Evidence of meeting #149 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 program.
A video is available from Parliament.
Director General, Chief Audit and Evaluation Executive, Department of the Environment
Yes. The audit committee recommended approval to the deputy minister, and the deputy approved the action plans that were developed by management to address the recommendations.
Liberal
Charles Sousa Liberal Mississauga—Lakeshore, ON
Obviously, noting why we're going to these investments, what are some of the obstacles you saw as a result of getting to where we're going?
Director General, Chief Audit and Evaluation Executive, Department of the Environment
I think the obstacle, really, was the growth that happened in the department and the multiple programs that were put in place across the various branches. There was central support, but the rapid pace of growth in some of the programs led to areas where there were inconsistencies that grew over time.
I think that what this audit is saying right now is, “Let's get an enterprise vision in place. Let's put those management controls in place that can be used horizontally to the extent possible, with the proper systems to store the documentation to support better decision-making.”
Director General, Chief Audit and Evaluation Executive, Department of the Environment
Liberal
Charles Sousa Liberal Mississauga—Lakeshore, ON
With regard to the motivation behind the grants and contributions program and the initiatives that are being taken, can you explain what those are? You made reference to the specific policies and priorities of the various aspects of the program. Can you reinforce or let the public know why it's happening?
Director General, Chief Audit and Evaluation Executive, Department of the Environment
Over the last nine years, the department has taken an approach to fund grant and contribution programs that will help achieve multiple priorities, including decreasing greenhouse gas emissions, conserving nature and protecting land. These contributions and grants are being used to support multiple priorities.
Liberal
Charles Sousa Liberal Mississauga—Lakeshore, ON
That is where the money is going. Is that right? There is a requirement, not just in Canada but around the world, to ensure we lower overall emissions and protect the environment—land, water and air. Some of the programs being put in place are not unique to Canada. They're a coordinated effort with other parts of the world.
Regarding those grants being initiated, can you tell us to what extent there has been some success? Where are the merits in some of these initiatives?
Director General, Chief Audit and Evaluation Executive, Department of the Environment
We did not look at outcomes as part of this audit. We looked at strengthening the processes in place in order to support departmental program delivery. This work was not necessarily focused on the outcomes and what we are achieving; it was more about the foundation and how the department can deliver these programs better.
Liberal
Charles Sousa Liberal Mississauga—Lakeshore, ON
In the approval process for these grant submissions, were there any elected officials interfering? Did you see any conflicts of interest?
Director General, Chief Audit and Evaluation Executive, Department of the Environment
Based on the review we did on the sample of 100 files, we did not find this in our audit.
Liberal
Charles Sousa Liberal Mississauga—Lakeshore, ON
You didn't see any engagement of elected officials. You didn't see....
What did you see, in terms of enabling the program to grow or initiate?
Conservative
The Chair Conservative Kelly McCauley
That is our time, Mr. Sousa. Perhaps you can get back to us in writing, Mr. MacDonald.
We will now go to Mrs. Block and then over to Mr. Jowhari.
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Thank you, Chair.
As I referenced earlier, this committee has seen the consequences of an utter failure of governance, risk management and internal controls in the cases of Sustainable Development and Technology Canada, ArriveCAN and others.
You mentioned that you have a good team as the chief audit executive. There's a big team of finance and audit professionals and a CFO, and you have chief audit executives.
How are there, then, such inconsistent approaches to financial management? What's the breadth and scope of inconsistency, and how loose are the internal controls?
Director General, Chief Audit and Evaluation Executive, Department of the Environment
I can speak for our department.
The CFO is responsible for signing attestation on controls—for the system of internal controls over financial management and reporting. It's her obligation to review those. Our role is to come in and look at whether they are doing it appropriately.
I think every department goes through this. You go through your risk assessment. You see what the priorities of that department are. What are the key risks they're facing? Then you develop a plan to provide assurance to the deputy in the areas that need focus, such as grants and contributions, across administration.
However, in general, I believe the controls are pretty well established. It's oftentimes a case of the implementation of controls at the program's working level.
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
The controls are established, but they're not implementing them. The recommendation to strengthen controls and practices, including conflict of interest, cash flow and claim review processes, is very concerning. If the audit has to make such recommendations, there have to be serious lapses, leakages and weaknesses in the internal controls.
Did you advise your deputy minister, minister and comptroller general about these issues?
Director General, Chief Audit and Evaluation Executive, Department of the Environment
Yes.
First of all, we advised the CFO throughout the audit process, going through a validation of the facts. We also advised the deputy minister when we went to the audit committee meeting. This was more a case of inconsistent application of the controls versus no controls. It's inconsistency across the department.
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
There are controls in place, but they aren't being applied.
Director General, Chief Audit and Evaluation Executive, Department of the Environment
The majority of the controls were being applied.
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Okay. I'm a little confused by what was in your audit and what you answered today. You're saying that they're there, but they're not being applied. Then you're saying the majority of them are applied. That sounds a little inconsistent to me.
Did you advise these individuals about the risks of not applying the controls consistently?
Director General, Chief Audit and Evaluation Executive, Department of the Environment
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Okay. Thank you.
My last question is this: If there are no section 32, section 33 and section 34 issues, why is the audit making recommendations to strengthen financial practices around cash flow processes?
Director General, Chief Audit and Evaluation Executive, Department of the Environment
Again, we did note some inconsistencies in how this was done across the department. For example, when you're looking at program officers who are probably just trying to help the recipients by pre-populating some forms, it's not really a good practice for departmental people to pre-populate forms for the recipients to submit their final funding. I think it's better to have an arm's-length approach so that the recipients are filling out their work and the departmental program managers do their job in terms of validating and monitoring.
Conservative
Director General, Chief Audit and Evaluation Executive, Department of the Environment
It's not a good practice.