PACC Committee Report

OBSERVATIONS AND RECOMMENDATIONS

The follow-up audit found that some improvements had been made since 1997. A predetermination system has been adopted to counter over-servicing by dental providers under the NIHB program. The use of this system resulted in a 15.4% reduction in dental costs in 1996-1997. Dental expenditures fell from over $123 million in 1995-1996 to just over $106 million in 1998-1999, a period during which the Aboriginal population increased by almost 8%. At the urging of the Auditor General, the Department resolved problems with system edits used to identify duplicate claims under the NIHB program. In 1999, according to the Department, system edits prevented processing of almost 100,000 duplicate claims totalling $3.1 million. These savings are significant at a time when NIHB is under pressure from rising costs and a population growth that is more than twice that of the general population. Lastly, a point-of-sale system for the administration of pharmacy benefits is now fully implemented. These measures and the results produced by them demonstrate what the Department can accomplish through rigorous fulfilment of its commitments.

These achievements, however, have been overshadowed by lack of movement in other areas. Indeed, the follow-up audit’s central observation was that the Department “has not yet made sufficient progress” in fixing many of the problems identified more than three years ago.

To report that the Committee is “concerned” with this lack of progress would be to significantly understate its frustration. Of the combined total of 22 recommendations made previously by the Auditor General and the Committee, only 7 have resulted in satisfactory progress. Progress was so poor that all but 2 of the 14 recommendations in the report on the follow-up audit are repeated from the 1997 audit, a highly unusual occurrence. It was thus surprising to read, in the text of the Assistant Deputy Minister’s opening remarks, that the Department considers that it has “made considerable progress in [its] efforts to address the recommendations contained in the Auditor General’s reports.” For its part, the Committee has yet to see evidence of “considerable” progress and is concerned by the slow pace in an area directly affecting the lives of some of Canada’s least advantaged citizens.

In the past, the Department has agreed to implement most of the recommendations made by the Auditor General and this Committee regarding Aboriginal health. As noted, the Department has experienced difficulty in meeting these commitments. Regular reporting to Parliament on the status of corrective measures may help the Department stay focused on the task at hand. In addition, regular reports will provide parliamentarians with the information they need to hold the Department to account. The Committee therefore recommends:

RECOMMENDATION 1

That Health Canada inform Parliament of the progress it is making in implementing the recommendations contained in chapter 13 of the 1997 Report and chapter 15 of the 2000 Report of the Auditor General of Canada and in the Committee’s 5th Report (36th Parliament, 1st Session) and also this report. This information must make specific reference to progress in implementing each recommendation and be provided annually in Health Canada’s performance reports beginning with the report for the period ending 31 March 2002.

Community Health Programs

Community health programs are composed of two elements: programs and services related to public health, health education and promotion; and strategies to address specific health problems such as alcohol and drug abuse. The Department and Aboriginal communities deliver these programs through three basic kinds of joint agreements: contribution agreements, integrated community-based health agreements, and transfer agreements that assign increasing levels of responsibility to communities. As responsibility for delivery increases, proper accountability for the use of transferred resources becomes more important. This is reflected in the agreements reporting requirements that become more rigorous in step with growing levels of responsibility.

Reporting requirements under community health programs ― activity reports, audits, and annual reports ― are designed to support accountability between chiefs and councils to their communities and to the Minister of Health. These reporting requirements are also meant to provide information used to adjust programs to better match community needs. In his 1997 Report, the Auditor General found that the Department was not doing enough to oversee this reporting activity and to assist First Nations communities whenever problems occurred. He made a series of recommendations; the Department agreed to all of them.

The follow-up audit found that little had changed. The Department is still not receiving all activity reports. Of those that are submitted, many still consist of lists of activities instead of information on services provided or health outcomes achieved. Once again, as in 1997, annual audit reports required under transfer agreements dealt with the fairness of financial statements but failed to mention compliance with the terms and conditions of the agreements as required. Two-thirds of the annual reports required under transfer agreements again contained mostly lists of activities and often did not include information on performance.

When the results of the follow-up audit were released, the Department indicated that it was developing a new accountability framework and planned to implement it in phases beginning in fiscal year 2001-2002. In its 1998 response to the Committee’s report, the Department also indicated that it was “currently working on a new accountability framework for community health programs.” The Committee welcomes the completion of this effort and fully expects that, in contrast to recent practice, the Department will fully monitor the new arrangements. The Committee therefore recommends:

RECOMMENDATION 2

That Health Canada ensure that it receives all accountability documents, including all reports and audits required under community health program delivery arrangements, in a timely manner.

RECOMMENDATION 3

That Health Canada conduct risk-based monitoring of all required accountability documents to ensure that they are accurate and address all terms and conditions specified in delivery agreements.

RECOMMENDATION 4

That when, as a consequence of its monitoring activity, Health Canada finds that accountability documents are incomplete or contain information that is inaccurate, or that there are problems in service delivery, it work closely with the First Nation or Inuit community concerned to take timely action to correct deficiencies identified.

Reporting requirements are meant to support accountability to the Minister of Health who, in turn, is responsible and accountable to Parliament for the funds spent and the results achieved. Therefore, because Parliament has a direct interest in the fulfilment of these reporting requirements, the Committee recommends:

RECOMMENDATION 5

That Health Canada include, in its annual performance report to Parliament, a discussion of the status of the accountability framework for community health programs including the status of reporting requirements that addresses timeliness, completeness, and accuracy. This discussion should also describe actions taken by the Department to correct deficiencies in reporting and in service delivery and should start with the performance report for the period ending 31 March 2002.

Many shortcomings regarding accountability documents may be traced to the lack of capacity on the part of some First Nations communities to comply with reporting requirements. The follow-up audit found that the Department had not paid sufficient attention to the extent to which communities possess the capacity to administer the programs and their attendant accountability requirements.

In 1997, in seeking to defend itself against suggestions that it was offloading the delivery of community health programs on poorly prepared First Nations communities, the Department recognized that it has an important role to play in capacity building, asserting that:

The approach of Health Canada has been, and will continue to be, one of caution and assurance that First Nations communities feel, and are, ready to take on responsibility for their health programming before transfer occurs.[1]

This did not happen. According to the Auditor General,

Health Canada now recognizes that it may have underestimated the ongoing work required to support First Nations as they take on transfer agreements. The Department has been largely focused on program delivery, and it recognizes that it could have been more diligent in ensuring that reporting requirements were met. It also realizes that it needs to devote more attention to ensuring that First Nations have the capacity and tools to manage and report on their programs and, in some cases, that it needs to sustain this attention over a significant period of time.

Signs that the Department intends to pay more attention to capacity building can be found in its Report on Plans and Priorities for fiscal year 2001-2002. For example, the Department indicates that it plans to:

Examine issues of integration, accountability, sustainability, and capacity building, leading to the development of a five-year framework for a renewed First Nations and Inuit health system, in collaboration with First Nations and other stakeholders.[2]

These steps are appropriate but more immediate actions are required. The Committee therefore recommends:

RECOMMENDATION 6

That, working with First Nations and Inuit peoples, Health Canada begin an immediate assessment of the capacity of First Nations and Inuit communities to administer community health programs and comply with required reporting requirements.

RECOMMENDATION 7

That, following this assessment, Health Canada, working with First Nations and Inuit communities, develop and implement a strategy designed to build or reinforce administrative and delivery capacity in communities where it is weak, and provide necessary resources where required.