Public Accounts Committee on Oct. 5th, 2011

[John Wiersema]

Mr. Chairman, no, I do not feel we have to go back and reopen the audit or change our opinion. I stand behind that report as we published and tabled it on June 9, wherein we indicated there is no documentation available within the federal government to determine how the 32 projects were selected.

Much documentation has been released subsequently, and that documentation, for the most part, has its origins in the records of municipal governments. I do not see a lot of value in the Office of the Auditor General auditing this information. We do not audit municipal governments. We are the auditors of the Government of Canada. The documentation is public, and I don't see a great deal of value in our doing additional work on this file.

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

Thank you so much.

Based on your comments today, and certainly your report.... In fact, I'm just going to quote your comments. You said a “strong internal audit can help an organization achieve its objectives, improve its management practices, and make it more effective”. You gave us a good report card on this. In fact, I believe that you're very impressed with the significant improvements. Correct me if I'm wrong, but I understand that the audit in this report regarding the strong internal control process--it was indeed your review of internal controls--was predicated on a 2004.... It was a follow-up audit, was it not?

[John Wiersema]

Correct.

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

It was predicated on a 2004 audit on the internal audit function in the Government of Canada.

There are many of us here as new members. Would you be kind enough to highlight the differences between the two? And what was the substantive improvement?

[John Wiersema]

Thank you for the question, Mr. Chairman.

The internal audit function in the government, I believe, perhaps as a result of the program review exercise in the 1990s, really had been significantly weakened. We so indicated in the report we issued in early 2000. We thought that internal audit was a vital function for an organization as large and complex as the Government of Canada, and we pushed hard to strengthen that function.

I was delighted to be able to report on June 9, and would like to congratulate the internal auditors in government that they have done a lot of work toward professionalizing the function. I was quite impressed with the progress that's been made, and a lot of that has come with the support of the Office of the Comptroller General. They've taken that on, made it a priority, strengthened the function, and professionalized it. In addition, as a result of legislative changes, they've established the departmental audit committees, with external members, which I believe have gone a long way toward contributing to the strengthening and professionalization of the internal audit function. That's very much a good news file.

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

Thank you very much. I appreciate that response and am gratified to hear that we're making such wonderful progress.

You've also addressed the financial management and risk management components. You are pleased this time. When was your previous audit examining those pieces? What was it a follow-up to? And again, for the benefit of us newbies, would you explain exactly how we've improved?

[John Wiersema]

I'd be pleased to, Mr. Chairman.

I believe that the previous audit we did on financial management was probably around 2002. One of the most significant findings coming out of that audit was that when we looked at the qualifications of the SFOs--a government term meaning senior financial officer in government--fewer than one-third of them were professionally qualified. These people were the chief financial officers of organizations involving billions of dollars of spending and billions of dollars of assets and liabilities. We so reported to Parliament and encouraged government to ensure that professionally qualified people were in place.

The report we tabled on June 9 indicated, again, a very positive story. Eighty-two per cent of the CFOs in the largest 20-some departments, I believe, had the requisite professional qualifications and were playing strategic roles at the senior management tables in their capacity as chief financial officers.

Again, it is good progress, and I congratulate the financial community for that progress.

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

Thank you so much. I appreciate that the chair has said that my time is up, but I look forward to learning more in terms of the improvements we've made.

Thank you.

[The Chair, NDP, David Christopherson]

Thank you, Ms. Bateman.

We'll move now to the NDP benches and Ms. Blanchette-Lamothe.

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

Thank you, Mr. Chairman.

Thank you for being here. I also want to express my appreciation for the report you submitted.

I have several questions.

First of all, e-mails were exchanged between Tony Clement and the Mayor of Huntsville with respect to audits of G8 spending by Infrastructure Canada, and the mayor said that was totally unacceptable. Mr. Clement apparently responded by saying that he was working on it.

Do you know whether that internal audit was carried out? If so, did you receive any information about such a review?

[John Wiersema]

Mr. Chairman, I'm not able to comment on the communication between the former Minister of Industry and mayors because they were not subject to our audit. As to whether or not any internal audits have been done in this area, I believe that.... Federal internal audits? In terms of any municipal internal audits, I don't know, and I'm not currently aware of any internal audits that were done on this program at the federal level.

Wendy seems to be confirming that. We're not aware that internal audits have been done here.

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

Thank you.

In your opinion, would it be acceptable for the Minister of Industry to involve himself in an internal audit process at Infrastructure Canada?

[John Wiersema]

Mr. Chairman, I don't believe it is appropriate for me to comment in terms of how ministers carry out their duties, so I'll pass on that one.

[The Chair, NDP, David Christopherson]

Thank you. Another question. You have the floor.

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

In one of Mr. Clement's e-mails, mention is made of a meeting of the Local Area Leadership Group that was to take place during the election period. Mr. Clement wrote that he expected to attend and that he would be there even if an election was called.

Once again, I would like to know what rules apply to ministers in election campaigns. Is meeting with local officials at an official function to discuss federal allocations acceptable in the middle of an election campaign?

[John Wiersema]

Mr. Chairman, as we indicated in our report, public servants were not involved in the project selection. That would be the normal process that would be followed, and the absence of the public servants' involvement in the documentation as to the project selection is the issue that we brought to the attention of Parliament.

So the normal process would be that ministers would not be involved at that level of detail of project selection. That would be the work of public servants.

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

Thank you.

I have one last question.

Officials attended meetings of the Local Area Leadership Group. Does the involvement of the Director of the Summits Management Office in a discussion on funding criteria not raise doubts in your mind as to the accuracy of the information provided to you about their involvement or otherwise?

[John Wiersema]

Mr. Chairman, we indicated in our report that public servants were not involved in project selection. I stand behind that report. I continue to believe this was the case, and when we have talked to government officials about the role public servants played in some of those meetings, they have reconfirmed to us that their involvement did not extend to the issue of selecting projects for funding.

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

Thank you very much for answering my pressing questions on the subject.

I think that pretty well completes my questions for the time being.

[The Chair, NDP, David Christopherson]

There's a minute there. Does anybody else on the bench want it, or shall I go to the next speaker?

Okay. We're going on rotation back to the government benches....

Oh, I'm sorry. I didn't hear you.

[Charlie Angus, NDP, Timmins—James Bay, ON]

You just thought I was flicking my beautiful hair.

[The Chair, NDP, David Christopherson]

I wouldn't put it that way, but I certainly didn't realize you wanted the floor, which you now have.

Go.

[Charlie Angus, NDP, Timmins—James Bay, ON]

You said we don't need new rules, so my understanding is that rules need to be followed. That's the question we're dealing with on the G-8.

Our colleague in the government, Mr. Shipley, talked about the lack of procedural process and maybe we can improve it, but I'm looking at the Lake of Bays project where the minister showed up with a $4.5 million cheque for a project the town didn't want to have anything to do with. The town had said there was no construction plan; there was no viability plan. So they clearly had not signed anything to agree to this. This is one of the projects that wasn't finally approved, but we understand Mr. Clement had the money in hand to give to the town and that the town told him they were not supporting this plan.

Is that a normal set of circumstances for approval of projects? Did you have any documentation on what went wrong with the Lake of Bays project?

[John Wiersema]

Mr. Chairman, I'm not able to shed any light on the specifics of the particular situation the member is referring to. I would just go back to our comment. It is not normal for public servants not to be involved in the process for determining which projects will ultimately be recommended for approval and funded.

[The Chair, NDP, David Christopherson]

Thank you. I'm sorry. Time has expired. Back to the government benches.

Mr. Hayes, you have the floor, sir.