Evaluation and reporting
5. We recommend that the Saskatchewan Research Council implement performance measures to help it manage
intellectual property.
Management told us that, as part of its regular governance process, SRC is conducting a review of all of its key performance indicators.
Management also told us that its review of all intellectual property policies and procedures will include consideration of the value of performance measures specific to intellectual property.
Selected references
Audit Office of New South Wales. (2005).Follow-up of Performance Audit: Management of Intellectual Property.
http://www.audit.nsw.gov.au/publications/reports/performance/200 5/followup_ip/followup-IP-contents.html. (7 March 2008).
Audit Office of New South Wales. (2001).Better practice guide:
Management of intellectual property.
http://www.audit.nsw.gov.au/publications/better_practice/2001/inte llectual_property_bpg_oct_01.pdf. (7 March 2008).
Australian National Audit Office. (2004)Intellectual Property Policies and Practices in Commonwealth Agencies. In Audit Report No.25 2003–04. Canberra: Author.
Canadian Intellectual Property Office. (2004).Stand out from your competitors: Make intellectual property your best business ally.
Ottawa: Industry Canada.
Limpert, B., & Samiian, A. (2002).Conducting an Intellectual Property Audit and IP Due Diligence.Conference papers presented at the Infonex Intellectual Property Summit 2002.
Sum, T.W., & Manson, M.D. (2001).Intellectual property due diligence audits of high-tech companies.Conference papers presented at the Canadian Corporate Counsel Association, 13th Annual Meeting.
Survey: Patents and technology. A market for ideas. (22 October 2005).
The Economist, special insert after 58, 3.
Survey: Patents and technology. The arms race. (22 October 2005).The Economist, special insert after 58, 6.
Investment Saskatchewan Inc.
Main points ... 138 Introduction ... 139 Our audit conclusions and findings... 140 Processes for investment oversight... 141 Background ... 141 Investment management agreement ... 141 Objective, criteria, and conclusion ... 143 Findings by criterion... 144 Identify the information required ... 144 Establish procedures to obtain reliable information ... 147 Analyze the information received ... 148 Take action on the information received... 150 Selected references... 151
Main points
Investment Saskatchewan is responsible for investments of about
$400 million and has plans to invest a further $150 million over the next five years. Most of its investments are in non-publicly traded
Saskatchewan companies.
Since November 2006, Investment Saskatchewan has hired an investment manager to exclusively buy and sell its current and future investments within certain limits. Through the five-year agreement with an automatic three-year renewal, Investment Saskatchewan has delegated key investment decisions to its investment manager. Although it has delegated these decisions, Investment Saskatchewan remains responsible for its investments and the oversight of them.
The performance of its investment manager is essential to the success of Investment Saskatchewan. We examined whether Investment
Saskatchewan had adequate processes to oversee its investments. We found that, to perform a comprehensive evaluation of the investment manager’s performance, Investment Saskatchewan needs to document its requirements, expectations, and planned assessment procedures.
Also, to provide its investment manager with informed advice on divesting, Investment Saskatchewan needs information on the public policy outcomes relevant to each investment. To manage its investing risks, it needs to receive sufficient documentation, analysis, and updates of each investment’s key risks.
Chapter 12 – Investment Saskatchewan Inc.
Introduction
Investment Saskatchewan Inc. is a wholly owned subsidiary of Crown Investments Corporation of Saskatchewan (CIC). In September 2003, Cabinet renamed the corporation (formerly, CIC Industrial Interests Inc.) and made its governance structure consistent with other CIC Crowns by appointing non-government officials to the Board instead of government officials.
Investment Saskatchewan’s mandate is to enhance Saskatchewan’s long-term economic growth and diversification through the provision of investment capital and financing and to ensure prudent management of commercially viable investments. Its mission is to support the growth of the provincial economy by investing in Saskatchewan businesses and achieving a risk-adjusted return on those investments.1
In 2007, Investment Saskatchewan had net earnings of $11.5 million and total assets of $652 million. At December 31, 2007, Investment
Saskatchewan owned the following companies of which only Big Sky Farms Inc. had active operations. The others are holding companies that hold various investments.2
CIC Swine Genetics Holdings Inc.
CIC WLSVF Holdings Inc.
1Investment Saskatchewan Inc., 2007-2011 Strategic Plan and Business Plan.
2The holding companies that do not have active operations do not prepare financial statements for audit.
The financial results are included in the financial statements of Investment Saskatchewan.
Our audit conclusions and findings
Our Office worked with KPMGLLP,Chartered Accountants, the appointed auditor for Investment Saskatchewan and the above-noted companies for the year ended December 31, 2007, except for Big Sky Farms. We worked with Deloitte and ToucheLLP, Chartered Accountants, the appointed auditor for Big Sky Farms for the year ended June 30, 2007.
We followed the framework recommended by theReport of the Task Force on Roles, Responsibilities, and Duties of Auditors.3Our Office and the appointed auditors formed the following opinions.
In our opinion, for years ending in 2007:
the financial statements of Investment Saskatchewan and Big Sky Farms are reliable
Investment Saskatchewan had adequate rules and
procedures to safeguard public resources except it needs to outline the requirements and expectations related to its investments, and analyze the key risks for each of its investments
Big Sky Farms had adequate rules and procedures to safeguard public resources
Investment Saskatchewan and Big Sky Farms complied with authorities governing their activities relating to financial reporting, safeguarding public resources, revenue raising, spending, borrowing, and investing
The remainder of this chapter contains the results of our audit of Investment Saskatchewan’s processes for overseeing its investments.
Chapter 12 – Investment Saskatchewan Inc.