May 19, 2015 the Honourable Dan D'autremont Speaker of The
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May 19, 2015 The Honourable Dan D’Autremont Speaker of the Legislative Assembly Room 129, Legislative Building REGINA, Saskatchewan S4S 0B3 Dear Sir: I have the honour of submitting my 2015 Report – Volume 1, to be laid before the Legislative Assembly in accordance with the provisions of Section 14.1 of The Provincial Auditor Act. Respectfully yours, Judy Ferguson, FCPA, FCA Acting Provincial Auditor /gb 2015 Report – Volume 1 TABLE OF CONTENTS Overview by the Acting Provincial Auditor.................................................... 1 Annual Integrated and Information Technology Audits 1 Municipal Employees’ Pension Plan ...................................................................... 11 2 Northern Municipal Trust Account ......................................................................... 15 3 Saskatchewan Water Corporation ......................................................................... 19 4 School Divisions..................................................................................................... 21 5 Central Services—Data Centre Security................................................................ 35 6 Summary of Implemented Recommendations ...................................................... 47 Performance Audits 7 Advanced Education—Working with the Advanced Education Sector................. 51 8 Economy—Coordinating English-Language Programs......................................... 63 9 Education—Putting into Operation the Education Sector-Wide Strategic Plan.... 77 10 eHealth Saskatchewan—Protecting Patient Information in the Saskatchewan Laboratory Results Repository.......................................................................... 93 11 Environment—Regulating Industrial Wastewater Systems ................................... 103 12 Government Relations—Coordinating Emergency Preparedness ........................ 115 13 Prairie South School Division No. 210—Equipping the Board with Knowledge and Competencies to Govern........................................................ 137 14 Regina Qu’Appelle Regional Health Authority—Safe and Timely Discharge of Hospital Patients ........................................................................................... 147 15 Saskatchewan Government Insurance—Monitoring Certified Vehicle Inspection Stations............................................................................................ 169 16 SaskBuilds—Evaluating Potential Use of P3s ....................................................... 183 17 SaskPower—Buying Power from Independent Power Producers ........................ 205 18 SaskPower—Managing the Risk of Cyber Incidents ............................................. 227 Audit Follow Ups 19 Economy—Managing Oil and Gas Wells ............................................................... 237 20 Education—Capital Asset Planning for Schools.................................................... 243 21 Finance—Governance of Information Technology ................................................ 249 22 Five Hills Regional Health Authority—Provision of Nourishing and Safe Food Services in Long-Term Care Facilities ..................................................... 251 23 Health—Preventing Diabetes-Related Health Complications ............................... 257 24 Parks, Culture and Sport—Provincial Parks Capital Asset Planning..................... 265 25 Public Service Commission—Out-of-Scope Staffing............................................ 269 26 Regina Qu’Appelle Regional Health Authority—Use of Surgical Facilities............ 271 27 Saskatchewan Housing Corporation—Long-Term Capital Planning .................... 277 28 Saskatchewan Liquor and Gaming Authority—Encouraging Responsible Use of Beverage Alcohol................................................................................... 279 29 Saskatchewan Opportunities Corporation—Maintaining Facilities ....................... 281 30 SaskEnergy Incorporated—Securing its SCADA System ..................................... 285 31 Social Services—Placing Minister’s Wards in Permanent Homes ........................ 289 32 University of Regina—Protecting Interests in Research........................................ 295 Provincial Auditor Saskatchewan 2015 Report – Volume 1 i TABLE OF CONTENTS Standing Committee on Crown and Central Agencies 33 Standing Committee on Crown and Central Agencies.......................................... 309 Appendices 1–Agencies Subject to Examination under The Provincial Auditor Act and Status of Audits...................................................................................................... 1-1 2–Samples of Opinions We Form on Ministries, Crown Agencies, and Crown-Controlled Corporations............................................................................. 2-1 ii 2015 Report – Volume 1 Provincial Auditor Saskatchewan Overview Overview by the Acting Provincial Auditor 1.0 REPORT OVERVIEW Through The Provincial Auditor Act (Act), the Legislative Assembly has made the Provincial Auditor its independent auditor. It has given the Provincial Auditor responsibility for auditing the Government of Saskatchewan, including all of its agencies. These agencies include ministries, Crown corporations, boards, commissions, and funds. Under the Act, the Provincial Auditor is required to report to the Legislative Assembly on the results of all examinations, and highlight matters that require the attention of legislators. Our Office typically reports the results of its examinations in two volumes. We aim to release Volume 1 in June and Volume 2 in December each year. This Report (Volume 1) includes the results of our examinations completed by April 24, 2015. We have organized the results of our examinations into four sections. The following provides a brief overview of each section of the Report, with the exception of the section on the Standing Committee on Crown and Central Agencies. Annual Integrated and Information Technology Audits–Overview This section of the Report includes the results of We use the term “integrated audits” to annual integrated audits for school divisions with describe our annual audits of agencies fiscal year-ends of August 31, 2014, and other that examine: agencies (including numerous Crown The effectiveness of their financial- corporations, and pension and benefit plans) related rules and procedures to with fiscal year-ends of primarily December 31, safeguard public resources with which 2014. See Appendix 1. they are entrusted Their compliance with authorities Effective controls reduce the risk of loss of governing their activities related to public money. Effective controls also help ensure financial reporting, safeguarding public government agencies provide complete and resources, revenue raising, spending, accurate financial information, prepare reliable borrowing, and investing financial statements, and comply with applicable The reliability of those statements for laws and regulations. In addition, effective those agencies that prepare financial controls help agencies achieve their objectives, statements and sustain and improve performance. Almost all of the agencies included in this Report had effective financial-related controls, complied with related authorities, and had reliable financial statements. Only 12 of those agencies need to improve some of their financial-related controls. These agencies include the Municipal Employees’ Pension Plan, Northern Municipal Trust Account (administered by the Ministry of Government Relations), SaskWater, and nine of the 28 school divisions. Provincial Auditor Saskatchewan 2015 Report – Volume 1 1 Overview Strong financial reporting controls include active monitoring to help ensure controls operate as intended – unmonitored controls tend to deteriorate over time. This Report notes a few agencies that need to better supervise staff responsible for financial reporting functions to ensure they follow established policies and procedures properly. Also, similar to our past findings for other agencies, a few school divisions need to either establish or improve their information technology (IT) policies including developing and testing their IT disaster recovery plans. In addition, we are pleased to report that SaskTel, Saskatchewan Housing Corporation, and three school divisions (Living Sky, North East, Prince Albert Roman Catholic Separate) rectified previously-reported problems with their financial-related controls. This section of the Report also includes the We use the term “annual information results of three annual IT audits: Ministry of technology audits” to describe our audits Finance – MIDAS Financials, the Public Service of three central agencies that provide key Commission (PSC) – MIDAS HR/Payroll, and the information technology (IT) services to Ministry of Central Services – Data Centre. other government agencies. In these audits, we assess the effectiveness of the MIDAS1 is a ministry-wide IT application used to central agency’s processes and controls to account for the financial activity of core secure IT systems and data. These audits government, and to administer employee, support our annual integrated audits of payroll and benefits of the 10,945 full-time government agencies that use the services equivalent staff2 employed within the core of these central agencies. government. The Ministry of Finance is responsible for MIDAS Financials, and PSC is responsible for MIDAS HR/Payroll. We found that the Ministry of Finance and PSC had effective central