Thank you, Madam Chair.
As I mentioned a little earlier, that's a very serious question. When I took up my position, I examined the situation and wondered what factors had led to these misunderstandings and different positions. I reached a general diagnosis of the situation using control elements that already existed within the federal government. A certain number of measures have already been taken to prevent any reoccurrence of this kind of situation, in which different perspectives are not brought to the Auditor General's attention at the appropriate time.
As I've previously indicated to my government colleagues and to the Auditor General, in this kind of situation, the Auditor General should be called immediately when a question arises concerning possible alternative accounting treatments. This is a practice that is regularly seen in the private sector, where there are different points of view. Outside auditors are then called in to clarify the situation and state their views. You may agree or disagree, but you at least know what the positions are at the appropriate time. This procedure was implemented this year for certain major transactions. We're making the protocol more formal in order to ask the Auditor General to provide us with advance audit opinions in the case of somewhat complex transactions and those for which different accounting treatments are possible.
We've also adopted a new audit policy that will lead to the creation of independent audit committees for each of the major departments. That will make it possible to review these transactions at the appropriate time. In general, this kind of protocol — and this is also seen in the private sector — means that the audit committee will ask the senior director of finance whether certain transactions could have been reported differently, what those transactions were, and why that was done. The audit committee will put the same questions to the auditor. The debate can take place at that point. We have two or three years to establish the audit committees. That will be a long-term effort, but it will be a major part of our strategy to prevent a repetition of this kind of situation.
In addition, we are reviewing all financial management policies in order to clarify roles and responsibilities so that, in future, when questions are put to the various officials of the central agencies, everyone knows what the various roles are and what the prevailing opinion is. As you know, the deputy ministers are responsible for administering their departments and for their financial statements. In future, the Comptroller General will have to inform the deputy minister formally whether he disagrees on the accounting treatment. Responsibility will always fall to the deputy minister. However, the Auditor General will be required to advise the deputy minister of his opinion formally, with a copy to the Treasury Board Secretariat.
In addition, for the first time this year, as of March 31, 2006, we asked that all departments and agencies present financial statements for each of their departments in their issues report, which you'll see in the fall. This is the first time this will be done. Financial statements won't be audited this year. We'll give the 23 largest departments until 2009 to get set up so that it is possible to have an auditor's opinion on the financial statements. Ultimately, I expect that the financial statements of the largest government organizations will be audited independently, which will make it possible to discuss these issues at the appropriate time.
Lastly, on March 31, 2006, I asked my colleague to establish a cut-off routine for receiving confirmation from all senior financial officers at the federal government as to whether, as of March 31, 2006, other transactions could be subject to alternative accounting treatment and to tell us what measures have been adopted. This information will be shared with the Auditor General in June and July, before the accounts are closed on March 31, 2006, once the information is received.