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2016 Annual Report Volume 2 Office of the Auditor General of Ontario Annual Report 2016 Follow-Up Reports on Value-for-Money Annual Report Annual Audits 2016 Volume 2 of 2 Office of the Auditor General of Ontario To the Honourable Speaker of the Legislative Assembly In my capacity as the Auditor General, I am pleased to submit to you Volume 2 of the 2016 Annual Report of the Office of the Auditor General of Ontario to lay before the Assembly in accordance with the provisions of section 12 of the Auditor General Act. Bonnie Lysyk Auditor General Fall 2016 Toronto, Ontario Copies of this report are available from ServiceOntario: (416) 326-5300 or toll-free at 1-800-668-9938. An electronic version of this report is available at www.auditor.on.ca © 2016, Queen’s Printer for Ontario Ce document est également disponible en français. ISSN 1719-2609 (Print) Cover photograph credits: ISBN 978-1-4606-8930-1 (Print, 2016 ed.) (Volume 2 of 2) top right: © wikimedia.org/SnowKing1 ISBN 978-1-4606-8936-3 (Print, 2016 ed.) (Set) centre left: © iStockphoto.com/ballycroy ISSN 1911-7078 (Online) centre right: © iStockphoto.com/Remains ISBN 978-1-4606-8931-8 (PDF, 2016 ed.) (Volume 2 of 2) bottom left: Office of the Auditor General/Christine Pedias ISBN 978-1-4606-8937-0 (PDF, 2016 ed.) (Set) bottom right: © iStockphoto.com/Stacey Newman Table of Contents Reflections 5 Chapter 1 Follow-Up Reports on 2014 Annual Report Value-for-Money Audits Summary 8 Section 1.01 Adult Community Corrections and Ontario Parole Board 10 Section 1.02 Child Care Program (Licensed Daycare) 22 Section 1.03 Financial Services Commission of Ontario— Pension Plan and Financial Service Regulatory Oversight 42 Section 1.04 Immunization 57 Section 1.05 Infrastructure Ontario—Alternative Financing and Procurement 71 Section 1.06 Infrastructure Ontario’s Loans Program 83 Section 1.07 Ontario Energy Board—Natural Gas Regulation 89 Section 1.08 Palliative Care 98 Section 1.09 Provincial Nominee Program 109 Section 1.10 Residential Services for People with Developmental Disabilities 127 Section 1.11 Smart Metering Initiative 142 Section 1.12 Source Water Protection 156 Chapter 2 Follow-Up Reports on Special Reports Summary 168 Section 2.01 Ontario Lottery and Gaming Corporation’s Modernization Plan 170 Section 2.02 Ornge Air Ambulance and Related Services 188 Section 2.03 Winter Highway Maintenance 201 Chapter 3 Follow-Up on Reports Issued by the Standing Committee on Public Accounts Summary 213 Section 3.01 Cancer Screening Programs 215 Section 3.02 Education of Aboriginal Students 221 Section 3.03 Financial Services Commission of Ontario— Pension Plan and Financial Service Regulatory Oversight 226 Section 3.04 Infrastructure Ontario—Alternative Financing and Procurement 232 Section 3.05 Ornge Air Ambulance and Related Services 237 Section 3.06 Public Accounts of the Province 245 Section 3.07 Smart Metering Initiative 249 Section 3.08 University Undergraduate Teaching Quality 253 iv 2016 Annual Report of the Office of the Auditor General of Ontario Reflections Bonnie Lysyk Auditor General of Ontario Reflections Value-for-Money Audits This year’s report contains 12 follow-up reports from the value-for-money audits published in our At the Office of the Auditor General, we audit a 2014 Annual Report. Consistent with previous years, wide range of services and programs delivered by we note that progress has been made toward imple- government, agencies of the Crown and organiza- menting the majority (75%) of our recommended tions in the broader public sector, and identify areas actions, including 40% of them that have been fully that need improvement. We take great care to make implemented. We are encouraged by the consider- practical recommendations from our audit findings able improvements made to a number of programs, that these entities can implement to improve the including: services they provide to Ontarians. Licensed child-care facilities—The Ministry We believe that identifying problems and offer- • of Education has taken action on most of our ing potential solutions is only the first step; the real recommendations, aimed at improving the work begins when those responsible take action health and safety of children in child-care to put our recommendations into practice. It is for centres. This includes establishing an Enforce- this reason that a key part of our Office’s work is to ment Unit and implementing risk-based follow up on our past audits to assess the progress licensing to improve the inspection process for made on our recommended actions. child-care centres. Our follow-up work consists mainly of discus- Ontario Immigrant Nominee Program— sions with, and review of supporting documents • The Ministry of Citizenship and Immigration provided by, the government, relevant ministries has either fully implemented or is in the and broader-public-sector entities we’ve audited. process of implementing about 86% of our We appreciate their continued co-operation in pro- recommended actions to the program, which viding us with comprehensive status updates. selects and recommends to the federal gov- This year, for the first time, our Office has pro- ernment potential immigrants who will con- duced a new volume (Volume 2) dedicated to the tribute to Ontario’s economy. We believe the follow-ups we have completed, including follow-up actions taken will help ensure that qualified reports on our 2014 value-for-money audits, on the nominees are selected for the program and previously issued special reports, and on the recom- will deter immigration fraud. mendations issued by the Standing Committee on Public Accounts in the last year. 5 6 2016 Annual Report of the Office of the Auditor General of Ontario • Source water protection—The Ministry of publicly reporting immunization rates at day- the Environment and Climate Change has cares, identifying schools with low immuniza- taken considerable steps to implement recom- tion rates and providing vaccinations to all mendations we made toward the protection immigrants before they enter Ontario. of existing and future sources of drinking • Smart meters—About 20% of our recom- water in Ontario. This includes approving all mendations on this initiative, which is 22 source-water-protection plans developed intended to manage demand for electricity for the province’s 19 source-water-protection in Ontario, have been fully implemented. regions. In the spring of 2016, it also signed While the Ministry of Energy is in the process funding agreements with all 19 Source Protec- of implementing our recommendations for tion Committees to help them provide support considering alternatives as part of the long- to municipalities for plan implementation. term energy planning process and ensuring • Infrastructure Ontario—Infrastructure ratepayer concerns are addressed properly Ontario has implemented all of the recom- and in a timely manner, little to no progress mendations from our 2014 Annual Report that has been made to reduce the duplication of were aimed at ensuring sufficient monitor- smart-meter processing costs, and ensure that ing and tracking of the loans made under Ontario’s electricity supply and demand fore- its loan program. As well, Infrastructure casts are critically re-evaluated periodically. Ontario either has fully implemented or is • Palliative care—The Ministry of Health and in the process of implementing 83% of our Long-Term Care has indicated that it is in the recommendations relating to its Alternative process of developing a co-ordinated system Financing and Procurement (AFP) approach. that will support more integrated delivery of For example, it has increased the threshold palliative care (which focuses on the relief of for AFP project delivery to $100 million. pain and other symptoms for patients with Some additional areas for improvement advanced illnesses). However, since this sys- include gathering empirical data to support tem is still in the planning stages, none of the the valuation of risks in the value-for-money recommendations we made in our 2014 audit assessment used to justify the AFP approach, had been fully implemented at the time of our and ensuring that risks assumed to be trans- follow-up. ferred in the value-for-money assessments are reflected in the project agreements. While we are encouraged by the progress made Special Reports on many of the recommendations made in our Our special reports are written at the request of 2014 Annual Report, we have also noted a few areas the Standing Committee on Public Accounts (Com- where little or no action has been taken: mittee) or by a Minister of the Crown, usually in • Immunization—While the Ministry of Health response to topical issues of concern to the people and Long-Term Care has finalized a strategy of Ontario. Chapter 2 of this report notes the to overhaul its immunization program, we progress made since we issued the special reports feel that its targeted implementation date of Ontario Lottery and Gaming Corporation’s Mod- 2020 is further away than we would expect, ernization Plan, Ornge Air Ambulance and Related given the importance of the program to public Services and Winter Highway Maintenance. health in Ontario. We also note that there In our special report on the Ontario Lottery and has been little progress made toward imple- Gaming Corporation’s (OLG) Modernization Plan menting our recommendations relating to (tabled in April 2014), we noted that the project Reflections 7 timeline was ambitious and financial projections ment programs and services delivered to—and were overly optimistic. At the time of our report, funded by—the people of Ontario. In addition to OLG was expected to complete all modernization- holding hearings on chapters in our annual reports related procurements by March 2015. It has since or our special reports, the Committee makes obser- revised its approach and has extended its deadline vations and issues recommendations in its own for procurements to August 2018.
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