Government Operations Committee on June 20th, 2006

[The Chair, Liberal, Diane Marleau]

Welcome to the Honourable John Baird, President of the Treasury Board.

It's your first time before this committee. It's not your first time before committees. I'd invite you to introduce the people with you, perhaps, and to say just a few words. I know you've wanted to say something, so go ahead.

[John Baird, Conservative, President of the Treasury Board]

Thank you very much, Madam Chairwoman.

Maybe I'll ask the officials with me to identify themselves, because they've all got very unique titles. At the Treasury Board we have assistant secretaries, not ADMs, so I want to make sure to get them right.

Maybe we'll start with Daphne.

[Daphne Meredith, Associate Secretary, Corporate Priorities and Planning Sector, Treasury Board of Canada Secretariat]

My name is Daphne Meredith and I'm the assistant secretary of corporate priorities and planning at the secretariat.

[Coleen Volk, Assistant Deputy Minister, Corporate Services Branch, Treasury Board of Canada Secretariat]

I am Coleen Volk. I am an assistant deputy minister of corporate services.

[Linda Lizotte-MacPherson, Associate Secretary, Treasury Board of Canada Secretariat]

I am Linda Lizotte-MacPherson, associate secretary.

[Charles-Antoine St-Jean, Comptroller General of Canada, Office of the Comptroller General, Treasury Board of Canada Secretariat]

I am Charles-Antoine St-Jean, Comptroller General.

[David Moloney, Senior Assistant Secretary, Expenditure Management Sector, Treasury Board of Canada Secretariat]

I am David Moloney, assistant secretary, expenditure management.

[The Chair, Liberal, Diane Marleau]

You don't have to touch the mikes, by the way. Somebody controls them. It really shifts things if you do.

Mr. Baird.

[John Baird, Conservative, Ottawa West—Nepean, ON]

I'm very pleased to be with you this morning to hear any concerns and to answer any questions and take any issues back to the secretariat and to my colleagues.

I'm joined by much of the senior management team here today. We also have additional officials behind me, should there be any more specific questions on a specific area.

I can tell you we take our responsibilities, as one of the key central agencies, very seriously. We're obviously here to provide accountability in terms of how tax dollars are spent, and I look forward to the opportunity to hear the concerns of members and answer their questions.

[The Chair, Liberal, Diane Marleau]

Did you prepare a written submission?

[John Baird, Conservative, Ottawa West—Nepean, ON]

I have some notes here that I could share, but in the interest of time I'll waive that.

[The Chair, Liberal, Diane Marleau]

You did say you wanted to leave at 10:15. Is that correct?

[John Baird, Conservative, Ottawa West—Nepean, ON]

Yes, I wanted to see if there was a possibility. Bill C-2 is at the report stage at committee, beginning at 10 o'clock, and a number of the members of the Bill C-2 committee--a number of our colleagues--have presented amendments at report stage and I did want to see if it was possible for me to participate in that debate out of respect to our colleagues.

[The Chair, Liberal, Diane Marleau]

We'll see what we can do for you.

[John Baird, Conservative, Ottawa West—Nepean, ON]

Any help would be appreciated, Madam Chairwoman.

[The Chair, Liberal, Diane Marleau]

Thank you.

The first questioner will be Madame Ratansi.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Welcome, Minister, and welcome to your team.

I am new to this committee and I get to ask you the first question. The Office of the Comptroller General was created and I think it was part of the process coming out of the Gomery, or pre-Gomery. It is a very important function because it is an internal audit function, and I see that there has been an increase in the main estimates of about $14 million, if I am not mistaken.

Could you just explain details of what this will involve? How will this office operate? How many people will that involve? What is the $14 million for?

[John Baird, Conservative, Ottawa West—Nepean, ON]

I'll just respond briefly and then ask the Comptroller General to elaborate.

The Office of the Comptroller General is not new. Back in the spending reductions of 1995 the office, in some respects, was eliminated, and in other respects was merged with that of the Secretary of the Treasury Board, the senior deputy minister at Treasury Board.

What the previous government started was basically to re-establish it as a stand-alone position. I think many of the resources that it has--basically with inflation--is putting it back to the level that it had in 1993 to a great extent.

I agree with the previous government's decision to re-establish it. I think it's an important component of our capacity to be able to strengthen internal audit and our capacity to be able to catch.... When you have a budget of $200 billion, no matter who is in government there will be challenges from time to time. Hopefully the Comptroller General will establish processes to minimize that, and there is the function to identify any challenges or problems earlier.

Charles-Antoine.

[Charles-Antoine St-Jean]

Yes, thank you very much, Mr. President.

And thank you very much for the question.

Essentially, as the president said, the plan is to rebuild the Office of the Comptroller General to what it was back in 1993. In mid-2004 we started with an office that had a complement of about 60 or 65 people. Back in 1993, with the same parameters, there were about 200 people, so we're at mid-course to rebuild the office. We're at about 120 people now, and the plan is that by the end of 2007-08 we will be back at that strength level.

Essentially, from an internal audit perspective it would be to conduct audits for small departments and agencies. The ability doesn't exist at the moment. Also, it would conduct horizontal audits for the Government of Canada--certain contracts, travel, whatever--and also establish a practice inspection to make sure that we do have quality internal audit throughout the system. That's one of the components of the Office of the Comptroller General that we will do.

[John Baird, Conservative, Ottawa West—Nepean, ON]

I should point out that this an area Mr. Alcock started, and I think it was wise on his part.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

I agree.

I come from the internal audit department. I was the risk manager for internal audit in the provincial government, so I understand where you're coming from.

What I need to understand in terms of reporting structure is whether you are directly under the Treasury Board. If you're going department by department, are you going to be creating internal audit units within each ministry? How will that function?

[John Baird, Conservative, Ottawa West—Nepean, ON]

The Comptroller General, as established by the previous president, Mr. Alcock, is a deputy minister rank. It operates out of the Treasury Board Secretariat, and it would work with the chief financial officer of each department. We're not reinventing the wheel; rather, we're just trying to strengthen the wheel in each department.

I'll just ask Charles-Antoine to comment.

[Charles-Antoine St-Jean]

Essentially, every department is accountable to put in place that internal audit function; however, there's a functional relationship with the Comptroller General to make sure that the same process and level of quality is executed throughout the system. But every deputy minister in their department is accountable to put in place the internal audit function so that they can be accountable for the management of their department--to make sure that there's quality control, to make sure we have the right people in place, the right process, and the right tools.

[John Baird, Conservative, Ottawa West—Nepean, ON]

I think, as well, there's always a debate, and this is one thing we're going to weigh with experience. Deputy ministers are, of course, accountable. Now, with Bill C-2, they would be accountable before a committee such as this one.

That said, the Department of Justice acts as the lawyer for every department. That probably goes further than we'd like to go with respect to internal audit, but it's not an all-or-nothing scenario. So I think we're going to watch very closely how it evolves.

I feel strongly that there should be important checks and balances taken from the Comptroller General on each department. Some deputies might find that unwelcome, but there are some CEOs of companies in the private sector who might find some of the increased audit requirements--through an audit committee of a publicly traded company, for example--to be onerous. So the challenges we're having in the public sector really aren't much different from what the companies based in your own riding would be facing on a day-to-day basis.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

I'm not questioning that. I fully understand, because it's a risky business. We are in a risky business: we're managing taxpayers' dollars.

Are you the chief internal auditor? Are there managers of audit in every government department who will be reporting to you if they see any risks?

We've seen classic examples. A case in point is Mr. Guité. Can we not have checks and balances in place through a risk management strategy, where you have your managers report to the chief internal auditor, who would be you, so then you can directly report to the President of the Treasury Board?

I'm just trying to conceptualize it.