Health Committee on Feb. 7th, 2007

[Sheila Fraser]

That's correct.

[Rick Dykstra, Conservative, St. Catharines, ON]

Why would the Receiver General make the payment if it didn't have any signed authorization to make it?

[Sheila Fraser]

No, the signature would have been there. The Receiver General makes the payment based on the signature being present. It's when we looked to see on what basis that person signed the authorization that there was no documentation in the file.

[Rick Dykstra, Conservative, St. Catharines, ON]

Then this isn't a fair question to ask you. It would be more for Ms. Cartwright.

Why would someone in the department authorize payment when there was nothing there to support the authorization of the payment?

[Susan Cartwright]

I'm going to ask Mr. Potter to comment. It's hard for me to answer that question myself, given that I can't speak for the individuals in question. It may not mean that they didn't have documentation at the time. What it does mean, however, is that there was no documentation on the file when it was reviewed. Whether that meant the documentation existed at the time or not, I don't know.

[Rick Dykstra, Conservative, St. Catharines, ON]

With all due respect, I would have anticipated that coming here you would have been able to say or to justify the review that's been done by the Auditor General, not to say that you're not sure. I'm not trying to get into a to and fro here, but I would anticipate that since 22 invoices were sent out and $5.5 million paid—I'm feeling a little uncomfortable here about the amount of money that's being spent without the ability to justify what those payments went for.

I only have five minutes, so I can't—

[Susan Cartwright]

I understand.

We have subsequently verified all of the $2.6 billion that was paid, and we have confirmation that all of that money was paid for the appropriate goods and services under the contract. We have conducted a post-audit verification, if you like, of that entire amount and have confirmed that all of those payments were made for appropriate services under the contract.

I don't know, Ian, if you would like to add anything.

[Rick Dykstra, Conservative, St. Catharines, ON]

That's fine. It somewhat answers the question.

I want to take that one step further and ask whether the former minister of the previous government was informed of what happened,

[Susan Cartwright]

I can't answer that question for you.

[Rick Dykstra, Conservative, St. Catharines, ON]

Okay. I'd certainly like to get an answer to that question and find out what his reaction would be to this and what steps he or his staff may have indicated to work toward a solution.

The second question is, if this information related to the audit was completed, why wouldn't the contract have been cancelled immediately and re-submitted or re-tendered, rather than go through all this work of trying to justify what had happened? We have established that none of the companies actually qualified. Why would we not have cancelled the contract and re-tendered?

[Susan Cartwright]

I don't think the process we went through to undertake the verification we did was designed to justify anything. We have a responsibility to ensure that the public funds that were spent were spent appropriately, and that's what we did.

As for cancelling the contract and re-tendering, I would return to some of the remarks I made earlier: that this is a large contract that delivers essential services to a part of the Canadian population that is by and large low income and has a significantly higher disease burden than average Canadians. It is very important for us to maintain service to this community, and it isn't—

[Rick Dykstra, Conservative, St. Catharines, ON]

Sorry, but I have one question left to ask. After everything that has happened and everything that's been done, has anyone in the department been sanctioned, or have you done any reviews—

[The Vice-Chair, Bloc, Christiane Gagnon]

Mr. Dykstra, the time allotted you is up. That will be for the next time.

Mr. Malo, go ahead.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Thank you, Madam Chair.

Ms. Fraser, ladies and gentlemen, good afternoon and welcome.

First of all, my question is for you, Ms. Fraser. In Chapter 10, you say that the expenditure management system has become less effective since the budget has produced a surplus. Are you saying that, since there's a lot of money in the portfolio, people are looking less at expenditures, that they're making somewhat more frivolous expenditures, that administrative expenses are increasing, at rates greater, for example, than should normally be expected?

[Sheila Fraser]

Madam Chair, I believe that Mr. Malo is referring to another audit that we conducted on the expenditure management system across government, in which we noted that the expenditure management system was based more on a period of tight restrictions, as a result of which new initiatives were very much being questioned. A great deal of attention was being paid to new programs and new expenditures. There were even two systems: one for current expenditures and another for new initiatives. A great deal of attention was being paid to new initiatives and very little to current and ongoing expenditures.

This way of doing things is obviously not as appropriate right now, which doesn't necessarily mean that crazy expenditures are being made. When we assess a program, we check to see whether certain programs should be modified or eliminated. We also have to conduct program reviews on a regular basis to determine whether they are still achieving objectives. It was in that context.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

You're telling us that's not being done at the Department of Health and that it's perhaps not being done by other federal departments either.

[Sheila Fraser]

That was in the government's expenditure management system as a whole. There were two expenditure streams. Furthermore, a study conducted by the government made appreciably the same findings.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Did you get any answers on the subject? Will existing programs be reviewed more, in an attempt to eliminate these duplicates?

[Sheila Fraser]

We're waiting to see the results of the government review.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

In Chapter 8, in addition to the absence of funds and guidelines, you noted, and I quote:

Furthermore, the Departmental Executive Committee does not routinely receive information on how well Health Canada is fulfilling its core role as regulator, even though the Committee is the only group in Health Canada that can address cross-branch funding issues.

Isn't that a bit curious? I was wondering whether that was a common practice. Is the deficiency that you observed in the communication chain in the Department of Health apparent elsewhere?

[Sheila Fraser]

I hesitate to comment because we haven't conducted that type of audit in a number of departments. As I mentioned, we conducted an audit of the system as a whole for the government. I can't really comment on whether that's the case elsewhere. It's really a question of resource allocation within a department. We would have to conduct fairly thorough audits in order to do so.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

In the department's comments, I didn't hear a response to that observation by the Auditor General. Can you comment?

[Susan Cartwright]

Certainly. In response to that element of the report, there's a very close linkage between the changes we've made to the operational planning process and the changes we've made to the budget management framework in the department. That included a number of governance changes within our committee structure.

We now have a subcommittee of the departmental executive committee. It meets on a regular basis to review funding issues, budgetary issues, within the department. That subcommittee reports to the executive committee itself and to the senior management board, which includes the deputy, the associate, and the ADM.

So we feel that along with the changes we've made to the budget management framework and the operational planning, those governance changes have addressed the comments the Auditor General made in her report.

[The Vice-Chair, Bloc, Christiane Gagnon]

Mr. Malo, it's over. I'm sorry.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

I had a final question, Madam Chair, that referred to the meeting we had last Monday.