|
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..01 Crown agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..02 Our audit conclusions and findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .03 Saskatchewan Institute of Applied Science and Technology . . . . . . . . . . . . . . . . . . . . . .05 Our audit conclusions and findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .07 Long term human resource plan needed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 International operations need review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..17 Teachers' Superannuation Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..22 Our audit conclusions and findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24 Investment contract needs to be improved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 Pension payments made incorrectly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..31 Shares improperly registered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38 Regional Colleges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..42 Our audit conclusions and findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Boards of Directors need better information to oversee senior management . . . . . . . . . . . . . ..52 Saskatchewan Indian Regional College . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..64 Our audit conclusions and findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66 Written governance policies required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73 Compliance with The Regional Colleges Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..80 Other payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86 List of persons who received money required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88 |
145
| Introduction |
.01
|
The Department has overall responsibility
for matters relating to education. The Department carries
out some of its activities through Crown agencies. The Department is responsible for the operation of several Crown agencies. This Chapter contains our audit findings for SIAST for the year ended June 30, 1996 and the following Crown agencies with fiscal years ending on or before December 31, 1995. Carlton Trail Regional College |
||
.03 In our opinion:
- the financial statements for the Crown agencies listed in paragraph .02 are reliable;
- the Crown agencies had adequate rules and procedure to safeguard and control their assets except where we report otherwise in this Chapter; and
- the Crown agencies complied with the authorities governing their activities relating to financial reporting, safeguarding assets, revenue raising, spending, borrowing, and investing except where we report otherwise in this Chapter.
.04 We also report other matters for the Legislative Assembly's attention at paragraphs .86 to .90.
147
| Saskatchewan Institute of Applied Science and Technology |
.05
|
The Saskatchewan Institute
of Applied Science and Technology (SIAST) provides career
education and operates under the authority of The
Institute Act. SIAST has four institutes. SIAST had revenue of $110.9 million in 1996 and held assets of $92 million at June 30, 1996. SIAST's annual report includes its financial statements. |
||
Our audit conclusions and findings
.07 KPMG and my Office audit SIAST as joint auditors.
.08 In our opinion:
- SIAST's financial statements are reliable;
- SIAST complied with the authorities governing its activities relating to financial reporting, safeguarding assets, revenue raising, spending, borrowing, and investing; and
- SIAST had adequate rules and procedures to safeguard and control its assets, except for the significant deficiencies reported in paragraphs .10 to .21.
.09 In our past reports to the Assembly, we reported many serious deficiencies in SIAST's rules and procedures to safeguard and control its assets. SIAST has acted on almost all of those deficiencies. We commend SIAST for its efforts.
.10 SIAST needs a long term human resource plan and consistent human resource management policies.
.11 SIAST needs a human resource plan related to its mission and objectives. Without a plan, requests for staffing may be at odds with its mission and objectives, resulting in an inadequate or excessive work force.
.12 Application of existing human resource policies regarding employee performance evaluation are not consistent across the four institutes. Also, the work some employees do is not reflected in their job descriptions.
148
.13 Inconsistent application of human resource policies may result in poor use of people and time wasted resolving differences.
.14 We also reported this matter in our 1993 Annual Report and our 1995 and 1996 Spring Reports.
We recommend
.15 SIAST should establish a long term human resource plan.
.16 Management informed us that SIAST plans to establish a long term human resource plan during 1996-97.
.17 SIAST needs rules and procedures to decide whether international operations benefit SIAST.
.18 SIAST participates in international training and education programs through a federal government agency. SIAST's legislation allows this activity where there is a benefit to SIAST.
.19 We also reported this matter in our 1996 Spring Report.
We recommend
.20 SIAST should establish rules and procedures to determine the expected benefits to SIAST of any international operations.
.21 Management informed us that SIAST plans to establish rules and procedures relating to international operations during 1996-97.
| Teachers' Superannuation Commission | .22 .23 |
The Commission manages the Teachers'
Superannuation Plan (Plan). It consists of the Teachers'
Superannuation Fund (Fund), a defined benefit final
average pension plan and the Voluntary Contributions
Fund, a defined contribution plan. In 1995, the Plan received contributions of $32.2 million from teachers and $105.0 million from the Minister of Finance. At June 30, 1995, the Plan held assets of $1,160.0 million and had liabilities of $2,999.0 million. |
||
149
Our audit conclusions and findings
.24 In our opinion:
- the Plan's financial statements are reliable;
- the Commission complied with the authorities relating to financial reporting, safeguarding assets, revenue raising, spending, borrowing and investing activities except for the matters described in paragraphs .31 to .41; and
- the rules and procedures to safeguard and control the Plan's assets were adequate, except for the significant deficiencies reported in paragraphs .25 to .30.
.25 The Commission needs to improve its contract with its investment manager.
.26 Pension plan administrators must follow limits set out in The Pension Benefits Act, 1993 when investing pension plan money. The law on pension plan investments aims to reduce the risk of loss to pension plans. Administrators must ensure compliance with the law when they contract the investing function out.
.27 In our opinion, service contracts should ensure the Commission receives reports on compliance with the law from the investment manager; require the manager to report periodically on the systems and practices it uses to comply with the law; and allow the Commission access to the manager's records and personnel to verify its reports or verify the reports using the Commission's independent auditor.
.28 The Commission's contract with its investment manager, Greystone Capital Management Inc. (Greystone) requires the manager to ensure the Plan's investments comply with the law.
.29 The Commission does receives investment compliance reports from Greystone. However, the Commission does not receive periodic reports on the systems and practices Greystone uses to comply with the law. Also, the Commission has not verified Greystone's compliance with the law reports.
150
We recommend
.30 The Commission should improve its investment contract to require Greystone to provide:
- periodic reports on Greystone's systems and practices for complying with the law; and
- the authority to verify compliance reports using the Commission's staff or the Commission's independent auditor.
.31 The Commission is making incorrect pension payments.
.32 The Teachers Superannuation and Disability Benefits Act (Act) sets out how to calculate a teacher's pension. The pension payments in the year totalled $134 million.
.33 We audited 76 superannuates' pensions to see if they were paid according to the Act. We found the Commission paid two superannuates incorrectly. These superannuates were underpaid $3,201 and $44,717 for the current and prior years.
.34 We told the Commission about the errors. The Commission paid these superannuates for the underpayments. The Commission decided to examine additional superannuate pensions to determine the potential underpayments.
.35 The Commission examined an additional 150 superannuates' pensions. The Commission found 4 more superannuates' pensions were not calculated correctly. These superannuates were underpaid a total of $1,550 for the current and prior years.
.36 We reviewed the additional work performed by the Commission. We estimate, based on the errors found the Commission owes superannuates approximately $830,000 for underpayments.
We recommend
.37 The Commission should ensure it calculates pensions according to The Teachers Superannuation and Disability Benefits Act.
.38 The Commission has not properly registered the Plan's shares in Greystone Capital Management Inc.
151
.39 The Business Corporations Act provides that only persons may incorporate a corporation. This Act defines "person" to include an individual, partnership, association, body corporate, trustee, executor, administrator or legal representative.
.40 The Plan is a shareholder in Greystone along with several other Government of Saskatchewan public sector pension plans and other Government of Saskatchewan agencies. The Commission has registered the Plan's shares in the name of the Teachers' Superannuation Fund. The Fund cannot be the registered shareholder because the Fund is not a person.
We recommend
.41 The Commission should register the Plan's shares in Greystone Capital Management Inc. properly.
| Regional Colleges | .42 .43
|
The Government created nine regional
colleges to provide learning opportunities in the
communities they serve. The Government has appointed
other auditors to audit these colleges. Following is a list of the colleges and their appointed auditor.
We set out our audit conclusions and findings for the regional colleges for the year ended June 30, 1995 in two sections. The first section deals with eight colleges where we have similar audit conclusions and findings. The second section deals with different audit conclusions and findings for the Saskatchewan Indian Regional College. |
||||
152
Our audit conclusions and findings
.45 My Office worked with the appointed auditors of the eight regional colleges referred to in paragraph .44 using the framework recommended by the Task Force on Roles, Responsibilities, and Duties of Auditors. The appointed auditors and my Office formed the opinions referred to in paragraph .46.
.46 In our opinion:
- the Colleges' financial statements are reliable;
- the Colleges complied with the authorities governing their activities relating to financial reporting, safeguarding assets, revenue raising, spending, borrowing, and investing; and
- the Cumberland Regional College and Southeast Regional College had adequate rules and procedures to safeguard and control their assets.
.47 In the Carlton Trail's appointed auditor's opinion, the College had adequate rules and procedures to safeguard and control its assets except that it was not readily evident that the analysis of the nature and extent of variances between planned and actual results was performed. The appointed auditor's opinion is included in Appendix VII.
.48 For the remaining five Colleges, their appointed auditors were of the opinion the Colleges had adequate rules and procedures to safeguard and control their assets.
.49 In our opinion, for all the eight Colleges referred to in paragraph .44, the Colleges had adequate rules and procedures to safeguard and control their assets except for the deficiencies reported in paragraphs .52 to .63.
.50 We relied on the appointed auditors' reports on the colleges' rules and procedures to safeguard and control their assets for the colleges referred to in paragraphs .47 and .48 except for the matters described in paragraphs .52 to .63. The appointed auditors' were satisfied the Colleges' internal reports were adequate for evaluating senior managements' performance.
.51 The Provincial Auditor Act requires us to do additional audit work when we are unable to rely on the reports of an appointed auditor. Our additional work consisted of reviewing the Colleges' internal reports and discussion with the Colleges' management.
Provincial Auditor Saskatchewan
1996 Fall Report153
Boards of Directors need better information to oversee senior management
.52 The Boards of Directors need better information to oversee the senior management.
.53 The directors are the Colleges' stewards. As such, they are responsible for the Colleges' business. To carry out this responsibility, the directors must oversee management. The directors must ensure management carries out their duties according to the directors' wishes.
.54 To carry out their responsibilities, directors need to approve and monitor control systems set up by management to safeguard and control the Colleges' assets, oversee internal and external communications, and evaluate management's performance.
.55 Paragraphs .56 to .63 describe where we think the directors do not receive essential information to evaluate management's performance.
.56 The Colleges' internal reports lack essential information for the directors to evaluate management's performance.
.57 The directors did not receive reports that showed the Colleges' assets, liabilities, revenues and expenditures in accordance with generally accepted accounting principles. The reports did not compare monthly planned results with actual results. Also, the reports did not show the cost of services and activities, whether the goods and services provided achieved the intended results, or if the Colleges complied with the law.
.58 Also, the Colleges have not formally defined and documented their internal reporting needs. The directors and senior management need to formally define their internal information needs to ensure they receive suitable and timely reports for decision making.
154
.59 The Colleges need written policies and procedures governing the Colleges' financial, operational, and compliance with authority reporting needs. Policy and procedures should set out:
- The information needs of directors and senior management. For example:
- financial reports should be prepared in accordance with generally accepted accounting principles;
- financial reports should show the full cost of classes, programs, and activities;
- operational reports should show the effectiveness of programs, i.e., outputs and outcomes;
- compliance reports should describe the laws and other authorities the Colleges are subject to, and the degree of compliance;
- all reports should show a comparison of planned results for the period and year to date to actual results for the period and year to date; and
- all reports should show a projection of expected results to the end of the year based on current information.
- The nature and extent of variances between planned results and actual results. Explanation of variances should include a comparison of planned level of activity compared to actual level of activity, when possible.
- Who is responsible for preparing and reporting the results of the variance analysis.
- Who in the chain of command should receive and monitor the results of variance analysis.
We recommend
.60 The directors should receive internal reports prepared in accordance with generally accepted accounting principles.
155
.61 The Colleges' internal reports should include a comparison of monthly planned results with actual results.
.62 The Colleges' internal reports should show the cost of services and activities, whether the services provided achieved the intended outcomes, and the degree of compliance with law and other authorities.
.63 The Boards of Directors should formally define and document their internal reporting needs.
| Saskatchewan Indian Regional College |
.64 .65 |
The Saskatchewan Indian Regional College
operates under The Regional Colleges Act. The
College provides training and learning opportunities to
members of First Nations in Saskatchewan. The College had revenue of $7.4 million in 1995 and held assets of $1.8 million at June 30, 1995. The College's annual report contains its financial statements. |
||
Our audit conclusions and findings
.66 My Office worked with Price Waterhouse, the College's appointed auditor, using the frame work recommended by the Task Force on Roles, Responsibilities and Duties of Auditors. Price Waterhouse and my office formed the opinions referred to in paragraph .67.
.67 In our opinion:
- the College's financial statements are reliable; and
- the College complied with the authorities governing its activities relating to financial reporting, safeguarding assets, revenue raising, spending, borrowing, and investing except for the matters described in paragraphs .80 to .85.
.68 We also report two other matters for the Assembly's attention in paragraphs .86 to .90.
.69 In Price Waterhouse's opinion, the College had adequate rules and procedures to safeguard and control its assets.
156
.70 In our opinion, the College had adequate rules and procedures to safeguard and control its assets except for the matter reported in paragraphs .73 to .79.
.71 We relied on the appointed auditor's report on the College's rules and procedures to safeguard and control the College's assets except for the matter described in paragraphs .73 to .79. The appointed auditor was satisfied that the College's internal reports were adequate for evaluating senior management's performance.
.72 The Provincial Auditor Act requires us to do additional audit work when we are unable to rely on the reports of an appointed auditor. Our additional work consisted of discussion with the College's management.
.73 The Board of Directors needs written governance policies setting out what they expect from management.
.74 The Board is responsible for the financial affairs of the College. To fulfill this responsibility, the Board needs to establish and communicate policies. Policies should prescribe what and how things should be done and prohibit inappropriate action.
.75 The directors need to give adequate direction to management for safeguarding and controlling the College's assets. The directors also need to know that management discharge their responsibilities according to the Board's policies.
.76 To govern the operations of the College effectively the directors should have policies:
- setting out the services the directors want delivered at what cost and the performance the directors expect of senior management;
- setting out the information the directors need to monitor management's performance (e.g. performance reports and assurance that assets are safeguarded);
- setting out delegated authority to management; and
- ensuring adequate accountability to the members of First Nations, the Minister responsible, and the Legislative Assembly.
Provincial Auditor Saskatchewan
1996 Fall Report157
.77 Written policies provide for the orderly and efficient conduct of business. Written policies also reinforce the Board's delegation of authority and responsibilities for all employees.
We recommend
.78 The Board should establish written governance policies.
.79 The Board should ensure senior management has provided adequate direction to staff to safeguard and control the College's assets.
.80 The College is subject to The Regional Colleges Act. The Act requires the members of the Board to be appointed by an Order in Council. There was no Order appointing four persons regularly taking part in Board meetings.
.81 The College paid these four persons per diem and expenses. In addition, the College paid all the members of the Board at a rate higher than the rate approved by Order in Council. In 1995, the total amount paid to the members of the Board for per diem was approximately $40,000. The College lacked authority to make these payments.
.82 The Act requires the Board, subject to the approval of the Minister, to appoint an auditor to audit the accounts and financial transactions of the College. The Minister did not approve the appointment of the auditor.
.83 The Act requires the Minister to approve the College's budget before the Board adopts it. The Minister did not approve the College's budget.
.84 The Regional Colleges Regulations made under the Act require the Minister to approve the College's personnel policy. The Minister did not approve the College's personnel policy.
158
We recommend
.85 The College should comply with The Regional Colleges Act. Alternatively, the Department of Education, Training and Employment should propose changes to the Act to exempt the College from the requirements of the Act.
.86 During the year, the College made several payments totalling $7,100. We are unable to determine whether the payments were for educational purposes.
.87 In addition, the College paid $18,000 to Saskatchewan Indian Training Assessment Group (SITAG), a related organization, to cover the pay and expenses for SITAG's Board of Directors. We are unable to determine whether these payments were used for educational purposes.
.88 The College needs to comply with The Standing Committee on Public Accounts' recommendation to provide a list of persons who received money from the Colleges to the Legislative Assembly for each fiscal year.
.89 The College did not provide the Assembly a list of persons who received money from the College for the year ended June 30, 1995.
We recommend
.90 The College should provide to the Legislative Assembly a list of persons who received money from the College.
159
| Please direct any comments about these pages to the Webmaster. Copyright © 1998 Provincial Auditor Saskatchewan |
1998.05.13 |