Madam Chair, thank you for the opportunity to appear before this committee.
I take seriously the findings of the Auditor General in chapter 1 of her report, which is entitled “Managing Government Financial Information”. I welcome the opportunity to discuss the chapter with the standing committee.
Attending with me this morning are Mr. Bill Matthews, senior director, government accounting, policy and reporting division, Office of the Comptroller General; and my colleague Mr. David Moloney, the assistant secretary, expenditure management sector, Treasury Board of Canada Secretariat.
The findings in Chapter 1 can basically be divided into two categories. Those that relate to internal controls and those that relate to the use of accrual-based budgeting and appropriations at the departmental level.
My colleague, Mr. Moloney, will address the question of accrual-based budgets and appropriations. I will focus my opening remarks on action being taken to improve internal controls at the departmental level.
While the strengthening of internal controls at the departmental level is an ongoing challenge, I believe there are several initiatives under way that will help advance the file in an efficient manner. Allow me to highlight these for you.
We are in the midst of completing a review of our financial management policies and reorganizing them based on a model that includes five core policies. These new policies will clearly spell out accountabilities and responsibilities for financial management.
In particular, our new policy on internal audit will require the annual audit plan to be approved by the deputy head of each organization, and it will support an annual opinion from the chief audit executive of each department on departmental risk management, controls, and governance processes. As part of the annual reporting process, deputy heads will be required to certify the soundness of the financial reporting controls in their organization and outline the steps they have taken to assure themselves that these controls are sound and are functioning properly.
A second core policy is departmental audit committees. These committees will add one more challenge function to examine the state of the controls and financial reporting within the department. You can rest assured that unaddressed control weaknesses are exactly the types of issues that these committees will insist be addressed.
Another core policy is an audited departmental financial statement initiative. This initiative will require major departments to table annual audited financial statements no later than March 31, 2009. Preparing for these audits is a major undertaking for the Government of Canada. In doing so, departments will undergo a readiness assessment conducted by external audit firms, which will highlight control weaknesses that need to be addressed before the department is ready to sustain an efficient financial statement audit. This initiative will put a much finer lens on government financial information and key controls.
In addition to these measures, we are taking steps to strengthen the professionalism of financial management within the federal government through better recruitment and professional development. As the Auditor General mentions in her report, the number of senior financial officers and senior full-time financial officers holding professional accounting designations has increased significantly from her 2002 report. We will continue to build on this success. As announced last week, the CICA has agreed to recognize certain government departments as Approved Training Offices, allowing employees to pursue their CA designation while working in the federal government. This announcement coupled with our earlier announcement on the CMA/CIPFA designation will increase our ability to attract and develop top-notch talent in the financial management field.
In conclusion, strengthening of internal controls is important and it is my belief that the initiatives that l have outlined will lead to good progress in this area. My colleagues and l would be pleased to respond to any questions that you or committee members may have at this time.
I'm going to ask my collegue David Moloney to take over from here.