget: about 78 million dollars
(about 55 million Euros)
Number of employees: about 640
We examine most areas of the
federal government and Canada’s
three northern territories.
Our staff is highly qualified and
multidisciplinary.
Office of the Auditor General of Canada
Types of transfer payment programs
Grants
Unconditional transfer payments
made to individuals or organizations
that have met established eligibility
requirements
Recipients of grants are not subject to
audit.
Office of the Auditor General of Canada
Types of transfer payment programs
Contributions
Conditional transfer payments made to
individuals or organizations that are
based on a contribution agreement
Subject to audit and reporting
requirements
About 17.5 billion dollars (about 12.3
billion Euros) spent a year on grants and
contributions
Office of the Auditor General of Canada
Types of transfer payment programs
Contracts
The federal government also uses
contracts to pursue public policy
objectives.
Three large government contracts
awarded to advertising firms
Office of the Auditor General of Canada
Audits of transfer payment programs
October 2000 audit of grants and
contributions in human resources
department
November 2003 audit of sponsorship
program involving advertising firms
May 2006 government-wide audit of
grants and contributions
Office of the Auditor General of Canada
Why auditing transfer
payment programs is
important
Canadians want to know why money
is being transferred and for what
purpose.
Transfer payments involve large
amounts of public funds.
Office of the Auditor General of Canada
October 2000 audit
Examined 40 transfer payment
programs
Represents about 560 million dollars
(about 394 million Euros) in transfer
payments
Weaknesses in financial management
and control, etc.
Office of the Auditor General of Canada
May 2006 audit
Objective
To determine effectiveness of
government-wide management and
control of the spending of public
money through transfer payments
Result
Government made satisfactory
progress in responding to our past
concerns of its management of
transfer payments.
Office of the Auditor General of Canada
November 2003 audit
Three large government contracts
awarded to advertising firms
More than 250 million dollars (about
176 million Euros) in public funds were
spent from 1997 to March 2003 in a
program without clearly stated
objectives
Sheila Fraser said the government
“broke every rule in the book.”
Office of the Auditor General of Canada
Our approach to auditing
transfer payment programs
Our audits examine…
Government is following its own rules
Compliance with the government’s Policy
on Transfer Payments
Compliance with Financial Administration
Act and delegations of authority
Office of the Auditor General of Canada
Our approach to auditing
transfer payment programs
Our audits examine…
Equal access to public funding
Eligibility criteria linked to program
objectives
Appropriate level of assurance that
the program is properly managed
Office of the Auditor General of Canada
How we ensure the quality
of our audits
By following professional auditing standards
By conforming to our quality management
framework
By clearly stating the objectives, scope and
criteria of our audits
By putting in place controls that focus on
results
Office of the Auditor General of Canada
Our audits make a difference
Government acting on our
recommendations
Government taking steps to
strengthen controls on the use
of grants and contributions
Office of the Auditor General of Canada
Reporting to Parliament
Our audit reports are automatically
referred to the Public Accounts
Committee.
This committee plays a critical role
by holding public hearings on our
findings and ensuring that
departments respond to identified
concerns.
Office of the Auditor General of Canada
Conclusion
Important that we report on
government’s progress in improving
its management of public programs
Important that we inform
parliamentarians and Canadians
when government does exercise
sound stewardship of public funds
Office of the Auditor General of Canada
For more information
Please visit our Web site:
www.oag-bvg.gc.ca
Office of the Auditor General of Canada