Evidence of meeting #122 for Government Operations and Estimates in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was audit.
A recording is available from Parliament.
1:45 p.m.
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Then no other rate above 0% has been identified as an acceptable rate of failure.
1:45 p.m.
Chief Audit Executive, Office of the Chief Audit Executive, Department of Foreign Affairs, Trade and Development
I wouldn't consider that a failure. We looked at various things. There were errors and issues identified in the report. I've been doing audits for several years, and we always seem to find some of the issues that come up because of the way we do risk-based sampling and raw sampling.
1:45 p.m.
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
I'll follow up on that. Do you think 26% is an acceptable rate of failure?
1:45 p.m.
Chief Audit Executive, Office of the Chief Audit Executive, Department of Foreign Affairs, Trade and Development
There are issues with.... We calculated 20%—
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Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
I need just a yes or a no, ma'am. Is that an acceptable rate?
1:45 p.m.
Chief Audit Executive, Office of the Chief Audit Executive, Department of Foreign Affairs, Trade and Development
I think categorizing it as a 26% failure rate is incorrect. As we categorized it, there were issues in 20% of the contracts that we reviewed.
1:45 p.m.
Conservative
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Chief Audit Executive, Office of the Chief Audit Executive, Department of Foreign Affairs, Trade and Development
I think—
1:45 p.m.
Conservative
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Chief Audit Executive, Office of the Chief Audit Executive, Department of Foreign Affairs, Trade and Development
It's not an easy question because it depends on what we do and what we look at, and it depends on the context.
1:45 p.m.
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Okay. I'm going to change the question, then. Perhaps I'll make it a little easier.
What is the expected rate of failure when dealing with organizations the size of Global Affairs Canada? Give me the expected rate, not the acceptable rate.
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Chief Audit Executive, Office of the Chief Audit Executive, Department of Foreign Affairs, Trade and Development
I'm sorry, but I can't answer that question.
Of course, it would be—
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Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Okay. I'll move on, then, and I'll note that you were unable to answer the question.
Over the course of this committee's investigation into arrive scam, we have learned of many terms in the world of government procurement. They are “bait and switch”, “Charbonneau loop” and, last but not least, “contract splitting”, which describes the practice of divvying up large contracts into smaller ones to bypass competitive bidding requirements and sole-sourcing because they do not reach the dollar threshold.
I'll go back to the auditor.
In your audit, you found cases of contract splitting. How many of the 19 contracts that failed the audit included cases of contract splitting?
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Chief Audit Executive, Office of the Chief Audit Executive, Department of Foreign Affairs, Trade and Development
None.
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Conservative
The Chair Conservative Kelly McCauley
Great. Thank you very much.
Mrs. Atwin, go ahead for five minutes.
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Liberal
Jenica Atwin Liberal Fredericton, NB
Thank you very much, Mr. Chair.
Thank you to our witnesses for being with us today.
I will take this opportunity to wish all the mamas out there a happy belated Mother's Day.
As I've been listening and taking this all in, I've noted the tone that some of our Conservative members have been using when addressing our public servants. I find it really interesting that the CPC is making unfair accusations of corruption and not following the rules, given the CBC article that came out today pointing out that members of the CPC have used House of Commons funds to fly their spouses to caucus meetings so they can attend partisan Conservative conventions. I found that a bit hypocritical, but I digress.
I'd like to ask our ADM a question about government fiscal responsibility, an important tool of that being, of course, the audit process.
Could you please compare the strengths and weaknesses of internal versus external audits in the federal government context?
1:50 p.m.
Assistant Deputy Minister and Chief Financial Officer, Corporate Planning, Finance and Information Technology, Department of Foreign Affairs, Trade and Development
I'm not sure I can compare and contrast. If I think about my audit executive within Global Affairs, for example, I expect her to look at the processes with the exact same lens as I would expect from an external auditor, and expect her to come back with her findings in the same way I would see from someone external to the department or the government.
1:50 p.m.
Liberal
Jenica Atwin Liberal Fredericton, NB
Your audit found that Global Affairs Canada complied with proactive disclosure requirements for all 1,486 consulting service contracts, valued at over $10,000, including those to which a national security exception applied. Contracts subject to a national security exception must be proactively disclosed, but information may be withheld pursuant to the Access to Information Act.
What factors account for such a high compliance rate for proactive disclosure?
1:50 p.m.
Assistant Deputy Minister and Chief Financial Officer, Corporate Planning, Finance and Information Technology, Department of Foreign Affairs, Trade and Development
I couldn't say for sure. Obviously, we have a good process in place within the department to make sure that nothing falls through the cracks when identifying all of the contracts, and to make sure that they're proactively disclosed in a timely manner and are following the policy.
1:50 p.m.
Liberal
Jenica Atwin Liberal Fredericton, NB
How many of the 1,486 contracts were subject to a national security exception?
May 15th, 2024 / 1:50 p.m.
Assistant Deputy Minister and Chief Financial Officer, Corporate Planning, Finance and Information Technology, Department of Foreign Affairs, Trade and Development
Perhaps I'll turn to my colleague Dan Pilon to see if he has that information with him. If not, we can get back to you.
1:50 p.m.
Director General, National Accommodations, Domestic Procurement and Asset Management, Department of Foreign Affairs, Trade and Development
I don't have the exact numbers. However, what we can say is that a certain percentage of our general contracts are subject to national security and mission security parameters. That's roughly between 5% and 10% of our procurement at any given time.
Despite not having access to the sample itself, I would expect that maybe 5% to 10% of those contracts were subject to national security exemptions.
1:50 p.m.
Liberal
Jenica Atwin Liberal Fredericton, NB
When a national security exception is applied, how do you determine whether the appropriate information is still disclosed?
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Director General, National Accommodations, Domestic Procurement and Asset Management, Department of Foreign Affairs, Trade and Development
We have a vetting mechanism internally.
Regarding the release of information, some contracts are repetitive in nature, like those for protection services in various missions, and there are the same kinds of issues, so we know exactly what we're looking for and we have processes in place to withhold specific information.
In the instance of individual, specific and unique contracts, there is a review on a quarterly basis before the report is published during which the data is scrubbed in accordance with certain criteria. It's validated by internal staff, from both security and information management, and then it's moved forward for publication if it's deemed non-sensitive or not subject to national security.