More than a decade after Ottawa began requiring federal railways to develop safety management systems, Transport Canada is in no position to assure Canadians that they've fully complied.

In an report released Tuesday, Auditor General Michael Ferguson warns that the audits meant to ensure Canada's 31 federal railways are meeting safety management requirements (SMS) have been too few and too limited to provide even minimal assurances.

"Transport Canada completed only 26 per cent of its planned audits of federal railways over a three-year period," Ferguson said in releasing the report. "Most of these audits were narrowly focused and provided assurance on only a few aspects of railway safety management systems."

The safety management systems approach to rail safety is the product of Liberal legislation from 1999 that has seen Transport Canada's role shift from one of direct regulatory oversight to one of ensuring the systems put in place by the railways themselves are up to snuff.

Since 2001, Via, CP and CN railways, as well as 28 smaller lines that cross provincial or international borders have been required to develop the systems.

A 2007 rail safety review confirmed the importance of the SMS approach to safety and in 2009 the federal government committed $71 million toward rail safety, including $43 million to improve Transport Canada's regulatory framework and oversight. Tuesday's audit reviewed whether the department is getting that oversight job done.

Transport Canada set out three-year cycles for auditing the SMS of each federally regulated railway, but has been unable to keep up with that commitment, the audit notes. In the three fiscal years ending March 31, 2012, the department completed 14 audits -- just 26 per cent of what policy requires.

The report suggests that some of the manpower needed for audits might be getting misspent on the massive number of inspections the department carries out each year. In 2011-12 alone, Transport Canada conducted over 20,000 inspections such as assessing a crossing or bridge to ensure it complies with regulations.

The decision to carry out inspections, the report notes, is still based on criteria set out in the 1990s -- before the shift to SMS oversight, before CN was privatized, and before elements of CN and CP had been sold off to smaller companies.

It's unsurprising then, that Ferguson characterized the shift toward an SMS oversight model as a work in progress.

"Fourteen years ago, Transport Canada recognized the need to shift from an inspection-based oversight approach to one that integrates the oversight of safety management systems," Ferguson said. "This shift is ongoing, much work remains to be done, and the transition is taking too long."

Audit efforts could be further strengthened by targeting higher-risk railways and the most significant types of safety concerns, the report adds. A systematic approach to collecting information on railway safety performance and risk could guide those efforts, but Transport Canada has yet to adopt it.

"The use of these risk factors is essential to ensure that Transport Canada is targeting the right locations, equipment, operations, and infrastructure," the report said.

Tuesday's report comes in the wake of a series of recent high profile derailments that brought fresh scrutiny to railway safety in Canada. The derailment and resulting inferno that killed dozens in Lac-Mégantic downtown this summer is one of several accidents involving petroleum tankers.

While the 31 federally regulated railways covered in the audit include MMA -- the railway involved in the Lac-Mégantic disaster -- Tuesday's report was careful to stipulate that this audit was not an investigation of that disaster.

Rail safety and SMS oversight is set to get a more political working over in the coming months. Two weeks ago, Transport Minister Lisa Raitt asked the House transport committee to conduct an in-depth review of how dangerous goods are transported in Canada and the role safety management systems play in all modes of transportation.

Raitt was quick to react Tuesday, issuing prepared statements concerning the report. Raitt said she welcomed the report, pointing to the transport committee study.

She made clear where she lays blame for the slow changes in safety oversight, and added that she "will not hesitate to ask the auditor general to come back and look at the progress that was made."

In a press conference later that day, Raitt said she didn't intend the comments as blame or derogation of ministerial responsibility.

"That came out of the conversation I had with the senior management team this morning and we were talking about what Canadians expect from our rail safety program and they do expect that if we put in place some regulations that we all do our best, in Transport Canada, to ensure that we follow through," she said.

Raitt's critic across the aisle, Olivia Chow, seems to be offering the benefit of the doubt so far.

After years of A-G reports warning of rail safety issues and years of what she sees as a lack of movement the department, Chow said that a succession of Conservative transport ministers have failed to act.

"Somehow in the transport department things have just languished," she said. "I think this minister may finally recognize (the need for action), but what is she doing about it?"

Chow said she'll be looking for proof of action this winter and spring as the transport committee works through a study of how dangerous goods are transported.

That committee is due to turn in an interim report in June, Chow said.

Ian Shelton is deputy editor of iPolitics, where this article first appeared.