PACC Committee Report

Pursuant to Standing Order 108(3)(e), the Standing Committee on Public Accounts has the honour to present its

The federal government of Canada has assumed direct responsibility for the provision of education to First Nation communities since the 1600s. Since the 1950s, however, this responsibility has gradually been delegated to the First Nations and the provinces. The Constitution Act of 1867, as well as various statutes, treaties, agreements and policies, gives to the federal government of Canada the jurisdiction over First Nations and the lands reserved for them. While education is an exclusive provincial jurisdiction, the federal government is empowered under the provisions of several treaties to deliver education services to On-reserve students.

The Department of Indian and Northern Affairs Canada (INAC) has developed a system of funding agreements under which the Department continues to fund elementary and secondary education for On-reserve students. The federal government applies provincial standards to education provided to On-reserve students whether they are enrolled in reserve, provincial or federal schools.

Both the federal government and the First Nations accord high priority to education. The quality of education for First Nations will have significant repercussions on the development of individuals, the survival of First Nation cultures, and the social and economic status of First Nation communities.

To ascertain the department’s success in carrying out its mandate on elementary and secondary education for the First Nations, the Committee decided to examine Chapter 4 of the Auditor General of Canada’s April 2000 Report. On May 18, 2000, the Committee met to consider the evidence. Representing the Office of the Auditor General of Canada were Mrs. Sheila Fraser (Deputy Auditor General), and Mr. Grant Wilson (Principal, Audit Operations Branch). The witnesses representing the Department of Indian and Northern Affairs Canada were Mrs. Shirley Serafini (Deputy Minister), Mr. Dennis Wallace (Associate Deputy Minister) and Mr. Bob Coulter (Director, Employment and Human Development).

In her opening statements, Mrs. Fraser indicated to the Committee that whether INAC delivers education services directly to On-reserve children or delegates the provision of these services through special agreements with the First Nations, the Department retains the responsibility for the cost and appropriateness of education to First Nations. Against this background, the audit asked the following questions. Does the department have a reasonable assurance that it is meeting its objectives for education? Is the department exploiting existing opportunities for operational improvements? Has the department demonstrated accountability for results? While INAC has already undertaken initiatives to deal with certain issues, there are still several fundamental questions that remain unresolved.

First, what role INAC ought to play in the delivery of educational services to First Nations? The Department still hasn’t fully articulated its role in education, despite the fact that it has been devolving education to First Nations for at least 30 years. Clarification is required to assist the Department in determining whether its existing capacity and resources are sufficient to achieve its objectives.

The audit also noted a serious gap in academic achievement of First Nation’s On-reserve students with respect to the overall population of students. The Department has been aware of this situation for over a number of years, yet has failed to take any prompt and effective remedial action.

Finally, while INAC collects some basic data on education, yet it still has not developed indicators of performance and of results to demonstrate accountability and to provide assurance that it is achieving its objectives.

There is also a need for operational improvements of the funding agreements to the First Nations, including how the Department administers education funding. Most notably, collect more relevant cost data, better management of funding arrangements, closer and more frequent consultations with First Nations in order to develop better tailored curriculum and delivery instruments, and obtain and use school evaluations to assess overall school performance and identify school specific issues.

The Deputy Minister, Mrs. Shirley Serafini, assured the Committee that INAC is determined to act on the Auditor General’s recommendations. There is recognition of the concerns raised in the audit, notably the need to clarify the Department’s role in delivering education to First Nations, to develop and use appropriate performance measures and to strengthen the Department’s operational importance.

The Committee members expressed concern about the Department’s lack of clearly defined role in the delivery of education services to First Nations. While the Department’s professed goal for education is to assist First Nations achieve their needs and aspirations, there remains considerable ambiguity and inconsistency in the way INAC carries out this mandate. Some of INAC’s departmental regions consider their major responsibility as that of providing a funding service, while other regions view their role more in the light of developing education programs. As its relationship with First Nations evolve, the Department will eventually have to decide whether its role should be that of a funding agency, a monitor, an education standards-setting body, capacity builder, advisor or co-ordinator – or all, some or none of these.

The Department must clarify and formalise its role and responsibilities. Otherwise, its accountability for results is weakened and assurances that education funding is being spent in an appropriate fashion are unclear at best. This leads the Committee to recommend the following:

Given that over the last 30 years, the Department has been devolving to many of the First Nations the responsibility for the delivery of education services, the Committee enquired whether INAC undertook evaluations to determine if First Nations possessed the capacity to deliver education services directly to its population.

The audit found that funding agreements did contain some provisions to evaluate capacity of First Nations through self-assessments but these have been executed on an inconsistent basis. (1605) The Committee therefore recommends:

The Committee is very worried about the significant gap in educational achievement between Indian students and non-Indian students. Between 1991 to 1996, the high-school completion rates of On-reserve students rose from 31 percent to 37 percent. This modest improvement in aboriginal educational achievement still compares poorly with the high-school completion rate of 65 percent for the overall Canadian population in 1996. At current rates of improvement, it would take approximately 23 years to close the gap between Indian and Non-Indian high-school completion rates.

This gap in educational achievement between Indian and Non-Indian student populations cannot be allowed to persist. Poor academic performance will very likely affect the current well being of On-reserve students, as well as their socio-economic standing in the future. In order to prevent further academic decline, the Committee strongly urges the Department to immediately undertake the required corrective measures. Thus it recommends that:

In terms of the Department’s management and administration of the On-reserve educational programs, the Committee noted that there were considerable opportunities for improvement in the development of performance and results indicators, in the collection and quality of cost information, and in updating funding allocation formulas.

The Committee was clearly preoccupied about the many issues that needed to be addressed for the Education Funding Agreements. The audit uncovered many shortcomings with regard to their management and administration, specifically the lack of funding agreements, the resolution of outstanding funding disputes between First Nations and provincial authorities, the monitoring of the implementation of the agreements, etc.

One particular area of concern was the outstanding issue of the disclosure of financial statements by First Nations. When a member of the Committee enquired on the availability of financial information on education programs, INAC officials indicated that they receive from First Nations audit reports on revenue and expenditures on a program basis but that overall consolidated audits are not made public. This state of affairs is the result of a 1988 court decision, which ruled that financial statements of First Nations could not be disclosed to the public because their consolidated financial statements often contain financial reports on businesses owned by First Nations.

The INAC officials further indicated that the Minister is currently working with First Nations and certified general accountants to find ways of improving the disclosure of financial information of First Nations, particularly with regards to the receipt and disposition of public funds. Specifically, the intent of these discussions would be to develop schedules that would show federal contributions and disposition of these funds by the First Nations.

The Committee acknowledges the current efforts and makes the following recommendation:

The Committee is very concerned about the state of elementary and secondary education for the First Nations. The observed gap in academic achievement between On-reserve high school students and the overall population of high school students cannot be tolerated. This situation must not be allowed to persist, otherwise, it will not augur well for the current and future well being of the First Nations in particular, and for Canada in general.

The Committee is dissatisfied by the Department’s "hands-off" approach in the management and administration of the education programs and special funding agreements. While decentralisation or devolution of responsibilities may be sound in principle, it must be accompanied with clearly defined roles and responsibilities to which all parties agree to comply, together with proper monitoring and consultation mechanisms to ensure feedback and prevent disagreements from becoming unmanageable.

There is broad understanding of the issues involved, the Committee expects the Department to rapidly demonstrate real progress in the resolution of the many shortcomings identified by the audit.

Pursuant to Standing Order 109, the Committee requests that the Government table a comprehensive response to this Report.

A copy of the relevant Minutes of Proceedings (Meetings Nos. 25 and 28) is tabled.

Respectfully submitted,

JOHN WILLIAMS, M.P.