Public Accounts Committee on Feb. 5th, 2007

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Okay.

[The Chair, Liberal, Shawn Murphy]

Mr. Aiken, does anyone want to wade in?

[Coleen Volk, Assistant Deputy Minister, Corporate Services Branch, Treasury Board of Canada Secretariat]

I agree.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

So by saying no to an arm's-length body investigating leaks that have undermined the integrity of Auditor General's reports and this committee's work, you've basically said that you think it's sufficient for us to agree to your investigating your own offices. That happened in June of last year. This fall, lo and behold, we had a leak again.

It comes back to what Mr. Christopherson was saying, that there is no consequence. There's not only no consequence, because there's no sanction for the person or persons involved in a leak, but there's an inability to actually find out who's doing the actual leaking. I think we need to put together a series of recommendations to try to address both aspects of that.

I had a letter from Mr. Zacardelli, the former commissioner, when as a member of Parliament I requested the RCMP to investigate the leak that took place in the spring. His response to me was, and I'll just quote part of it: Although I appreciate your concerns, you may wish to know that the RCMP will not undertake a formal investigation into these allegations unless the Auditor General of Canada makes a formal request to the RCMP—

So the former Commissioner of the RCMP has basically stated that unless there is a request from you, they will not investigate and try to get to the bottom of who's doing the leaking. But I guess you don't feel this is serious enough to have the RCMP come in to try to get to the bottom of it.

[Sheila Fraser]

If it is the wish of the committee that we ask for an investigation by the RCMP, we will do so. But I caution members that does not mean the RCMP will automatically conduct an investigation, because they are the ones who determine their work.

We discussed it informally with an RCMP official and went through the processes. When we asked whether there were things we should do, they did not recommend anything further. Again, it's over the physical security of the documents. Maybe the RCMP can come and say how they can actually find out if somebody's chatting about information they received in a report, but I think it would be very difficult for them as well to determine who is doing this.

But if the committee wishes that I request a formal investigation, I will do so.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

I think that's a very helpful suggestion. It goes back to some of the things Mr. Williams was stating. I think the statement was that the consequences are equal to a wet noodle. That was Mr. Christopherson's statement—that there are no consequences.

Instead of just recommending that we call individuals before us, if individuals who may leak information know that the RCMP will come in—not just to look at the systems but to investigate and try to find out who is culpable in this—that in itself will act as a deterrent. I think your suggestion is one that we'll probably discuss.

[Sheila Fraser]

With all due respect to the RCMP, I think we have to recognize that an investigation is not going to happen tomorrow, next week, or even within this calendar year. I guess that's why I didn't think an investigation would be the road to take.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Wrzesnewskyj.

Thank you, Ms. Fraser.

When you were questioning Ms. Fraser, Mr. Wrzesnewskyj, Mr. Williams asked that the letter you got from Mr. Zacardelli be tabled with the committee.

Mr. Fitzpatrick.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Thank you, Mr. Chair.

I have a couple of observations to start with. The age-old problem of catching the person who is breaking the rules is as old as the hills. Any police department in the country will tell you that's the number one problem in any investigation: to find out who did it.

Naturally, if it's a serious matter, we all expect serious consequences and a deterrent value. Somebody in my group here, a famous person, has referred to the wet noodle treatment on the firearms registry. I believe it even went to the political minister at the time. It violated the Constitution of Canada, specific provisions of the Financial Administration Act, and the rules of Treasury Board, and what did the bureaucrats involved with that whole decision get? To quote my famous colleague, they got the wet noodle treatment. They're free; they're walking around enjoying their freedom without much consequence.

Quite frankly, this 800 Place Victoria thing troubles me to no end. It seems to me a whole slug of rules were either bypassed or violated here. We pretty well know what happened, but what are the consequences? It seems to me that this is a good discussion point, but when we actually do have clear-cut cases of people not obeying the law or the rules, not a whole lot seems to happen.

On the question of leaks too, I just want to put something in perspective and put a timeframe on it. In your term as Auditor General, there have been ten situations of leaks occurring. Do you know how many leaks have occurred in the period of time since January 2006?

[Sheila Fraser]

There were three, I believe.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

So there would have been three since January and presumably seven prior to that period of time. Thank you for that comment and insight.

I have a question that relates to dealing with your department officials. I think it's quite important that you have this dialogue with the department officials, because I'm quite sure that even the Auditor General's office can get something wrong sometimes. It can get corrected and save everybody a lot of headaches, so I see a lot of value behind this approach. Do you ever have face-to-face meetings with department officials?

[Sheila Fraser]

We do, very much so. When we share the drafts with them, there are often very long meetings, in fact, during which the departments will bring forward either new documentation or corrections of facts. Yes, there will be meetings back and forth.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

One may presume there would be internal meetings too, once they have the draft. There would be high officials discussing this.

[Sheila Fraser]

I'm sure they would.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

I'm just curious: when they have those face-to-face discussions or their internal discussions, are all cellphones and BlackBerry devices and so on removed? Maybe Madam Meredith and Mr. Smith could comment. I understand there is a big potential for leakage of information if you don't have that in place. Is that a standard procedure?

[Daphne Meredith]

Mr. Chairman, I can certainly answer for our department. We now have very strict procedures around any discussion of Auditor General reports. We prevent anybody who's dealing with information in the reports from using the e-mail system to record even their thoughts on it. We keep any documents from the Auditor General's office very restricted in number, and we keep them in a secure area. We don't allow those who came in to have--

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Do you mean that before they have their discussions, they take these things out and put them on the table or get them out of the room?

[Daphne Meredith]

They're not allowed to record anything about the report or its contents on their BlackBerrys.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Do they have them in their presence when these meetings are taking place?

[Daphne Meredith]

I'd have to check the protocol for all of the specifics, but I don't believe we've addressed BlackBerrys in particular. I think it's probably covered off with the rule against using any kind of e-mail, BlackBerrys being understood to be included, to communicate any information in the report.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

It is my understanding all you have to do is click one of these things on and the whole conversation could be transmitted right out of that room.

[Daphne Meredith]

Mr. Chairman, if you might allow me, as a result of the alleged leaks and out of our concern about this issue, we've developed quite a detailed protocol we are using with the Auditor General's office in dealing with the discipline around our dealings with her office on the reports, as well as how we deal with any internal discussion of the contents of the reports. I'd be happy to give copies of the protocol and our security procedures for those documents. We're open, as the Auditor General was open, to suggestions on improvements, but we think we have a pretty solid regime now, probably extremely rigorous.

[The Chair, Liberal, Shawn Murphy]

It would be appropriate if you did tender that to the committee, Ms. Meredith, and we thank you for that.

Thank you, Mr. Fitzpatrick.

Thank you, Ms. Meredith.

That, members of the committee and witnesses, concludes this part of the agenda, and I do want to thank all the witnesses for their appearance here this afternoon.

The committee will be writing a report on this particular issue, and we do hope that the correct and proper procedures are put in place, not only by the Department of Public Works and Government Services but by all departments.

Now, the second part of the agenda, members, is going to deal with the Auditor General's departmental performance report and the departmental plans and priorities, but we're going to adjourn and we'll resume the meeting in five minutes' time.

The meeting is adjourned.

[The Chair, Liberal, Shawn Murphy]

I want to call the meeting back to order.

Again I want to welcome our Auditor General, Sheila Fraser. She's accompanied by John Wiersema, Rick Smith, and Jean Landry.

The purpose of this meeting, colleagues, is to deal with the departmental performance reports from the Office of the Auditor General for the fiscal period ending March 31, 2006, and also the office's report on plans and priorities for the upcoming period of time.

This, I suggest, is a very important meeting. This is part of the supply process. The auditor is basically asking for Parliament's appropriation of approximately $83 million to run her office for this fiscal period, and this will be her only interaction with Parliament on that particular appropriation.

So I welcome the Auditor General. I understand you have an opening statement, Mrs. Fraser. I'll turn the floor over to you.

[Sheila Fraser]

Thank you, Mr. Chair.

We are pleased to be here and would like to thank you for giving us the opportunity to discuss our 2006-07 report on plans and priorities, as well as our 2005-06 performance reports.

I'm accompanied today by John Wiersema, Deputy Auditor General; Rick Smith, Assistant Auditor General responsible for strategic planning and professional practices; and Jean Landry, our acting Comptroller.

As the legislative auditor, we provide objective information, advice, and assurance that parliamentarians can use to scrutinize government spending and performance. Our financial audits provide assurance that financial statements are presented fairly, in accordance with Canadian generally accepted accounting principles or other relevant standards.

Our special examinations assess the management systems and practices of crown corporations and provide an opinion on whether there is reasonable assurance that there are no significant deficiencies in the systems.

Our performance audits examine, against established criteria, whether government programs are being managed with due regard for economy, efficiency, and environmental impact and whether measures are in place to determine their effectiveness. We make recommendations to address the most serious deficiencies identified.

All of our work is conducted in accordance with the standards set by the Canadian Institute of Chartered Accountants. It is guided by a rigorous methodology and quality management framework and is subjected to internal practice reviews and to external reviews by peers. All of this provides assurance that you can rely on the quality of our work.

During 2005-06, the period covered by our most recent performance report, we used $76.8 million of the $79.6 million in appropriations available to us and had the equivalent of 577 full-time employees. There's an attachment that details this. Our net cost of operations, taking account of services provided without charge by other departments and other smaller adjustments, was $85.3 million.

With these resources, the office carried out the following activities:

- it produced 18 performance audits of federal departments and agencies and 4 related-products; this number is lower than normal because, as a result of the 2006 election, our status report for February 2006 was postponed to May;

- it performed more than 100 financial audits, including those of the Government of Canada, Crown corporations, and the three territorial governments;

- it completed 11 special examinations of Crown corporations; it assessed the performance reports of three federal government agencies;

- it assessed the actions of 13 federal organizations in implementing 25 commitments from their 2001 and 2004 sustainable development strategies, and reported on the adequacy of government direction in preparing the 2004 strategies, and;

- it monitored 32 environmental petitions, 90% of which were responded to by ministers within the time limit specified in the Auditor General Act.

Our performance report contains a number of measures of what was achieved through our work. The performance highlights page of that report notes the following during 2005-2006:

We participated in 22 parliamentary hearings and briefings, 13 of which were with this committee. This is a decrease from 37 the previous year, and is mainly due to the dissolution of Parliament.

This committee endorsed 74% of our performance audit recommendations that it reviewed. Our target was 75%.

We met or exceeded our targets for the percentage of key users of reports and audited organizations that considered that our findings were reported in an objective and fair manner and that our reports were clear and concise.

We reported eight financial and performance audit internal practice reviews, all of which concluded that our audits were conducted in accordance with our quality management frameworks.

Our employee survey indicated that 82% of our employees believe the office is better than average or one of the best organizations to work for, and 92% say they feel proud to work for the office.

We have noted two key areas where improvement is necessary. By 2005, departments and agencies had fully implemented 44% of the recommendations we had made four years earlier. We would like to see a higher level of implementation. To that end, we have updated our guidance to staff to improve the recommendations we make, and we provided input to the Treasury Board Secretariat's review of departmental responses to our recommendations, as recommended by this committee.

Second, just over half the special examinations we completed in the current round were transmitted more than a month after the statutory date. One of our management committees is overseeing the development of an action plan to redress this situation for the upcoming round.

Our report on plans and priorities identified four priorities for 2006-07. Following the election, our first priority was to inform new and returning members of Parliament about our role, our mandate, and our work. We are continually looking to improve how our audit reports, testimony, information, and advice can best meet Parliament's needs.

In 2005, Parliament expanded our mandate. As a result, we are including foundations in our performance audit work and are expanding our financial audit and special examination work to a larger number of crown corporations.

We are continuing to modernize our audit practices to make better use of information technology and to focus our audit work on areas of highest risk. And changes to professional standards require an additional investment in methodology and training.

Recruitment and retention of qualified people to carry out our mandate is an important issue for the office. We face a higher workload, more retirements, and an increased demand in government departments and in the private sector for people with the skills and experience we need. We are developing a multi-year recruitment and retention strategy to respond to these pressures.

In earlier Estimates documents, and in discussions with several parliamentary committees, we had presented the need for a new funding mechanism for officers of Parliament. I am pleased that the Advisory Panel on the Funding of officers of Parliament was recently reconstituted for this purpose on a pilot basis, and that I had the opportunity to appear before it on November 23.

At that meeting, we were seeking the Panel's recommendation to increase our funding for 2007-2008 by approximately $4 million for ongoing expenses and about $2 million for one-time investments in technology (see Attachment 2). Our request for these new funds was primarily as a result of new and additional work resulting from recent expansions to the mandate of our Office and additional work that has been requested under our existing responsibilities. I am pleased that the panel has supported our request, and that the Treasury Board has approved this new funding.

In the longer term, our key budget unknown is the cost associated with the government's initiative to audit departmental financial statements. Additional unknowns are related to changes contained in the Federal Accountability Act and potential international audit work in support of the interests of Parliament and the Government of Canada. We will continue to monitor our financial requirements as these initiatives unfold, and we may need to consider seeking additional funding for future years.

My staff and I appreciate the continuing support that we have received from this committee. As I said in my introduction to our most recent performance report, your endorsement of our work is highly valued by me and my staff, and we look forward to continuing to serve parliamentarians in the future.

For members' information, I have attached the list of performance audits planned for reporting in 2007 and a preliminary list of topics for 2008. I hope this list will be useful to you as members of this committee. In fact, it may be of interest to all members of Parliament. In that light, unless you object, I would like to post this list on our website and continuously update it.

I thank you, Mr. Chair. My colleagues and I would be pleased to answer any questions that members may have.