Auditor General's Assessment

of Performance Information in the
2004-2005 Annual Report to Parliament

To the Commissioner and Board of Management 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 its 2004-2005 Annual Report to Parliament. My assessment covers the performance information in that report, excluding the letters from the Minister, Chair, and the Commissioner. It also excludes the schedules following the report, except for Schedule C, Overall Performance against Service Standards. My assessment does not cover the financial statements or the additional information that 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 improvements to its report. At the same time, further improvements are necessary and the Agency recognizes this. In particular, more of the performance expectations need to be clear, concrete, and measurable and the Agency needs to put more focus on reporting significant outcome-oriented results.

Sheila Fraser, FCA
Auditor General of Canada

Ottawa, Canada
26 September 2005

Annex 1

Summary assessment by criteria

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 improvements that the Agency has made to its report, and I found other areas where further improvement is needed.

1. Relevant

The overall performance reporting framework has been stabilized. The performance reporting framework includes the Agency's mission and strategic outcome as well as expected outcomes, expected 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. However, these changes made it difficult for the reader to compare actual results reported in the Annual Report with the expectations set out in the corporate business plan. This year the framework has been stabilized and is generally in accordance with the Corporate Business Plan for 2004-2005 to 2006-2007.

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 compliance for filing, registration, and remittance 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, although improved from prior years, much of the discussion in the Appeals business line deals with activities and production statistics rather than showing that Canadians received an impartial and responsive review of contested decisions. 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. As well, they need to be clearly linked to the expected results they are meant to support. Some of the current performance expectations meet these requirements 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 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 four years, usually with a discussion of why results have changed. Where performance gaps exist, actions planned to improve performance are generally indicated.

Results information relating to the Corporate Management and Direction business line needs improvement. The information in the Corporate Management and Direction (CMD) business line would be better provided by integrating it into the other business lines. The expected outcome for CMD is, “Internal services enable business lines to maximize performance and operations.” Yet, there is little discussion of the impact CMD has had in helping the other business lines achieve their objectives.

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.

More could be done to link reported results to the Agency's actions. The contribution of many of the Agency's programs in achieving the reported results is not sufficiently clear. While I recognize there are challenges, 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 performance information in the annual 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. As in prior years, the “Resource Spending” amounts for each business line 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. Once again 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. Balance could be enhanced by including a summary of performance improvement priorities, as was done in 2003-2004 and by improving the analysis where expectations are “mostly met”.

Annex 2

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? The performance information is fair and reliable if it enables Parliament and the public to judge how well the organization or program 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/domino/other.nsf/html/200310frpi_e.html

Date modified:

2005-10-26