Auditor General's Assessment

To the Commissioner of the Canada Customs and Revenue Agency
and to the Minister of National Revenue

Purpose and Scope

The Canada Customs and Revenue Agency Act requires that the Auditor General of Canada periodically assess the fairness and reliability of the information in the Agency's Annual Report about its performance with respect to the objectives established in its Corporate Business Plan.

The Canada Customs and Revenue Agency has reported its performance in the first volume of its 2003-2004 Annual Report. My assessment covers the performance information in that volume, excluding the letters from the Minister, Chair, and the Commissioner. It also excludes the schedules following the report, except for Schedule E, Overall Performance Against Service Standards. My assessment does not cover the financial statement volume or the additional information which resides on CCRA's Web site.

The performance information in the Annual Report is the responsibility of Agency management. My responsibility is to provide an assessment of the fairness and reliability of the performance information in the Annual Report. To do so, I assessed the performance information against the criteria for fairness and reliability that are described in Annex 2. My assessment was conducted to a review level of assurance and was made in accordance with Canadian generally accepted standards for review engagements. Accordingly it consisted primarily of enquiry, analytical procedures, and discussion related to the performance information supplied to me by the Agency. An assessment to a review level of assurance does not constitute an audit and consequently I do not express an audit opinion on the Agency's performance information. I did not assess or comment on the Agency's actual performance.

Conclusion

Based on my review, nothing has come to my attention that causes me to believe that the Agency's performance information is not, in most significant respects, fair and reliable using the criteria described in Annex 2. The key findings of my assessment, organized by these criteria, are presented in Annex 1.

The Agency continues to make advancements in improving its report as compared to the prior year. It still needs to make further improvements and the Agency recognizes this.

Sheila Fraser, FCA
Auditor General of Canada

Ottawa, Canada
19 October 2004

Assessment

The following presents the key findings of my assessment, organized according to the criteria used to assess the fairness and reliability of performance reports (see Annex 2). Overall, nothing came to my attention that causes me to believe that the report is not, in most significant respects, fair and reliable. During the review I identified a number of important improvements that the Agency has made to its report and I found other areas where further improvement is needed. For example, the report needs more performance expectations that are clearer and more concrete and measurable and it needs to report more significant and outcome-oriented results.

1. Relevant

The report is more concise. This year the Agency made a concerted effort to reduce duplication and overlap in the Annual Report, which resulted in a more concise and readable document. The Agency reduced its strategic outcomes, from two to one, in order to better reflect its mission and mandate, and it streamlined the number of anticipated results in the four business lines from 20 to 9.

The overall performance reporting framework is sound. The performance reporting framework includes the Agency's mission and strategic outcome as well as expected outcomes, anticipated results, and performance expectations for each business line. This framework allows the reader to conclude how well the Agency has performed against its strategic outcome and to conclude how well each business line has performed against its expected outcomes. In each of the past four years, the Agency has improved its performance reporting framework by making significant changes to it. Schedule B to the Annual Report provides a crosswalk between the anticipated results for each business line presented in the Corporate Business Plan for 2003-2004 to 2005-2006 and those presented in the 2003-2004 Annual Report. However, these changes make it difficult for the reader to compare actual results reported in the Annual Report with the expectations set out in the Corporate Business Plan. The Agency should strive to stabilize its performance reporting framework.

More needs to be done to focus on significant results. In some key areas, significant outcome-oriented results are reported. For example, overall levels of filing, registration, and remittance compliance are discussed and this information links directly with the Agency's strategic outcome. However, in other cases, the Agency reports too many activity and process type results or results of limited significance. The number of these types of results often outweighs the number of significant and outcome oriented results that are reported. For example, in the Tax Services business line, there is unnecessary description of training, feedback and information to telephone agents, the review process for publications, the quality of the web-site, and the development of client service standards. There is also a descriptive paragraph on Charities, which includes developing a comprehensive plan and creating an Advisory Committee. As the Agency continues its efforts to enhance its performance information, it should ensure that it focuses on reporting only accomplishments that are significant and outcome-oriented.

2. Meaningful

More performance expectations need to be clear, concrete and measurable. As indicated in previous assessments, performance expectations should be clear, concrete, and measurable. Some of the current performance expectations meet this requirement while others do not. For example, service standards are clear, concrete, and measurable and the reader can easily determine whether they have been met. However, other performance expectations simply represent ongoing activities or the continuation of initiatives. The Agency should continue to review its performance expectations to ensure that each is related appropriately to the anticipated result that it is meant to support. It should also ensure that each performance expectation is stated in terms that are clear, concrete and measurable, so that the reader is able to judge whether the Agency has achieved its expectations.

The report contains good trend information. The Agency presents good information showing trends so the reader can understand how performance has changed over time. The information is often presented in graphs covering three or more years, usually with a discussion of why results have changed. Where performance gaps exist, actions planned to improve performance are generally indicated.

Comparisons with other organizations provide a better performance story. Last year the Annual Report referred to an external study comparing tax compliance levels in Canada with those in other OECD countries. This year, the Agency has also reported the results of an external study comparing percentages of personal income tax returns filed online in Canada and in five other countries. The Agency should continue this trend and explore additional opportunities for comparison.

3. Attributable

The report discusses the role of key partners. The report contains a description of other entities such as financial institutions and other government departments that help the Agency attain its results. The Agency also continues to disclose the extent to which source deductions by employers contribute to taxpayer compliance. However, the contribution of many of the Agency's programs in achieving the reported results is not sufficiently clear. The Agency should continue working to provide as much information as possible on the extent to which the actual results achieved are attributable to its own actions.

4. Accurate

There is no reason to believe that the report is not accurate. Based on my review, nothing came to my attention that would indicate that the performance information was not supported by appropriate corroborative data sources and other evidence. The assessment did not include a review of the “Resource Spending” for each business line. These amounts are determined on an appropriation (modified accrual) basis of accounting. They are not the same as those amounts provided in the Agency's financial statements which are prepared on an accrual basis of accounting and have been audited. I encourage the Agency to report its spending information on an accrual basis in the future.

5. Balanced

The report is reasonably balanced. All aspects of the Agency's mandate are included in the report. The Agency describes problems and challenges it has faced, and discusses situations in which performance did not meet objectives. The information in the Corporate Management and Direction (CMD) business line would, however, be better provided through integration in the other business lines. The expected outcome for CMD is, “Internal services enable business lines to maximize performance and operations.” Yet, there is no discussion of the impact CMD has had in helping the other business lines achieve their objectives.

Criteria for the Assessment of Fairness and Reliability
Office of the Auditor General

The following criteria were developed to assess the fairness and reliability of the information about the Agency's performance with respect to the objectives in its Corporate Business Plan. Two key issues were addressed: Has the Agency reported on its performance with respect to its objectives? Is that information fair and reliable? Performance information with respect to objectives is fair and reliable if it enables Parliament and the public to judge how well the entity or program in question is performing against the objectives it set out to accomplish.

More information on the criteria is available on our Web site at www.oag-bvg.gc.ca .

Date modified:

2004-10-28