Chapter 8
Standing Committee on Crown Corporations

Table of Contents

Provincial Auditor Saskatchewan
1996 Fall Report

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Committee membership

.05 The members of the Committee are as follows:

• Pat Lorje, Chair
• Kim Trew, Vice-Chair
• Bob Bjornerud
• Judy Bradley
• Dan D'Autremont
• Doreen Hamilton
• Lloyd Johnson
• Lindy Kasperski
• Jack Langford
• Harvey McLane

Provincial Auditor Saskatchewan
1996 Fall Report

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Committee activities

.06 The Committee focuses its efforts on those Crown corporations that generate revenue from sources outside the General Revenue Fund. In its Fourth Report (May 5, 1994), the Committee identified those Crown corporations as follows:

Crown Investments Corporation of Saskatchewan (CIC)
Saskatchewan Crop Insurance Corporation
Saskatchewan Economic Development Corporation
Saskatchewan Forest Products Corporation
Saskatchewan Government Growth Fund Management Corporation
Saskatchewan Government Insurance
Saskatchewan Liquor and Gaming Authority
Saskatchewan Opportunities Corporation
Saskatchewan Power Corporation
Saskatchewan Telecommunications
Saskatchewan Telecommunications International, Inc.
Saskatchewan Transportation Company
Saskatchewan Water Corporation
SaskEnergy Incorporated
Workers' Compensation Board

Also, the Committee may review any other Crown corporation it deems appropriate.

.07 In its public meetings, the Committee reviews Crown corporation annual reports and financial statements. Ministers and officials attend these meetings and answer questions about the financial results, plans, and priorities of their corporations. The Committee reports the results of its reviews to the Legislative Assembly.

.08 Our Office attends the Committee's meetings to help the Committee in its review. When a corporation has an appointed auditor, the Committee also invites the appointed auditor to help in its review.

.09 During the first session of the current Legislature, the Committee held nine meetings from March to June 1996. During these meetings, the Committee:

• reviewed the annual reports of thirteen Crown corporations for fiscal years ending 1993, 1994 and 1995;

• began its review of ten Crown corporations for the 1995 fiscal year; and

• adopted its first report for presentation to the Legislative Assembly.

 

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1996 Fall Report

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.10 On June 6, 1996, the Committee presented its first report of the first session of the 23rd Legislature. The Committee reported it completed its review of the financial statements and annual reports of thirteen Crown corporations and related agencies. However, the Committee did not report its observations and recommendations on the annual reports of those Crown corporations.

Public needs to know the Government manages Crown corporations well

.11 At the Committee's orientation meeting on April 11, 1996, we reviewed the contents of Chapter 3, Planning Information and Chapter 4, Annual Reports of Crown Agencies from our 1994 Fall Report. We explained how the Committee could use the information in those Chapters to focus its review of Crown corporations' annual reports and operations. We think the Committee's reviews and reports to the Assembly can build public confidence that the Government manages Crown corporations well. We made the following comments.

.12 We think the public needs to know that Crown corporations are accountable for their operations to the Assembly. A significant part of the public's confidence that the Crown corporations are accountable to the Assembly will come from the Committee's review and reports to the Assembly.

.13 Many Crown corporations have more autonomy from the Assembly's control than government departments. For example, Crown corporations do not need their spending plans approved by the Assembly. Also, they generally set the rates they charge for their services without the Assembly's prior approval. We think that greater autonomy needs to be balanced with stronger accountability.

.14 The Committee has an important and challenging mandate. How will the Committee review the annual reports and financial statements of Crown corporations and question their operations? We think two Chapters from our 1994 Fall Report may help the Committee in its work.

.15 The first Chapter, Planning Information, explains why we think the Government needs a comprehensive business and financial plan for all of Government. The Chapter also describes business and financial plans and sets out their key elements.

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1996 Fall Report

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.16 The Government's summary financial statements report on all its financial activities. These statements include the financial activities of the General Revenue Fund, CIC and its subsidiary Crown corporations. They also include other Crown corporations such as the Liquor and Gaming Authority, and other agencies like District Health Boards.

.17 We think a business and a financial plan based on the Government's summary financial statements will help legislators and the public:

• assess the Government's decisions as they affect all parts of Government;

• judge how effective the Government's strategies are to achieve its overall goals; and

• assess the Government's performance by comparing actual results with plans.

.18 The Government does not publish a multi-year, government wide, summary financial plan. Without a clearly stated overall plan for the Government, the Committee cannot assess whether Crown corporations are contributing to the Government's overall objectives.

.19 However, for CIC Crown corporations, the Committee can use information CIC provides to assess if those Crowns are contributing to CIC's overall objectives. CIC is to give the Committee an annual statement showing:

• its mandate, goals, objectives, and performance indicators;

• the structure of its investments; and

• the reasons for keeping or selling its investments.

In addition, CIC is to give the Committee notice of all significant transactions within ninety days.

.20 The second Chapter, Annual Reports of Crown Agencies describes the information they should include in their annual reports. To provide useful accountability information, annual reports of Crown corporations should describe:

• what the corporation is all about;

• what the corporation has done;

• where the corporation is now; and

• what the corporation plans to do.

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.21 What the corporation is all about. The Committee needs this information to understand each Crown corporation's operating, financing and investing activities. Therefore, annual reports should include:

• a description of the corporation's business and its significant legislation. This should include its lines of business and the assets that are critical to its success, including its infrastructure, employees and information;

• a description of the corporation's broad objectives or measures of success; and

• a description of the corporation's annual goals or financial and operating targets to accomplish its broad objectives.

.22 What the corporation has done. The Committee needs to know what each Crown corporation accomplished. Annual reports should show:

• the corporation's major activities during the year; and

• what the corporation did compared with what it planned to do.

.23 Where the corporation is now. The financial statements provide information about actual results. Annual reports should also show:

• financial highlights and analysis;

• information about different lines of business; and

• information about productivity, such as physical output, percentage of capacity used compared to industry norms or other efficiency measures.

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.24 What the corporation plans to do. The Committee needs more information than the general direction Crown corporations plan to go. Annual reports should include specific information about plans, future events that could have an impact, and significant work in progress.

.25 As stated earlier, we think the Committee and the Government can take steps to strengthen Crown corporations' accountability. We think those steps will help to ensure the Assembly and the public are confident the Government manages Crown corporations well.

.26 We continue to encourage the Government to publish a multi-year, government-wide summary financial plan. A summary financial plan would assist the Committee in its reviews of Crown corporations' plans and performance. Without a clearly stated overall plan for the Government, the Committee cannot assess whether Crown corporations are contributing to the Government's overall objectives.

.27 To provide useful accountability information for the Committee's review, we encourage the Government to ensure its Crown corporation annual reports contain the information described in this Chapter. When Crown corporation annual reports do not include this information, the Committee's Report to the Assembly should include those observations and recommendations for improving the Crown corporations' annual reports.

Provincial Auditor Saskatchewan
1996 Fall Report

112

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