Toward Better Accountability

Chapter 5 Toward Better Accountability Each year, our Annual Report addresses issues that provides a formal record of the relationship of accountability—and initiatives to help between the agency and the responsible minister. improve accountability—in government and It clarifies expectations and policies set out in the Chapter 5 across the broader public sector. This year, in statute that established the agency.) Most provin- addition to issues of accountability raised in cial agencies are required to produce annual reports our value-for-money audits, we have examined and submit them to their responsible minister the timeliness of provincial agencies in publicly within a specified time period. Ministers are then to reporting on their activities through their annual review these reports and make them public, either reports. Thorough and accurate disclosure of such by “tabling” them (officially presenting them) in information is essential to accountability, and is a the Legislature or by approving them for posting mandated requirement for provincial entities. As on an agency or government website. Although the this chapter highlights, there is considerable room intent of these requirements is to promote agency for improvement by some provincial agencies and transparency and accountability, we have found their responsible ministries in meeting the required that some aspects of a new directive issued by Man- timelines for reporting. agement Board of Cabinet in February 2015 instead conflict with this intent. We also noted: • Fewer than a quarter of agencies sampled had specific timeframes legislated for submitting 1.0 Main Points and/or tabling their annual reports. Despite the legislated requirement for their 2014 A provincial agency’s annual report, including annual reports, these timeframes were often its audited financial statements, provides details not met. Similarly, required timeframes set out about the agency’s activities, and is meant to give in MOUs (for agencies without legislated time- the responsible minister, all members of the Legis- frames) were often not met. Further, over the lature and the public a comprehensive view of the past three years, only a small portion of prov- agency’s operational and financial performance. incial agencies’ annual reports were tabled The annual reporting requirements and timelines in the Legislature in accordance with the are typically governed by the statute that created timetables specified in the Management Board the agency, a Memorandum of Understanding directive in effect at the time. We reviewed the (MOU) between the agency and its responsible min- timeliness of such reporting for a sample of 57 ister, and/or a directive of Management Board of agencies over the past three years and found Cabinet. (An MOU is an administrative agreement that only 5% were tabled within six months 696 Toward Better Accountability 697 after the agencies’ fiscal year-end, while 68% process. Posting on public websites is seen were tabled more than 12 months after year- as part of the government’s Open Govern- end and 6% had not been tabled at all. Our ment initiative announced by the Premier in work further showed that the major delays October 2013. However, we believe that some were often not in the agencies themselves, but measure of accountability may be lost if our rather in the ministers’ offices. elected officials are not also formally notified • Timelines required for submitting and tabling when reports become publicly available that annual reports are not consistent. This is document the operations and expenditures because the annual reporting requirements for of agencies that are responsible for billions some agencies, but not all, are specified in the of dollars of public funds. If reports are legislation, regulation or Order-in-Council that not tabled, another way is needed to notify established them, or in an MOU between the elected officials of their public release. In this agency and its responsible minister. Legislative way, the democratic role of the Legislature is requirements take precedence over the Man- upheld and public access to vital information agement Board of Cabinet directive that gov- is enhanced. erns agencies without such requirements. As • An annual report could sit in a minister’s Chapter 5 a result, agencies with responsibilities in the office for months or even years without the same areas may report on different timetables, minister being in contravention of the new and reporting timelines for an agency and its February 2015 directive. The new directive responsible minister may be found in different changes the requirements specifying what places. These complications further contribute provincial agencies are required to report to inconsistencies in the release of reports, on, and the timelines for the submission and to decreased access to the reports by the and release of reports. The stated intention members of the Legislature and the public. for replacing the previous directive, which • Ontario has recently moved away from tabling dates back to 2010, with the new one was reports as a means to hold agencies account- to increase accountability and openness, able. Under the new directive that came into and to expedite public reporting. However, effect in February 2015 (directives are not one change actually achieves the opposite. publicly posted), the requirement was elimin- Whereas the previous directive required the ated for ministers to table in the Legislature relevant minister to table an agency’s annual the annual reports of provincial agencies. report in the Legislature or with the Clerk’s However, 101 provincial agencies are still Office within 60 days of receiving it (unless required by statute to table their annual the agency’s establishing legislation specified reports in the Legislature. Some would argue otherwise), the new directive specifies no that tabling is not necessary because the deadline for the minister to release the report Legislature’s Standing Committee on Govern- either through tabling or posting on a website. ment Agencies is empowered to review the • Our survey of other Canadian jurisdictions operations of all provincial agencies, regard- indicates that five have statutes mandating less of whether their annual reports have been a consistent process for submitting and/or tabled. The view of the Management Board tabling agency annual reports. Minimizing of Cabinet is that posting annual reports on ambiguity in reporting requirements across websites is preferable to tabling them in the government agencies could lessen confu- Legislature because posting on a public web- sion and serve to increase transparency and site invites the public to engage in the political oversight. 698 2015 Annual Report of the Office of the Auditor General of Ontario Directive in effect until January 2015. See Appen- OVERALL RESPONSE FROM dix 2 for the types and number of agencies under TREASURY BOARD SECRETARIAT the new Agency and Appointments Directive in Ontario has recently enhanced the governance, effect from February 2015.) accountability and transparency of its provincial agencies. The Agencies and Appointments Direc- tive has introduced several new accountability 2.2 How Are Provincial Agencies and transparency requirements including: the Governed? public posting of key governance documents The government of Ontario grants provincial agen- (i.e., business plans, memoranda of understand- cies the authority and responsibility to perform ing, and annual reports); regular mandate their public functions or services and makes the reviews for all agencies; quarterly risk reporting majority of appointments to the agencies’ governing to Treasury Board and Management Board of boards. The agencies’ governance structures are Cabinet; and annual agency CEO/Chair declara- defined by Management Board of Cabinet directives tions of compliance with applicable legislation, issued under the Management Board of Cabinet Act Chapter 5 regulation, directives and policies. The input and and consist of three key parties: recommendations of the Auditor General will • the responsible minister; assist in further enhancing the governance and • the governing board; and accountability of Ontario’s provincial agencies. • the agency’s management. Although agencies are not part of a ministry, they are accountable to the responsible minister for fulfilling their legislative obligations, managing the 2.0 Background Information resources they use and maintaining the appropriate standards for any services they provide. 2.1 What Are Provincial Agencies? Where present, the governing board is responsible for setting and achieving an agency’s object- Governments in Canada establish agencies to under- ives. The board is immediately accountable to the take a variety of activities in the public interest. responsible minister for the agency’s performance. Although the work of these agencies is related to the Agency management is responsible for carrying responsibilities of provincial or federal ministries, out the board’s direction. Figure 1 illustrates this they are intended to provide goods and services to relationship. Government appointments to provin- the public and to operate to varying degrees at arm’s cial agencies (i.e., board of directors, adjudicative length from the government. The government of tribunals) are made for either a fixed term or at Ontario establishes provincial agencies through an the pleasure of the responsible minister and/ act, a regulation of an act or an Order-in-Council,

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