Environment relies on six DAOs to deliver programs
The Minister of Environment has delegated the operation of certain programs to independent DAOs. The six DAOs that conduct Environment business are the:
• Beverage Container Management Board
• Alberta Used Oil Management Association
• Forest Resource Improvement Association of Alberta
• Tire Recycling Management Association of Alberta
• Alberta Professional Outfitters Society
• Alberta Conservation Association
Because the programs delegated to DAOs are important to the success of the Ministry, Department staff should perform routine, documented reviews of these arrangements.
Last year, four of six DAOs had not implemented the Department’s monitoring system
The Department developed a system to monitor and evaluate its DAOs. The key to the system is a workbook, which is an extensive checklist of monitoring activities to be undertaken by the designated Departmental manager. The checklist includes the review of each DAO’s annual plan, budget, and annual report. As well, Environment’s managers monitor each
DAO against defined performance measures and communicate regularly with their DAO to ensure that the Ministry’s business objectives are being fulfilled. Last year, my staff reviewed progress in implementing this system. We found that, for four of the six DAOs, formal monitoring had not progressed. We were told that the Department would have its monitoring and paperwork up-to-date within a few months.
This year’s review shows that monitoring and intervention should be strengthened
This year, we again reviewed the Department’s monitoring.
While there has been progress, we found that the
Department’s system has not been implemented for one DAO, the system itself might be enhanced, and one DAO is facing significant challenges. As a result, we have made two recommendations to the Department.
Monitoring system for DAOs Recommendation No. 14
We recommend that the Department of Environment fully implement and continue to refine its system for monitoring its Delegated Administrative Organizations.
The monitoring system has not yet been implemented for one DAO
This year, at the time of our review, no progress had been made in the completion of the workbook for the Forest Resource Improvement Association of Alberta. This is a compliance issue because the Department’s established monitoring process has not been followed. However, the main concern is that failure to follow the process means that the Department cannot demonstrate that it has monitored and considered the effectiveness of the activities of this DAO.
The workbook system could include an analysis of risk for each DAO
The DAO evaluation workbook describes the generic
monitoring and analysis expected for each DAO. However, the risks associated with each DAO are unique. We believe that an annual assessment of risk, as an integral part of each
workbook, would help to determine how much and what type of monitoring is appropriate for each DAO. Currently, the degree of attention given to each DAO varies considerably. For example, Environment’s legal counsel reviewed the Tire Recycling Management Association’s governance documents in depth, while other DAOs were not subject to such a detailed analysis. However, no analysis of risk supports the differing degrees of attention accorded these DAOs. As well, risk
analysis may offer efficiencies for the monitoring process. For example, where a detailed analysis of some aspect of a DAO’s
operation has already been performed, future monitoring in that area might be restricted to changes in that DAO or its business.
Governance issues at the ACA We recommend that the Department of Environment encourage the Alberta Conservation Association to resolve its governance issues.
The Department and ACA share common objectives
The Alberta Conservation Association (ACA) was established under the Societies Act; seven existing organizations that shared an interest in conservation issues became the founding members of the ACA. Under Schedule 2 of the Wildlife Regulation, the Lieutenant Governor in Council delegated the
ACA a mandate to address a wide range of conservation activities. The ACA is primarily funded by a portion of the revenue generated by hunting and fishing licences in the Province. The ACA’s conservation responsibilities and
activities complement those of the Department. Therefore, for the Ministry to succeed in its conservation objectives, the ACA
needs to succeed. For its part, the Department has viewed its relationship with the as a partnership in which both
The Alberta Fish and Game Association strongly influences the ACA
Prior to the formation of the ACA, the Department had a long-standing working relationship with the Alberta Fish and Game Association (the Association). The Association became one of the founding members of the ACA, and has more members on the ACA’s Board of Directors than any other organization. As a result of its Board presence, and also because fishing and hunting licences provide the majority of ACA’s funding, the Association has been able to exercise considerable influence over the activities of the ACA. That influence has meant that the ACA’s projects tend to deal with hunting and fishing issues.
As well, to maximize its contribution to the Ministry’s conservation mandate, the ACA should enlist broader support for its mandate from land-use stakeholders such as the oil and gas, forestry, and agriculture sectors. This would mean
reduced influence by the Association. Board minutes and interviews with Board members demonstrate a rift that needs to be addressed.
The relationship between the Department and the ACA can be strengthened
ACA Board Members have had difficulty in defining the ACA’s
relationship with the Department. In our review of the ACA’s
Board minutes, we found that board members complained of the “lack of understanding of the mandate and programs ACA
inherited” from the Department and that “the mandate of the
ACA is too broad for the funds available.” The minutes noted,
“Some members of the Board expressed concern regarding the…relationship between ACA and the government. [These board members’] continued involvement will be contingent upon the resolution of these issues.” The Department should clarify its expectations of the ACA. Some form of contract or consultation to clarify existing regulations might help to define and agree expectations and activities. It may also be useful to establish a mediation mechanism to assist the parties in resolving any conflicts that may arise. A clear mutual understanding of mandates will help to ensure that the ACA
contributes to the Ministry’s conservation goals.
Conflict of interest issues at the ACA represent a risk to the Minister
The ACA has developed and approved a conflict of interest policy. The policy says that when “a conflict arises, the affected [board] member must declare the conflict, fully disclose any personal interest he may have in the transaction, and refrain from voting upon the matter.” From review and discussion, we understand that the ACA board members have interpreted this policy to mean that a board member will declare a conflict of interest only where there might be a direct
personal benefit. However, where there is a conflict “as a result of their associations with organizations having dealings with the ACA” (as the policy says), no conflict of interest is being declared. The risks related to conflict of interest are clearly defined in the policy: “participation in any matter in which [a board member has] a conflict could invalidate the decision and could result in embarrassment to both the ACA
and the affected organization. If the conflict is significant, public confidence in the ACA could suffer.” As the ACA
delivers services on behalf of the Minister, the risks of non-compliance are shared by Environment. This issue should be raised at the ACA by the Minister’s representative on the Board, by the Departmental manager who monitors the ACA, or by other means. Close monitoring will also be required.
Initial steps have been taken by the Minister
The previous Minister of Environment began to address these issues. In April 2000, he asked “to receive a plan from you [the ACA], by July 31, 2000, which describes the ACA’s new directions and implementation strategy”. On July 17, the ACA
responded by letter to the current Minister, but has yet to provide a complete plan that would address these governance issues.