Public Accounts Committee on Dec. 9th, 2009

[The Chair, Liberal, Shawn Murphy]

At this point in time, I'd like to call the meeting to order. Bienvenue à tous.

This meeting is called pursuant to the Standing Orders, and the committee today is dealing with chapter 8, “Strengthening Aid Effectiveness—Canadian International Development Agency”, of the fall 2009 report of the Auditor General of Canada.

We are very pleased to have with us today, first of all, from the Office of the Auditor General, Richard Flageole, the Assistant Auditor General, accompanied by John Reed, Principal, and Dusan Duvnjak, Director. From the Canadian International Development Agency, we have the President and Accounting Officer, Margaret Biggs, accompanied by David Moloney, Executive Vice-President.

On behalf of the committee, I want to again welcome each of you to the meeting.

There is a possibility, members and witnesses, that the committee hearing may be suspended for a vote, but that would only take about 10 or 15 minutes. That's just a possibility. I don't know if it will happen or not. In any event, we have no control over that, so I'm going to call for opening statements.

I understand, Mr. Flageole, you'll be delivering the opening statement for the Office of the Auditor General. I turn the matter over to you right now.

[Richard Flageole, Assistant Auditor General, Office of the Auditor General of Canada]

Thank you very much, Mr. Chair.

Thank you for this opportunity to discuss chapter 8 of our 2009 fall report, “Strengthening Aid Effectiveness”, concerning the Canadian International Development Agency.

As you mentioned, I'm joined at the table by Mr. John Reed, principal, and Mr. Dusan Duvnjak, director. They were responsible for the audit.

CIDA is the agency that administers the bulk of Canada's official development assistance. In the past fiscal year, it spent around $3.5 billion, almost half of which was for its geographic, or country-to-country, programming. CIDA's geographic programming takes place in over 60 countries, 20 of which are considered countries of concentration.

Our audit examined the extent to which the agency is meeting commitments it made in 2002 to improve the effectiveness of delivering aid in its geographic programming. Specifically, we looked at CIDA's management processes to sustain the implementation of its commitments related to aligning with the needs and priorities of recipient countries; harmonizing with other donors; using program-based approaches; and achieving greater sectoral focus. CIDA views these commitments as important for delivering aid effectively.

As noted in the chapter, CIDA has made progress in aligning its projects with the needs of recipient countries and harmonizing its efforts with other donors.

Many stakeholders in the development aid community—both here in Canada and abroad—describe CIDA and its field staff as a valued and active partner. Yet, overall, we found that CIDA had not put in place the basic management processes required to direct and sustain implementation of its commitments. Frequent changes in priorities and policy direction, and weak management practices have hampered CIDA's ability to deliver foreign aid more effectively.

With respect to achieving greater sectoral focus, the agency recognized that its aid is widely dispersed across many sectors. It therefore committed to focus on fewer priorities to make a more meaningful Canadian contribution. However, we found no evidence that it was concentrating its aid on fewer sectors. This is due to CIDA sectoral priorities being too broadly defined and changing too often, and to the agency never developing a robust plan to achieve greater focus.

This situation has also had a negative impact on the agency's ability to determine and build upon its strengths relative to other donors. CIDA's relative strengths in the development of its country programs and individual projects were not evident in our audit. The agency has also made limited progress in deciding what types of skills and expertise it needs to support its priorities and how to provide them. CIDA needs to clearly identify which sectoral priorities and programming areas it will and will not fund, and acquire the appropriate skills and expertise.

Over the past decade, new forms of projects known as “program-based approaches” have been put in place. These approaches entail new forms of funding, such as direct transfers to the budgets of recipient countries, and involve several donors working together. They typically rely on recipient government systems for delivery.

Our audit found that the support for using these approaches has been neither uniform nor timely throughout the agency. CIDA management has provided little specific direction and no targets to country desks on how and when to use program-based approaches. Further, it has not clearly defined the specific conditions under which the agency would or would not participate in a program-based approach, and it has not standardized the types of risk assessments that must be done before accepting such approaches.

Given that CIDA has gained considerable experience with such approaches over the past decade, it would be important that the agency evaluate its use of them to determine whether the approaches are in fact achieving the agency's goals.

With respect to CIDA's process for planning its country programming, we found that programming frameworks for the countries that we examined had all expired by the end of our audit and a rigorous country planning process was missing. The Agency was embarking on a new planning process whose requirements were constantly changing, causing frustration among staff, and taking time away from analytical work. As a result, donor partners, recipient governments, and program staff were unclear about the agency's direction and long-term commitment.

With respect to funding projects, we found that CIDA adequately identified project risks up front and managed those risks through implementation. However, we also found that burdensome administrative processes within the agency hamper effective decision-making. For example, an internal study conducted by the agency in 2007 found it took an average 43 months to get project approval. The agency acknowledged such problems in 2002 and yet this long-standing issue remains unresolved.

In our view, many of the weaknesses discussed above and in the chapter can be traced to the absence of a master plan to implement the commitments made in the 2002 policy statement. Early intentions were simply not matched with specific action plans and followed through. Indeed, even when action plans were developed, they were not completed.

Finally, as we note in the chapter, the long-term nature of international development requires stability and predictability of programming. In our view, frequent changes in policy direction and substantial turnover of senior management have posed significant challenges to CIDA in achieving its aid effectiveness agenda.

CIDA has agreed with our recommendations and we understand it has prepared a detailed action plan. While we're encouraged by the current management commitment, we are mindful of past initiatives that fell short of timely and full completion. Your committee may wish to have the agency report on its progress to ensure that the current momentum is sustained.

This concludes my opening remarks. We would be pleased to answer any questions the committee may have.

Thank you.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Flageole.

We're now going to hear from Ms. Biggs, from the agency.

Thank you very much.

[Margaret Biggs, President, Canadian International Development Agency]

Thank you very much, Mr. Chair.

Thank you for the opportunity to discuss Chapter 8 of the 2009 Fall Report of the Auditor General of Canada as it relates to the Canadian International Development Agency, CIDA.

Aid effectiveness is a priority of the Government of Canada, and CIDA has an agenda that delivers on the government's commitment to ensure that Canada's development assistance yields concrete results.

The Auditor General's recommendations are very much in line with our ongoing efforts to improve how we do our work. I would point out that the audit was completed six months ago, in the middle of May, and many steps have been taken since that time.

I would like to take a few minutes to outline for you the important progress that CIDA has made to implement its aid effectiveness agenda. I would like to highlight three areas in particular. These are bringing greater focus to CIDA programming, stronger management and sustained implementation, and streamlined business processes.

First, in terms of bringing greater focus to CIDA's work, the agency has made significant progress in defining and refining its priorities, and in fact has already moved on many of the steps laid out in the Auditor General's report. We have narrowed our focus both geographically and thematically so that our resources can have the greatest impact where they are needed the most.

Regarding geographic focus, Minister Oda announced in February that 80% of CIDA's bilateral assistance will be concentrated in 20 countries. The remaining 20% of our bilateral aid will be invested in a smaller number of countries as required, and as of this year CIDA has met this commitment.

As for thematic focus, last May the minister outlined CIDA's thematic priorities for international development: increasing food security, securing the future of children and youth, and stimulating sustainable economic growth. She followed up by unveiling CIDA's food security strategy in October, the children and youth strategy in November, and the third, on sustainable economic growth, will be released in the new year.

For each of these strategies, we consulted extensively with experts and partners to put together what we believe are solid plans for our priority areas.

Within these thematics, the agency has narrowed the focus, further targeting elements we believe will make the greatest difference and where Canada can make a significant contribution. For example, for children and youth, CIDA will zero in on three elements: child health and survival, including maternal health; access to quality education, particularly for girls and young women; and safety and security. Using these thematics, the agency has also narrowed the focus of our individual country programs and new country strategies have been approved.

I believe that concentration of CIDA’s efforts will strengthen our results. I believe it will strengthen the expertise and effectiveness of the agency. And I believe it will provide the clarity and direction that CIDA partners and staff have been seeking.

The second area I would like to highlight, Mr. Chair, is that solid management tools are being put in place to ensure follow-through and sustained implementation of the government's development priorities. The Auditor General's report correctly notes that previous intentions were not always matched with specific action plans. We agree this was a concern for the period under review. I am pleased, however, to report that significant work has been completed since that time.

CIDA has put in place an aid effectiveness action plan. This plan now provides the entire agency with clear actions and concrete direction, including indicators and time-bound targets for implementing all key elements of the government's aid effectiveness agenda. The agency will monitor performance and report progress annually.

CIDA has also instituted a policy to guide the use of program-based approaches throughout the agency. It sets out very clearly whether and when to use PBAs to maximize results and how to put them in place.

This policy was not yet finalized at the time of the audit. Program-based approaches are still a relatively new approach. CIDA, like other donors, has had to learn by doing. We have now consolidated the lessons learned into our program-based approach policy and have communicated this directly to staff.

Third, CIDA has been rightly criticized for its complex and lengthy administrative processes.

The length and unpredictability of CIDA's decision-making has made it an unreliable partner. It has also made the agency inefficient and it has compromised its effectiveness. The agency has taken action. It has successfully piloted a new business process that cuts processing times for its major bilateral programs from 43 months to 15 months at a maximum. This is a 66% reduction, and these processes will be mainstreamed in January 2010.

The agency has also reduced processing times for its partnership programs from 50 weeks to 20, a 60% reduction.

In conclusion, I draw your attention to the detailed action plan the agency has prepared in response to this audit. Most of the actions we have identified are already completed and the remainder are well on track. I'm also tabling with you today the OECD's mid-term review of Canada's development assistance. Following up on its 2007 peer review, the OECD also highlighted and encouraged CIDA on the need to focus its efforts. It states that Canada is progressing well and on a good trajectory.

I believe the steps CIDA is taking will meet the concerns outlined by the Auditor General.

CIDA is becoming more focused, effective and accountable. It now has clear priorities and a management plan to guide and sustain implementation of the government's aid effectiveness agenda.

It also has the talent and the expertise. As the Auditor General highlighted when she was here with you on November 4, CIDA staff in the field are highly regarded by donor partners and recipient countries, and their efforts are appreciated.

I believe we now have the priorities and the plan needed to deliver Canadian aid more effectively.

Merci beaucoup.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Ms. Biggs.

Just a couple of issues I want to address before we go to the first round.

First, I plan to stop at 5:15 and deal with the minutes from the steering committee on an issue arising from the steering committee during the last 15 minutes of our two hours allocated.

Secondly, you can take this in the nature of a pre-ruling, but it's a job of the chair to predict issues that may or may not come up during the questioning.

One issue that I predict might come up is KAIROS, which is a public debate. There are a number of findings and recommendations made regarding the performance targets, evaluations, focus, expectations, progress, and the expertise needed. If the decision not to fund relates specifically to a finding, I will allow the question. But I will not allow any discussion or questions dealing with the merits of the decision. That is a policy decision made by the government. This is not a continuation of question period; it's the public accounts committee, and any question of that nature will be ruled out of order by the chair.

You have seven minutes, Mrs. Crombie.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Thank you, Mr. Chairman.

[The Chair, Liberal, Shawn Murphy]

Sorry, on a point of order, Mr. Shipley.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

On a point of order, Mr. Chairman, in your comments you mentioned committee business at 5:15. My understanding, unless I'm wrong, is that the bells will go then.

[The Chair, Liberal, Shawn Murphy]

Yes, it will give us ten minutes. We will go until 5:22. I'll stop at 5:10.

[David Christopherson, NDP, Hamilton Centre, ON]

I think you might need a little more time, based on what I heard before the meeting started.

[The Chair, Liberal, Shawn Murphy]

We'll go from 5:10 to 5:25.

You have seven minutes, Ms. Crombie.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Thank you, and welcome to our guests.

My first question is to Mr. Flageole. The audit rightly says that CIDA doesn't have any governing legislation that defines its role or mandate. But we know that in 2008--and I think it concurred with the time the audit was written or being prepared--Parliament adopted Bill C-293, which was the Official Development Assistance Accountability Act. So I wonder why it wasn't referenced in the audit or within the scope of the audit. It provided for three criteria that defined the mandate of CIDA: poverty alleviation, perspectives of the poor, and being consistent with international standards.

[Richard Flageole]

The act was promulgated while we were doing the audit, so right at the planning of the audit we considered that. A good portion of the act is also related to reporting requirements. The first report was due in fall 2009, which was after the report was finalized, so it was not possible for us to look at it. We probably should have made a reference to that in the introduction of the chapter as a point of background, but we just made the decision not to. There was nothing to audit at that stage.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Thank you very much.

Ms. Biggs and Mr. Moloney, you were criticized at the time, and I don't know how new you are to CIDA. Perhaps you can let us know. Certainly someone has to be accountable and explain what was--and not just that you have good intentions and wishes going forward, and a plan, but let's talk about what was. There was no master plan or comprehensive strategy. There was a lack of direction, shifting priorities, and a lack of corporate management process.

From what I can count, there were about 24 different priorities since 2000, five different ministers, four different agency heads, and a partridge in a pear tree. How did such shifting priorities and priority sectors impact your effectiveness? How did this lack of focus or absence of a plan help you achieve your effectiveness commitment? How did the agency achieve its goals? Which goals could you achieve? How did that impact recipients, other governments, other donors, etc.?

[Margaret Biggs]

Just to answer your first question, I was appointed the president of CIDA on July 1, 2008, so I've been there for 16 months. David joined me in May 2009.

As the Auditor General's report notes, CIDA's work that they reviewed--and they did field visits--was highly regarded. We have a very strong results-based management system in CIDA, so I believe the work on the ground was still garnering very strong results.

We accepted the comments of the Auditor General, and in fact we had already begun to put in place greater focus and a stronger sense of priority and direction in what CIDA would focus its programming on. My comment really relates to the work that has happened recently, which has been to give the kind of sense of overall direction, priorities, and implementation plan that I believe the Auditor General was looking for and the Government of Canada committed to do.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

I know we're going to go back to this issue, probably repeatedly, so I'll let it go for now, but with so many differing priorities over the years, how is a government or an NGO able to apply for funding if they don't know what the priorities will be next year? How can anyone anticipate what the priority will be so they know if they can qualify to apply?

[Margaret Biggs]

I can't speak for all of the different moments, and this goes back through, as you would of course remember, a number of governments. Governments have a policy decision where they can decide what it is they wish to focus on. I believe that at all times the agency has been transparent about what its priorities were. I think the question you're asking is that there has been--and the Auditor General notes this--some change in terms of the leadership of the agency and the direction it has been given.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Shall I keep going?

[The Chair, Liberal, Shawn Murphy]

There will be a 30-minute bell, so I'll suspend the meeting with five minutes left to go.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Okay.

So let's go back to achieving your goals--

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Chairman, I have a point of order. I think you need unanimous consent, once the bells go, to extend the meeting. Do you not?

[The Chair, Liberal, Shawn Murphy]

That's not my understanding.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

I do believe that. Would you check with the clerk, please?

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

As I understand, the Standing Orders now explicitly require the committee to adjourn as soon as the bells start ringing, but members can, by unanimous consent, carry on as they think best.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

It's right next door, for goodness sake.