year ended March 31, 1999
In addition to the audit of the financial statements of the Lottery Fund, my staff followed up on a recommendation I made in my last Annual Report with regard to the
accountability for grant expenditures made from the Fund.
Accountability for grant expenditures from the Lottery Fund
In the 1997-98 annual report (page 76) it was recommended that accountability for grant expenditures made from the Lottery Find be improved. Lottery Fund grants were paid to support health, community development, culture, agriculture and recreation in response to requests from the various Ministries responsible for providing services and financial assistance in these areas. The Alberta Gaming and Liquor Commission, which is responsible for administering the Lottery Fund, was not obtaining accountability from the beneficiaries of these grants but was, instead, relying on the Ministries to perform this task.
I was concerned that the accountability “chain” for these grant expenditures did not extend through to the Legislature.
The grant funds were not included as revenue and
expenditures in the financial statements of the Ministries and thus the Ministries were not held accountable for
performance results from these expenditures. If the Ministries were not accountable for the expenditures, the incentive to make the grant beneficiaries accountable was missing.
My concern did not apply to Lottery Fund grants made to Provincial agencies. The financial statements of the agencies and related Ministries contained the Lottery Fund grants as revenues and the Ministries and agencies were accountable to the Legislature for expenditures made from these
revenues.
Accountability to the Legislative Assembly will be improved
I am pleased to report that, commencing in the 1999-2000 fiscal year, quarterly payments are made from the Lottery Fund to the Ministries requesting Lottery Fund grants and are deposited in the General Revenue Fund and included as revenue of the departments of those Ministries. The
departments then draw cheques in favour of the Lottery Fund grant beneficiaries as needed. The effect is to place
responsibility for providing accountability to the Legislature, and thus for obtaining accountability from grant recipients, firmly with the Ministries because the grant revenue from the Lottery Fund and the related expenditure transactions will be included in the Ministry financial statements. In the
instances where provincial agencies were receiving grants directly from the Lottery Fund, there is no change in the procedures. Payments from the Lottery Fund continue to be made directly to the provincial agency and the expenditures made from these funds will be included in the agency and related Ministry financial statements. As in past years, the accountability chain for these grants from the beneficiary through to the Legislature is intact.
Where grants are paid directly from the Lottery Fund and are not made in response to a request from a Ministry, the
Alberta Gaming and Liquor Commission is taking full responsibility for accountability from grant recipients. The Commission will be directly accountable for approximately
$56 million (Budget 99), which is approximately 7% of the payments planned to be made from the Fund. To assist in
Commission to make a clear distinction in the 1999-2000 financial statements of the Lottery Fund between the grants paid to the other Ministries and the grants for which the Commission and the newly formed Ministry of Gaming are accountable.
Other entities
Financial audits of the following were also completed for the year ended March 31, 1999.
Alberta Opportunity Company
An audit as at and for the nine months ended
December 31, 1998 was also completed for the Alberta Motion Picture Development Corporation (The
Corporation ceased operations effective March 31, 1996 and has now been wound up).
Guidance to reader
The mission of the Ministry of Education is to ensure that all students have the opportunity to acquire the knowledge, skills and attitudes needed to be self-reliant, responsible, caring and contributing members of society.
Education is delivered primarily through a network of schools within publicly funded school jurisdictions.
Authority over these jurisdictions is given to publicly elected school boards. Schools are responsible for providing
instructional programs that enable students to meet Provincial completion requirements and prepare them for entry into the workplace or post-secondary studies.
The Department of Education provides approximately
$1.7 billion of financial assistance to schools in addition to the $1.2 billion raised from property assessments that are distributed through the Alberta School Foundation Fund.
Total operating expenditure for the Ministry of Education is as follows:
1993-94 $3.0 billion 1994-95 $2.7 billion 1995-96 $2.7 billion 1996-97 $2.7 billion 1997-98 $2.9 billion 1998-99 $3.0 billion
The Ministry’s budget for 1999-2000 is $3.2 billion, which is intended to reflect both an anticipated growth in enrolment as well as a general increase in funding rates of
approximately 3%.
Departmental monitoring and evaluation
The Minister’s responsibilities for the delivery of education are laid out in the School Act. In order for the Minister to ensure that his primary responsibilities are being met, the Ministry must monitor the activities and results of school jurisdictions. The following section includes a
recommendation related to the Ministry’s monitoring of school jurisdictions. I believe that a more comprehensive, risk-based approach to the Ministry’s planning of monitoring activities would result in greater confidence that all of the Minister’s critical responsibilities are being met, as well as improving the overall delivery of education in the Province.
In previous years, I have commented on specific aspects of the education system where the Department should seek to maximize the opportunities to improve student performance.
Although I have noted improvements in certain areas, I am repeating recommendations relating to local target setting by school jurisdictions, charter school reporting and
accountability, and financial reporting of expenses for the delivery of special needs education.
School facilities As a result of the government reorganization on
May 25, 1999, the Ministry of Education now forms part of the Ministry of Learning. As part of this reorganization, the School Facilities branch has been transferred to the Ministry of Infrastructure. During 1998-99, the Ministry of Education developed a plan to implement recommendations made by an
MLA School Facilities Task Force. During the year, my staff reviewed progress with respect to this plan.
Financial reporting by school jurisdictions
Section 19(3.1) of the Auditor General Act requires me to report on the results of my examinations of school
jurisdictions’ audited financial statements. Except for Northland School Division, I am not the auditor of any school jurisdictions. Where I am not the auditor of school jurisdictions, the Auditor General Act requires school board auditors to provide me with a copy of the audited financial statements and management letters containing observations arising from the audits. My staff has reviewed the results of these audits and the financial statements. This section includes the resulting recommendation on school jurisdiction accounting treatment of restricted net assets.