Potentially dangerous people may have slipped into Canada because of weaknesses at the country's border agency, the federal auditor general said Tuesday.

"The agency's lookout systems, which are intended to intercept high-risk individuals and shipments, have missed some that were identified as high risk," Auditor General Sheila Fraser said in her latest report.

The government has spent $150 million on new automated systems to screen people and shipments before they enter Canada. But those tools are still in the early stages of development and implementation, the report said.

Fraser found that despite the new system, border guards are eyeballing people and using their instincts to judge whether they might be a security risk.

"Because border services officers perceive weaknesses in the systems, they continue to rely more on their own analysis and judgment to select shipments for examination," the report said.

About 96 million people cross Canada's border every year.

The report also found that officials are not doing a good enough job investigating container ships entering Canada.

Fraser said there are examples where ships have been red-flagged but never checked to determine if they were a security risk.

"The agency's lookout system, which was designed to identify and intercept high-risk individuals and shipments, is not working as intended: we found some cases where lookout subjects were missed at the border, and not examined as required," the report says.

Must do spot checks: Fraser

The auditor found an average of 13 per cent of customs lookouts and 21 per cent of immigration lookouts from January to March in 2007 were not referred for further examination.

Fraser said the agency must do spot inspections.

"They are focusing all of their inspections now on cases that they identify as high risk, and the only way to really ensure the system is effective is if you do these random checks."

Fraser found the agency could not assure it conducts risk assessments of all air and marine cargo in advance of arrival.

She also said the agency does not receive enough information on the results of its activities to know whether it is doing a good job at the border or to know where improvements are needed.

Day promises to heed recommendations

Public Safety Minister Stockwell Day said he accepts the criticism and measures have already been taken to deal with the problems.

"It's a huge operation. We are accepting all of her recommendations."

But Day added: "We've made significant increases in terms of interceptions of drugs, contraband, firearms and illegal individuals."

Liberal MP Mark Holland, a member of the public works committee, expressed concerns over the results of the audit.

'There's a real mismanagement of resources here, and the net result is our borders aren't as safe as they should be.'—Liberal MP Mark Holland

"It's particularly concerning when the government has spent so much money and attention on arming border guards, it's going to cost them a billion dollars. And yet we're seeing that some of the more basic items, like ensuring that high-risk items and individuals are not getting through, are getting neglected," Holland said.

"And this raises serious security concerns. So in my opinion, there's a real mismanagement of resources here, and the net result is our borders aren't as safe as they should be."

Fraser's report on the border security agency was just one of a number of reviews on government operations. Fraser also found that:

• The Canadian military's failure to keep track of whether its health-care staff have maintained their licences and certifications after enlisting may have resulted in unlicensed physicians and nurses providing direct patient care to soldiers.
• The federal government is not as stringent as it should be when it comes to handing over its secrets to private contractors.

• Ottawa has not lived up to its obligations to provide land and other benefits 23 years after signing a massive deal with Inuit in the Western Arctic.

With files from the Canadian Press