Auditor General Michael Ferguson has found problems with the federal government’s plans to expand Canadian prisons, with agreements to provide for First Nations policing and with management of money set aside to develop the North.

In his spring 2014 report tabled Tuesday in Parliament, Ferguson found Canada isn’t saving as much as expected from shutting down two prison facilities and is spending money to expand others that are in poor condition, requiring upgrades.

He also found:

There's little input from First Nations in the First Nations policing program. It’s also being used in some cases to replace core policing services the provinces should be providing. And, in some cases, the policing buildings don’t comply with fire and building codes.

The $152-billion public-sector pension plan needs better risk assessment and planning. The Department of Finance says it does that assessment, but wouldn’t share it with the auditor general, citing cabinet confidence.

The $52-million Canadian Northern Economic Development Agency isn’t properly monitoring the money it hands out and doesn’t collect enough information from recipients to know whether they’re complying with the terms of their agreements.

Statistics Canada provides good national numbers, but has a harder time breaking out data for small geographic areas and population breakdowns.

The process to find a moving company for civil servants is inefficient, with the government sending a request for proposals before drawing up its plan to find the service provider.

At his press conference in Ottawa on Tuesday, Ferguson said that twice over the course of the audits, the Department of Finance said it couldn't answer audit questions because the information was kept secret as a cabinet confidence: for the public-sector pension plan assessments and for how it deals with Canada Revenue Agency requests for legislation to deal with aggressive tax planning.

Ferguson said it's normal that some information isn't available because of cabinet confidence, but that he found it "surprising" the information regarding tax legislation wasn't available outside of cabinet.

Transfer costs more than double

Canada’s penitentiaries will be over capacity again soon after the current round of expansions is complete, Ferguson says in his report.

More than 2,000 new cells were to be added by last month, but inmates are likely to be double-bunking again within a few years of the end of construction as they reach or exceed capacity again, it says. Auditors were told Correctional Service Canada hasn't finalized plans to address the shortfall.

Public Safety Minister Steven Blaney said about 20 per cent of inmates are double-bunked and that it's normal in the Western world. He pointed to the estimated savings the government has found after closing two prisons and a mental-health facility.

But Blaney and Ferguson differed on whether double-bunking increases the risk of violence in a penitentiary.

Blaney said Correctional Service Canada has done studies that show "there is no link between the rate of violence and double-bunking." He says the government doesn't believe prisoners are entitled to their own cells.

Ferguson said Blaney's department has recognized the risks of overcrowding.

"They do have, I think, a target of having no more than 20 per cent double-bunking and they themselves have recognized that that can be a risk to security if they go beyond that," Ferguson said, adding that the risk of double-bunking wasn't the subject of his audit.

No room to transition

The government closed those institutions in 2013:

Kingston Penitentiary.

Ontario's Regional Treatment Centre.

The Leclerc Institution in Quebec. ​

Auditors found that while the government projected the closures would save $120 million a year, the savings are only $86 million a year.

But the way the new cells are being added is increasing transfer costs, the audit found.

Public Safety Canada expanded prisons with available land already within the existing secure perimeters, so auditors found that the expansions weren't proportionate to the expected increases. That has meant increased cost to move prisoners around.

Corrections nearly doubled the number of offenders transferred from Ontario and prairie prisons to the Pacific and Atlantic regions, leading to more than double the cost — from $1.5 million in 2010-2011 to $3.4 million in the first nine months of 2013.

Canadian penitentiaries held 14,200 offenders in 2009, and that increased to 15,224 by March 2013, close to the government’s projection of 15,270. At the same time that there were more than 15,000 inmates, there were only 14,807 cells to accommodate them. The completed construction is expected to house 16,700 inmates in single cells.

It's not possible for them to move down through the system and eventually get parole. - Auditor General Michael Ferguson

The audit also found offenders are in custody longer, despite entering treatment and rehabilitation programs an average of two months earlier than they were three years ago.

The report says discretionary releases by the parole board have declined 14 per cent since 2009, while the overall offender population has grown by nine per cent since March 2010.

Ferguson said that could be because there's no room to transition inmates from a higher level of security to lower ones and then to a community facility.

"For somebody to achieve parole, for example, it's necessary that they have to be able to move down throughout the system," he said.

"But if they do not have enough facilities at the appropriate security levels, then they have to keep some of the offenders at sort of the more costly levels and it's not possible for them to move down through the system and eventually get parole."

Pensions viable?

Auditors also recommended periodically assessing whether public-sector pensions are sustainable. The Department of Finance said in its response to the recommendation that it does regular assessments, but that the analysis couldn't be shared because of cabinet confidentiality.

Ferguson said he didn't have a concern that the government wasn't co-operating with auditors.

Treasury Board president Tony Clement said the decision to invoke cabinet confidence falls to civil servants, not politicians.

He also cautioned that the audit looked at the management of the pension plan, not whether it was sustainable. He said he agrees with one of the recommendations that suggested the government make it easier for Canadians to understand the risks of the plans.

"There’s a bunch of actuaries who sit in a dark room somewhere, and they get out their calculators and they work out whether these plans are sustainable given the facts on the table in terms of growth rates, and stock markets and so on," he said in explaining how government determines whether the plan has enough cash to back it up.

Public Works found lacking

Paying to relocate employees costs the government about $300 million a year. In 2009, Public Works awarded the contract to cover the approximately 17,700 Armed Forces, RCMP and public servant moves, known as the Integrated Relocation Program, to Brookfield Global Relocation Services Ltd.

Auditors found Public Works knew its decision to award one big contract rather than a series of smaller ones meant that Brookfield was the only company in Canada that would be able to manage it, eliminating any chance of domestic competition for the contract.

The audit also found that the team evaluating the proposals didn’t leave a paper trail for its decision to award the contract, noting the team didn’t “write down their comments or rationales justifying the scores they assigned for each criterion and for how they arrived at the final aggregate score.”

The department manages moving services for civil servants who relocate, as well as the Canadian Forces and the RCMP.

This isn’t the first time Public Works has had its knuckles rapped over contracting out moving services. In 2006, the auditor general found that contracts tendered in 2004 hadn’t been done fairly. A House of Commons committee upheld that conclusion in 2007.

Auditors found even more administrative problems at the agency created to deliver cash to the North.