Public Accounts Committee on Oct. 31st, 2011

[The Chair, NDP, David Christopherson]

Thank you, Mr. Aspin. I appreciate that.

We're moving along to Madame Blanchette-Lamothe.

You have the floor, ma'am.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Thank you, Mr. Chair.

Good afternoon, Mr. Ferguson. Welcome.

You no doubt know that the Auditor General's report on the G8 Infrastructure Fund received a lot of attention. As for the granting of these funds, a parallel process was apparently launched and apparently prevented the Auditor General from getting to the bottom of things in that matter.

The report states that "Senior officials were not able to provide us with any information and said their input had not been sought as part of that process."

Do you think that the Auditor General's mandate should be reviewed to allow the AG to receive municipal and provincial documents when federal funds are involved?

[Michael Ferguson]

That's certainly not something I've given a lot of thought to at this point; I would have to take it under advisement.

My understanding of the legislation—and I believe it's very similar to the legislation in New Brunswick—is that in situations in which the Auditor General does not receive all of the information the Auditor General has asked for, the Auditor General is to report that fact to Parliament. That ends up being much of the role of this type of committee and of Parliament.

The Auditor General would have to work within the requirements and the restrictions of the legislation, but if the Auditor General felt that those restrictions were affecting a particular audit, then the Auditor General would raise that type of issue with this committee.

I can't really speak to any specific situation. I don't know the fact base behind any specific situation, so I can't give you an opinion on any specific set of facts.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Would you have an idea about a mechanism that the government could put in place to facilitate internal auditing, even when there are parallel processes?

[Michael Ferguson]

Do you mean, to make internal auditing easier? Did I understand that correctly?

Internal auditing is a process very similar to external auditing. Really, the only difference is the audience. I'm not sure that I can tell you anything in particular, off the top of my mind, that would say, if we made this change, it would improve the internal audit practice. That's something I would have to look at, to see how the actual internal audit function was being carried out. It's not something I could give you a recommendation on at this point; it's something I would have to look at.

[Lysane Blanchette-Lamothe, NDP, Pierrefonds—Dollard, QC]

Thank you.

One of the objectives of the audits of the financial statements by the Office of the Auditor General is to enable the main institutions involved to follow up on the office's observations.

In the spring 2011 report, the Auditor General recommended two things to the Treasury Board Secretariat. She recommended reviewing the methods used to determine what information needs to be presented to Parliament in the Supplementary Estimates. She also recommended modifying the process so that when Parliament needs to approve funding, it has clear and specific information about the intended use of the funds.

Do you support these recommendations? If so, would you intend to follow up on them and how?

[Michael Ferguson]

Those were recommendations of the Auditor General. Certainly, if they were recommendations of the Auditor General, they would be followed up in accordance with the normal process of the Auditor General's office. I know they have a process for follow-up—they decide which items to follow up. I'm not sure exactly what that process is, but certainly the process would be applied to any and all recommendations that were made.

If I am named to this post, I will definitely stand behind any recommendation that has been made by the Auditor General's office in the past.

[The Chair, NDP, David Christopherson]

Thank you, Madame. The time has expired.

Next up is Ms. Bateman.

You have the floor, ma'am.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Thank you very much, Mr. Chairman.

Thank you so much for being here today and for giving us the opportunity to get to know you a little bit better, and for having given us purpose to study your CV, which in my view is very impressive. I'm a chartered accountant myself, and I really appreciate the comments you have made, and I truly appreciate that your value to the crown will be greater because you have worked on both sides of the equation. That's something we can be grateful for benefiting from.

I want to ask you some questions with an international focus. I'm very proud that we in Canada are so well regarded as a model, not only within the accounting profession, but when it comes to accountability in government. We have an incredibly open system. We allow the Auditor General to freely examine whatever he or she chooses to investigate and then to report publicly on those findings. Certainly we as government have improved things based on Auditor General findings in the past.

How do you see the role of the Auditor General—your role, je l'espère—in setting an example for other countries in the world in regard to that openness, that accountability piece?

[Michael Ferguson]

I believe that the Auditor General of Canada has very much established a leadership position over the last number of years under Ms. Fraser's leadership in terms of its reputation across the world for excellence in performance audits and excellence in financial audits. I think Canada also has a reputation for having very excellent accounting standards for governments, as established by the Public Sector Accounting Board.

So I don't think Canada takes a back seat to anybody, whether it be in terms of the quality of financial statements, the quality of accounting standards, or the quality of the audit work that is done. And I think it's very important for Canada to continue to deliver that message.

For me, as Auditor General, one of the most important parts of that is the recognition that we have an independent accounting standard-setter, that being the Public Sector Accounting Board, and it is absolutely imperative that each and every government comply with the accounting standards set by that board so that everyone has confidence that the financial statements are prepared appropriately and that auditors audit to that set of standards.

Again, I think Canada doesn't take a back seat to anybody and that the federal Auditor General's office very much has a leadership role to play.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Thank you.

I greatly appreciate your comments on the PSAB, but what kind of work specifically can the Office of the Auditor General do to help other countries' governments improve their audit practices?

[Michael Ferguson]

I have personally been involved in work with Tanzania, in Africa, through the federal Auditor General's office, whereby we went over and did an assessment of the Tanzanian National Audit Office and its capabilities, particularly in such things as performance audits. We went through a rigorous analysis of their methodology, their outcomes, and the reports they produce and were able to provide them, I think, with a lot of good information. They were very receptive to it.

It also, though, taught me quite a bit. It taught me that there are a number of things you can learn from some of those developing countries. One thing—and I'm quite sure it exists in the federal Auditor General's office here as well, but it is something that in Canada we sometimes may tend to lose sight of—was that every single person in the National Audit Office in Tanzania recognized they had a role to play to make their country a better place. I'm sure this is also recognized in the Auditor General's office here in Canada, but I think we should never lose sight of it: that it is fundamental to the reason the Auditor General's office exists. It is to make better management of the federal government and to play a role in making Canada a better place.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

I so appreciate your comment, that you learned from that experience, too.

Are there—?

[The Chair, NDP, David Christopherson]

I'm sorry, I was giving you a chance to close, but we're done.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Oh, darn. I want to follow up.

Thank you very much, Mr. Chairman.

[The Chair, NDP, David Christopherson]

Thank you, Madam.

We move along to Mr. Bélanger. You have the floor, sir.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Thank you, Mr. Chair.

Mr. Ferguson, last week, the president of the Public Service Commission, Ms. Barrados, appeared before a committee. In response to a question asked by a colleague on the appointment of individuals who would be in a position where bilingualism is essential, she said, and I'll quote her in English so you fully understand:

The way we operate in the public service is that the language requirement is an essential requirement. ... If you don't meet the language requirement, you don't get the job.

Do you have any comments about what Ms. Barrados said?

[Michael Ferguson]

I really don't have any comment, Mr. Chair.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Thank you.

Mr. Ferguson, the Office of the Auditor General of Canada, 2009-10 Estimates, Performance Report looks at aspects of accountability and indicators relating to staffing. The sixth element is "merit". This is what it has to say about that: "Persons appointed meet the essential qualifications, including official languages."

Since the Office of the Auditor General itself acknowledges that knowledge of both official languages is an essential requirement when it comes to merit, do you have any comments on that?

[Michael Ferguson]

I really don't have any comment, Mr. Chair.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Mr. Ferguson, I cannot assume what the outcome will be of the vote in the House or in the Senate, but based on the comments we've heard so far, your appointment may not be unanimous. There are five political parties represented in Parliament. Three of them are officially recognized. Based on the comments made so far by the parliamentarians, four of the five parties represented in the House will not be supporting your nomination.

The Auditor General is an agent of Parliament and it is not a government position. I cannot assume how the vote will turn out, but if the indications we have are correct, the only party represented in the House that would support you would be the governmental party.

Do you have any comments on that?

[Michael Ferguson]

Again, Mr. Chair, there's not much I can say on that. We'll have to wait and see what the vote is.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

I would like to ask another question, Mr. Chair.

Within the Office of the Auditor General, many people report to the Auditor General. The Official Languages Act confers rights on these people. Naturally, they need to meet the language requirements of their position, but the act also gives them the right to work in the language of their choice. In certain cases, that would be French.

Do you think that your nomination could interfere with the rights of these people? These rights are guaranteed by legislation that is quasi-constitutional.

[Michael Ferguson]

The office of the Auditor General will have the capacity to make sure that every person in the office can continue to work in their language of choice. I will be absolutely committed to making sure that every person can continue to work in their language of choice; I fully respect that as a right for people. As I said, I'm sure the office has the capacity to make sure that this right will be protected for each and every employee of the office.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

How will this right be respected in the interactions between senior managers in the Office of the Auditor General and you? I'm talking about direct interactions.