Special Examination Report 2017

Under the Financial Administration Act, AECL is subject to a special examination by the Office of the Auditor General of Canada at least once every 10 years. 

The Office of the Auditor General conducted a special examination of AECL and submitted its report to the Board of Directors of AECL in June 2017. The examination conclude that "except for a significant deficiency in Board renewal and some other improvements needed, the Corporation had in place good corporate management practices." It was noted that AECL does not have control over Board renewal.

The full report from the Auditor General is available here.

AECL's action plan in response to the special examination is presented below.  

 

AECL Action Plan in Response to OAG Special Examination Recommendations

OAG Recommendation

Actions

Status

The Corporation should continue to engage with the Minister of Natural Resources on the need for timely appointment of the President and Chief Executive Officer and of a full complement of members to its Board of Directors. It should also reinforce the need for staggered terms of office to ensure continuity.

As indicated in AECL’s response to the Auditor General's Special Examination and since the issuance of the Auditor General's report, AECL continued to engage with the Minister of Natural Resources on the need for the timely appointment of a President and Chief Executive Officer and new members of the Board of Directors. Appointments are the responsibility of the Governor in Council and therefore are outside the control of AECL.

In February 2017, the Governor in Council appointed a President and Chief Executive Officer on an interim basis (for a term of one year or until a new President and Chief Executive Officer is appointed). In June 2017, the Governor in Council appointed the Chair of the Board of AECL along with four members of the Board, consisting of three new members and one interim appointee becoming a permanent appointee. 

Of the five appointments, three appointments are for three years and two appointments are for two years, thus providing for staggered terms of office.

Complete

The Corporation should plan for an orderly transition, during which the newly appointed Board members and the President and Chief Executive Officer have the opportunity to familiarize themselves with the initial goal of restructuring; the resulting Government-owned Contractor-operated arrangement; and the Corporation’s strategic plans. They should also have the opportunity to provide guidance on modifying and implementing plans.

As indicated in AECL’s response to the Auditor General's Special Examination, AECL had put in place an onboarding program for new members of the Board of Directors and the President and CEO in order to enable an orderly transition. The program includes information about the history of AECL, its current mandate and activities, roles and responsibilities, governance framework (including the Government-owned, Contractor-operated model), the operation of the Board and its committees, and the current plans, both long and short term. The program also includes a multi-day orientation, which features a tour of AECL’s main site and meetings with the AECL management team. Since the issuance of the Auditor General's report, the three members of the Board newly appointed in June 2017 have all participated in the aforementioned onboarding program. With the benefit of the onboarding program and as part of their ongoing orientation and continuing education, they will also have the opportunity to provide guidance on modifying and implementing plans.

Complete

The Board should strengthen and improve its process for monitoring and reviewing risks listed in its risk register, and should appropriately document discussions and actions.

Since the issuance of the Auditor General's report, considerable effort has been undertaken, with the assistance of external risk management consultants/expertise, to strengthen and improve AECL’s process for reviewing and monitoring risk. The results of this effort will be presented to the Board’s Audit Committee in September as part of strengthening and improving its processes in this regard. Appropriate documentation of discussions and actions will occur at that time and subsequent as the Audit Committee formally reviews AECL’s risk register on a quarterly basis in the future. Since the issuance of the Auditor General's report, the skills and experience of the Board in the area of risk management has also been augmented with the appointment of a new member with experience in this area.

In Progress

The Corporation should develop a more detailed reporting framework so that it can better measure and demonstrate to Canadians that it is enhancing efficiency and effectiveness, and is containing and reducing costs and risks over time.

AECL is in the process of developing a performance measurement plan, which will focus on efforts to measure and demonstrate the objectives of the Government-owned, Contractor-operated model, namely to enhance efficiency and effectiveness, and containing risks and costs over time. This includes measuring Canadian Nuclear Laboratories’ performance, which is being done on an ongoing basis through a series of measures and targets, some of which are presented and reported upon in AECL’s Corporate Plan. AECL will also review and update performance measures annually to ensure alignment to objectives.

In-progress

The Board should hold periodic public meetings, as required by the Financial Administration Act, to present its annual report and provide information on the report on the Government-owned Contractor-operated model.

A public meeting was held on May 8, 2017. AECL will continue to fulfill its obligations under the Financial Administration Act by holding public meetings on an annual basis.

Complete

The Corporation should address the alignment in remuneration by engaging with the Minister of Natural Resources. In its annual report, it should consider providing additional insight and disclosure concerning its compensation framework.

Starting with its Fiscal 2016-17 Annual Report, AECL has included additional insight and disclosure on its compensation framework. As in previous years, AECL has also included the total compensation for senior managers in its Annual Report, as per the accounting and reporting standards under which AECL reports.

As part of its approach to compensation, AECL will periodically review its compensation philosophy and propose adjustments as appropriate to achieve the goal of attracting and retaining employees needed to fulfill its mandate. Adjustments will be approved by the Board of Directors and its committees, in-line with governance requirements.

AECL continues to engage the Minister of Natural Resources Canada in remuneration matters as needed.

Complete

The Corporation should strengthen the skills and competencies of the contract management team to manage the overall performance of the contractor in the context of the Government-owned Contractor-operated model.

AECL has in place a succession plan, which includes consideration for the skills and competencies needed in the contract management team.

AECL is also in the process of building a training program for its contract management staff, with a focus on both formal classroom and on-the-job training. The program will be applied to all contract management staff, both existing and new.

In-progress