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Highlights from the auditor general’s fall report

Above: Auditor General’s report subject of intense debate in House of Commons

Here are some highlights from Auditor General Michael Ferguson’s wide-ranging report on Tuesday.

National Shipbuilding Strategy:

Budget caps were set too early, which could result in fewer ships being delivered or the ships having fewer capabilities, Ferguson wrote.

“This finding is important because cost/capability trade-offs need to be monitored and revisions made to project budgets, if necessary, to make sure that Canada gets the military ships that it needs to protect Canadian interests and sovereignty.”

Still, the program shows promise, he said.

“It’s still early, but so far the National Shipbuilding Procurement Strategy has resulted in the transparent and efficient selections of two yards to build ships for the Navy and Coast Guard … As with anything new, there are risks involved, and these will need to be closely monitored on an ongoing basis.

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READ MORE: Canadian navy may be shortchanged on ships because of budget problems: auditor

Financial reporting from federal departments:

There are not enough effective controls over financial reporting in five of the seven departments Ferguson’s office audited.

“Eight years after government made it a priority to have in place effective internal controls over financial reporting, I am concerned that several large departments are still years away from knowing whether these controls are in place and working effectively. With annual spending of nearly $300 billion across government, effective and internal controls are a necessary part of safeguarding public assets. It is imperative that departments get this work done without further delay.”

Access to online services:

Online services are not focused on the needs of Canadians, Ferguson wrote in his fall report.

“Since 2005, the government has not significantly expanded the services it offers online to its citizens. As Canadians rely more on the Internet in their day-to-day lives, they expect the government to provide them with online information and services that address their needs.”

National food recall system:

The Canadian Food Inspection Agency needs to improve the food recall system, Ferguson wrote.

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While the agency, with help from the Public Health Agency of Canada, does a good job of getting potentially dangerous foods off the shelves, there are weaknesses in its follow-up actions and management of large-scale recalls, Ferguson concluded.

“The weaknesses we saw in both follow-ups with industry and in the large emergency recalls leave significant gaps in the system,” he wrote.

The auditor general noted that no illnesses were contained in the specific examples his office examined for this audit, but that he still had concerns.

“I am not confident that the system will always yield similar results. The weaknesses we found in decision-making and follow-up stand in the way of the continuous improvement of a system intended to deal with food safety incidents in Canada,” he wrote.

READ MORE: Follow-up after recalls a problem for food inspection agency, auditor finds

Preventing entry into Canada:

Some people who could pose threats to public safety are entering the country because controls to prevent entry into Canada aren’t always working the way the government intends, Ferguson wrote in his fall report.

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“I am very concerned that our audit found too many examples of controls not working,” he wrote. “Though the Canadian Border Services Agency has made significant progress in some of its efforts to detect high-risk travelers, it often does not get the information it needs to identify those travelers before they arrive in Canada.”

Even when the agency has had the information, Ferguson noted, the controls don’t always work.

“Though it’s not the first time we have raised these issues, border controls are still not working as they should. With better analysis of information and better monitoring, many of these issues can be fixed,” Ferguson wrote.

READ MORE: Border agency needs tighter controls, some dangerous people get in: auditor

Emergency management on First Nations reserves:

A lack of clarity and coordination from Aboriginal Affairs and Northern Development Canada is having a dire effect on federal support for dealing with emergency management for First Nations on reserves, Ferguson wrote in his report.

The department is “in a cycle of reacting to emergencies. It has not been able to focus on what can be done to prevent and mitigate these events,” he wrote. “Some reserves continue to be adversely affected in significant ways by repeated emergencies, such as floods.”

The fact that roles and responsibilities for the federal government and other stakeholders is not clear is making the problem worse, Ferguson said.

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READ MORE: Auditor general raises red flags over handling of emergencies on reserves

Rail safety:

As an increasing number of train derailments across the country continue to cause concern for public safety, there are “significant weaknesses” in Transport Canada’s oversight of rail safety, the federal auditor general concluded in a wide-ranging report tabled Tuesday.

Despite years of work, Transport Canada has yet to establish an approach to safety oversight that provides “a minimum level of assurance” that federal railways are operating with “adequate and effective” systems to ensure they are complying with federal railway safety rules on a day-to-day basis, Ferguson wrote in his report.

READ MORE: ‘Significant weaknesses’ in Transport Canada’s oversight of rail safety: Auditor General

Disaster relief for producers:

Producers affected by disasters that warrant only small payouts are sometimes more than a year for financial help, while those affected by large disasters get help in a more timely maker, Ferguson concluded after an audit of Agri-Food and Agriculture Canada’s disaster relief for producers.

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“Agriculture and Agri-Food Canada needs to streamline its processes for smaller initiatives, and it must track whether it is meeting its timelines.”

The department hardly ever met its 45-day target for assessments, which can have a negative impact on businesses being able to return to normal as quickly as possible, the auditor general said.

READ MORE: AG’s observations and recommendations for managing timeliness

Offshore banking:

The Canadian Revenue Agency needs to come up with a formal approach to dealing with information about offshore accounts, Ferguson wrote in his fall report.

The agency did well at following up on information about offshore accounts in Liechtenstein, the agency will soon likely be dealing with more lists and changes in legislation, the auditor general wrote.

The CRA has, meanwhile, made improvements in four areas that help identify taxpayers who may have undeclared offshore income, he noted.

“We found the agency has initiated work to find Canadian taxpayers with undeclared offshore income without informant information,” Ferguson wrote. “This finding is important because this gives the agency more tools to find taxpayers.”

Watch: Conservatives react to Auditor General’s report