Procedure and House Affairs Committee on Nov. 19th, 2013

[Michael Ferguson]

Thank you, Mr. Chair.

In my opening statement, I identified three types of audits: financial audits, performance audits, and compliance audits. The first message is that not all audits are the same. That's important for everybody to understand.

As to a performance audit of the administration, that's what we did in 2012. We did an audit of the administration of the House and an audit of the administration of the Senate.

The purpose of these audits is to look at whether the administration is performing its function in an economical and efficient manner, looking at whether all of the support functions are operating the way they should.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

To the best of your knowledge, has that been the case? Has there been follow-through on that?

[Clyde MacLellan]

In relation to that question, we completed the audit. Typically, we allow a bit of time to pass before we do any type of follow-up. The unique relationships between the House and the Senate have operated on the basis of being invited back to take a look at particular issues. So in answer to your question, we have not followed up on those recommendations.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

That's right. So there's a need for us to invite you back.

Performing more detailed audits of parliamentary spending seems to be what Canadians are wanting to see. Do you feel this is something the Auditor General's office would be able to provide—looking at ways we could perform more detailed reporting of our expenditures? Do you believe this would help out in furthering accountability and transparency, Mr. Ferguson?

[Michael Ferguson]

In terms of expenses themselves, I think there are a couple of different types of audits that could be undertaken. One would be a compliance audit, which would be the standard: did the claims comply with the rules and were they processed properly?

In terms of the question you're asking, that would be standing back and trying to do a broader audit of disclosure practices, making recommendations around those practices. It's certainly something that we could put an objective around and do an audit of. Usually in our performance audits we have to stay away from commenting directly on policy. We just look at how policy was implemented. In this instance, we would very much have to be given the mandate. If we were going to do that type of audit, it would have to include a mandate to be able to comment on policy. I'd have to make sure that we would be able to do that under our legislation, but that would be the thing we would need to consider.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

It is about trying to say to Canadians that we want to reform the system. One of the things that seems to come up is this whole idea of in camera meetings, to the degree that the leader of my party wants to see legislation that would in essence make it a law that we could not have in camera meetings of the Board of Internal Economy, with the odd exception, such as when dealing with security or personnel matters.

Are you able to comment on in camera meetings?

[Michael Ferguson]

I'm not trying to insert myself into any political debate here, but with any type of committee or organization that needs to meet on these things, there probably needs to be some ability to meet publicly, meet privately, and meet in camera. All three of those tools have to be available. When I say “meet privately”, I mean not with the cameras on, but not under the rules of in camera. There would be minutes.

Those three types of avenues would need to be available to any type of committee that had this responsibility: public, private, and in camera meetings.

[The Chair, Conservative, Joe Preston]

You have one minute, Kevin.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Currently there is proactive disclosure by ministers on such things as flights and hospitality. Have you ever had the opportunity to audit those things? If so, can you comment?

[Clyde MacLellan]

The only work we do that's related to those types of expenditures is via the public accounts. I used the vernacular for that. In our office, that's the audit of the government's financial statements as a whole. As a part of that financial audit and all financial audits, we randomly select certain travel/hospitality expenditures for examination. We have never specifically targeted that group writ large for examination. But it's possible that some of those expenses, since they would be paid through a department, could have been a subject we looked at as a small sample in doing that particular work.

[The Chair, Conservative, Joe Preston]

You have 10 seconds.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Thank you for coming. It's great to see you.

[Voices]

Oh, oh!

[The Chair, Conservative, Joe Preston]

That's very good. I like the efficiency.

We move to four-minute rounds.

Mr. MacKenzie, you start it.

[Dave MacKenzie, Conservative, Oxford, ON]

Thank you, Chair.

Have either of you conducted corporate audits?

[Michael Ferguson]

I did long ago.

[Clyde MacLellan]

Yes, for the first eight years of my career I worked for what is now Deloitte. I audited corporations, mostly private companies, in the Atlantic provinces. Since joining the Office of the Auditor General in 1991, I have audited almost every crown corporation that we do.

[Dave MacKenzie, Conservative, Oxford, ON]

Thank you very much.

I think you indicated there was 98.5% compliance, which would seem a pretty good number. Have you even done an audit that was 100%?

[Michael Ferguson]

It's difficult to say. Certainly we've looked at lots of samples where we have not found any errors, when we're selecting samples in different audits.

[Clyde MacLellan]

The short answer to that question is I don't think I can ever relate to 100% compliance, which I think is the point of your question.

[Dave MacKenzie, Conservative, Oxford, ON]

Yes.

[Clyde MacLellan]

But on the issue of focusing on this 98%, we concluded in the report in 2012 that we found that the systems and practices were sufficient to meet the objective that we'd established. Keep in mind that as part of that audit we didn't look at the issues around transparency in terms of disclosure that you're debating today, or the issues around governance and oversight of the various aspects that you're looking at today.

As the Auditor General mentioned in his response, even though the percentages are very good, the issue is that we had some concerns about documentation, even with respect to the House.

[Dave MacKenzie, Conservative, Oxford, ON]

And I would agree with you that we should shoot for 100%.

[Clyde MacLellan]

Yes.

[Dave MacKenzie, Conservative, Oxford, ON]

I know that in the corporate world, 100% is a pretty scarce thing to find in an audit. That's why you have an audit, to find shortcomings and to correct things.

With ours, I don't hear a great deal from the corporate world demanding more transparency. Where I hear the complaints come from is inside the House and from the press. The corporate world seems to have an understanding that we're fairly limited in our budgets to start with. Each member's budget is something of the same nature, and you have to take into account the salaries and the rent from your constituencies. There's very little in there that is available for a member. There are some areas, but most of it is covered pretty well. Certainly, my experience with the administration is that they're very tight on mileage. You have to produce the information for them on travel.

I hate the thought that we have a partisan game going on trying to depict this whole area as being one that's kept under wraps. For instance, the Clerk of the House testified that if the board meetings were held in public, the real discussions regarding expenses would then be forced underground, creating a new problem.

I think what she was trying to tell us is that if you do them in public there's going to be political grandstanding, so the real negotiations would happen outside in the halls. Would you concur with that?