Public Accounts Committee on Oct. 17th, 2011

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

Okay.

And I have one further question, if I may, Mr. Chairman.

I'm curious about how long a typical performance audit would take and how many staff are involved.

This is probably for Mr. Wiersema.

[John Wiersema]

Thank you for the question, Mr. Chairman.

A typical performance audit could take 12 to 18 months to carry out from start to finish, from the planning of the work to the ultimate tabling of the report in Parliament. The number of staff involved can vary from as few as three or four to six, eight, or more staff, depending on the size of the audit.

A typical performance audit done by the Office of the Auditor General will require 6,000 to 8,000, and sometimes 10,000, hours of activity by the audit staff. A large performance audit will have 8,000 to 10,000 hours charged to it from the Auditor General's staff. That doesn't count all the time that departmental staff take in dealing with and responding to the audit.

A typical performance audit is a big activity and reasonably costly.

[The Chair, NDP, David Christopherson]

Thank you very much.

Monsieur Dubé, you have the floor, sir.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

First of all, I would like to thank our guests for their presentations. We work so closely with you that I feel it is important to have a clear understanding of your roles.

For the Office of the Auditor General to have so much prestige and respect as it has in Canada, it must obviously have a certain amount of credibility. To have that credibility, the facts provided by the office must be accurate. Given your good reputation, your team is clearly able to do this job well. But it sort of goes both ways, since the department being audited must provide the information.

Could you give us more details about the process that guarantees the accuracy of the facts when an audit is conducted?

[John Wiersema]

Thank you very much for the question, Mr. Chairman. In the interest of time, I won't go through the audit process in total, but there are a couple of really important steps in the process.

At the start of every audit of a department, we prepare and send to the department what we call an audit plan summary. It is a very high-level plan of what we intend to do. It also includes the criteria we intend to use in those audits, the standards against which we assess the department's management performance. We say, “We're going to audit this and assess you against these standards, but can you please tell us if you agree that these standards are reasonable expectations for you?” We ask for the department's confirmation that the standards against which we will assess their management performance are reasonable.

At the end of the audit a lot of discussion takes place between the auditors and the department on the audit findings. We discuss the facts, what we saw and what it means. We talk to the department about the types of actions that might be necessary to deal with the problems, and we ask for the department's input on those actions. In the very final step the audit team sends the final draft of the report to the deputy minister of the department explicitly asking the deputy minister to confirm the accuracy of the facts reported.

We take responsibility for the opinions and conclusions we reach, but we ask the department to confirm explicitly to us that the facts upon which we have based our opinions and conclusions are accurate. We get that confirmation in the vast majority of cases. We want to make sure that the facts are right. The opinions that are expressed based on those facts are our responsibility. We have our own internal processes to ensure that we're forming proper opinions.

There are many other aspects to ensuring the quality of our work, because, ultimately, parliamentarians need to have confidence in the Auditor General's conclusions in order to act on them. Those are two important steps in the process of interaction with the departments.

[Matthew Dubé, NDP, Chambly—Borduas, QC]

That's all from me.

[The Chair, NDP, David Christopherson]

Thank you.

You're my new favourite.

Mr. Hayes, you have the floor, sir.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

Thank you, Mr. Chair.

This question is for Madame d'Auray.

One of your staff mentioned that the supplementary estimates are largely misunderstood. Today we quickly looked at this report, which was a really nice slide presentation. I was fortunate to have the opportunity to see the presentation.

In your opinion, how do members of Parliament understand this whole supply process? Do they understand it well? Is it well communicated? Whose responsibility is it to communicate that process, in the event that it isn't? Does that rest with each individual party itself or with your department?

[Michelle d'Auray]

Thank you for the question.

Supply is a complex undertaking. There are many opportunities for members to learn about it. I would argue that the main communication or engagement process is really through the standing committees. Every standing committee has a number of organizations that can be called before committee to explain its spending plans and priorities. That is part of the estimates process. You will get a real understanding of the set of organizations or departments that relate to that standing committee and, therefore, make the links to the supply process. Ultimately, though, it is the responsibility of each individual member to understand, appreciate, and be informed of the supply process. We're always agreeable to coming before any committee to explain the supply process, and have done so on a number of occasions.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

Thank you, Mr. Chair. That's fine.

[The Chair, NDP, David Christopherson]

Very good.

Thank you.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

I'm another one of your best friends, or whatever they are called.

[The Chair, NDP, David Christopherson]

You are.

You're my new best, my favourite, committee member.

We'll go to Mr. Byrne.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Wow. Thanks.

I'm not going to be your best friend.

[The Chair, NDP, David Christopherson]

No.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Mr. Wiersema, you talked about how you select audit materials and topics to study. It has been brought up in this committee whether or not MPs have tried to provoke an audit, or asked additional questions of you pertaining to a specific audit.

Would you encourage that, or should we as members of Parliament have confidence that in your office, your staff are assessing information as it's made available through your contacts with departments, the media, and other sources of information? Would you explicitly encourage MPs to provoke you with audit encouragements?

[John Wiersema]

The answers, Mr. Chairman, are yes and yes, that is, yes to both. I would like to believe that this committee has confidence in the Office of the Auditor General, in the rigour of our planning processes. I can assure you we are very rigorous in terms of assessing government operations, looking at departmental risk, looking at government-wide risk, looking at areas of significance, consulting broadly with internal and external stakeholders, and coming up with a good list of subjects for audit. So I would like to believe that committees have some confidence, and are entitled to have some confidence, that the OAG has a rigorous process behind all of that.

At the same time, I absolutely encourage individual MPs, if they have a particular area of concern, to bring that to our attention, and we will feed it into that process of what we call one-pass planning, to consider another perspective, a particular issue, that may be of concern to an individual member of Parliament. The member of Parliament may be dealing with a very specific or individual situation, but it might in fact be symptomatic of a broader matter that warrants the Auditor General's consideration—as long as the expectation isn't that we do every single one of those, because we physically can't. We couldn't accommodate everything, but if members have a particular concern, they are encouraged to bring it to my attention or the attention of my parliamentary liaison people, and we will do our best to consider it in our planning process.

So, yes and yes.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Perfect. Thank you.

Madame d'Auray, there has been a fair bit of criticism about the whole estimates process and the actual value of the information. There's not a whole lot of plainspeak within the estimates as they're tabled, and I think there has been an acknowledgement that straightforward language would probably be a little more helpful in educating and informing parliamentarians and Canadians as to what's going on in terms of planned government expenditures.

Could you comment on whether or not you feel that the estimates that were published just a few short months ago represented progress and whether or not changes are being contemplated for the future?

[Michelle d'Auray]

Thank you, Mr. Chair, for the question.

I think we always want to improve on the estimates—the text, the narrative, and the context. There are some elements that are prescribed, if I can put it that way, by the voting authorities and the legislative requirements. But at the outset and at the front part of the estimates document, we do try to give context, to give, as Bill indicated, explanations as to what has changed from one year to the next, what has caused that change, what some of the major priorities are of the government, and what are the major changes in the requests for expenditures.

So to the extent it is possible, we try to do that within the confines of what is also a pretty rigorous process, and a very large process as well. It's not quite on a reporting level with the public accounts, but it is a significant process that involves working with a rather large number of organizations.

That's why we also look at the performance reports and the reports on plans and priorities, which each organization fulfills and provides to Parliament, because they will give the narrative of those organizations as well. So they come in and support the estimates documents as well. So there is a variety of tools, and everything is not just in the estimates. A variety of tools and reports and mechanisms are provided to Parliament to facilitate the study of the supply requests.

[The Chair, NDP, David Christopherson]

Thank you.

Mr. Dreeshen, you have the floor.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you very much, Mr. Chair.

Again, welcome to our guests.

First of all, Mr. Wiersema, I wanted to ask you one specific question with regard to performance audits. You talked about the fact they are value-for-money audits. You also indicated that these audits are against the government's own rules and analysis, but you said that if they didn't take place, you would look at best practices.

Can you give me an idea of how often you see a lack of those particular rules, where you then have to go to best practices?

[John Wiersema]

I would say, Mr. Chairman, that 90% plus of our performance audit work comprises our auditing of management performance against government policies. So the vast, vast majority of our work is done against government's own policies. Where we're auditing something that may not be the subject of a particular government policy, we might look at ISO standards or other best practices out there, but the majority of our work is against government's own policies.

[Earl Dreeshen, Conservative, Red Deer, AB]

Okay, thank you.

Mr. Chair, I'd like to save just a minute of my five minutes for Mr. Saxton. So could you remind me at that time?

Thank you.

[The Chair, NDP, David Christopherson]

Okay.

[Earl Dreeshen, Conservative, Red Deer, AB]

Then to Mr. Ralston, you had asked earlier to have some time to talk about your internal audits. It's certainly something that I'm interested in knowing a bit more about—the provision of objectives to the deputy head, the evidence-based opinions, and the governance. That's part of it. I just wonder if you could talk a little bit more about that internal audit function that you had wished to put on the table.