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The Audit and Evaluation Plan was developed taking into account the broader government context within which Environment Canada is functioning and some important factors that are impacting on the work of the Audit and Evaluation Branch (AEB).
The government's Federal Accountability Act and Action Plan released in April 2006, entrenches the internal audit and the evaluation functions and requires the department to: valuate grants and contributions programs over five years; ensure an appropriate internal audit capacity; establish a departmental audit committee; and support the Deputy Minister in his role as Accounting Officer.
Canada's Clean Air Act introduced in Parliament on October 19, 2006, proposes a comprehensive and integrated approach to tackling air pollution and greenhouse gases by regulating and enforcing emissions targets.
In November, 2006, the Government released Advantage Canada: Building a Strong Economy for Canadians, an economic plan designed to make Canada a true world economic leader. The plan introduces a new expenditure management system to ensure existing spending is effective, efficient, focused on areas of federal responsibility and provides value for money. It also calls for enhanced program evaluation.
On December 8, 2006 the Prime Minister along with the Minister of Environment and the Minister of Health, unveiled Canada's new Chemicals Management Plan that provides realistic and enforceable measures that will improve our environment and protect the health and safety of Canadians.
Budget 2007 confirms the direction set by the Government for the environment through the identification of four environmental priorities under the general theme of "A Better Canada: Ensuring a Cleaner, Healthier Environment":
The Treasury Board Secretariat (TBS) Internal Audit Policy which came into force on April 1, 2006, requires departments to: establish and support an External Advisory Audit Committee (EAAC) with expanded responsibilities; provide a holistic opinion to the Deputy Minister on departmental controls, governance and risk management; adhere to the International Standards for the Professional Practice of Internal Audit (The Institute of Internal Auditors Standards); and support the Comptroller General in the conduct of horizontal audits.
Work underway to develop the new TBS Evaluation Policy (expected to come into force in fall, 2007), could impact the Branch activities over the next fiscal year. The policy will require departments to: establish and support the internal Evaluation Committee; expand evaluation to cover 100% of all program expenditures on a five-year cycle; use evaluation findings to inform policy and expenditure decision-making and program improvement; and have an enhanced role in performance measurement.
On February 14, 2007, TBS announced a series of immediate actions to improve the management of grants and contributions in response to the report "From Red Tape to Clear Results" of the independent blue ribbon panel on grants and contributions. These actions will strengthen accountability for the management and the results of grants and contributions programs.
Last year, Environment Canada (EC) reorganized its activities and resources into an updated Program Activity Architecture (PAA) that enables the department to better manage how its activities interact with, and contribute to its overarching strategic objectives.
Environment Canada key priority areas for action for 2007-08 are:
As part of the annual audit and evaluation planning process, the Audit and Evaluation Branch conducted a risks and opportunities analysis. The analysis is based on the findings of last year's analysis, an environmental scan, an Information Management/Information Technology (IM/IT) risk analysis, and the review of different sources of information such as EC's Report on Plans and Priorities for 2006-07 and TBS Assessment of EC's performance against the Management Accountability Framework (MAF) for 2005.
The following five criteria, used for last year's analysis, were also utilized for this year's exercise:
Annex A provides a more detailed description of these criteria.
A number of key areas of risks emerged from the analysis. More particularly:
The results of the analysis supported a strategic discussion at the DAEC meeting in December, 2006. Annex B provides more detailed information on these key areas of risk.
The list of potential audit engagements and evaluation projects for the next three years was developed by:
conducting an Environmental Scan by looking at government priorities, central agency priorities, external priorities, and EC's priorities;
using the results from the risks and opportunities analysis to inform decision on priority audit engagements and evaluation projects;
using the results from the IM/IT risk analysis to inform audit engagements priorities;
reviewing last year's A&E plan to identify both audit engagements and evaluation projects originally scheduled for 2006-07 that would be carried forward into the new plan as well as those already identified for future years;
identifying audits or evaluations being carried out by other departments in which A&E is involved;
identifying external audits and studies planned by other entities such as the office of the Auditor General, the Commissioner of the Environment and Sustainable Development, the Public Service Commission, the Access to Information Commissioner, and the Commissioner of Official Languages;
considering the work already underway to meet new requirements under the Internal Audit Policy;
preparing to meet new requirements under the Federal Accountability Act; and
Consultations were conducted with departmental Boards and the Chief Financial Officer to discuss the potential list of audit engagements and evaluation projects and to obtain advice on the priority areas, potential scope and timing.
1 A departmental corporate risk profile was unavailable at the time the plan was being prepared.