The Auditor General watches over the administration of Ontario's finances to help the Legislature hold the government accountable. The Auditor does this by carrying out detailed scrutiny of government spending and then producing Annual and Special reports that provide MPPs with the information they need to judge how well public resources are being used.
The Auditor General Act (Act) mandates the Auditor to examine the government's financial accounts and transactions, known as the Public Accounts, and to report to the Legislature her findings, including any instances of misuse or mismanagement of public funds.
The Auditor is also required to assess whether government and broader public-sector activities operate with due regard for economy and efficiency, and whether procedures to measure and report on the effectiveness of programs and organizations exist and function properly. This is known as the "value-for-money mandate." For more detailed information on the Auditor General's role and responsibilities, see our Office chapter in the latest Annual Report.
Under the Act, the Auditor General is an officer of the Legislative Assembly. This provides a vital safeguard for the Office to fulfill its responsibilities objectively and fairly by making it independent of the government and its administration.
The Auditor General's responsibilities include: examining the province's Public Accounts and the accounts and financial transactions of a number of Crown agencies; carrying out value-for-money audits of selected government activities and programs, and of broader public-sector organizations that receive government grants; and assessing compliance with relevant legislation and government directives. The Auditor General's main responsibilities are described below.
The government is required to report annually to the Legislature and the people of Ontario on its financial performance. It does this in part by submitting to the Legislature each year its audited financial statements, called the Public Accounts. These statements outline all spending, borrowing and revenues for the previous fiscal year (the province's fiscal year runs from April 1 to March 31).
The Public Accounts are a record of financial transactions that have actually occurred, while the province's Budget and Estimates outline planned financial activities. The Auditor General audits the province's Public Accounts annually in accordance with generally accepted auditing standards in what is known as an attest audit. After her audit, the Auditor General expresses an opinion on the financial statements of the province—whether they are fairly presented and comply with appropriate accounting principles.
The Auditor General's opinion is reproduced in both the Public Accounts of the province and in her own Annual Report.
In addition to auditing the financial statements of the province as a whole, the Auditor General examines the accounts and financial transactions of numerous provincial Crown agencies such as the Liquor Control Board of Ontario, TVOntario, the Ontario Securities Commission and Metrolinx.
These audits include the expression of an opinion that is usually supplied to the agency's board and the Minister responsible. As well, the Auditor General directs the audits of several other Crown agencies that are performed by public accounting companies. The Auditor General also has access rights to audits of Crown-controlled corporations, whose audits are also done by public accounting firms
Generally, each agency and Crown-controlled corporation reproduces its audited financial statements in its own Annual Report, which is publicly available.
A key part of the Auditor General's mandate is the value-for-money audits, which assess whether money was spent with due regard for economy and efficiency, and whether appropriate procedures were in place to measure and report on the effectiveness of government programs. Under the Auditor General Act, the Office is required to report to the Legislature significant instances where it has found the government is not fulfilling its responsibilities in these areas.
Each year, the Office audits selected ministry or agency programs and activities, with the major ones generally audited every five to seven years. In deciding which areas to audit, the Office considers such factors as the results of previous audits, the total revenues or expenditures at risk, the impact of the program or activity on the public and the costs of performing the audit in relation to the benefits.
Results of these value-for-money audits are published in the Auditor General's Annual Report, and usually get a great deal of attention from media and the public attention.
When the Auditor General Act became law on November 30, 2004, it expanded the Auditor's value-for-money mandate to include organizations in the broader public sector that receive government grants. These include hospitals, colleges and universities, school boards, children's aid societies, and so on. This was a significant change to our mandate, allowing us for the first time to audit an area that accounts for more than 50% of provincial spending. While the expanded mandate does not apply to municipalities, it does allow the Auditor to determine whether a municipality spent a provincial grant for the purposes intended.
The expanded mandate also allows the Office to conduct value-for-money audits of Crown-controlled corporations, such as the new hydro companies that began operating in 1999 after the restructuring of Ontario Hydro
Under the Auditor General Act, the Auditor may also be asked to undertake special assignments by the Legislature, the Standing Committee on Public Accounts, or a Minister of the Crown. Such assignments, however, should not take precedence over the ongoing work of the Office, and the Auditor may decline an assignment by a minister if it conflicts with her other duties.
In recent years, when we have received such assignments, our normal practice has been to obtain the requester's agreement that the special report will be tabled in the Legislature on completion and made public at that time.
Every year, the Auditor General reports on her examination of government resources and administration in an Annual Report tabled by the Speaker of the Legislative Assembly in the Legislature. Tabling is usually at the end of the year, at which time the Annual Report becomes public.
The main body of the Annual Report deals with individual value-for-money audits of ministries and agencies, and includes significant findings, observations and recommendations, as well as ministry and agency responses to the recommendations. There is also a chapter of follow-up reviews of all the value-for-money audits from the Annual Report published two years previously, and another on the Office's review of government advertising. In addition, the Annual Report includes observations resulting from the attest audits of the Public Accounts and reports on the Office's operations and on the activities of the Standing Committee on Public Accounts. After the Annual Report is tabled, it is referred to the Public Accounts Committee for review.
In order to determine whether the government is doing a good job managing the public purse, the Legislature needs quality and timely information, for which it turns to its Standing Committee on Public Accounts (also known as the Public Accounts Committee, or "PAC"), and to the Auditor General.
The mission of the eight MPPs who make up PAC includes reviewing and reporting to the full Legislature their observations, opinions and recommendations on the province's financial statements, called the Public Accounts, and the Auditor General's reports.
PAC is an all-party legislative standing committee that examines, assesses and reports to the Legislature on a number of issues, based on the Auditor General's reports. These include: the economy and efficiency of government operations; the effectiveness of programs in achieving their objectives; controls over assets, expenditures, and the assessment and collection of revenues; and the reliability and appropriateness of information in the Public Accounts.
The Committee also selects parts of the Auditor General's report on which to hold public meetings. The responsible Minister, Deputy Minister or agency chief executive officer, along with senior staff, normally attend these hearings to answer questions. Following these hearings, the Committee prepares and submits to the Legislature a report containing comments and recommendations based on the Auditor General's report. It is then up to the government to respond to the Committee's recommendations.
The Committee's reports can be accessed by clicking here. The Auditor General attends all Committee meetings and provides assistance to the Committee on preparing its agenda, reports, and other areas as required.
Critics have in the past claimed that some taxpayer-funded government advertisements contained partisan elements designed to give the government party an unfair advantage. In an effort to bring greater accountability in this area, the government in 2004 gave the Auditor General the added responsibility of reviewing proposed government advertisements. The Auditor examines these advertisements before they are published or broadcast to verify that they meet certain standards.
Under the Government Advertising Act, 2004, no reviewable government advertisement can be published, displayed, broadcast or distributed a reviewable item without approval from the Auditor General. If the Auditor finds the item in violation of the Act, it may not be used, and all decisions of the Auditor General are final.
The Act applies to all ministries, Cabinet Office and the Office of the Premier, and it covers newspaper and magazine advertisements; advertisements displayed in public places such as billboards, posters in malls and shopping centres, advertisements on subways, buses, streetcars, and transit shelters and stations; radio and television commercials; and printed matter distributed unaddressed in bulk to households.
For more information, please see the Government Advertising Review page here.