Oversight of Major Initiatives in Departments and Ministries
In addition to creating and delegating to various government agencies, boards and authorities the delivery of some public services, federal and provincial departments and ministries also retain responsibility for the delivery of other critical public services, social programs, and capital projects. This Practice Guide collectively refers to these “major initiatives” (in contrast to more routine programs) and where they exist, stresses the need for effective governance to ensure the delivery of value for money. As stated previously, where there is a need for effective governance, there is also a need for strong oversight.
Major initiatives managed by departments and ministries that may warrant special or specific oversight mechanisms can include:
- large, complex procurement or capital projects (such as transit projects, bridges, and hospitals);
- projects and services outsourced to private sector providers, through traditional contracts or through public-private partnerships (such as ambulance services, and construction and maintenance of schools, hospitals, and highways); and
- government-wide initiatives that involve large sums of public money (such as economic stimulus programs and public safety initiatives).
There is no single definition of what constitutes a major initiative. Each audit office has to define what this term means in its own context and exercise professional judgment in determining if special or specific oversight is warranted (whether in place or not). In general, major initiatives will involve a department managing (or outsourcing the implementation of) a program, project, or service of direct benefit to the public, as opposed to projects or services of benefit to the department itself (exceptions may be warranted, however, in the case of high value and/or high risk projects).
In instances where strong governance and oversight are especially important, it is common for governments to create special governance structures that share several characteristics:
- a discrete body composed of a number of senior officials (for example, assistant deputy ministers, deputy ministers, and ministers);
- a clear oversight mandate; and
- a degree of independence (no involvement in the day-to-day management of the overseen program, project, or service).
For example, in the case of the National Shipbuilding Procurement Strategy, which included plans to spend more than $50 billion over 30 years to recapitalize fleets of Navy and Coast Guard ships, a committee of assistant deputy ministers was charged with overseeing the Strategy’s development and implementation. (See the OAG Canada audit on this topic.)
Similarly, in the context of Canada’s Economic Action Plan, Infrastructure Canada instituted a project review panel composed of the Associate Deputy Minister and assistant deputy ministers to review all Infrastructure Stimulus Fund projects recommended by program staff before forwarding them to the Minister for final approval. (See the OAG Canada audit on this topic.)
In the context of preparing for the 2015 Pan American Games and the Parapan American Games to be hosted in Toronto, the Province of Ontario has established a Security Budget Oversight Committee to oversee the budgets and costs of the large security operations that will be necessary to ensure safety during the games. This committee includes senior officials from two provincial ministries and from the Pan/Parapan American Games Secretariat. (See the special report of the Auditor General of Ontario on this topic).
Given their significance, programs, projects, and services overseen by special oversight committees (or similar structures) will often be of interest to auditors. The Audit Methodology part of this Practice Guide includes guidance for auditing the oversight of major initiatives in departments and ministries.