The legal basis of Office of the Auditor General (SAI Canada) is the Auditor General Act (AGA), and this is the primary legislation with respect to the structure of the Office and the Public Accounts and value for money audit mandates. The Head of the SAI is appointed by the Government for a tenure of 10 years and the mandatory retirement is at 65 years of age. The procedure for terminating the appointment of the Head of the SAI is removal on the address of the Senate and House of Commons, by the Governor in Council. The prescribed qualification for the appointment is that the Auditor General must be a qualified auditor.
The various conditions of service of the Head of the SAI to secure independence of the SAI are:
Regarding the relationship of the SAI with other branches of the government, the Auditor General reports to the Legislative Branch. For administrative matters, the Auditor General may be subject to direction from the Executive, but not for audit-related matters. The Auditor General audits the administrative functions of some courts and investigating agencies.
The Auditor General has a degree of financial independence. The Government presents the budgetary estimates to Parliament for approval. Once Parliament authorizes the spending, the Auditor General has complete control over the funds. The Government has a say in the amount that is presented to Parliament. however, the Auditor General may report to Parliament if the amount is insufficient.
As regards the mechanism to secure accountability of the SAI, the Auditor General's financial transactions are audited annually by an auditor appointed by the Government. The Auditor General's reports on the use of its funds are tabled in Parliament.
The SAI's jurisdiction extends to following:
Mandate varies depending on legislation that gives rise to it. Some limit SAI's work to financial audits only.
The SAI's jurisdiction extends over regulatory bodies (e.g. Privatisation, Environment, Pollution Control, telecom etc.)
The SAI has powers of requisitioning all records of the auditee departments/organisations to discharge its mandate, under the authority of Section 13 and 14, Auditor General Act. It has powers to enforce or initiate enforcement action to secure access to needed records, which are not produced; under the authority of Section 13(4), Auditor General Act.
The SAI does not have power to seal, search and seize documents and other related items considered necessary for audit and inspection. It has the powers to seek testimonials of the persons concerned (appearances and answers) of the persons concerned or those who are deemed to have been involved in the matter subject to audit and inspection; under the authority of Section 13(4), Auditor General Act. As regards the powers to seek co-operation of persons other than agencies subject to audit and inspection, the Auditor General may seek information or corroboration from third parties, who are not subject to audit. Any information is provided voluntarily by them.
The SAI does not have powers of instructing government investigating agencies to perform activities considered necessary. The SAI can not decide on claims of interested persons in connection with official actions, duties and behaviour of persons subject to audit and inspection. The SAI does not have the authority to dispense with, in whole or part, the audit of Federal Government accounts and other related matters. The SAI does not have powers to take punitive action and/or impose surcharges.
The SAI has powers to access the computer systems of the auditees and to download and use electronic data either in site of off site. Further it can also review the development of computer systems of the auditees and suggest any controls.
The SAI does not have any role in the appointment of other external auditors engaged by the auditees for meeting statutory requirements. Further if such external auditors are engaged, the SAI does not have powers to supervise and regulate their work.
The SAI prescribes Financial, Compliance, Performance & EDP Audits in its scope of Audit. The powers to perform these audits: Auditor General Act, Sections 5,6,7 for financial audit of Canadian public accounts and value-for-money audits of government departments and agencies. For Crown Corporations, Part X of the Financial Administration Act provides our audit mandate.
The SAI's value-for-money audit mandate may include pre-audit and concurrent audits. Section 11 of the Auditor General Act permits the Auditor General to perform a special audit of an individual or organisation in receipt of public funds, or of any matter relating to the financial affairs of Canada, if requested by the Governor in Council.
Regarding audit methodology/procedures followed, the financial audits of Crown Corporation follow a control-reliant approach. The public accounts audit will move from a substantive approach to a control-reliant one over the next few years. Performance or value-for-money audits follow a cycle of planning, examination and reporting, with a focus on matters of higher risks. Compliance audits and EDP audits are included in financial and value-for-money audits as appropriate. EDP audits also involve control assessments and use of automated tools.
The SAI does not discharge judicial functions. The SAI conducts follow-up audits generally two years after the original audit and submits follow-up reports to Parliament. The SAI is required to follow specific standards, practices and guidelines in conducting audit and reporting.
The SAI can consult and/or collaborate with other countries/SAIs and international organisations on matters relating to audit e.g. the SAI can consult on best practices and audit methodology. For example, the SAI used interchange options for the staff to gain experience on auditing accrual accounting in government. Regarding engaging consultants conducting audit, the SAI can engage consultants, under the authority of Subsection 15(2), Auditor General Act.
The SAI can report on acts that infringe upon State economic interests like mass embezzlement of state assets, serious losses and wastes, but if there are criminal aspects and possible charges, the matter would be turned over to the police.
The Auditor General reports periodically to Parliament. The SAI does not have any role on the disposal or the action taken on the audit findings. The SAI does not present an interim report before rendering an annual report on the examination of the closing of accounts of the Federal, Provincial and local governments. Once the report is tabled in Parliament, it can be released to the public and the media. Certain audits of Crown Corporations may not be released by the Office. In case of Financial Statements audit, the SAI does not have the powers to amend accounts. The SAI does not have advisory role.
The SAI is constituted as an audit office with monocratic status. The SAI is empowered to engage external auditors/ agencies/ consultants as required.
The SAI can expend resources budgeted independently. Once approved by Parliament, the Auditor General has discretion as to spending of funds. The Auditor General is subject to the same financial controls of the Financial Administration Act as all other departments. These controls relate to signing authority and payment verification. It has full independence in forming its workplan, although financial audits must be done each year. Staff are employed in accordance with the Public Service Employment Act.
The SAI is subject to an independent audit, and the scope of such audit is financial. The SAI reports periodically ( up to 4 times per year) to Parliament. In addition, the Auditor General prepares annually a report on plans and priorities and a department performance report, which are tabled by the Government, in Parliament.