Finance Committee on June 22nd, 2020

[The Chair, Liberal, Wayne Easter]

Okay. Thank you, all.

We'll go to Ms. Dzerowicz, followed by Mr. Morantz.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

I want to add my sincere and warm congratulations to you, Ms. Hogan, on your appointment to be our new Auditor General. It's an important role. Thank you for your service to our nation.

I want to start by correcting something on the record. My colleague Mr. Julian indicated that the only time there's ever an increase in the Auditor General's budget is when there is a minority government. I think as you just stated, and as the interim Auditor General indicated the last time you met with us, in 2017 there was actually an increase of just over $7 million. In budget 2018 our government committed to investing more than $41 million in additional dollars. I know there's more to come, but I wanted to make sure it was on the record that dollars did flow, and in a majority government, in our last Parliament.

My first question for you is with regard to your point 11. You mentioned that our committee's motion calls on the Auditor General to “audit all federal programs associated with Canada's COVID-19 response”. Is that the intention? While there is a motion, would it be typical that the Auditor General would audit 100% of the programs or is it the intention that you will do 50%, 70%, 75%?

If you could clarify that, it would be appreciated.

[Karen Hogan]

I did raise it, I guess, in order to provide a little bit of clarity to that. To go back to the motion, it did say all programs within COVID and all the audits that we were intending on doing. As an independent audit office, it's very important to be able to have the choice to audit what you want, when you want and to the extent that you want.

I simply wanted to highlight that auditing all of the COVID programs would be astronomical. There are just so many. We would likely be doing just that for many years to come, which we don't believe is the best thing for Parliament and the best for Canadians.

There are many important programs out there that we need to look at. There's military spending. We would love to go back and look at cybersecurity, something that we have delayed. We think the reliance on technology across the entire country has made it very clear that this is an important audit to look at. We'd love to do a follow-up on connectivity in the north. There are so many—

[Julie Dzerowicz, Liberal, Davenport, ON]

Ms. Hogan, I'm sorry to interrupt. You're just saying that you're not intending on all programs, but it would be a subsection.

[Karen Hogan]

We're going to look at risk and at where we'll have the best impact and value, so yes, that is our intention. We just wanted to highlight that we can't look at what the motion said, which was all programs.

[Julie Dzerowicz, Liberal, Davenport, ON]

Perfect. At this point, you don't have any idea of whether it's 25% or 50%, but you'll just kind of take it as it comes along.

[Karen Hogan]

Absolutely. I think we need to be able to have the flexibility to plan right now in the short term. We do have a medium- and long-term plan. It's a little bit in flux, because the pandemic might evolve as we move forward, so I don't have a number or a target. Our intention is to look at what we think will add the most value and is the most important.

[Julie Dzerowicz, Liberal, Davenport, ON]

Next, you indicated that the work is progressing and is under way.

How is the audit of the spending that's been undertaken and the money that's been borrowed due to COVID-19 different from the audits regularly conducted by your office?

[Karen Hogan]

When you say “regularly”, do you mean with respect to performance audits? I guess I don't really see it much differently other than it came from an order in the House. It might be somewhat different in that some programs that we focus on are really within one department. This has a much more horizontal impact across many departments which might have a role in either establishing a program or rolling it out. That just adds some complexity.

Some of the programs might be structured in a very different way. We might see lots of controls before money flows. Because of the response in an emergency time, that's usually where you try to get funds out quicker. Your controls then show up a little bit later on in the process—what we, as auditors, would call preventative controls or detective controls. It just changes the approach you might take or the way you might look at a program if there are preventative versus detective controls.

Other than that, it doesn't really change what we're looking at. We still have to gain a great understanding of the program. We'll look at the outcomes and how it might have been established.

[The Chair, Liberal, Wayne Easter]

Ask a fairly quick question, Ms. Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you. I have one more.

I know we have been talking a little about technology and how far behind and how ahead we are. Is there a sharing of best practices around the world with similar countries or G7 countries on how to be conducting these audits around COVID-19 or where technology needs to be?

[Karen Hogan]

We have been engaged with our fellow supreme audit institutions across the world and within the country. I believe we have had several great conversations, and continuing ones, with the Australian National Audit Office, as well as the provincial auditor general offices. We do this regularly, and much more regularly now in the context of COVID, so we can benefit from best practices.

When it comes to technology, every office is very different. Some of the provincial offices, for example, have 25 individuals, so their capacity and technology needs are very different from what ours might be.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you.

We're turning to Mr. Morantz, who will be followed by Mr. Sorbara.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you.

I'll offer my congratulations as well, Ms. Hogan. It's a wonderful opportunity, and I'm sure you'll look forward to your service.

I want clarification on a couple of things.

First, you said earlier that all audits have essentially been cancelled, other than the ones you described. The website talks about international obligations. For example, as I understand it, your office audits the International Labour Organization and UNESCO. Are those audits also postponed or cancelled? I think that comes through your membership in INTOSAI.

[Karen Hogan]

The audits you're referring to for Interpol and UNESCO are done on a cost recovery basis. They are the annual financial audits for those organizations, which we undertook after consultation with Global Affairs Canada many years ago. It is part of a strategy to ensure the Auditor General of Canada has a presence in standards setting, as well as in the international accounting community. So, no, those audits have not been deferred because they are the annual financial audits.

Audits similar to the audits of Crown corporations and the Government of Canada, as well as the three territorial governments, are mandated in legislation to occur annually, and we are honouring all those commitments. Unfortunately, it is our discretionary work, which is the performance audit work, that is seeing the delays.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Okay. I appreciate the clarification. I just wanted to check on that.

A few days ago Commissioner Maynard said there were difficulties with some of the ATIP units. I believe you rely on ATIP and I'm not sure if it's for all or some of your information. Have you had any difficulties getting the information you need? I know the Parliamentary Budgetary Officer has been struggling to get information on IICP. I'm wondering if you're having similar issues.

[Karen Hogan]

I will ask Andrew to pipe up here if I misspeak or if I miss something.

We do not rely on the access to information legislation to obtain our information. We obtain our information through the Auditor General Act. When we run into issues, we work very hard with the departments to work those out. On occasion we have had to involve Parliament or PCO to help us sort them out.

To my knowledge, we don't have any of those issues right now, but I'll turn to Andrew to see if he wants to amend that or add to it.

[Andrew Hayes]

I might add a few comments.

In terms of delays in accessing information, right now the biggest obstacle for us is with respect to secret information, as that information can't be transferred over the normal network. In some cases, both on the part of the department and on our part, we need to have people on the ground dealing with paper. I would say that's the most challenging right now.

As Karen was saying, we had the support of Parliament to get an order in council that expanded our access to cabinet confidences. We haven't encountered any problems accessing cabinet confidences. I'll just say the same challenges with secret documents exist there, so we experience delays in getting that information right now.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you.

Ms. Hogan, you said earlier that you're planning on examining the CERB as at least one of the emergency programs. I'm not sure if you want to examine any of the others, but because you mentioned that one, I'm wondering if you have any specific concerns. Why is that the one you want to have a look at?

[Karen Hogan]

As I mentioned, we have a great deal of criteria when we choose a topic in order to examine it.

The CERB is one that is a large monetary drain on the government. It has an impact on so many Canadians across the country and is one that unfortunately, as we're all aware, might have some activities that are fraudulent. All of those are factors that increase the risk and importance of a program, hence one that we would need to look at. I believe that if we could provide some advice on perhaps how it was established or rolled out, those could be used as best practices to amend any other programs that are similar or related to it.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Mr. Chair, do I have time for another quick one?

[The Chair, Liberal, Wayne Easter]

Yes, a quick one.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

I just wanted to circle back to the independent funding mechanism, because I want to get your perspective on this. It's obviously important for you to have a stable source of funding so that you can conduct your work, but I see the independent funding mechanism as more than that. Your department, as much as any auditing organization, needs to be perceived as being independent of government.

Do you see the independent funding mechanism not only as a source of stable funding but as an added safeguard in the system, basically, to ensure that the public perception of the Auditor General remains independent?

[Karen Hogan]

Absolutely. As you noted, it is from two fronts that we need it to be independent, not just for stability. There is an added complexity when you must turn to a department that you audit on a regular basis, both financially and through performance audits, and ask them for money. Obviously, there's a need to have it just be in a better realm, where there is no potential perceived or real conflict.