Toward Better Accountability—Quality of Annual Reporting

Chapter 4 748 of provincial agencies and requirements Theannualreporting performance. organization’s andfinancial operational view ofthe publicacomprehensive Legislature and the of the meant to responsible give minister, the allmembers organization’s activities,andis details aboutthe including itsaudited financial statements, provides A public-sector organization’s annualreport, annualreports. intheir of reporting broader-public-sector improvement by many provincial agencies and isroom for chapter highlights,there ties. Asthis for provincial and to accountability, andisamandated requirement isessential andfinancialinformation operational Thorough, clearandaccurate disclosure of reports. annual their activitiesthrough ontheir reporting broader-public-sector quality ofprovincialined the agencies’ and our addition to in raised issuesofaccountability broader publicsector.across the Thisyear, in improve government accountability—in and initiativesof accountability—and to help year,Each addresses issues ourAnnualReport 1.0 Summary 1.0 Chapter 4 Chapter value-for-money broader-public-sector audits,we have exam organizations in the quality organizations inthe public organizations’ Annual Reporting Quality of Accountability— Toward Better broader-public-sector enti - -

Understanding (MOU)between agency andits the agency, createdstatute the that of aMemorandum (BPS) organizations are typically governed by the such as hospitals, colleges ashospitals, anduniversities,such also site. Similarly, broader-public-sector organizations, for posting onanagencythem orgovernment web Legislature orby approving in the presenting them) (officially by them “tabling” public,either them and make to reports Ministers review are then these aspecifiedtimeperiod. responsible minister within to their andsubmitthem annualreports their andusefulinformation. to thorough contain reports annual expect andshouldtherefore dollars tax their organizations with these support Ontarians organizations shouldbetreated any differently— ofpublic-sector no reason whyannualreports the overall financial andorganizational health. We see company’s and financial results, spendingpatterns aboutthe shareholders high standards, informing are expected to Thosereports meet annual report. market) are alsorequired by law to publishan open is, companies whosestockonthe istraded agency.) the established statute that the andpoliciessetexpectations outin It clarifies between responsible agency minister. andthe the relationship sets outthe trative that agreement ment Board ofCabinet. (AnMOUisanadminis responsible minister, and/oradirective ofManage Most provincial agencies are required to produce Publicly private-sector traded companies (that

- - - ectives asfollows: encouraged by SORP. SORPgoesbeyond dir both requirements information to mandatory the their broader-public-sector organizations, andcompared provincial appliesto agencies that andanother ally, we onedirectiveappliesto examined that Specific guidelines regarding annualreports. adhere to government directives andto SORP’s encouraged butnot mandatory. are practices Thesereporting an annualreport. prepare ance tothat organizations, includingthose financial statements. SORPprovides guid general presented beyond information inthe that mentary respect supple to matters(SORP) with ofreporting has issuedaStatement ofRecommended Practice PublicSector Accountingtion, the Board (PSAB) content Inaddi ofmost agencies’ annualreports. organization’s year-end. ofthe sixmonths within be posted directly organization’s onto website the governmentto for the review. Rather, are to they butdonot submitthem produce annualreports • • We reviewed how agencies’ annualreports Government directives mandatory stipulate the encourages that analysis to include the signifi analysisencourages to includethe that SORP performance). operational just their sector organizations are required to analyze broader-publicperformance; and operational agencies financial must analyze their both makethey available public(provincial to the information orother annualreports their in performance include ananalysis oftheir organizations are required by directive to outputs. those that benefits orpositiveresult from outcomes takes (outputs)butshouldalsomeasure the entityunder orproducts the actions, services measures shouldnot belimitedis, the to just “output”-based.That than based rather related targetsures andtheir to be“outcome”- meas SORPencourages performance reports. targets annual intheir include performance organizations are required by directive to Provincial agencies andbroader-public-sector Provincial agencies andbroader-public-sector ------Toward Better Accountability—Quality of Annual Reporting Toward Accountability—Quality Better sector organizations are not required to analyze the Specifically, ofbroader-public-the annual reports directive appliesto provincialthe that agencies. sector organizations hasfewer requirements than annual reports. usefulnessandreliability oftheir enhance the SORPsuggests. information Thiswouldalso the mation required applicabledirective by the but infor not just the annualreports include intheir accountability and transparency.accountability Specifically: where improvements couldbemadeto strengthen ten inplainlanguage. However, we didnote areas wereports reviewed were andwrit understandable readers. their foring additionalandmore usefulinformation would hospitals, benefitfrom providparticular We ofonesector, annual reports noted the that in SORPrecommends. that information more ofthe were Theremaining annualreports lacking criteria. We met noted allbutoneofthe that four others two entitiesdidnot produce anannualreport). organization, while organizations andone“Other” 28entitieswere(the 15 provincial agencies, 12 BPS asnotedselected in SORPcriteria we that reviewed annual reports allthe contained annual reports. analysis intoorganizations their this to incorporate results against estimates). We encourage these between actualfinancial discussing variances their (including financialperformance organizations’ • • The directive appliesto broader-publicthat We encourage allpublic-sector entitiesto We overall, annual found entities’ that, the We only foundtwo28entities’ that ofthe

financial performance information. financial performance linkingfinancialandnon- achieved, thus results performance costs ofthe ofthe readers was. effect whatthat andexplain formance, affected per factors that andother cant risks tions didnot clearly identifyperformance agencies,the andfive of 12 BPS organiza clearly identified. were measures not always Performance SORP encourages annual reports toSORP encourages inform annualreports Four 15 ofthe provincial Figures 1 and - - - 2 -

- 749

Chapter 4 Chapter 4 750

Figure 1: Provincial Agencies’ Incorporation of Selected SORP Criteria and Compliance with Selected Agencies and Appointments Directive Requirements in Their 2015/16 Annual Reports1 Prepared by the Office of the Auditor General of Ontario

Included in Annual Report? Audited Linkages of Performance Performance Financial Financial Variance Financial and Risk Provincial Agency Measures2 Targets2 Statements3 Analysis4 Analysis4 Non-Financial Data5 Discussion6 AgriCorp Y7 Y Y Y n/a8 Y Y Algonquin Forestry Authority Y9 Y Y Y Y Y Y Liquor Control Board of Ontario Y9 Y Y Y Y N Y Ontario Energy Board Y9 Y Y Y Y Y N Ontario Lottery and Gaming Corporation Y7 Y Y Y Y N Y Metrolinx Y7 Y Y Y Y N N Northern Ontario Heritage Fund Corporation Y7 Y Y Y Y N N Ontario Clean Water Agency Y9 Y Y Y Y N N Ontario Infrastructure Lands Corporation Y9 Y Y Y Y N N Ontario Securities Commission Y9 N Y Y Y N Y Local Health Integration Network—Toronto Central Y10 Y Y N n/a8 Y N Agricultural Research Institute of Ontario N N Y N N N N Education Quality and Accountability Office N N Y N N N N Ontario Educational Communications Authority (TVO) N N Y N N N N Ontario Science Centre N N Y N N N N % of agencies that included this content 73 67 100 67 69 27 33 % of agencies that did not include this content 27 33 0 33 31 73 67 1. Provincial agencies are ranked from most to least adherent to SORP criteria and Directive requirements in their 2015/16 annual reports. 2. Performance measures and performance targets relate to Directive requirements of analysis of operational performance as detailed in the Treasury Board Secretariat Guide to Developing Annual Reports for Provincial Agencies as well as SORP criteria to describe actual results and compare them with planned results, explaining any significant variances. 3. Audited financial statements are a Directive requirement. 4. Financial Analysis and Variance Analysis related to the SORP criteria in footnote 2, as well as criteria to provide comparative information about trends, benchmarks, baseline data or the performance of other similar organizations where having these comparisons would be useful to users in interpreting and using the information provided. These criteria also relate to the Directive requirement for analysis of financial performance as detailed in the Treasury Board Secretariat Guide noted above. 5. Linkages of Financial and Non-Financial Data relates to the SORP criteria to link financial and non-financial information to show how resources and strategies influence results. 6. Risk Discussion relates to the SORP criteria to identify significant lessons learned during the reporting period and the implications arising from them, as well as to include information about key factors critical to understanding performance. 7. Performance measures include both output-based and outcome-based measures. 8. There was no significant variance requiring analysis. 9. Performance measures are output-based only. 10. Performance measures are outcome-based. Figure 2: Broader-Public-Sector Organizations’ Incorporation of Selected SORP Criteria in Their Annual Reports, 2015/161 Prepared by the Office of the Auditor General of Ontario

Included in Annual Report? Linkages of Performance Performance Financial Variance Financial and Risk Measures2 Targets2 Analysis3 Analysis3 Non-Financial Data4 Discussion5 Broader-Public-Sector Organization Norfolk General Hospital Y6 Y Y Y N N Brock University Y7 N Y Y N N Cambrian College Y6 Y Y N N N Queen’s University N N Y Y N Y Georgian College Y6 Y N N N N Muskoka Algonquin Healthcare Y6 Y N N N N Seneca College Y8 Y N N N N Mohawk College Y7 N N N N N Halton Healthcare Services Group N N N n/a9 N N Toward Better Accountability—Quality of Annual Reporting Toward Accountability—Quality Better Humber River Regional Hospital N N N n/a10 N N St. Joseph’s Health Centre—Toronto N N N n/a9 N N Trillium Health Partners N N N N N N McMaster University11 n/a n/a n/a n/a n/a n/a University of Toronto11 n/a n/a n/a n/a n/a n/a % of organizations that included this content 43 36 43 45 14 14 % of organizations that did not include this content 57 64 57 55 86 86 Other Ontario Power Generation Y8 N Y Y Y Y 1. Broader-public-sector organizations are ranked from most to least adherent to SORP criteria and Directive requirements in their 2015/16 annual reports. 2. Performance measures and performance targets relate to SORP criteria to describe actual results and compare them with planned results, explaining any significant variances. 3. Financial Analysis and Variance Analysis related to the SORP criteria in footnote 2, as well as criteria to provide comparative information about trends, benchmarks, baseline data or the performance of other similar organizations where having these comparisons would be useful to users in interpreting and using the information provided. 4. Linkages of Financial and Non-Financial Data relates to the SORP criteria to link financial and non-financial information to show how resources and strategies influence results. 5. Risk Discussion relates to the SORP criteria to identify significant lessons learned during the reporting period and the implications arising from them, as well as to include information about key factors critical to understanding performance. 6. Performance measures include both output-based and outcome-based measures. 7. Performance measures are outcome-based. 8. Performance measures are output-based only. 9. There was no significant variance requiring analysis. 10. Not able to determine variance as information was not available to do so.

11. An annual report was not prepared. 751

Chapter 4 Chapter 4 752 • • •

an analysis of financial performance. Allprov an analysis offinancial performance. Powersample, Ontario included Generation, entityinour The other financial performance. we reviewed did not ananalysis of contain 12 annualreports the BPSorganizations’ incial agency andeightof annualreports annual reports. Financial inmany didnot analysis exist public. to the would provide more meaningfulinformation are more andcompile difficult to track but level anentity’s describe ofactivity. Outcomes based measures are easier to compile asthey Generally, orprogram. of aservice output- benefits quences asthe ofactionstaken, such conse onthe words,puts; inother report they out consequences ofthe Outcomes are the inannualreports. outcome-based reporting We isaneedfor more noted there that needed. are outcome-basedresults More shortfall. the entity to discusspossiblestrategies to address for the achieved. Itisalsoanopportunity targets reason why andthe targets were not entitytofor identifywhere itdidnot the meet targets. Thisdiscussioniscrucial performance previouslyor outcomesinrelation to set their results reported included adiscussionoftheir targets, 12 andofthem, performance (80%) only 15an annualreport), (54%) disclosed additional two organizations didnot have we 28annualreports sampledOf the (an results. ofperformance ofanalysis Lack entity assessesitsperformance. to determineread how multiplereports the having to than rather report measures inthis performance entity’s some discussionofthe year, the ance during areader would expect ofanagency’s perform isasummary report annual the Given that annualreports. in their than businessplansrather measures intheir Many performance agencies disclosetheir measures initsannualreport. performance Powermeasures. Ontario included Generation Overall,the five of 15 prov - - - - - • • •

Financial and non-financial information Financial and non-financialinformation aspectofperformance. this public understand togoals andobjectives helpingthe iscritical in relation to anentity’s financial performance Inclusion ofsomediscussionandanalysis of reader. pointfordoes provide the astarting alone isnot considered financialanalysis, it inclusionofaudited financial statements the exception the ofoneorganization. While with their audited financial statement on websites audited financialtheir statements posted didnot contain of BPSorganizations that Theannualreports annualreports. in their tions includedaudited financial statements while approximately BPSorganiza halfofthe their annual reports financial statements in incial agencies we reviewed includedaudited idea if the Provinceidea ifthe met itsstated goals. applicabletargets, publichaslittle the the and Provincethe measures itsperformance Annual Report. 2015/2016 Province ofOntario’s in the andtargets measures ofperformance Lack risks. plans to address the entities’ consequences, andthe are facing,the entities the insightonrisks publicwith the provides Legislature and the cussion ofrisks dis Athorough cussion initsannualreport. PowerOntario dis includedarisk Generation or were discussionofrisks. limited intheir organizations were missingadiscussionof agency and11 annualreports 12 ofthe BPS not explained. often were facing public entitiesare Key risks resources expended. the andwhatwas achieved asaresult of period reporting the entity useditsresources during reader assesshow helpsthe the information ing of financial and non-financial performance Power linkage. Thelink hasthis Generation linkage. Ontario BPS organizations hadthis 12cial agency andnoneofthe annualreports not sufficiently linked. Without adiscussionofhowWithout Ten 15 ofthe provincial Four 15 ofthe provin - - - - - Prepared by the Office of the Auditor General ofOntario the AuditorGeneral Prepared by Officeof the SORP Criteria Their 2015/16 to Figure 3: Ranking of Sampled Entities According of Selected Incorporation Annual Reports’ no significantvariances were identified). as analysis (exceptfinancial andvariance AgriCorp, gets. alsoincludedthorough Theirannualreports were tar ures that clearandincludedperformance meas performance annualreports included intheir Thesesixentities andGamingCorporation. Lottery Power Board, Ontario Ontario andthe Generation Energy Ontario (LCBO), the Board ofOntario Liquor Controlsample the met allbutonecriterion: Forestry Authority. Four inour annualreports other noted in as selected met SORPcriteria allthe annual reports 27 provincial entities,we noted two that 2015/2016 of annualreports Based onourreview ofthe * ofToronto University didnothave asthey andthe arenotranked annualreports. University Note: McMaster Other organization Broader-public-sector Provincial agency Entity Category Overall Conclusion Overall Ranking system: Very Good(6–7SORPcriteriamet); Good(3–5SORPcriteriamet);andFair(0–2met). Ranking Very system: Figures 1 and • • • • • • Good* Very 2 Ontario PowerGeneration Ontario Corporation andGaming Lottery Ontario Board Energy Ontario Ontario Liquor ControlBoardof Authority Algonquin Forestry AgriCorp : AgriCorp andAlgonquin : AgriCorp - • • • • • • • • • • Good* - Queen’s University Cambrian College Brock University Hospital Norfolk Network—Toronto Central Integration Local Health Commission Securities Ontario Corporation Lands Infrastructure Ontario CleanWaterOntario Agency Fund Corporation Heritage Ontario Northern Metrolinx Toward Better Accountability—Quality of Annual Reporting Toward Accountability—Quality Better sector organization websites we reviewed met the Figure 4 ments asrequired Directive. by the Asshown in includedaudited financial state annual reports All meeting allbutonecriterion. annual reports anadditionaltwo with (13%)Directive criteria, weannual reports reviewed selected met allthe 15(60%) ofthe provincial agencies’ 2015/16 and Accountability Directive, we noted nine that met); andFaircriteria met). (0–2SORPcriteria met); Good(3–5SORP Good (6–7SORPcriteria Figure 3 asshown in SORPcriteria ranked basedonthe With respect to compliance with the Agencies respect to With the compliance with The provincial entitiesinoursample were , seven14 (50%)ofthe broader-public- following, usingthe system: ranking Very • • • • • • • • • • • • Fair* Trillium Partners Health Toronto Centre— St. Joseph’sHealth Hospital Humber RiverRegional Group Services Halton Healthcare Mohawk College Seneca College Healthcare Muskoka Algonquin College Georgian ScienceCentre Ontario (TVO) Communications Authority Educational Ontario Office Accountability Education Qualityand of Ontario ResearchAgricultural Institute - 753

Chapter 4 Chapter 4 754 ance Reporting to enhance their annualreports. toance Reporting enhancetheir ment ofRecommend #2—PublicPerform Practices requirements Stateannual reporting andusethe applicable directives whendetermining their public-sector organizations to gobeyond their not always ononewebpage. websitesselected ontheir Directive albeit criteria 14 broader-public-sector organizations hadallthe tion allononewebpage. Intotal, ofthe nine(64%) tive’s requirement key to informa includecertain Broader PublicSector BusinessDocumentsDirec ofOntario the AuditorGeneral Prepared by Officeof the Key on One Webpage Criteria on Their Websites Compliance with Their Directive’s Requirement Organizations’ Figure 4: Broader-Public-Sector 3. 2. 1. thatdidnotincludethiscontent % oforganizations thatincludedthiscontent % oforganizations ofTorontoUniversity Queen’s University Centre—TorontoSt. Joseph’sHealth Muskoka AlgonquinHealthcare University McMaster Humber RiverRegional Hospital Brock University Trillium Partners Health Seneca College Hospital General Norfolk Mohawk College ServicesGroup Halton Healthcare College Georgian Cambrian College Organization Broader-Public-Sector We encourage provincial agencies andbroader- Directive. The information was located on other webpages within the organization’s website. organization’s the webpageswithin waslocatedonother Directive. Theinformation waspubliclyavailable, itwasnotononewebpageasrequiredby BroaderPublicSectorBusinessDocuments information the the We although notedthat website. organization’s wasnotavailable onthe This information websites. ononewebpageoftheir key information certain include they BroaderPublicSectorBusinessDocumentsDirective’srequirementthat the arerequiredtocomplywith Broader-public-sector organizations - - - - Activities 100 Key Is the information publiclyavailableIs theinformation ononewebpage? 0 Y Y Y Y Y Y Y Y Y Y Y Y Y Y the many meansofproviding different the direction willbegiven Consideration toannual reports. focusing on reports, content ofperformance the to direction on strengthen opportunities pursue public money ismanaged. will TheSecretariat easeofaccessto abouthow information porting public,sup to ofthe information members isalsocommittedThe Secretariat to providing adviceonimprovements. andthe annual reports attention andappreciates to the annual reports, content respect to of the with accountability is committed to enhancingtransparency and The Treasury (Secretariat) Board Secretariat TREASURY BOARD SECRETARIAT OVERALL RESPONSE FROM Performance Targets 64 36 N N N N N Y Y Y Y Y Y Y Y Y 2 2 2 3 3 Performance Operational Analysis of 93 N 7 Y Y Y Y Y Y Y Y Y Y Y Y Y 2 1 That They Include That They Include Statements Financial Audited 86 14 N N - Y Y Y Y Y Y Y Y Y Y Y Y 2 3 policy objectives set out in the entities’ applicable policy objectives entities’ set outinthe stakeholder groups. the publicand arekey electedother officials, ofgovernmentusers agency annualreports toolfundamental ofgoodmanagement. Primary public.Itisa Legislature andthe ability to the vehicle an entitydischarges by itsaccount which main isthe reporting Public-sector performance operations. entity’s about the information financial statements and sharing other notable accomplishments, andprovide ameansfor how targets, anentitymet outline itsperformance cal year andis expected to on includeinformation what cost. Itprovides aretrospective fis lookatthe objectivesentity’s andgoalswere achieved andat extent the to which activities,andthe an entity’s about key information other stakeholders with of Provincial Parliament publicand (MPPs),the isintended toan annualreport, provide Members commonly called report, An annualperformance Important in the Public Sector? Important 2.2 Why Are Annual Reports Report? Performance 2.1 What Is an Annual 2.0 Background ive route to change. achieving andeffect most appropriate when selectingthe wethat employ anevidence-based approach andstakeholders toengages ensure partners oversight Secretariat andgovernance, the ofourwork Asaregular part approaches. on communication reflect modern ensure they isdispensedto information which through may include reviewing andchannels formats andeducation.This andoutreach materials, and guidance,includingdirectives, supporting Public-sector entities exist to carry outpublic Public-sector to entitiesexist carry - - - Toward Better Accountability—Quality of Annual Reporting Toward Accountability—Quality Better their resources and maintaining the appropriate appropriate resources the andmaintaining their their legislativefor obligations, fulfilling managing responsible minister to are accountable the they agencies ofaministry, aretion. Although not part agency’s direc stakeholders ofthe public andother Legislature, the the whileinforming performance, to agency’s evaluate the necessary information the canprovide publicwith The annualreport the responsible for them. ministries agencies andthe relationship between accountability of the the funding and/orself-generated revenue, was used. and how agency’s resources, the includingpublic to how publicpolicyobjectives are these beingmet inorderreported to demonstrate as accountability canbe public-sector performance context that this governinglegislation orother documents.Itisin under the under the (TVO). TVOntario Energy Board and (LCBO), Ontario Metrolinx, the Liquor Control Boardcies includethe ofOntario functions.Examples ofprovincialor advisory agen activity, decision-making,operational regulatory involve that adjudicativefunctions orservices or government, ongoingpublic by to the perform andresponsibility, authority It hasthe granted itprovides.uses, anditsstandards for any services resourcestive management it obligations, ofthe the tois accountable aminister for fulfillingitslegisla regulation or Provincial agencies areby established legislation, relationship. illustrates this board’s direction. outthe for carrying Agency managementperformance. isresponsible responsible ministerable to agency’s for the the board ofanagencyerning isimmediately account provide. they standards Thegov for any services the to Accountable Organizations and Broader-Public-Sector Agencies 2.3 Are Provincial As a result, annual reports are a critical part part are acritical As aresult, annualreports Broader-public-sector organizations, asdefined Public? Broader PublicSector Accountability Act Order-in-Council . Aprovincial agency Figure 5 - , - - - - 755

Chapter 4 Chapter 4 756 online. Although the initiative doesnot the specifically online. Although in itsactivities,includingputting government data finding the governmentways for to be more open OpenGovernment initiative,of the focusing on October 2013, launch Premier announcedthe the toimportant openandtransparent government. In is ations andfinances,includingannual reports, Province are spent. receive able for how public funds they from the the objectives.and meeting They their are alsoaccount are effectively, operating their mandates fulfilling they publicto ensure Legislature that andthe to the entitiesareTherefore, ultimately these answerable are practices essential. ance andaccountability broader-public-sector organizations, goodgovern are well by provincialOntario served agencies and leges, boards andChildren’s AidSocieties. school include, for example, universities, hospitals, col ManagementBoardofCabinet Source ofdata: Agencies AllProvincial for Framework Figure 5:Accountability Ready oper accessto aboutentities’ information To citizensof Legislature andthe the ensure that

Agency Ministry CEO/Executive Director Legislative Assembly (where present) A A gency Boar gency Chai Ministe Cabine t r d r - - - - activities and expenditures to inform all Members toactivities andexpenditures allMembers inform entitiesare expected entities’ toof these detail the publicinterest. Theannualreports activities inthe Provinceallocated by to the to them undertake annual reports. organizations are required to produce Provincial agencies andmany Open Government. intent of would the annual reports beinlinewith agencyties, enhancingpublicaccessibilitythrough refer to provincial orbroader-public-sector enti are required Over to produce an annualreport. profile. Approximatelyrisk 125 provincial agencies limitedgiven power andlower their andauthority are not requiredgrams to publishanannual report developmentand/or adviceto assist inthe ofpro lic Sector Business DocumentsDirective. Broader Pub BPS organizations andhasissuedthe to issuespecific directives authority for designated Management Board the ofCabinet alsohasthe Under the Agencies andAppointmentsDirective.issues the Managementincial agencies, Board the ofCabinet annual reports. and broader-public-sector entitiesto prepare these Board formallyrequires ofCabinet that provincial Management cases,itisthe inother annual report; the entitymust produce an that entity specifies Order-in-Council provincial the established that ownerate Province. their fundsfor the gen Liquor Control Boardtion andthe ofOntario, andGamingCorpora Lottery Ontario asthe such have money. spenttheir Someprovincial entities, entitieshave goalsandhowthe achieved their they of Provincial Parliament publicwhether andthe Reports? Annual Reports? Are Required Publish to 2.4 What Types of Organizations Each year,Each provincial entitiesspendpublicfunds Advisory agencies that provide agencies that information Advisory To assist inoverseeing governance ofprov the legislation,regulation or In somecases,the Broader PublicSector Accountability Act broader-public-sector - - - - , - -

two Directives isincludedin and are notedannual reports in organizations, respectively. for provincial agencies andbroader-public-sector content requirements annualreport the establish 1,Documents Directive (effective January 2016) 2017) Broader PublicSector Business andthe ments Directive (most recently updated April requirements.reporting TheAgencies andAppoint Cabinet issueddirectivesspecifyannual that sector organizations, Management Board of annualreports. ing their canguideallentitieswhenprepar practices these Therefore, information. supplementary reporting framework for developing aconsistent to approach acommon with information preparers ofsuch mandatory. Instead, SORPisintended to provide are encouraged that practices butnot reporting SORPrepresents annualreports. mation intheir infor includesupplementary organizations that Handbook butdoesprovide general guidanceto CPA ofthe part CanadaPublicSector Accounting financial statements.presented SORPisnot inthe beyond information that supplementary reporting respect to matters (SORP)with of mended Practice Board (PSAB) hasissuedaStatement ofRecom ThePublicSector Accountingannual reports. entities indetermining whatto includeintheir assist provincialThere are anumberofsources that documents. or other annualreports maytion, which beincludedintheir required to produce businessandfinancialinforma 270 broader-public-sector organizations are also Report? Annual Report? in an2.5 What Is Contained The suggested content andrequirements for the For provincial agencies andbroader-public- 2.5.3 . Aswell, acomparison ofSORP andthe Sections 2.5.1 Figure 6 . , 2.5.2 - - - - - Toward Better Accountability—Quality of Annual Reporting Toward Accountability—Quality Better well linkage offinancialandnon-financial asthe as inannualreports, information cial performance result, SORPwas directed ataddressing non-finan consumed, inrelation to whatwas planned.Asa resources the what isactually beingachieved with hasbeenanincreased focus on there important, used andhow were they beingusedcontinueto be and atwhatcosts. Whilewhatresources were being intended goalsandobjectiveswhich were achieved, extent to inaclearandconcisemannerthe explain isto ofanannualreport aspects. Themainpurpose andlong-term short- complex both topic with isabroad, (SORP)notesPractice performance that The September 2006Statement ofRecommended can beaccessed. analysis regarding specific aspectsofperformance website where and more detailed information links provide reference to companion documentsor and,for who needmore readers details, summary may includeanexecutivemeaningful. Thereport provided analyses andexplanations are the so that Sufficientdetail shouldbeprovidedperformance. documentsto reported consult other understand included in Selected SORPrecommendations are performance. tions aimedatimproving quality ofpublic the SORPincludesrecommenda an annualreport, and understandability. comparability,relevance, fairness, consistency ofreliability, characteristics embodies the validity, iscredible andthat municate that information shouldcom Anannualreport information. lists qualitative ofperformance characteristics SORP presenting clearandconciseinformation, information. performance Reporting Performance Practice—Public 2.5.1 of Recommended Statement Users of annual reports shouldnot have ofannualreports Users to qualitative of In additionto the characteristics To in helpguide preparers ofannualreports Figure 6 (SORP) . - - - 757

Chapter 4 Chapter 4 758 work for preparing the annual report asit identifies work annualreport the for preparing Theguideprovides aframe efforts. ance reporting publicperform available to their entitiesto support is (commonly that referredto asannualreports) reports publicperformance a guideto preparing Public Sector developed Accounting Board staff ofOntario the AuditorGeneral Prepared by Officeof the BusinessDocumentsDirective PublicSector Appointments DirectiveandtheBroader and Agencies PreparinganAnnualReport, for Recommended PSAB Figure 6:ComparisonofSelected Practices how resources and strategies influenceresults. how resourcesandstrategies toshow financial andnon-financialinformation shouldlink report The publicperformance Linking financialandnon-financialinformation b) a) including: performance, understanding criticalto aboutkey factors information shouldinclude report The publicperformance andresults onkey thatinfluenceperformance Reporting factors implicationsarisingfromthem. period andthe the reporting during significant lessonslearned shouldidentify report The publicperformance provided. information interpreting andusingthe in comparisonswouldbeusefultousers these wherehaving similarorganizations of other performance orthe benchmarks, baselinedata abouttrends, information comparative shouldprovide report The publicperformance results, explainingany significantvariances. planned with actual resultsandcomparethem shoulddescribe report The publicperformance commitments. sourceofthe identify the periodand reporting plannedresultsforthe the shoulddescribe report The publicperformance publicsectorentity. directionofthe strategic the shoulddescribe report The publicperformance andexplaining results Reporting few criticalaspectsofperformance. shouldfocusonthe report A publicperformance report Deciding whatto Recommended #2 Practice of Statement PSAB Guide to Preparing Public Performance Reports Preparing Public Performance Guide to explaining the nature of this impact. natureofthis explaining the andresults; an impactonperformance have had that factors andother considerations identifying significantrisks,capacity performance. performance. and financial Analysis ofoperational estimates. variances against variances, andexplanationsofthe actualresults, with assurance external appropriatelevelof subject toanother statements financial audit isnotpractical, or,statements Audited financial wherean ofappointmentexpires. term the current appointedandwhen when first Names ofappointees,includingdate performance. andfinancial Analysis ofoperational not achieved. when achieved andofactiontobetaken target Discussion ofperformance year.Description ofactivitiesoverthe Appointments Directive and Agencies - - included in recommended isbeingappliedare practice the andexamplespractices suggest offeatures that credibility andusefulness.Selected recommended the report’s perception of could influenceauser’s features that and/ormissinginformation report Appendix 1 . Audited financial statements. Audited financial performance. Analysis ofoperational ifnotachieved. to betaken achievedandofaction target Discussion ofperformance previousfiscalyear.over the Description ofkey activities Business DocumentsDirective PublicSector Broader performance. Analysis ofoperational ifnotachieved. be taken achievedandactionsto targets A discussionofperformance certain certain requirementissued aDirectivesets outthe for that Accountability Act ofthe Under authority the board-governed provincial agencies. of requirements annualreports formandatory the andsuggested purpose content ofthe forthe each and AppointmentsDirective. provincial agencies asrequired Agencies by the in June2016 ondeveloping for annualreports The Treasury publishedaguide Board Secretariat mandate letters. in 2016, agencies not receive allsuch currently isarelatively beganBecause this new process that comingfiscal foryear.) the priorities performance and respect to service with broad expectations minister’s agency agency’s outliningthe to chair the minister responsiblefrom for the aboard-governed agency mandate letter isanannualcorrespondence ifamandate letterannual report was issued.(An wouldtherefore bereflected inanagency’s 2016/17 This requirement cameinto inJuly effect 2016 and applicableagencyset mandate outinthe letter. municate achievementsexpectations infulfilling exception requirement the ofthe towith com agencies haveerned for beenineffect many years, governed provincial agencies. requirementsshows annualreporting for board- the in aprovincial agency’s annualreport. ability Directive) stipulates whatmust beincluded Agency andAccount Establishment named the The Agencies andAppointmentsDirective (formerly Sector Organizations Sector Broader-Public- Documents Directive for Business Public Sector 2.5.3 Broader Agencies Provincial for Annual Reports Developing Guide to Agencies Provincial for and Appointments Directive 2.5.2 Agencies Annual reporting requirementsAnnual reporting for board-gov broader-public-sector , Management Board ofCabinet Broader PublicSector organizations (speci Appendix 2 Figure 6 outlines - - - - Toward Better Accountability—Quality of Annual Reporting Toward Accountability—Quality Better that directs visitors to the mandatory accountability accountability directs mandatory visitors tothat the As aresult, organizations may create awebpage samewebpagethe organization’s website. onthe required Directive underthe must beavailable on ective requires alldocumentsandinformation that available public.To to the Dir public,the assist the required information is documents aslongthe to rename orcreate itisnot new necessary that Directive cases,the specifies Inthese agreements. business plans,strategic plansandaccountability titles,for different example, in documentswith required already includethe businessinformation 1,Directive becameeffective January 2016. This specifiedinformation. documents containing businessorfinancial business plansandother the legislation) fied into prepare and publish online information. this requirementused to satisfythis ifitcontains ataminimum: contain ments that must post additionalbusinessorfinancialdocu lowing information: fol ataminimumthe Business plansmust contain their business orfinancialdocumentson websites. required Directive.information underthe • • • • • • • Some broader-public-sector organizations may An organization’s annual report mayAn organization’s be annualreport As well, broader-public-sector organizations Broader-public-sector organizations must post

and actionsto be taken ifnot achieved; and tion over previous fiscal the year; and key activities;and direction; audited financial statements. targets achieveda discussionofperformance an analysis performance; ofoperational ofkey organizaa description activitiesofthe measures andtargets.performance andfuture programs an overview ofcurrent an organization’s mandate andstrategic - - - - 759

Chapter 4 Chapter 4 760 broader-public-sector organizations andCrown- ministries-and-agencies be found at Afulllisting ofprovincialreports. agencies can ered by universities, we alsoreviewed annual their deliv Aswell, services reports. important given the annual entitieswhenexamining focused onthese consolidated financial statements. Therefore, we Province’s ofthe part form operations entities’ over $10these million.Thefinancial results of outsidesources ofrevenue,with deficitorsurplus assetsexpenses, orliabilitiesover $50million, or controlled agency revenues, ororganization with Treasurythe Board Secretariat. to andagreed by seniormanagementcussed with at Appendix 3 annual reports. requirement 2015/2016 inourreview ofthe took inJuly effect 2016, we didnot includethis applicableagency mandatein the letter only setachievementsexpectations infulfillingout Directive, respectively. Broader PublicSector BusinessDocuments and the Agenciesof Cabinet’s andAppointments Directive requirements by asestablished Management Board applicable includedthe annualreports izations’ incial agencies’ and selected provreview the alsoassessedwhether Statement). Reporting (Public Performance Our Statement ofRecommended (SORP)#2 Practice PublicSectormended by Accounting the Board goals andobjectives andatwhatcost asrecom intended achieved their extent they to which the broader-public-sector selectedwhether provincial agencies and The objective ofourreview was to assess 3.0 What We Looked At A consolidated entityisalarge government- The objective andscopeofourreview were dis Our objective are includedin andreview criteria requirementBecause the to communicate www. ontario.ca/data/provincial- . broader-public-sector organizations publicly report . Alisting ofconsolidated organ - - - - - present throughout this report. report. this present throughout the statistics findingsin we but donot includethose SORP. We onourfindingsin report to seehowAccounts ofOntario well followed they 2015/2016Ontario’s Public onthe AnnualReport organizations, we alsoreviewed Province the of of provincial agencies andbroader-public-sector organizations. health homesandcommunitymental as long-term-care sector are not organizations consolidated, that such include non-controlled andsmallerbroader-public- statements#section-2 public-accounts-2016-17-consolidated-financial- canbefounderation, at Power like Ontario controlled corporations, Gen mining the scopeofouraudit. mining the requirements. Thiswork was considered indeter keywith Agencies andAppointmentsDirective review to complied this determine ifthey during for 2013/14 Annualreports reports. were examined onitsreviewreported ofbusinessplansandannual 2016,Division. InApril Audit Internal Ontario Audit completed Internal reports Ontario by the report. this theconclusionof the findingsor significantly affect itwas aware information could allthe ofthat with effective November 16, 2017, ithasprovided us Treasury from the tation that, Board Secretariat wereports reviewed. We represen written obtained Appendix 4 was separatelyAccounts ofOntario reviewed. Province’s 2015/2016 Public onthe annualreport entityforother atotal of30entities.Aswell, the broader-public-sector organizations andone of15annual reports provincial agencies and14 tember 2017. Therefore, 2015/16 we the examined Our work was conducted inAugust andSep In additionto reviewing selectannualreports In planningouraudit,we reviewed relevant contains a list of the 2015/16 alist ofthe contains annual . Thelisting doesnot www.ontario.ca/page/ Section 4.1.4 - - -

- annual reports to includeare asfollows:annual reports tives SORPencourages donot includebutthat Documents Directive. Directive Broader PublicSector Business andthe two directives—the Agencies andAppointments encourages required ofthe against the information reports. directives annual require to includeintheir them their information goesbeyond the that information encourages public-sector entitiesto provide useful Statement ofRecommended (SORP) Practice The PublicSector Accounting Board’s (PSAB) Directive beyondInformation Include to Annual Reports (SORP) EncouragesPractice 4.1 of Recommended Statement Recommendations and 4.0 Key Observations • • The three types of information that the direc the that typesofinformation The three sector organizations are required to analyze broader-publicperformance; and operational agencies financial must analyze their both makethey publicly available (provincial information orother annualreports their in performance include ananalysis oftheir organizations are required by directive to annual reports. to recommended information includein this outputs. those that fits orpositiveresultfrom outcomes bene (outputs) butshouldalsomeasure the entityundertakes orproducts the services measures shouldnot belimited to actions, just “output”-based.Thatis,the than rather measures andtargets to be“outcome”-based SORPencourages those annualreports. their measures andtargetsinclude performance in organizations are required by directive to Provincial agencies andbroader-public-sector Provincial agencies andbroader-public-sector Figure 6 Requirements shows additionaldetails SORP the Section 4.1.1 expands on expands - - Toward Better Accountability—Quality of Annual Reporting Toward Accountability—Quality Better public-sector entities. requirementsnoted reporting for inthe the reporting of performance measures: ofperformance reporting the on highways resulting inasafer highway system. dangerous zones. road safety: respect toof outputandoutcomemeasures with followingadded.” SORPincludesthe example “consequence, benefitorvalue outcomes asthe “what”andthe outputsasthe ofthe ful to think Itishelp canbeplausibly to attributed them. that outputs consequences ofthose Outcomes are the activity resulted inpositive ornegative outcomes. this onwhether measures donot report these entity. activities ofthe produced by the However, entity. direct products andservices Outputsare the activityofan publiconthe Legislature andthe the measures inform Output-based performance 4.1.1 Outcome-Based Performance Than Output-Based Performance Measures Than Output-Based Performance More Useful Information Measures Provide • • • Section 4.1.4 SORP suggests following the whenitcomesto numberofaccidents Outcome: Reduction in the Output: Posting ofroad signsindicating

information toinformation includeinannualreports. Section 4.1.3 information. non-financial performance linkingfinancialand results achieved, thus performance costs ofthe ofthe readers toinformation includeinannualreports. Section 4.1.2 was. effect whatthat andexplain formance, affected per factors that andother cant risks signifi analysisencourages to includethe that SORP performance). operational just their of outputsandoutcomes…” …” ing period report plannedresults for the the describe SORP encourages annual reports toSORP encourages inform annualreports “… Plannedresults would bestated interms should report publicperformance “The outlines other gaps we outlinesother expands on this recommended onthis expands recommended onthis expands - - - - 761

Chapter 4 Chapter 4 762 information. This enables the Legislature and the Legislature andthe Thisenablesthe information. financialandnon-financialperformance fully links costs ofresults achieved meaning the Reporting performance. affect risks businessplansdiscusshow require the those that Italsodoesnot for annualreports. information agencies. However, itdoesnot require any risk plans beincludedinbusinessfor provincial andrelated risk-managementrequires risks that andpossible mitigating strategies. on performance risks impact ofthose entityisfacing,the lenges the publiccannot assesswhatchal Legislature andthe including: performance, standing aboutkey toinformation factors under critical shouldinclude SORP suggests annualreports that broader-public-sector organization. the agency benefitsandvalueadded or by the abetterreader ofanannualreport senseof give the onthem measures andreporting overprogress time.Meaningfuloutcome-based the outputandtrack outcometo the link the what itwants to measure, achieve, quantify the require entity to asthey determine the report delivered. the products orservices benefits of entityactually achieved readerorthe whatthe the isneededto cases, additionalinformation inform public.However, isusefulto the tion that inmost Annual Report Information Annual Report Would the Usefulness ofAchieved Improve 4.1.3 of Results the Costs Reporting of Annual Reports Readers to Information 4.1.2 Valuable Provides Risk Analysis • • The Agencies andAppointmentsDirective the discussionofrisks, athorough Without Outcome-based measures canbedifficult to canprovideOutput-based reporting informa

impact on performance andresults; and impact onperformance have factors that andother siderations hadan explaining the nature of this impact. nature ofthis the explaining capacitycon risks, identifying significant - - - - - comes it is reporting. comes itisreporting. year outputsandout to the achieve the during public to assesshow anentityuseditsresources will pursue opportunities to strengthen direction todirection strengthen opportunities will pursue The Treasury (Secretariat) Board Secretariat • • • for annualreports: followingamended to includethe requirements Public Sector BusinessDocumentsDirective be and AppointmentsDirective Broader andthe AgenciesManagement Boardthe ofCabinet that proposeBoard to Secretariat Treasury Board/ organizations, we Treasury recommend that provincial agencies andbroader-public-sector To improve of annualreports quality ofthe the • • • SORP suggests following regard: the inthis

report on the costs ofresults achieved. onthe report factors and other risks identify significant measures andtargetsbase performance on SECRETARIAT RESPONSE TREASURY BOARD and risks; mitigate the impacts, onplansto andreport the explain havethat impacted andresults, performance on outputs; improved solely than consequences) rather of is,interms outcomes to beachieved (that RECOMMENDATION 1 services must beprovided dueregard with services reasonable level, sincehigh-quality effective resourcesneeds andkeeping usedata the achieved asaresult.” andwhatwas period were the appliedduring onstrate to how users resources entrusted information to dem financial performance influence results.” tion to show how resources andstrategies link financialandnon-financialinforma to costs.” “A between balanceexists meeting public to“It isimportant linkfinancialandnon- should report publicperformance “The - - - on behalf of taxpayers and the generalon behalfoftaxpayers public. andthe organization accountable Parliament holdthe that and usefulfor ofProvincial stakeholders, Members would information bemore helpful performance all ofanorganization’s financial andoperational with ofanannualreport form stop shop”inthe Having a“one- report”). calls a“publicperformance it (which inanannualreport becontained reported fullrange itencourages ofinformation the be that SORPspecifies some mightbeinanannualreport. showing organization’s businessplanand the one place—someofitmightbeonawebpage couldbedivided upinmore than information the webpage organization’s website. onthe Thatmeans it just hasto bepublicly same available andonthe not have to beinanorganization’s annualreport— Public Sector BusinessDocumentsDirective does actual financial results against estimates). between (including discussingvariances their available public information to the inthe formance required financialper to organizations’ analyze the broader-public-sector cies andAppointmentsDirective. Specifically, Directive hasfewer Agen requirements the than The Broader PublicSector BusinessDocuments Documents Directive Business Public Sector Gaps in the Broader Requirements Entities of Public-Sector 4.1.4 Other Gaps inthe Reporting change. change. achieving andeffective most appropriate route toing the towill useanevidence-based approach select Secretariat andeducation;the outreach and materials, including directives, supporting ent meansofproviding direction andguidance, willbegivenConsideration many to differ the results. achieving costs associated with and the risks measures, significant output performance includingoutcomeand ing onannualreports, focus reports, content ofperformance on the As well, the information requiredAs well, information Broader by the the organizations are not - - - - - Toward Better Accountability—Quality of Annual Reporting Toward Accountability—Quality Better fall outside the scope of both the Agencies and the scopeofboth fall outsidethe We alsonoted somepublic-sector entities that of Directives Entities outside the ScopePublic-Sector • • organizations: these that Documents Directive beamendedto require Broader PublicSector Business the Cabinet that to Treasury Board/Management Board of Treasurymend that propose Board Secretariat broader-public-sector organizations, we recom To improve of annualreports quality ofthe the change. achieving andeffective most appropriate route tothe touse anevidence-based approach selecting will TheSecretariat munication approaches. com dispensed to reflect modern ensure they is information which through and channels may includereviewingaddition, this formats andeducation.In andoutreach materials, and guidance,includingdirectives, supporting many meansofproviding different direction willbegiven public.Consideration to to the the to approach providing andthe access variances, and tion ofananalysis offinancialperformance includingconsidera focusing onannualreports, reports, content ofperformance tion onthe to direc strengthen opportunities will pursue The Treasury (Secretariat) Board Secretariat

include all other performance information in information performance include allother their in financialperformance analyze their or onawebpage showing organization’s the inanannualreport toinformation beeither allowing than the rather annualreport the against estimates; and ances between actualfinancial results their includingdiscussingvari annual reports, RECOMMENDATION 2 SECRETARIAT RESPONSE TREASURY BOARD business plan. - - - - - 763

Chapter 4 Chapter 4 764 report of the Province. While this section describes Province. sectiondescribes ofthe Whilethis report on “Non-Financial annual the Activities” within adiscussionin,for section example, such expect the targets.measures We andperformance would Province’s performance discussionofthe lacks ability, However, andvulnerability). flexibility it assets, liabilitiesand keyratios (sustain financial a five-year trend analysis of revenues,expenses, year year year to to andcurrent prior budget; and current (both detailed ofvariances explanation includinga analysis offinancialperformance, has improved andnow includesadiscussionand transparency andaccountability.port For example, followingguidance inthe sup ways would further be improved. We applying SORP that observed could Province’s annualreport sis (FSD&A)inthe Financial the Statementwhich Discussion&Analy of our non-financial data. andincludedlinkages offinancialand on risks includedadiscussion analysis. Theannualreport afinancialdiscussion,includingvariance with audited financial statements were includedalong applicabletargets.measures butnot the OPG’s didincludeperformance tives, its annual report direc scopeofboth tion (OPG)fallsoutsidethe fied information. Province,of the isnot mandated to includespeci PublicAccounts ofthe itsannualreport preparing required to. Similarly, in Province the ofOntario, available for public-sector organizations butisnot option offollowing ithasthe guidance contain, the a directive must mandatingwhatitsannualreport Power absenceof isanexample. Generation Inthe Sector BusinessDocumentsDirective. Ontario Appointments DirectiveBroader Public andthe • • Overall, the Province’sOverall, 2015/16 the AnnualReport In We Power Ontario noted although Genera that,

and uncertainties. results; and actual previous extends to year’s the that expand on the analysis of material risks risks analysis ofmaterial onthe expand analysis include amore robust variance Chapter 2, Public Accounts of the ProvinceChapter 2,PublicAccounts ofthe 2015 AnnualReport , we identified ways in ------

to meet. Province’s goalsorany outcomesitmay have set stated achievements wereidea ifthe relevant to the reader haslittle the additionalinformation, this targets.results measured upagainst the Without what itstargets are andhow 2015/16 the actual measures Province itsperformance, the ofOntario isnodiscussionofhow assets, capital there tangible conditionofprovincial andthe cation andtraining, edu care, education,post-secondary ashealth such achievements inmajor government’s the sectors tion, we Treasury recommend that Board Secre informa directives usefulandthorough contain scopeofexisting falloutsidethe tor entitiesthat To ofpublic-sec annualreports the ensure that effective route to change. achieving and most appropriate toapproach selectingthe willuseanevidence-based tion. TheSecretariat andeduca andoutreach materials, supporting ing direction andguidance,including directives, be given many to meansofprovid different the direction. will Consideration corporate existing scopeof falloutsidethe tion ofentitiesthat includingconsidera focusing onannualreports, reports, content ofperformance tion onthe to direc strengthen opportunities will pursue The Treasury (Secretariat) Board Secretariat must contain. be provided they information regarding the direction Board authoritative ofCabinet that propose to Treasurytariat Board/Management RECOMMENDATION 3 SECRETARIAT RESPONSE TREASURY BOARD ------actually achieved. businessplans against whatthey laid outintheir publiccanassesstargets minister andthe the that so targets annualreports intheir performance businessplan.They are alsotothe provide actual against agency targets performed the set out in are to provide minister ofhow to adescription the measures.Agencies specifically for performance onwhatagenciestional information are to report Provincial for Agencies Reports Appointments Directive Guideto Annual Developing to betaken whennot achieved. The targets actions achieved performance and the the agencies on must the report annualreport in the years beincludedinagencies’ businessplans,while measures andtargets performance overthat three The Agencies andAppointmentsDirective requires stated target. ofthe ance fell short publicalsocannot determine where perform the itsstated goals.TheLegislaturein achieving and cannot management assesswhatprogress hasmade public Legislature andthe the annualreport, the measures, andapplicabletargetsperformance in established the entity’s or clearidentificationof goals,or“targets.”established disclosure Without andtime-focused.results-oriented measures must achievable, bespecific,measurable, and outcome.To bemeaningful,performance canincludemeasures ofinput,ance, which output aspectofperform indirectly measure aparticular usedto measure asametric directlyperformance or how SORPdefinesa well anentityisperforming. indicates lecting andanalyzingthat information process ofcol measurement isthe Performance Provincial 4.2.1 Requirements and Results for Be Targetsand the Performance to Was MeasuredPerformance Always Identify Howthe Entity’s Do Not 4.2 Annual Reports Performance shouldbemeasured againstPerformance pre- Achieved Agencies provides someaddi Agencies and - - - - Toward Better Accountability—Quality of Annual Reporting Toward Accountability—Quality Better reviewed (43%)didnot clearly per identifythe public-sector we organization annualreports actionsto betaken whennotand the achieved. targetsdocuments to achieved discussperformance ective also requires financial businessplansorother The Broader PublicSector BusinessDocumentsDir target (see performance agency, andfour didnot discloseoridentifythe measures ofthe clearly performance identifythe agency we annualreports reviewed (27%) didnot following:the ofSORP guidance,we lookedincorporation for for selected annualreports When assessingthe ance targets initsannualreport. ance measures butdidnot discloseany perform directives, scopeofboth identifieditsperform the annualreports. intheir them tions we sampled butonly five (64%), included were publicly available 14 for nineofthe organiza targets Performance annualreports. intheir them Asaresult, onlyance indicator sixincluded report). website asaperform document,such orin another organization’s (itcouldbeelsewhere onthe report publicly annual available, butnot inthe necessarily (see target performance did not discloseoridentifythe organization, andseven measures ofthe formance Other and Broader-Public-Sector for 4.2.2 Requirements andResults 4.2.3 Further Analysis 4.2.3 Further • • • Overall, wethe noted five of 12 broader- that Overall, we 15 noted four ofthe that provincial Ontario PowerOntario fallsoutside which Generation, The Directive discussion be requires this that

Figure 2 formance measure; and formance result oroutcome reported. applicable quantifiabletarget per for each measures; clear performance Organizations ). Figure 1 ). ------765

Chapter 4 Chapter 4 766 examples include: were measures. Some tiedto specificperformance year.the However, activities itwas not clearifthese key during achievements andactivitiesundertaken weThe annualreports reviewed generally listed Performance Measures Not Clearly Identifiable Measures Not Performance • •

measures clearly defined in the annual report, measures clearlythe annual report, definedin university’s website. performance the Without itispublicly each availablereports, through annual isnot information includedinthe this field and rates.student satisfaction While percentage employed ofgraduates inarelated sector, employment asgraduate such rates, education on system-wide indicators inthe Education andSkillsDevelopment to report ofAdvanced Ministry the with agreement organizations alsohavethese aseparate islikely annualreports universities’ because ofclearmeasures inthe measures. Thelack performance the organizations’ reflected However, information itwas not clearifthis enrolment andrevenues.ment, international asoverall listed such statistics reports enrol its stated goalsandobjectives. extent ithasachieved to determine which the entityisusingto assess whatmeasures the is not clearlythe publiccannot identified, measure performance Ifthe annual report. measure andtargetthe are not identifiedin performance businessplanbecausethe in the target inrelation to progress the presentedthe ing ofonlineassessments,butitdoesnot state test mentionsthe annualreport example, the not clearly For annualreport. presented inthe measures andassociatedformance targets are targets priority. for each However, per the goals, strategy, measures and performance its 2016–19 businessplanclearly outlinedthe Wetargets priorities. for didnote these that measures and clearly performance identifythe listed butdidnot four strategic priorities (EQAO’s)Office’s 2015/16 annual report The EducationQualityandAccountability Many of the universities’ 2015/16 universities’ Many ofthe annual - - - get. Examples include: tar the performance (54%) disclosedoridentified In oursample, only 15 28annualreports ofthe in the annual report so that Members ofProvincial Members sothat annualreport in the As well, should report. be sufficient discussion there are not clearlythe annual identifiedordisclosedin measures andapplicable targets performance the targets achievement againstnot the if assessthe of past targets. publiccan TheLegislature andthe achievements year’s current onthe to report which vehicle by isthe future targets, annualreport the Whilebusinessplanslookat annualreport. in the arequirement plans without to alsoincludethem targets toperformance inbusiness becontained to directives both are somedrawbacks allowing the Annual Reports Sampled the Annual Reports Half Targets Approximately for Performance No • • As noted in

the numberofquestions asked via the ofteachers doesincludeusage as such report statistics, province. board inthe Theannual school publicly fundedEnglish-languagein every available to 7to Grade service 10 students isafree onlinemath-tutoring Learning, work isonecomponent Help,which ofDigital was anarea offocus Home Learning for TVO. have intended met goalsandobjectives. their universities publiccannot determine ifthe the positive orare inneedofimprovement. results are ated ifthese targets, itisuncertain entity; however,ures ofthe associ without meas would are performance assumethese annual report visits.Areader ofthe on school number ofvisitors andnumberofstudents includesmany asthe report such statistics, expectations. met TVO’s would not service know usage ofthis ifthe annualreport a target reader ofthe goal,the however,formance; as context, such without ishow statistic measures itsper this TVO that Homework Help.Thepublicwould assume In TVO’s 2015/16In TVO’s Digital annualreport, The Ontario ScienceCentre 2015/16The Ontario annual Sections 4.1.4 and 4.2.1 , there , there ------results. For example: agencies’ performance detailed ofthe explanation its timeline. lege hadencountered preventing itfrom meeting Col publicwhatchallenges Cambrian the inform 31,March 2016, was nodiscussionto butthere Thiswas tocourses. have beencompleted by creation ofaninventory academic ofexisting the was was inprogress example, oneactivitythat sion asto whyactivitywas not completed. the For were was nodiscus there that inprogress, those measures were completed either For orinprogress. achievement of2015/16 goalsand objectives. The outlinedits that atable contained annual report as well. discuss possiblestrategies shortfall to address the entityto for the achieved. Itisalsoanopportunity target reason why targetthe andthe the was not entitytocial for identifywhere itdidnot the meet result oroutcomes.Thediscussioniscru reported (20%)didnot includeadiscussionofthe three targets 28 reviewed), (54%performance ofthe 15 weOf the annualreports reported sampled that in meeting itsstated goals. get entity were ofthe inorderprogress to assessthe measure andapplicabletar performance what the businessplan—aseparate document—tothe see Parliament publicdonot needto andthe refer to Discussion of Reported Outcomes Discussion of Reported • We didnote was someexamples a where there For example, we College’s noted Cambrian that

did not target. meet the plans for results addressing areas where the LHIN’s results and someofthe sion ofthe isfollowed result. Thistable in the by adiscus is provided to show year-over-year the change 2015/16 outcome;aswell, 2014/15 the result target measurable the andthe indicators with showingincludes atable itsperformance Network’s 2015/16 (LHIN’s) annualreport The Toronto Integration LocalHealth Central - - - - - Toward Better Accountability—Quality of Annual Reporting Toward Accountability—Quality Better this approach, the Secretariat will pursue willpursue Secretariat the approach, this analyticsdata and evaluation. Employing andoutcomemeasurement, based, performance engaged inbuilding capacityfor evidence- for evidence-based decision-making,andis frameworkhas developed anenterprise-wide The Treasury (Secretariat) Board Secretariat • • action to helpensure that: take ministries, inconjunctionwith Secretariat, targets, Treasury we the Board recommend that entity met, exceeded ofitsstated orfell short publicto easily the and the assesswhether To ofProvincial enableMembers Parliament •

when targets are not met, asrequired by the entities clearly identify anddiscloseper SECRETARIAT RESPONSE TREASURY BOARD targetsactions to future. achieve these inthe includeplanned directive, annualreport the and annualreports; and results intheir targetsdirective, applicableperformance measures, and,asrequiredformance by the RECOMMENDATION 4 clearlythe reasons whythe public identifies to detailed discussion reductions. Such price revenue, asaggressive competition such and OCWA challenges the the facedingrowing its 1.95% over 2015. addresses Theannualreport was not achieved asrevenue only increased by target noted this cast. Theannualreport that revenue in2016 by 6.1% over 2015 the fore measures andrelated target was to increase For OCWA’s example, oneofthe performance year-end goalandthe ofeach progress result. target to performance measure the goals, the strategyoverall to the achieve these goalswith year-end results. TheOCWA clearly its links measures, applicabletargetsformance and 2016 clearly per annualreport outlinesthe the performance target was performance not achieved.the The Ontario CleanWaterThe Ontario Agency’s (OCWA’s) - - - 767

Chapter 4 Chapter 4 768 come orbenefitprovided: “whatwas done,” out measures, orthe butnot the outcome-based measures. based measures whilefive (45%)included output- strictly measures, six(55%)contained clearperformance contained that reports 11Of the of15 provincial agency annual directives.report intomeasures annual shouldbeincorporated mendation 1 output-basedmeasures. In than readers tomore valuableinformation annualreport outlines how outcome-basedmeasures provide based measures. Asnoted in outcome- reported ance measures, whileothers output-basedperform someentitiesreported that revealedOur review annualreports of30entities’ 4.3.1 Agencies Results Provincial for Outcome-Based Measures on Lack Reporting 4.3 Many Annual Reports approaches. communication approaches. tion isdispensedto reflect modern ensure they informa which through andchannels formats may includereviewingtion. Inaddition,this andeduca andoutreach materials, supporting direction andguidance,includingdirectives, given many to meansofproviding different the should targets not bemet. willbe Consideration plannedactions ofthe anexplanation with measures andtargetstifying performance along ofiden includingconsideration annual reports, focusing on reports, content ofperformance to direction onthe strengthen opportunities • Here are two onoutput examples ofreporting of 2016. TheOCWA ithadfully that reported be fully implemented second quarter by the managementits process data system was to measure andtarget performance stated that The Ontario Clean WaterThe Ontario Agency’s (OCWA’s) , we suggest outcome-based that Section 4.1.1 Recom , SORP ------outcome measures or benefits attained from ser outcome measures orbenefitsattained public to assess the performance of the entity. ofthe performance public to assessthe Legislature andthe tovaluable information the compared to aprovincial Thisprovides benchmark. field of study. Thisoutcomemeasure was also wererates graduates andwhether working intheir to determinement satisfactionsurvey employment Mohawk College conducted andemploy a graduate provided isMohawk from College. services attained includedoutcomemeasures orbenefits tion that outcome-based measures. output-based measures whilesix(86%)included ance measures, one(14%) strictly contained clearperform contained that tion annualreports sevenOf the of12 agency was meeting itsgoal. the publicthat to show Legislature andthe the Thismeasure alsohadapplicabletargets services. customer satisfaction,anoutcomemeasure for its on reported Agricorp vices provided isAgricorp. Organizations 4.3.2 Results Broader-Public-Sector for • An example ofaprovincial included agency that An example ofabroader-public-sector organiza

enhanced information for the public. for the enhanced information would provide performed, typeofservice each asclientsatisfaction rates formeasure, such anoutcome-based measure isappropriate, and onbudget. output-based Whilethe major andreal estate projects were ontime managed plants. a resultimprovements oftechnological inits flowingcontaminants the Great Lakes into as onreduced statistics incidenceof instance, OCWAcome, the couldhave provided, for implementation? Toof that indicate anout outcomeorbenefit system, butwhatisthe implemented management itsprocess data Infrastructure Ontario reported how reported many Ontario Infrastructure broader-public-sector organiza ------Rather, auditedthe financial statement the was (see analysis offinancial performance we (33%)did notreports an examined contain discussion.” Wethe noted five of that 15 annual ments isnot enoughto beconsidered a“financial However, providing only audited financial state Figure 1 asrequired Directiveannual report by the (see their audited financial statements in included their All provincial we agencies’ annualreports sampled of significant variances. ness plan,year-end actualresults andexplanations including approved budget busi asset outinthe agency’sanalysis financialperformance, ofthe an contain annualreport also suggests the that Provincial for Agencies AnnualReports Developing The an analysis offinancialperformance. includeaudited financial statements and report provincial annual agencies requires the that The Agencies andAppointmentsDirective for aspectofperformance. this publicunderstand the to goalsandobjectivesan entity’s helping iscritical in relation to and analysis offinancialperformance own.their Therefore, inclusionofsomediscussion not on beableto financialinformation analyze the financial statements may unfamiliarwith readers entity. by the activity undertaken Aswell, many program-by-program donot providea whole,they ona information theentityas of the financialperformance reflect these itedstatements financial statements. While generallyAnnual reports aud includeanentity’s Inclusion of Analysis of Financial Performance Inclusion of Analysis Financial Statements Inclusion of Audited ProvincialAgencies and Results for Expectations 4.4.1 Requirements, Suggested Analysis CouldBeImproved 4.4 Financial and Variance ). basis or highlight a particular basisorhighlightaparticular Figure 1 Guide to ). - - - Toward Better Accountability—Quality of Annual Reporting Toward Accountability—Quality Better of interest public.For to the example, ifexpenses year would prior be ofthe year results andthose between a20%variance more current- than that oursample weexamining ofannualreports, felt In reasonable to includeassignificantvariances. agencies believe must determine whatthey is is.Asa result, define whatasignificantvariance Agencies andAppointmentsDirectivethe doesnot included inprovincial agencies’ annualreports, areWhile reasons forto be significantvariances expectations. with was inline agency’s financialperformance the not have sufficientinformation to determine if would annualreport analysis, areader ofthe the only included. Without financialinformation because there werebecause there nosignificantvariances. sample didnot have discussions significantvariance 15of the provincial agency inour annualreports We annualreport. inthe explained noted two that lion, or23%.However, were variances not these decreasing expenditures byand research $1.2 mil increasing by approximately $22million,or38%, assetstangible capital as such significant variances, 2015/16of Ontario’s included some annualreport Institute Research we Agricultural noted the that discussion ofsignificantvariances. example,For weannual reports sampled (31%) didnot have any 17.2% increase inproduct salesdollars.” age were andsellingprices achieved resulting ina 14.9% year andslightly the higherstump during contractor produced forest products increased by 17.3 %compared to 2014/15. Demandfor our represents anincrease of$3,719,218which or revenues“operating year for were the $25,759,397, noting that analysis initsannualreport variance providedAlgonquin Forestry anin-depth Authority (see nificant variances sampled, nine(69%)didhave adiscussionofsig might well wonder why occurred. that annualreport readerincreased ofthe by 40%,the Inclusion ofExplanationsSignificant Variances The remaining four of the provincialThe remaining four ofthe agency 15Of the provincial agencywe annualreports Figure 1 ). For example, the - - - 769

Chapter 4 Chapter 4 770 their businessplan. their or annualreport budget their include their ineither budgets businessplans. intheir (87%) financial agencies includedtheir ofthese agencies’ applicablefinancialbudget. However, 13 weannual reports sampled (40%)includedthe strategies over two next years. to the three how resources willbeusedto achieve goalsand plan. Budgets alsoprovide on usefulinformation budgetedcompare actualresults against the the abaselineto publicwith Legislature andthe the Budget asitprovides isimportant information Inclusion of Budget Data Inclusion of Budget materials, and outreach andeducation.The andoutreach materials, and guidance,includingdirectives, supporting many meansofproviding different the direction financial analysis. willbegiven Consideration to andpromoting effectivesignificant variances, respect to tion ofaconsistent with approach includingconsidera focusing onannualreports, reports, content ofperformance tion onthe to direc strengthen opportunities will pursue The Treasury (Secretariat) Board Secretariat • • Board/ Management Board ofCabinet that: Treasury propose Board to Secretariat Treasury that we financialperformance, recommend cies’ ofagen understanding athorough with reports To provide ofprovincial readers agency annual Only two15 ofthe agencies we sampled didnot We provincial noted sixofthe agency that

the Agencies andAppointments Directivethe be in conjunction with ministries, ittake action ministries, in conjunctionwith SECRETARIAT RESPONSE TREASURY BOARD agency annualreports. beincludedinallprovincialcant variances, foranalysis, includingexplanations signifi financialperformance to helpensure that is;and significant variance amended to includeadefinitionofwhat RECOMMENDATION 5 - - - - izations’ annual reports for the quality of their quality for oftheir the annualreports izations’ should bekept inmindaswe organ review these implementation of the directivewegap inthe that suggest befilled by Asnoted in performance. site butdoesnot require any analysis offinancial organization’s webstatements beincludedonthe Directive audited only financial mentionsthat The Broader PublicSector BusinessDocuments organization. ofthe formance financialper tion for areader to the understand isenoughinforma single placewhere there of the of ate from its annual report. alsoprovidesHalton Healthcare statements separ ited financial statements andafinancialdiscussion. that includesitsaud financial stand-alone report exception ofoneorganization. (See website, the onthe with report as astand-alone were they available annualreports, organizations’ ments were not includedinbroader-public-sector requirements for itsannualreport. isnot boundby which Generation, any directive Powerfinancial statements. ThisincludesOntario weannual reports sampled didincludeaudited 13 seven anannualreport, (or54%) ofthe within directive to includeaudited financial statements organizations are notAlthough required by the financial information. Other andResults Broader-Public-Sector for and Expectations 4.4.2 Suggested Inclusion of Audited Financial Statements Inclusion of Audited route to change. achieving andeffective most appropriate to selectingthe willuseanevidence-based approach Secretariat Recommendation 2 broader-public-sector As noted in For University example, the ofToronto hasa We alsonoted whenaudited financial state that Organizations Organizations Section 4.1.4 Recommendation 2 would improve quality the and other organization andother Section 4.1.4 , the implementation , the Figure 4 , this isa , this . This .) ------to publishfinancialanalysis, that we didnotexpect directiveSince the doesnot require organizations was not information availablebecause the to doso. were not abletowas avariance determine ifthere were Inonecase, there nosignificantvariances. we not have discussionsbecause significantvariance inoursampleorganization annualreports did cies, we noted two that broader-public-sector indicator.years for that last three change inthe to highlightthe a bargraph indicator,addition, besideeach provided report the assets, liabilities,net assets indicators. In andother for revenues, ofvariances explanations expenses, its 2015/2016 Itsanalysis included annualreport. University provided financialanalysis in athorough discussion ofkey For variances. example, Brock a didcontain had significantfinancialvariances reviewed organization annualreports other that significant change. providedexplanation asto a why was such there casewas an by $5.9million,or32%.Inneither liabilitiesincreased accounts payable andaccrued ments increased by $12.6 million,or20%,and College we annualreport, noted invest that Figure 2 we reviewed (see hadsignificantvariances that 10 insix(60%)ofthe explained annualreports required to doso,significantvariances were not As would absenceofbeing beexpected inthe annual report. is not boundby any directive requirements for its PowerThis includesOntario which Generation, afinancialanalysis (see less contain weannual reports reviewed (38%)didneverthe 13the notEven required though directive, by the five of Inclusion of Budget Data Inclusion of Budget Inclusion ofExplanationsSignificant Variances of Financial Performance Inclusion of Analysis Similar to whatwe found for provincial agen Four broader-public-sector (40%)ofthe and broader-public-sector ). For 2015/16 example, inthe Mohawk and other organization andother Figure 2 - ). - - Toward Better Accountability—Quality of Annual Reporting Toward Accountability—Quality Better had budgetwebsites. ontheir information out publicly available financialbudget information, organizations with majority ofthose comprise the seven (54%) which didnot. hospitals, None ofthe website, inadocumentontheir information while organizations we sampled hadfinancialbudget 13six (46%)ofthe were documents instead. Overall, includedinthese business andstrategic plansto determine ifbudgets Weannual report. applicable the alsoexamined izations sampled hadincludeditsbudget inits 12 Only oneofthe organization’s annualreport. budgets would organ typically beincluded inthe achieve specificaccomplishments. amountoffinancial resources actually used the to statements. There was littleto nodiscussionof audited financial was limited inclusionofthe to the year,accomplished inthe butfinancialinformation entity discussionsofwhatthe thorough contained were involved achievement ofperformance. inthe ashuman resources)non-financial resources (such Aswell,report. we discussions ofhow examined annual includedinthe information performance alinkbetweenentity established itscosts andthe desired outcome.Wethe the alsoassessedwhether discussion ofhow resources were usedto achieve Primarily,applied several criteria. we looked for a aged by we SORPwas includedinannualreports, should bearequirement directives. inannualreport linkbetween onthe costreporting andachievement ance reader to understand used includeadiscussionof crucially linkages between financialandnon-financialdata As noted in Would Annual Reports Improve Data Financial andNon-Financial 4.5 Better Linkages between In some cases, we noted that the annual reports In somecases,we annualreports noted the that encour In order information to determine ifthis . In to achieve the desired outcome, enabling the desiredto outcome,enablingthe achieve the Recommendation 1 Section 4.1.1 broader-public-sector the costs ofachievedperform , SORPoutlineshow , we suggest that how resources were and other andother - - - - - 771

Chapter 4 Chapter 4 772 oughly understand an entity’s performance. In performance. anentity’s oughly understand impact, to to readers for thor iscritical their report factors, and and other risks onsignificant reporting As noted in financial andnon-financialinformation. Power didhave Generation, linkages between 2 ure (See financial andnon-financialinformation sampled hadfullandcomplete linkages between None ofthe related accomplishments to noted the above. statements cannot cost beusedto determine the these annualreports, entities are includedintheir not (see the majority, financial information; 11 (73%), did reviewed, only four (27%) linked financialandnon- 15Of the provincial agencywe annualreports and the Impact on the Entity and the Impact 4.6 Limited Discussion of Risks and Other Organizations 4.5.2 Results Broader-Public-Sector for 4.5.1 Agencies Results Provincial for • • While the auditedthese financial statements While the for For example:

tioned in the annual report. annualreport. tioned inthe new facilitieswas notThe cost ofthese men complex. greenhouse commercial research facilityandanew pre- research new dairy openingofa commissioningandgrand the year,many the activitiesduring most notably highlighted InstituteResearch ofOntario plishment was not tiedto whatwas achieved. Literacy Test.School accom Thecost ofthis Secondary Ontario ofthe onlinedelivery the including four separate pilot tests to assess many year, accomplishments the during Quality andAccountability Officeoutlined The 2015/16 Agricultural ofthe annualreport The 2015/16 Education ofthe annualreport ). The one other entity in our sample, Ontario entityinoursample,). Theoneother Ontario Figure 1 Section 4.1.1 broader-public-sector ). , SORP outlines that , SORPoutlinesthat organizations Fig Rec - - - - - the current year). However, current the we most part, for the of would performance befound (asitaffected the discussion would placewhere this reports bethe annual plans. Asaresult, we the expected that isnot required performance to beincludedinthese However, affect adiscussionofhow risks those included inbusinessplansfor provincial agencies. andrelated risk-management risks that plansbe The Agencies andAppointmentsDirective requires directives.in annualreport impact requirement shouldbeareporting and their ommendation 1 report mentions in detail the financial risks the risks financial mentionsin detail the report noted Queen’s University’s that 2015/16 annual analysis. (See a risk Generation’s 2015/16 alsocontained annual report Power analysis. Ontario sample arisk contained public-sector inour organizations annualreports mitigating strategies. (ifany)impact andrelated onperformance organization, the the affecting disclose risks Directive annualreport doesnot require the that The Broader PublicSector BusinessDocuments discusses how risks. various itmanages the clearly TheCommission’s annualreport legal risks. strategic, system, businesscontinuity, financialand itisfacing,including mission includedalist ofrisks Com managed. Securities For Ontario example, the were were there onhow risks explanations these were clearlywe risks identifiedand noted the that agency was the facing(see risks on the annual reports intheir includedinformation that the case. this did notto be find Provincial and Results for Expectations 4.6.1 Requirements, Suggested and Other Organizations 4.6.2 Results Broader-Public-Sector for As a result, only one of the 12As aresult, only oneofthe (8%)ofbroader- Forthe five of the 15 provincial agencies (33%) Agencies , we suggest that discussing risks , we suggest discussingrisks that Figure 2 .) For example, we Figure 1 ), - be useful,itmust beableto beunderstood by read inplainlanguage. andwritten understandable we annualreports reviewedAll the were clear, risks. plansto address the and their impacts are facing,the they provide insightonrisks and would annualreports of risk round outtheir Adiscussion financialorannual reports. izations’ broader-public-sectorincluded inany ofthe organ analysis was not this most part, analysis, for the Pension Plan.” Universitybuild anew Ontario Jointly Sponsored employeecommitment with to designand groups university payments hasnegotiated andthe cern a charges to cover cost ofadditionalgoingcon the anadditional4.5% inpension began contributing tion strategies: “…inSeptember 2015 allunits specificmitiga pension planincludessomevery andtuitionrevenue. support Thediscussionofthe maintenancedeferred anditsreliance ongrant university pensionplan, isfacing:anunsustainable Plain Are Written in 4.7 Annual Reports SORP states that for performance information to information for performance SORP states that wereWhile there afew goodexamples ofrisk Language - - - - Toward Better Accountability—Quality of Annual Reporting Toward Accountability—Quality Better well, College’s 2015/16 Cambrian annualreport As narrative. written the to support throughout was well andtables organized andusedgraphics 2015/16is the Thereport LCBO annualreport. year.the andconveyedtables, entityachieved in whatthe and well agooduseofgraphics organized with is, itdidnot language usetechnical orjargon), was inplainlanguage was written (that report see ifthe oversimplifying oromittingrelevant details. sonable conclusions.Care shouldbetaken to avoid toreaders reasonable insightsordraw obtain rea enable factsandmatters that focuses oncritical clearly stated language inplain,non-technical that shouldbeprecise and narratives Explanatory ers. and financial shortfalls, ifany.and financialshortfalls, to entityis taking addresssteps performance the entityandthe accomplishmentsto ofthe assessthe public able make Legislature andthe iteasy for the financial performance. toconcise narratives and discuss itsoperational toused atable highlightitsaccomplishments and A good example of an understandable report report A goodexample ofanunderstandable For recommended we practice, this looked to Annual reports that are clearandunderstand that Annual reports - - 773

Chapter 4 Chapter 4 774 Source of data: Financial Reporting and Assurance Standards Canada Standards andAssurance Reporting Financial Source ofdata: financial performance information? financial performance entitylinkitsfinancialandnon- Did the andresults? performance influencing andkey factors learned describelessons report Does the similarorganizations? other of performance orthe baseline data abouttrends,benchmarks, information providecomparative report Does the any significantvariances? plannedresults,explaining with them periodandcompare reporting for the entityexplainactualresults Does the direction? strategic entity’s describethe report Does the critical aspectsofperformance? few focusonthe report Does the understandable? report Is the Recommended Practice Selected Recommended of Application withRelated Practices Examples Reports— Preparing Public Performance Guideto Appendix 1: PSAB • • • • • • • • • • • • • • ofFeaturesThatSuggestThisRecommended Was Practice Examples Applied (ideally) outcomes. levelandtypeofresourcesrequiredtoproduceoutputs analysis ofthe measures,thereby permitting arelinkedtoindividualperformance All entitycosts results. howfinancialandnon-financialresourcescontributedtoactual understands entity the illustrate measuresthat andperformance includesnarratives The report todoso. timeframes estimated steps and describesspecific report the actual andplannedperformance, periodgapbetween current futuretoclosethe Where actionsarerequiredinthe steps. planned results,andprogressisevaluatedinrelationtothose inlinewith neededtobringactualperformance steps includes outlinesofthe the report hadasignificantimpactonperformance, arerisksthat Where there goals,andassessprogressovertime. to long-term achievements toassessplans,relatecurrent isprovidedtoallowusers Information twopreviousperiods. the actualresultsforatleast actual resultswith period ataminimum,presentscurrent that, includestrendinformation The report cause(s). insight intotheir userreasonable Explanations areprovidedforallsignificantvariancesandgivethe outputs andoutcomes. of interms stated period, the reporting identifiesplannedresultsfor The report direction. entity’sstrategic the with accomplishmentisconsistent howtheir understand user entity’sgoalsandobjectiveshelpsthe descriptionofthe The report’s performance. goalssoastoprovidecontextforreported term entity’shigh-levelprioritiesandlong- aboutthe summarizesinformation The report entity’s fewcriticalaspectsofperformance. ofthe auser’sunderstanding measuressupport andperformance Narratives goals andobjectives. entity’skey strategies, focusesonthe The report reasonable. measuresappears The numberofperformance can readilyunderstand. public amemberofthe isconciseandwritteninplainlanguagethat The report

Appendix 2: Agencies and Appointments Directive’s Annual Report Requirements and Suggested Content for Board-Governed Agencies Source of data: Treasury Board Secretariat, June 2016

Requirement Purpose Suggested Content Description of activities over the year. To provide a report on activities Provide a high-level description of key programs, activities and highlights over the year that during the year. fulfilled the agency’s mandate and government priorities. Describe how the agency’s activities aligned with its corresponding business plan for the year covered in the annual report. Identify any significant changes to the agency’s programs and services, and the impacts of those changes. Analysis of operational performance. To provide a report on Provide an analysis of the agency’s operational performance. This should include how the operational performance agency performed against targets in the business plan and applicable industry standards focusing on operational results. (e.g., effectiveness, productivity) Analysis of financial performance. To provide a report on Provide an analysis of the agency’s financial performance, including approved budget as set performance with a focus on out in the business plan for the fiscal year of the annual report. financial results. Include actual year-end expenditures and explanations of significant variances. Toward Better Accountability—Quality of Annual Reporting Toward Accountability—Quality Better Discussion of performance targets achieved To provide a report on whether Measures of actual performance targets should be provided so the Minister and the public and of action to be taken when not achieved. targets were achieved and any can compare business plan targets to achievements for the fiscal year of the annual report. corrective actions taken. Where business plan targets were not met, provide an explanation of the action(s) to be taken to meet the target(s) going forward. The agency’s new, approved business plan is a useful reference for discussion of actions that are being taken to address targets not being met. Include explanations and descriptions for targets that were significantly exceeded. Names of appointees, including date when To provide information on Identify all appointees, positions, dates first appointed and when the current term of first appointed and when the current term of appointees to the board of appointment expires. appointment expires. directors of the agency. Total amount of remuneration for all appointees combine. Audited financial statements or, where an audit To provide financial statements. Consult with ministry controllership for further specific details. is not practical, financial statements subject to another appropriate level of external assurance with actual results, variances and explanations of the variances against estimates. Any legislatively required content. To address any legislatively As stipulated in legislation. required content set out for agency annual reports. 775

Chapter 4 Chapter 4 776 1. Criteria Directive, respectively. Broader PublicSector BusinessDocuments and the Agenciesof Cabinet’s andAppointments Directive requirements by asestablished Management Board applicable includedthe reports performance and broader-public-sector public organizations’ selected provincial the assess whether agencies’ Statement).Reporting Ourreview willalso Recommended #2(PublicPerformance Practice PSABcost asrecommended by Statement the of intended goalsandobjectivestheir andatwhat achieved extent they to which the publicly report To selected provincial the assesswhether agencies Objective ofOntario the AuditorGeneral Prepared by Officeof the Appendix 3: Review Objective and Criteria

• • • • • • incorporate the following the incorporate principles: reports suggests public-sector performance that PSAB Statement of Recommended Practice

to understanding performance, including: to performance, understanding from them; implications arising andthe period reporting tion provided; informa ininterpreting andusingthe users comparisons wouldhaving these beusefulto similarorganizations where ofother formance per orthe baselinedata trends, benchmarks, cant variances; any plannedresults, explaining signifi with sector entity; performance; focus on the few aspectsof focus critical onthe include information aboutkey include information factors critical the during identify significantlessonslearned provide comparative about information actualresults andcompare describe them public- strategic direction ofthe the describe - - - 2. 3.

• • • • • • • • • • • governed agencies: Agencies and Appointments Directive for board- following elements in order to comply the with Directive: Broader Public Sectorthe Business Documents following elements in order to comply with The performance report must contain the the must contain report The performance The performance report must contain the the must contain report The performance

• • results. show how resources andstrategies influence and actionsto be taken ifnot achieved; and the organization;ous fiscal year of estimates. against variances ofthe and explanations actualresults, variances with nal assurance levelsubject to appropriate another ofexter audit isnot financial practical, statements and appointment expires; of term the current appointedfirst andwhen and ofactionto betaken whennot achieved; analysis performance; ofoperational ofactivitiesoverdescription year; the link financialandnon-financialinformation to audited financial statements. targets achieveda discussionofperformance an analysis performance; ofoperational of keya description activitiesover previ the audited financial statements or, where an names ofappointees, includingdate when targets achieveddiscussion ofperformance analysis offinancialperformance;

explaining the nature of this impact; nature ofthis and the explaining capacitycon risks, identifying significant an impact on performance andresults; and an impact onperformance have factors that andother siderations had - - - Prepared by the Office of the Auditor General ofOntario the AuditorGeneral Prepared by Officeof the 16. 15. 14. 13. 12. 11. 10. 9. 8. 7. 6. 5. 4. 3. 2. 1. Ministry of Environment andClimateChange ofEnvironment Ministry ofEnergy Ministry ofEducation Ministry ofEconomicDevelopment Ministry Affairs FoodandRural ofAgriculture, Ministry ofAdvanced EducationandSkillsDevelopment Ministry Appendix 4: 2015/16 We Examined Annual Reports Ontario CleanWaterOntario Agency PowerGeneration Ontario Board Energy Ontario (TVO) EducationalCommunicationsAuthority Ontario Office Education QualityandAccountability andLandsCorporation Infrastructure Ontario Research ofOntario Agricultural Institute AgriCorp ofTorontoUniversity Seneca College Queens University Mohawk College University McMaster College Georgian Cambrian College Brock University Toward Better Accountability—Quality of Annual Reporting Toward Accountability—Quality Better 26. 25. 24. 23. 22. 21. 20. 19. 18. 17. 30. 29. 28. 27. Ministry of Natural Resources andForestry ofNatural Resources Ministry ofHealthandLong-TermMinistry Care ofFinance Ministry Ministry ofTransportation Ministry ofTourism, CultureandSport Ministry Development andMines ofNorthern Ministry Trillium Partners Health Centre—TorontoSt. Joseph'sHealth Hospital General Norfolk Muskoka AlgonquinHealthcare Network—Toronto Integration Local Health Central Humber RiverRegional Hospital ServicesGroup Halton Healthcare SecuritiesCommission Ontario GamingCorporation Lottery Ontario Liquor ControlBoardofOntario Metrolinx ScienceCentre Ontario Fund Corporation Heritage Ontario Northern Authority Algonquin Forestry 777

Chapter 4