Government Operations Committee on Dec. 5th, 2006

[The Chair, Liberal, Diane Marleau]

You still have three minutes.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Given the length of time that some of these efforts to recoup dollars can go on--I'm a little uncomfortable asking this question--would the department have recourse to the estate of someone who may have been consistently misusing these funds? Would that be one option that would be available?

[Sheila Fraser]

I'm afraid I don't know. I can get that information for you and send it to the committee. I don't have that offhand.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Thank you.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

May I take the remaining time?

[The Chair, Liberal, Diane Marleau]

Certainly. You have two minutes.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

You've talked about the transparency or lack thereof with respect to federally funded foundations. The Accountability Act seeks to add 20 organizations to the list of those subject to access to information regulations, including many foundations that are not currently covered. Do you consider this to be a positive step?

[Sheila Fraser]

We haven't really looked at that, though when we made comments on foundations in the past, we indicated that several were not subject to access to information. Given that many involve large sums of public money, I would think that, yes, access to information transparency around their spending would be a good thing.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Good. We're encouraging the Senate to hurry its passage of this expansion of access to information.

Secondly, you noted in a previous report, I think it was in October or November, with respect to the environmental programs the previous government was financing, the lack of targets and lack of achievable results. This was done in conjunction with the environment commissioner. I'm looking at Sustainable Development Technology Canada. You made observations about the lack of transparency in that regard.

Is it part of the same theme, that moneys allotted by the previous government for so-called environmental programs lacked transparency, the goals were unclear, and the objectives were not articulated?

[Sheila Fraser]

No, the issue we have here with regard to Sustainable Development Technology Canada is with a clause inserted by the Treasury Board Secretariat, saying that if there were a meeting at which the federally appointed directors formed the majority, they couldn't make a decision. So it really hampered their ability to function effectively as a board. This was done I think for various other reasons, which were mentioned in the report. But it doesn't have anything to do with their program objectives.

[The Chair, Liberal, Diane Marleau]

Thank you.

We'll go to Mr. Alghabra.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Thank you, Madam Chair.

It's good to see you again, Madam Fraser. You've become a regular here, and we enjoy having you.

[Sheila Fraser]

With pleasure.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

I have to say, first, I'm heartened by the work your office does. It's a sign of strong democracy at work, which always strives to correct itself. We all know that in an organization as big as the federal government, there will be errors and deliberate mistakes, and we need somebody to oversee or make sure those errors are not made or repeated.

My question to you is, how do we set up a system that makes this monitoring much more frequent and immediate, i.e., perhaps by using some performance indices or some permanent offices within the department?

Again, a lot of my colleagues have been using their personal experiences. I can tell you, from my experience in the private sector, there are accounting auditors. The person who oversees the performance of accounting within a department or an agency is a comptroller. There are quality assurance auditors. There are people who oversee performance, such as quality assurance managers, and so on and so forth.

There might be a systemic issue here that we can fix or improve upon. I know some people alluded to the surplus. Maybe that is a symptom, but I think it's much more mechanical or technical than that.

Do you have any thoughts on this?

[Sheila Fraser]

Thank you, Madam Chair. I would just like to echo that our objective in doing these audits is to help improve management and give assurance to parliamentarians about whether important systems and practices are working well or if there needs to be improvement.

On the whole question of monitoring, the performance measurement is critical to that. Do departments have in place good performance measures? I think we need to all recognize that performance measurement in government, in the public sector, is much more complicated than it is in the private sector. In the private sector, the measures are largely financial, tend to be earnings per share or stock price, so the systems are perhaps easier in a way. As well, in government a lot of the programs need to run for a very long time before you actually see the results. It's difficult for government. There's the question of attribution. For example, was it the government's actions that reduced poverty, or were there other factors?

It is very complex to do that. Nevertheless, I think that's why it is so important. We've done a number of audits over the years on performance measurement. The government has made good progress generally over the last ten years, but it seems to have sort of stalled lately. In the last few years we note that they aren't making the same kind of progress, and if I can be so bold, I think there needs to be more attention paid by parliamentarians. The departments produce a lot of this information. But honestly, I think a lot of people--and parliamentarians--will say that the review of those documents is not being done--for good and valid reasons.

If I can make the comparison with the private sector, when you buy a share in a company, everybody receives the annual report and the financial statements. I'm not sure everybody reads those cover to cover. You have a stockbroker who does the analysis for you and basically says buy or sell, or here's our recommendation.

I think parliamentarians may need a more rigorous analysis section, be it through the Library of Parliament or others--I know there has been discussion around that--that could help them do the analysis of the performance reports, and then they would be better able to question and to query departments about their performance.

So I think it's something we have to look at, and it has to be resolved. But there needs to be the pull from parliamentarians in order to improve the performance measurement system in government as well.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Yes, I will acknowledge the fact that parliamentarians are overwhelmed, typically, with the amount of information they receive, whether they're dealing with constituents' issues or legislation or performance of government, and I think probably the same would apply to a CEO of a large corporation. That's why they try to delegate or divide up the responsibility and then have individuals or organizations or departments responsible and accountable for the performance of certain indices.

That's what I was wondering. Yes, I would certainly agree with you. The ideal situation is to have parliamentarians dedicate a lot more time to these issues, but the reality is that we probably need some mechanism to help us do that.

[Sheila Fraser]

Yes. I'd say within government the mechanisms are there. The Treasury Board Secretariat actually plays a kind of management board role. There is the role of the Comptroller General as well. The departments all have their groups that do these performance reports. So I think the mechanisms are there.

There probably needs to be more attention paid to it, perhaps more rigour, and I would suspect probably more investment as well, be it in terms of systems or people. There needs to be better information. Now, government has certainly indicated that they want to go forward with some kind of regular review of programs, and in order to do that well, they will need that performance information. So I'm hopeful that this movement to trying to get a better expenditure management system will require much better performance information.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

I just want to make a short comment. I want to go on the record in saying I think part of that process would be going to accrual accounting, because it will also help us examine the financial performance of departments.

Thank you.

[The Chair, Liberal, Diane Marleau]

Thank you.

Mr. Nadeau.

[Richard Nadeau, Bloc, Gatineau, QC]

Thank you, Madam Chair. I am almost tempted to ask Mr. Campbell if Scotland is a nation in the same way that Quebec is, but we all know the answer so I will leave it at that.

Ms. Fraser, I am particularly interested in chapter 5 of your report. You said that the contracts to relocate members of the Canadian Forces, the RCMP and the federal public service were not awarded through a fair and equitable process.

Could you provide us with further explanation on this?

[Sheila Fraser]

That is correct. There was an error regarding the volume of work in the request for proposals. When they are relocated, some people keep their house and require a property manager. Their request for proposals said that 7,200 people a year required property management services. A number of companies challenged this figure—they said that there were anomalies and inconsistencies in the request, that the figure was too high and so forth. At any rate, the figure was never substantiated; it was simply provided by Public Works and Government Services Canada.

The actual demand for property management services stood at 180 requests over a 6-year period; an average of 30 per year rather than 7,200. The company that had the previous contract was, obviously, aware of the actual demand and submitted a very low bid, while the other asked for millions of dollars. We would need to do some calculations to work out what the difference would have been, but suffice it to say that the process was unfair because the company that had the previous contract was aware of the actual level of demand. The department did not review the figure, even when it was challenged by potential contractors.

[Richard Nadeau, Bloc, Gatineau, QC]

You could not have had a more enormous difference between the bids. In your conclusions to chapter 5, you point out, amongst other issues, that neither Treasury Board Secretariat nor the other involved organizations had developed performance indicators to determine whether the program objectives had been met.

Are these two situations related?

[Sheila Fraser]

Not really. The program was initially set up to reduce government expenditures. We point out that the services should have been evaluated. There was a sort of evaluation of the services provided to people who relocated, but there should also have been a program evaluation to determine whether the desired results and savings had been achieved. It is not really related to the other problem.

[Richard Nadeau, Bloc, Gatineau, QC]

Fine, but are they in the process of developing a mechanism? Are Treasury Board Secretariat and the other bodies working on that at the moment?

[Sheila Fraser]

I believe they said that they agreed that it needs to be done; perhaps we could ask Mr. Campbell if he knows any more. I believe they said that they agreed with the recommendation, but as far as I know, they were no more specific than that.