Summary: what we found in our audits
Systems
The Ministry needs to update its computer services agreement—see page 172.
Performance reporting
Our auditor’s reports on the financial statements of the Ministry, Department and seven provincial agencies are unqualified. We found no exceptions when we completed specified auditing procedures on the Ministry’s performance measures.
Overview of the Ministry
Ministry entities The Ministry consists of the Department and seven provincial agencies.
The Ministry was established on December 13, 2006 and is responsible for:
Four core
businesses • managing Alberta’s provincial parks and protected areas and promoting recreation and sport opportunities
• facilitating tourism marketing, development and film investment
• promoting Alberta’s rich culture, including its arts and heritage
• protecting human rights, promoting diversity, fairness and access, and supporting the inclusion of all Albertans
The Ministry received $30 million from sources external to government in 2006–2007.
Ministry received
$30 million
In 2006–2007, the Ministry spent $452 million, primarily as follows:
Ministry spent
$452 million
(millions of dollars)
Lottery funded programs $ 202
Culture and heritage 110
Parks, recreation and sport 77
Tourism 48
Human rights and citizenship 6
Website For more information on the Ministry, visit its website at www.tprc.alberta.ca.
Volume 2—Audits and recommendations Tourism, Parks, Recreation and Culture
Scope: what we did in our audits
1. Systems
We followed up on the Ministry’s progress implementing our previous recommendations on:
• improving management systems in provincially-owned parks
• improving processes for the grant programs previously administered by the Department of Gaming
2. Performance reporting
We audited the financial statements of the Ministry, Department, and the following seven provincial agencies for the year ended March 31, 2007:
• Alberta Foundation for the Arts
• Alberta Sport, Recreation, Parks and Wildlife Foundation
• Human Rights, Citizenship and Multiculturalism Education Fund
• The Alberta Historical Resources Foundation
• The Government House Foundation
• The Historic Resources Fund
• The Wild Rose Foundation
We completed specified auditing procedures on the performance measures in the Ministry’s 2006–2007 annual report.
Our audit findings and recommendations
1. Systems
1.1 Computer control environment Recommendation
We recommend that the Ministry of Tourism, Parks, Recreation and Culture work with Service Alberta to:
• document the services that Service Alberta is to provide and its control environment for information technology
• implement a process to ensure that Service Alberta consistently meets service level and security requirements
• provide evidence that control activities maintained by Service Alberta are operating effectively
Background Ministry relies
on outsourced computer environment
The Ministry relies on its computing environment to provide complete, accurate, and valid data for its daily business. It has outsourced many of its information technology (IT) infrastructure and operations to Service Alberta.
Outsourcing can be an efficient and effective way to provide IT services to an
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operation. However, organizations that outsource all or part of their IT infrastructure or operations are still responsible to meet service levels and for appropriate controls over the confidentiality, integrity, and availability of all their information.
Criteria: the standards we used for our audit The Ministry should:
• have a contract with Service Alberta that outlines the levels of service that Service Alberta will provide. The contract is known as a Service Level Agreement (SLA).
• have effective documented control processes in place to ensure that Service Alberta consistently meets the SLA and that all Ministry information remains secure and available when required.
• ensure that control processes are properly designed and implemented by either Service Alberta or the Ministry, and that there is adequate evidence of their operating effectiveness.
Our audit findings
The Ministry and Service Alberta currently do not have an SLA. They had an agreement, but it ended on March 31, 2005.
No current agreement for computer services
Also, although Service Alberta is responsible for providing services to the Ministry, there is no evidence of controls in place to ensure that it is delivering these services as required. For example:
• neither the optional security operations review and report
recommendations, nor an independent third-party review of network security exists.
• there was no evidence that the process for requesting user access, and properly documenting the request and the granting of access was consistently followed.
• the same person developed and tested changes to the Grant Management Information System and then moved them to production during the year.
However, the Ministry implemented a new procedure in March 2007 to prevent this lack of segregation of duties from recurring.
• the Ministry has not tested its disaster recovery plan.
• no formal control process exists to test the Ministry’s data backups or ensure that they can be used to restore data.
Implications and risks if recommendation not implemented
The Ministry is ultimately responsible for the confidentiality, integrity, and availability of its information—even if:
1. it has outsourced some or all of its IT control environment, and
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2. controls that protects its information are—even partly—physically and operationally removed from its direct oversight.
The outsourced environment is an integral part of the Ministry’s IT control environment. Without procedures to ensure that service providers maintain sound control environments, the Ministry cannot depend on the confidentiality, integrity or availability of its important business, financial or other sensitive information.
1.2 Management of parks and protected areas—implemented Background
In our 2002–2003 Annual Report (page 81), we recommended that the Ministry improve its system for selecting private operators to run provincially-owned parks and for monitoring contract performance.
Our audit findings Recommendation
implemented The Ministry has implemented the recommendation. It put guidelines in place and applies them to requests for proposals and open competitions. It also uses them in selecting operators based on the quality of the proposals. Ministry staff have developed checklists and use them to improve their monitoring of contractor performance.
1.3 Grants management—progress report Background
In 2004–2005, we examined the Department of Gaming grants management systems. In our 2004–2005 Annual Report (pages 203 and 205) we
recommended that the Department:
• ensure published information on grant programs available is complete,
• develop guidelines for assessing Other Initiatives Program grants, and
• improve the timeliness of its grant monitoring.
We followed up on the status of the recommendations at the Department of Tourism, Parks, Recreation and Culture (Department) because it took over the Department of Gaming’s grant programs in a December 2006 government reorganization.
Management actions CFEP published
information complete
Ensure published information for CFEP and Other Initiatives grant programs is complete and establish guidelines for the Other Initiatives program—the Department implemented the recommendation for the
Community Facility Enhancement (CFEP) program. The Department updated the published information to disclose the form and size of grants available, specifically the availability of grants in excess of $125,000.
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Plan to publish information for Other Initiatives program
The Other Initiatives program’s purpose is to fund projects that do not fall within the parameters of other government programs. The Department is in the process of developing information to publish for the Other Initiatives program.
The information will cover existence, nature and purposes. The Department has an established process to assess Other Initiatives grant applications against the program objectives and enforce accountability of grant recipients for use of funds through grant agreements.
Steps to improve monitoring processes
Improve the timeliness of grant monitoring—the Department has made progress implementing this recommendation. In June 2006, the Department started a one-year initiative to improve the timeliness of receiving and reviewing financial accounting statements from grant recipients. The
Department hired additional staff that used monthly reminders and phone calls to follow up on outstanding documents with grant recipients. Management also created a new report to track and monitor the status of approved applications.
Focus on file reviews—
backlog reduced
Since the one-year program started, the Department made progress in reducing the backlog of files awaiting documentation and financial statement reviews.
Over 3,125 files were closed. At the end of April 2007, less than 4% (587 of 14,960) of grants recipients had not filed financial accounting statements by the Department’s due date. To be effective, the Department must apply the resources necessary to ensure the catch-up effort is sustained permanently.
To finish implementing this recommendation, the Department needs to establish an ongoing process for ensuring that grant funds have been used as intended through prompt receipt and review of grant recipient financial
statements. The process must ensure prompt review of the financial statements from all grant recipients—not just those applying for new grants.
1.4 Community Initiative program (CIP)—unmatched grants in excess of $10,000
Background Questions raised
on unmatched CIP grants
On May 15, 2007, the Minster of Tourism, Parks, Recreation and Culture presented to the Legislative Assembly copies of the 2004 CIP guidelines, which were not previously posted on the Department’s website, and a list of unmatched CIP grants over $10,000 for a three-year period. This responded to questions Members raised on the nature of unmatched CIP grants in excess of
$10,000 and on whether the Minister had the discretion to make the grants.
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Our audit findings Grants met CIP
program guidelines
We examined the information on unmatched grants in excess of $10,000 covering a three-year period. We tested a sample of these grants and
reconfirmed our previous audit conclusion that the systems to ensure that CIP grants comply with program guidelines were operating as designed. The unmatched grants in excess of $10,000 were made under the Minister’s authority to use discretion under section 9.1 of the CIP Program Guidelines.
2. Performance measures
We found no exceptions when we completed specified auditing procedures on the Ministry’s performance measures.
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