Thank you, Mr. Chair, for this opportunity to speak to the committee about the consulting contracts awarded by the federal government to McKinsey & Company.
I'm joined today by Sheri Ostridge, assistant comptroller general in the internal audit sector; and Emilio Franco, executive director of the procurement, materiel and communities directorate in the acquired services and assets sector.
As this committee knows, the Treasury Board Secretariat, or TBS, and Public Services and Procurement Canada, or PSPC, conducted a review of the McKinsey & Company contracts in early 2023.
We asked departments to conduct an internal audit of the contracts awarded to McKinsey between January 1, 2011, and February 7, 2023. We wanted to assess whether the contracts complied with the Treasury Board policies and departmental internal control frameworks.
The 10 departments that awarded contracts to McKinsey conducted independent compliance audits and developed management action plans to address opportunities for improvement. These documents were provided to the Standing Committee on Government Operations and Estimates and posted online.
These audits established that there wasn't any evidence of political interference in the awarding of contracts. However, they identified cases where procurement rules and requirements weren't always adhered to.
In the final report of the joint TBS and PSPC review, which took into account this committee's proceedings, TBS identified broader measures to strengthen procurement practices. These measures included strengthening expectations for the regular review and testing of procurement controls.
In addition, to make the rules clear, in fall 2023, the Treasury Board Secretariat published “Manager's Guide: Key Considerations When Procuring Professional Services.” It shared this guide with the chief financial officers and communities of practice, including procurement specialists. Key parts of this guide have been incorporated into the mandatory procedures set out in the directive on the management of procurement.
In addition, in March, the President of the Treasury Board and the Minister of Public Services and Procurement announced further government measures to strengthen procurement activities.
In her audit, “Report 5: Professional Services Contracts”, the Auditor General found evidence of gaps, similar to our own findings, in adherence to procurement requirements. Quite simply, contracting organizations need to do better, and we will continue to work across government to reinforce the responsibilities of those involved in contracting. As her sole recommendation, the AG recommended that the government effectively monitor and ensure that officials involved in procurement do not have conflicts of interest. TBS, which responded on behalf of the 10 audited departments and agencies, agrees with this recommendation.
In exercising their duties, public servants must uphold the values and ethics code for the public sector and adhere to the directive on conflict of interest. The new mandatory procedures I mentioned provide additional measures to ensure managers are clear about their responsibilities and accountabilities related to oversight, conflict of interest, and values and ethics when contracting for professional services. Specifically, they require managers to certify that, first, they acknowledge their responsibilities in managing the contract; second, they do not have a conflict of interest; third, they have not directed which resources should be working under the contract; and as the last one, the contractor did not assist in or have unfair access to the solicitation process.
We are committed to ensuring effective stewardship of public funds and managing its procurement activities responsibly. Practitioners across the procurement community are dedicated professionals who have an important and often complex job to do. TBS is continuously examining how best to support them through guidance, tools and training to ensure that procurement makes the best use of public funds and preserves public trust.
I'm now happy to answer your questions. Thank you.