Government Operations Committee on Nov. 25th, 2010

[Chris Warkentin, Conservative, Peace River, AB]

I wonder if representatives from the other two organizations would speak to the committee with regard to the challenge function and the responsibility of Treasury Board to ensure that moneys that are being asked for are actually legitimate dollars and going toward legitimate projects, and how the challenge function and the interaction between departments and Treasury Board actually are undertaken when it comes arriving at dollar figures.

[Alex Lakroni]

I can start.

Of course all initiatives that are before you today are approved by Treasury Board. We have certain standards in terms of meeting Treasury Board oversight expectations, but within our own department we have a series of oversights before we go to Treasury Board.

For instance, in my capacity as a CFO, I exercise my oversight on initiatives in terms of soundness from financial management, the risks. If we have sound performance, I sign all the proposals before they go to Treasury Board and then Treasury Board exercises.... When I say Treasury Board, I mean the Treasury Board Secretariat. They exercise their own oversight from various areas, from the Comptroller General's perspective, the expenditure management system perspective, as well as from a program and policy perspective. They get back to us with comments and we cannot move forward until we address them. That's basically the standard.

John can give some specific examples of some of the programs before you.

[John McBain]

Thank you for the question.

My colleague Christine Walker represents the corporate side of the Treasury Board Secretariat for the real property program, and the moneys you see here are certainly significant. We work very closely with our colleagues in the government operations sector and the expenditure management sector. They scrutinize our proposals. They challenge us with respect to content. They prepare a précis of our recommendations that is separately submitted to Treasury Board ministers, so there is a very thorough review.

The $88 million that is asked for in this, which is what I characterized earlier as a quasi-statutory requirement, is developed with very detailed scrutiny of all of our occupancies, whether they are crown-owned or leased, based on actual expenditures and lease and operating costs.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you.

[The Chair, Liberal, John McKay]

Madame Coady, please, for five minutes.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Thank you very much.

I'll go back to some of the key questions I asked earlier, because they are important questions about what departments and agencies have done to achieve the savings under the operating budget freeze.

We have heard from three departments, and they have talked about hospitality and travel quite extensively. With all due respect, you've probably pared those savings down as much as you're able to. I'm more concerned now about the reductions and how they're affecting the corporate risks, and their effect as measured by the management accountability framework.

Can you tell us further what is being done? Are you looking in particular at your staffing levels? Some of you have said you really watch what you are doing with regard to your hires and making sure you are doing the best you can here, but when you look at the amount of money and the savings that the Parliamentary Budget Officer says we will need to make, he was quite concerned about those areas.

I'll ask again if anyone cares to comment further. We have heard from most of the departments, but maybe you can comment more fully.

I have two other questions. I'm simply opening the door, so if you want to explain how you are going to find those savings, I'd appreciate that.

As I say, I have two other questions, so please note the time. Thank you.

[Christine Walker]

I'll be relatively quick.

As chief financial officer, we have to sign off a statement of internal controls that we have on the internal controls in place to be able to ensure the stewardship of funds. So the last thing we want to see with any cost containment measure is the degradation of those controls. What we are focusing on, in IT for example, is consolidation of purchases, streamlining processes as much as we can, so really trying to improve the efficiency of our purchases and the efficiency of the staff and the employees we have in the work that we do. That is what we're focusing on in terms of the cost containment measures.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

I'll allow for another comment, and then I have to ask two more questions.

Thank you.

[Alex Lakroni]

From our perspective, we talked about the travel but we also implemented budget management excellence in PWGSC, which was more promoted, because the freeze leaves the implementation to the discretion of the department to achieve efficiencies.

Let's be mindful that about 70% of our operating budget vote is program-specific expenditures. That is non-discretionary, and is funded through a formula and indices. The main impact for us for not receiving the funding for collective bargaining is less than 1% to our gross budget of $3.8 billion, so the impact for us in this fiscal year is $5.6 million, and it's managed through a financial plan.

Our financial plan yields efficiencies as follows. I talked about sound financial management principles that we implement. There is continuous focus to manage expenditures such as travel, hospitality, conferences. There is tight control of expenditures, particularly the discretionary spending, and there is analysis of demand in certain key areas such as professional services, to make smart use of professional services, and we are managing revenues very carefully. We do annual and semi-annual evaluations of our reallocations.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Thank you very much.

I'm cognizant of the time; I only have a minute left.

Again, I appreciate that detail, and if you could submit it to this committee, that would be helpful.

What I am looking for from all departments is how you are going to achieve the requirements of the budget savings targets.

I have two further questions. The funds associated with vote 25 will allow federal departments and agencies to carry forward unused funds from the previous year to a maximum of 5%. When I added it up, the total vote was about $1 billion, I think. Is that number correct?

When you're reclaiming some of these costs, should we put it to the cost savings of government or toward the deficit you have?

Can anyone comment on that? Could Treasury Board comment on that?

[Christine Walker]

Yes.

What the carry-forward budget allows you to do is carry forward 5% of basically your main estimate from the previous year. That goes into the department. That can be spent by each department for the initiatives they have planned for that year.

At this point in time I don't think there is a plan out there to take that carry-forward and put it back into the fiscal framework.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Okay.

I have one final question. I'd like to get back to that, but I have to get to another one.

In vote 10—

[The Chair, Liberal, John McKay]

Madame Coady, I'm sorry.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Out of time.

Thank you.

[The Chair, Liberal, John McKay]

Mr. Warkentin.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you, Mr. Chair.

At some point, as a committee, we have to either vote in favour or opposed to the respective votes that are given to us. We have the responsibility for five specific votes, to undertake a review of them.

The Privy Council vote 1b was with regard to security and so forth. What was the amount of that vote?

[Marilyn MacPherson]

It was $1.4 million net.

[Chris Warkentin, Conservative, Peace River, AB]

Okay. The next vote that's recommended is under Public Works and Government Services, and it's vote 1b. I'm just trying to bring the committee back to what we as a committee are responsible for. We've gone quite a distance to look into other issues, but today we have some very specific initiatives that we're supposed to review.

On vote 1b, under Public Works and Government Services, what was the amount of that vote?

[Alex Lakroni]

The amount that is asked for in these supplementary estimates is $96.5 million.

[Chris Warkentin, Conservative, Peace River, AB]

And of course we've talked about what's included in that already.

In terms of vote 5b of Public Works and Government Services, what was the amount of that vote?

[Alex Lakroni]

It was $56.7 million.

[Chris Warkentin, Conservative, Peace River, AB]

And remind me what's included in that vote, those dollars.

[Alex Lakroni]

Well, for the $56 million, we have the data centre sustainability projects, we have the manège militaire, and we have the transfer from Transport Canada for environmental remediation. And we have $51.8 million that's being transferred from operating, from vote 1 to vote 5, to align the funding with the spending.

[Chris Warkentin, Conservative, Peace River, AB]

Right.

Okay, so under Treasury Board, vote 1b, what was included in that vote?

[Christine Walker]

A total of about $1.5 million, and what's included in that are increased spending as a result of approved programs for classification, cyber security, and the public service readiness plan, less the cost containment measures of $2.2 million, and there are some small transfers there as well.