OTTAWA -- Indigenous Services Canada is failing to measure and accurately report the social and economic gaps between First Nations people on reserves and other Canadians, auditor general Michael Ferguson said Tuesday.

"There are so many discussions about the need to close the socio-economic gaps between Indigenous people and other Canadians in this country and we don't see those gaps closing," Ferguson told a news conference after his spring report was tabled in Parliament.

"We don't even see that they know how to measure those gaps."

was the embattled Phoenix pay system for federal civil servants, which Ferguson described as an "incomprehensible failure" -- a description he also ascribed to Canada's intractable failure to get better results for Indigenous people.

"I concluded that I have to refer to that as an incomprehensible failure as well."

Indigenous Services Canada is not using large quantities of socio-economic data provided by First Nations and other sources, the report found. It has also failed to engage meaningfully with First Nations people in order to report whether the quality of life on reserves is improving.

The Indigenous Services index used to measure social and economic well-being is not complete, Ferguson said, because while it includes education, employment, housing and income, it lacks certain other factors important to First Nations people, such as health, environment, language and culture.

Ferguson's audit also found that the education gap has not improved in the last 15 years, that the department did not measure the education gap on reserves and that the information reported by the department was inaccurate.

"The department's method of calculating and reporting the on-reserve high school graduation rate of First Nations students overstated the graduation rate, because it did not account for students who dropped out between Grades 9 and 11," it said.

Using department data from the 2011-12 to the 2015-16 fiscal years, Ferguson's auditors calculated graduation rates that accounted for all students who dropped out in Grades 9, 10 and 11. His office found rates that were 10 to 29 percentage points lower than those reported by the department.

That means that while the department reported a graduation rate of about 46 per cent of First Nations students, Ferguson's report showed that only about 24 per cent of students who started in Grade 9 actually finished high school within four years.

The department did not report on most education results to determine if the gap was closing, nor did it collect data to improve programs or inform funding decisions, or assess data for accuracy and completeness, Ferguson found. It was also unable to report how federal funding for on-reserve education compares with funding levels for other education systems across the country.

Minister of Indigenous Services Jane Philpott said the government is committed to prioritizing education and the well-being of Indigenous Peoples.

"Our government is resolute in renewing the relationship we have with Indigenous Peoples," said Philpott, adding that the government is taking steps to eliminate the gaps.

Ferguson also looked at how Employment and Social Development Canada implemented, monitored, reported on and improved two programs aimed at helping Indigenous people find work.

He found the department did not collect data or identify performance indicators that would show whether the Aboriginal Skills and Employment Training Strategy and the Skills and Partnership Fund were increasing the number of people getting sustainable employment.

Ferguson said that while the goal of the programs is to help Indigenous people find sustainable employment, the department didn't define what that work looked like -- making a part-time job or a five-day temporary assignment on a construction site qualify as sustainable.

Labour Minister Patty Hajdu said the government is working with Indigenous partners to co-develop and implement the new Indigenous Skills and Employment Training program.

The audit's findings highlight the legacy of decades of underfunding for Indigenous communities under previous governments, Hajdu added.