Back in the spring of 2009, we tabled an audit entitled “Financial Management and Control—National Defence”. I would recommend that audit to the committee members. It talks about the planning processes within National Defence related specifically to, in some instances, the financial situation.
What we observed was that National Defence's ability to carry forward money was limited to about 1%. According to the Auditor General of the day, given the size of the budget, which is $19 billion, $20 billion, a 1% carry-forward is a very tough target to meet. It's very tough to manage your budget down to 1%. Other departments have a 5% carry-forward; National Defence’s was 1%. Given the size of its budget, of course, it probably would not get 5%, but as a result of this audit and the recommendation of the Auditor General, the carry-forward was increased, I believe, to 2.5%.
That gives the department more flexibility in the management of its programs, particularly in the management of acquisitions and capital projects, because when you have a hundred capital projects during the course of the year, it is difficult to make sure that all the work planned for a specific year actually occurs within the specific year. It could be as a result of the contractors' work. It could be a result of not having certain decisions made on time, which is nobody's fault in either case necessarily, but some of these contracts can fall behind. This will free up money. National Defence does attempt to take the freed-up money and use it for other purposes, but when it can't be used for other purposes, if they don't have a sufficient carry-forward, it can get lost.
So with this type of budget, with this complex organization, with the number of contracts and capital projects in place, it is very tough to be able to manage within a small carry-forward. They do the best they can with the people they have.