Evidence of meeting #32 for Public Accounts in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was contract.
A recording is available from Parliament.
4:40 p.m.
Chief, Military Personnel, Department of National Defence
He would have been part of the organization, but he was not the director general at that time.
4:40 p.m.
Liberal
Yasmin Ratansi Liberal Don Valley East, ON
Could we make note of it in case we need to call the colonel at a future date?
My question then is this. Madam Fraser, you looked at the zero balance account. As an accountant and as a businesswoman, I find it quite interesting that somebody would pay me on a daily basis and I wouldn't have to wait 30 days or 60 days. Do the Treasury Board guidelines say we have to pay immediately?
4:45 p.m.
Auditor General of Canada, Office of the Auditor General of Canada
I would presume it is part of the contract. I have seen these kinds of things in the private sector as well. But in instances like this, it's usually part of the request for proposal, and the bidders would take the timing of the payment into account when establishing a price. It would be part of the contract.
4:45 p.m.
Liberal
Yasmin Ratansi Liberal Don Valley East, ON
Did it make the RFP or the bid more efficient or did it make it cheaper?
4:45 p.m.
Auditor General of Canada, Office of the Auditor General of Canada
I can't answer that, and I don't believe the department could answer it, because you would have had to get a bid using a longer payment term. One would expect it to be less expensive, but I can't answer whether or not it would have been.
4:45 p.m.
Liberal
Yasmin Ratansi Liberal Don Valley East, ON
Yet on page 15, paragraph 5.62, you state that the bid they received was probably $9 million more expensive.
4:45 p.m.
Auditor General of Canada, Office of the Auditor General of Canada
That's correct.
4:45 p.m.
Liberal
Yasmin Ratansi Liberal Don Valley East, ON
You also raised another issue, and I think I'd like to ask the RCMP about this.
Mr. Pile, the Auditor General wrote that there was a drawdown on the zero balance account on a daily basis and there was no verification. In her paragraph, she notes the payment was made “before its staff could review the supporting documentation to ensure that payments have been made to valid parties and that they are consistent with the policies on relocation”.
If you do not give adequate time to your staff or whoever is supposed to look at it, how do you verify that the amount paid is accurate, that the work has been done, and that it is within the terms in the contract?
4:45 p.m.
Chief, Military Personnel, Department of National Defence
Mr. Chair, the Auditor General's observations were absolutely correct. There were some 500,000 transactions per year on the zero balance account. We have since taken steps to ensure that those transactions are monitored appropriate to the financial accountabilities that are within the department.
4:45 p.m.
Chief, Military Personnel, Department of National Defence
They are going to be monitoring each transaction such that we can compare the transaction to the individual member who is actually conducting the move. If I'm a member of the Canadian Forces and I'm engaged in a posting from one area to another, a file will have been started on me and transactions will be made within my account. We'll be able to actually compare those transactions to the individual members.
4:45 p.m.
Liberal
Yasmin Ratansi Liberal Don Valley East, ON
But then the Auditor General states, in paragraph 5.92, that the RCMP has a financial control problem, and that it uses only a limited, informal, risk-based audit. When they asked departmental officials in the Pacific region, the officials said that they lack the resources needed to perform proper audits.
How are you going to solve the problem? Have you hired more accountants?
4:45 p.m.
Chief, Military Personnel, Department of National Defence
Are you directing the question to the RCMP?
4:45 p.m.
Assistant Commissioner, Finances, Royal Canadian Mounted Police
Yes, that would be me.
4:45 p.m.
Assistant Commissioner, Finances, Royal Canadian Mounted Police
I'd be happy for him to answer, but I'll take it on.
We're in fact going to develop more precise guidelines on how to conduct a more statistically sound risk-based approach. The issue was that it was too informal a process in terms of a risk-based approach. We're going to institute a more statistically sound risk-based approach in terms of verifying accounts.
4:45 p.m.
Liberal
4:45 p.m.
Liberal
Yasmin Ratansi Liberal Don Valley East, ON
Okay. So how much do you think you risked overpaying Royal LePage? How much have you paid Royal LePage to date?
4:45 p.m.
Assistant Commissioner, Finances, Royal Canadian Mounted Police
There is no issue in terms of overpaying. The issue is just in terms of the level of detail of the invoices.
4:50 p.m.
Liberal
Yasmin Ratansi Liberal Don Valley East, ON
If I don't know what I'm paying and why I'm paying for the services, how can I be sure or how can you be so sure that what you've paid is accurate?
4:50 p.m.
Assistant Commissioner, Finances, Royal Canadian Mounted Police
We do two levels of audit, a pre-audit and then a post-audit. So after the accounts are paid, we review to verify if there are any overpayments and discrepancies. We haven't found any to date.
4:50 p.m.
Liberal
Yasmin Ratansi Liberal Don Valley East, ON
Unfortunately, my time is up; otherwise I would ask you more.
4:50 p.m.
Liberal
The Chair Liberal Shawn Murphy
Thank you very much, Mrs. Ratansi.
Thank you very much, Mr. Séguin.
Mr. Sweet, for eight minutes.