PACC Committee Report

GOVERNMENT RESPONSE TO THE STANDING COMMITTEE ON PUBLIC ACCOUNTS TENTH REPORT ON THE OCTOBER 2000 REPORT OF
 THE AUDITOR GENERAL OF CANADA: 
HEALTH CANADA - FIRST NATIONS HEALTH: FOLLOW-UP

MAY 2002

GOVERNMENT RESPONSE TO THE STANDING COMMITTEE ON PUBLIC ACCOUNTS TENTH REPORT ON THE OCTOBER 2000 REPORT OF THE AUDITOR GENERAL OF CANADA: FIRST NATIONS HEALTH

The Government of Canada extends its appreciation to the Standing Committee on Public Accounts for its Tenth Report on the October 2000 Report of the Auditor General of Canada (Chapter 15:Health Canada B First Nations Health Follow-up).  The Government shares the Standing Committee and the Auditor General=s belief that health programs for First Nations and Inuit must be well managed and accountable.

In its Report, the Committee recognized that Health Canada - First Nations and Inuit Health Branch (FNIH Branch) had made a commitment to phase in the development and implementation of new accountability frameworks for Community Health Programs (CHP)[1] and the Non-Insured Health Benefits Program (NIHB)[2].  The Committee also indicated it would continue to monitor the Department=s progress in these areas.  To assist Parliament in its oversight, Health Canada will supplement its annual Departmental Performance Report with an electronic annex on progress made towards fulfilling the Auditor General=s and the Committee=s recommendations, beginning with the report for 2001-2002.

Several important milestones were reached in 2001-2002 as Health Canada - FNIH Branch worked to implement its new measures.  The Department began to phase in new accountability frameworks for its First Nations and Inuit Health (FNIH) programs.  As well, departmental capacity was increased through the creation of the Business Planning and Management Directorate, which serves to implement and support accountability and management measures.

Milestones for CHP in 2001-2002 included the introduction of new standard agreements and other types of contribution agreements which clarified roles and responsibilities.  An electronic system to manage contracts and contributions was implemented nationally.  This single management system for contribution agreements will enhance the ability to report, monitor and audit.  In March 2002, an Intervention Policy was introduced to to guide Health Canada-FNIH Branch=s actions in communities which have been unable or unwilling to address exceptional or problem situations.

In 2001-2002, the NIHB program also improved its overall accountability and management.  In 2001, the NIHB program, with the Assembly of First Nations (AFN) and the Inuit Tapiriiksat Kanatami (ITK), established a framework to gather client consent for the use of personal medical information in claims processing and reimbursement.  In 2002-2003, consent will be gathered nationally to permit retrospective and online drug utilization monitoring to be reintroduced in 2003-2004.

In 2001, the NIHB program established a results-based management and accountability framework.  As benefits are primarily delivered to individuals through a third-party claims administrator and health practitioners, the NIHB program requires an accountability framework which includes auditing of providers.  The framework features a risk management initiative, introduced in 2000, to address financial and management risks, using a more transparent process.  The initiative allows the program to better target and manage benefits.  The comprehensive audit program is a key component of the risk management activities.

The NIHB program management and accountability framework will improve the reporting of outcomes and results achieved by the program.  As the framework is further developed and phased in, assessment and evaluation elements will be introduced.  The program has undertaken evaluations of specific program components, including the drug benefit management process and the dental benefit review process.

Although considerable progress has been made in developing and phasing in new measures to improve its performance, the Government also recognizes that more remains to be done and is committed to undertaking this work.

The Government has chosen to respond to the 26 recommendations by grouping information under five topics: Community Health Programs accountability; supporting capacity development; measuring performances, outcomes achievement, and managing information; NIHB control and prevention measures; and reporting to Parliament on progress.  A general statement for each of the subject areas precedes the detailed responses to each recommendation.  This thematic format

 is consistent with the Committee Report which clusters its observations and recommendations.

Community Health Programs (CHP) Accountability

Health Canada - FNIH Branch=s introduction of new standard funding agreements for the delivery of health programs and services coincided with the release of the revised Treasury Board Policy on Transfer Payments, which obliged all federal government departments, including Health Canada, to ensure that agreements comply with the new financial policy.  The new standard agreements were one of the first accountability measures to be implemented with First Nations and Inuit communities, as part of a comprehensive Accountability Framework.

The new standard agreements streamline 16 agreements into seven.  They help clarify the roles and responsibilities of all parties involved, improve risk management, and allow the Department and First Nations and Inuit communities to better reflect accountability for the prudent use of public funds.

The review of all funding agreements and the subsequent adoption of new standardized agreements is just one part of the comprehensive Accountability Framework.  Health Canada has already begun the implementation of a departmental Management Control Framework (MCF) for Grants and Contributions which will also serve to strengthen internal and external governance and accountability mechanisms, through improved information systems and risk management. The MCF emphasizes government-wide control objectives that relate to Modern Comptrollership and the Resultsfor Canadian Management Framework.  It addresses control practices to provide assurance that grants and contributions are well managed, and aims at streamlining processes across the Department=s Branches and Regions.  Health Canada - FNIH Branch continues to work closely with First Nations and Inuit communities on all aspects of the Accountability Framework, including the development of its major elements.

To support implementation of the MCF relating to reporting, auditing and monitoring aspects of the FNIH accountability framework, Health Canada - FNIH Branch introduced the Management of Contracts and Contributions System (MCCS).  MCCS was introduced in all regions of the Health Canada - FNIH Branch in December 2001, with full implementation in April 2002.  MCCS will facilitate active monitoring of compliance and performance, results-based management, continuous learning and progress at both community and departmental levels.  The system will increase transparency, leading to more effective action should problems with reports and audits arise.

Health Canada - FNIH Branch recognizes that exceptional or problem situations under health funding arrangements may arise, and in response to this an Intervention Policy Framework has been developed.  When there is an inability due to lack of capacity, or an unwillingness/lack of commitment to address a problem situation, Health Canada - FNIH Branch will act to correct the situation, with the appropriate level of intervention required.  Intervention may range from assisting the recipients to develop and implement a plan of action to requiring a co-management arrangement to a third party management.  Health Canada - FNIH Branch is committed to working closely with communities, and recognizes that this is one of the most important aspects in determining the nature of the problem and in obtaining the communities= perspective and input.  The intervention policy helps ensure the protection of health programs and service delivery, and the adherence by communities to the accountability principles of transparency, disclosureand redress.  The policy parallels that of the Department of Indian Affairs and Northern Development.

Health Canada - FNIH Branch pays particular attention to developing its internal administrative capacity, and on supporting First Nation and Inuit authorities in strengthening their capacity to create a basis for accountability, risk-management, and continuous learning.  The new Business Planning and Management Directorate oversees ongoing management of funding agreements, staff development, and business planning and reporting.

While it is important to ensure that reports are provided by First Nations and Inuit recipients and are consistent with the terms and conditions of funding agreements, Health Canada - FNIH Branch also uses on-site visits along with regular contacts and discussions to ensure permanent efficient and active accountability.