Public Accounts Committee on May 11th, 2006

[The Chair, Liberal, Shawn Murphy]

I call the meeting to order, members.

First of all, I want to welcome everyone here to the meeting, and I especially want to welcome the Auditor General of Canada and her staff to the meeting. She is accompanied by John Wiersema, the Deputy Auditor General of Canada; and Robert D'Aoust, the comptroller of that particular department. I want to welcome the staff to the first time sitting in this the 39th Parliament of this government. Welcome.

I want to welcome the members again. Members, the agenda pursuant to the Standing Orders has been circulated. What I propose to do is to follow the agenda.

The first item on the agenda is the first report of the subcommittee on agenda and procedure. The committee met. We had a full meeting on May 9, Tuesday of this week. The minutes of that meeting have been circulated. People here may not have not had an opportunity to read them and review them. If you want to take an opportunity, then we can entertain a motion.

Does there need to be any discussion?

Mr. Williams, go ahead, please.

[John Williams, Conservative, Edmonton—St. Albert, AB]

As I pointed out the other day, there's been either a Freudian slip or a lack of attention to detail, but there is no Progressive Conservative Party here anymore. And perhaps that could be, if not corrected on paper, at least on the record that it's the Conservative Party of Canada that forms the government these days, and rightly so and deservedly so. So you can maybe make that correction.

[The Chair, Liberal, Shawn Murphy]

Mr. Williams is quite correct. That party is no longer with us. Let the record reflect that, and in future documentations we'll refer to it by its correct name.

Mr. Sweet, go ahead, please.

Excuse me, Mr. Williams, Mr. Sweet does not have a copy of the report. Go ahead, Mr. Williams.

[John Williams, Conservative, Edmonton—St. Albert, AB]

You're saying that on May 18 there is a luncheon meeting. Is that a meeting of the full committee, or is that the steering committee?

[The Chair, Liberal, Shawn Murphy]

That's a meeting of the full committee, Mr. Williams. And the problem with that date is that it is the date the Australian Prime Minister is here, and we had to rearrange the timing of our meeting. It normally would start at 11 o'clock, but we're going to start at 12, I believe, for a luncheon. Instead of going from 11 to 1 o'clock, that day we'll go from 12 to 2 o'clock.

It was pointed out, Mr. Williams, that the question period that day actually starts at 11 or 11:15, whatever the case, and goes to 12. The plan is that this committee will meet at 12 and go to 2, and the steering committee will have a meeting after that, because of course there's no question period at 2 o'clock that day.

Is there any further discussion on any of the items arising from the--

[John Williams, Conservative, Edmonton—St. Albert, AB]

Are the 21st and 22nd reports the only two reports that we have not received a government response to?

[The Chair, Liberal, Shawn Murphy]

I believe that's correct. I'll check with the clerk.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Chair, I do not know whether this question belongs here or after, but it probably relates to the report because it's on procedure. If we receive reports and we are not given 12 hours or even 24 hours, I think it's unfair to the witnesses because we are not intelligently informed. I looked at the 64-page performance report and felt that I couldn't do justice to it, because I'm sure it took them days to write these reports, and we have a few short hours to review them and question them when we have not done an in-depth analysis.

Does that become part of the procedure? Or should we have something that stipulates that we should be given at least 24 to 48 hours to review it? I think we need to do justice to the witnesses.

[The Chair, Liberal, Shawn Murphy]

You're quite correct, and I agree with you. The earlier we can get these reports the better it is for everyone; it's better for the members of the committee, and it's better for the witnesses also. Sometimes there's a limitation, but again that report ought to have been in your hands before that.

[The Clerk of the Committee, Ms. Danielle Bélisle]

It was actually available as of November for all MPs, and we just sent extra copies, but we were lacking copies, so I waited to have a copy for everybody. But it's something that had been available since November.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

I guess because we added new members of the committee to the older members of the committee.... I was going to say old guard, but I decided not to say that.

Mr. Williams is very well respected. He's an FCGA, so I'll grant him that respect. We new ones would really like to have an understanding before we subject anybody to questions that may not be properly phrased.

[The Chair, Liberal, Shawn Murphy]

Your point is well taken, and we will do our utmost to accommodate that. And that's the only way this committee is going to work. If people get the documentation in sufficient time, they can come here both informed and prepared.

[John Williams, Conservative, Edmonton—St. Albert, AB]

Mr. Chair, does that mean we can get a copy of the Auditor General's report today?

[The Chair, Liberal, Shawn Murphy]

I can't see any reason why not, Mr. Williams, if you're prepared to....

I think we're going to have to wait till Tuesday.

Are there any further issues arising from the minutes of the steering committee?

Do you mean to say you don't already have a copy? It's in the Ottawa Citizen this morning.

If there's no further discussion, the chair will entertain a motion that the minutes be adopted as circulated and amended.

[John Williams, Conservative, Edmonton—St. Albert, AB]

It should be moved by somebody from the steering committee, not by me.

[The Chair, Liberal, Shawn Murphy]

Mr. Christopherson has moved that.

(Motion agreed to [See Minutes of Proceedings])

[The Chair, Liberal, Shawn Murphy]

The next item arising from that, members, is the actual travel budget request that did come forward from the steering committee. I believe that has been circulated; it's in front of you. I don't think this should take much time.

We never know how many people want to attend these annual meetings, but we've done our best, and we've used the number 10, and that is the budget that we are going to present to the Liaison Committee for approval.

For the information of new members, this is the way the system works for this committee. For any travel, we have to prepare and present a budget to another committee that's above us to approve financial expenditures such as this. This is the budget the steering committee has prepared. It has to be approved by this committee, and has to be presented and approved by another committee called the Liaison Committee. Again, this is a work in progress, because we don't know how many will attend, but this is probably our best guess at this time.

So what I would like to do, if it's okay with the committee, is to receive a motion for the approval of this budget to go forward to the Liaison Committee.

Mr. Williams.

[John Williams, Conservative, Edmonton—St. Albert, AB]

Mr. Chair, I thought that when we normally attended the public accounts committee the members travelled on their 64 points rather than charging it to the committee. Can that be checked out?

[The Chair, Liberal, Shawn Murphy]

Again, that's at our discretion, I understand. We can do it, but we don't have to do it. We've presented this budget without doing it, but again, you're quite right that a lot of times, if there's any issue, we can change that.

The way I'd like to see it done is that the members use their 64 points, but if that presents a problem to any of the members, then we have the budget to pay it to a committee.

Monsieur Lévesque, s'il vous plaît.

[Yvon Lévesque, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

This is a twelve-member committee. I'm wondering if we could possibly amend the motion by substituting the number 12 for the number 10, in case all committee members would like to attend.

[The Chair, Liberal, Shawn Murphy]

We could, Mr. Lévesque. Of course, there are two or three staff who would normally go too, but in the past we'd never get full attendance, although everyone is welcome and urged to attend.

Another point is that I actually live in Charlottetown, so I would not have any expenses for this particular conference. And again, we have flexibility, as Mr. Williams pointed out, in the budget. People could use their own points in certain instances, and that would drive down the cost to this committee. This is just a best estimate of the cost.

In 2003 at this meeting we had four members of Parliament attend, at the 2004 annual meeting we didn't have any attend, and last year was probably our best year ever--we had seven attend--so the chances of getting 12 are probably slim. I hope everyone is considering coming.

[Yvon Lévesque, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

I therefore move that the motion be adopted as is.

[The Chair, Liberal, Shawn Murphy]

I accept that as a motion, Mr. Lévesque.

(Motion agreed to [See Minutes of Proceedings])

[The Chair, Liberal, Shawn Murphy]

Members, the next item on the agenda for today is the vote, under Finance, referred to the committee.

I'm going to welcome again the Auditor General and turn the floor over to her.

[Sheila Fraser, Auditor General, Office of the Auditor General of Canada]

Thank you, Mr. Chair.

Let me begin by congratulating you and the other members of the committee on your election or re-election and on your appointment to this committee. We very much look forward to working with you over the coming session.

We are very pleased to be here today and would like to thank you for the opportunity to discuss our estimates and our latest performance report. I am accompanied today by John Wiersema, Deputy Auditor General, and Robert D'Aoust, our comptroller. We would also like to take this opportunity to briefly outline our mandate and operations for the benefit of new members to the committee.

The Auditor General is an Agent of Parliament who is independent from the government and reports directly to Parliament. As legislative auditors, we provide objective information, advice and assurance that parliamentarians can use to scrutinize government spending and performance. Obviously, we audit the federal government which includes some 70 federal departments and agencies, 10 departmental corporations and 60 other entities.

We also audit 40 Crown corporations, the three territorial governments, 15 territorial agencies and two United Nations agencies, namely UNESCO and the International Civil Aviation Organization. For the two UN agencies, we recover the costs of our work.

Our legislative audits include both financial audits and performance audits. A financial audit examines whether the government is presenting its financial information fairly in accordance with accounting policies. Our financial audits are similar to the type of audits you see in the private sector.

Each year, we conduct over 100 financial audits, including the financial statements of the Government of Canada, Crown corporations, and the three territorial governments.

Through our performance audits, we examine whether government programs are managed with due regard to economy, efficiency, and environmental impacts and whether measures are in place to determine program effectiveness. We select the subject of our performance audits by assessing the risks that departments and agencies face in fulfilling their mandates and conducting their operations. We audit matters of significance, and we report what we find.

We conduct about 30 performance audits a year. They are tabled in Parliament up to four times a year in reports of the Auditor General and the Commissioner of the Environment and Sustainable Development, who leads my office's environmental audit group. Our reports for 2006 are listed in an attachment to the opening statement.

Special examinations are a form of performance audit that assess the management systems and practices of crown corporations and provide an opinion on whether there is reasonable assurance that no significant deficiencies exist. All crowns must have a special examination every five years. Our special examination reports are addressed to the board of directors of the corporations. Most crown corporations post our reports on their websites.

The work of my office is conducted by a diverse staff of about 600 audit professionals and administrative services personnel. The majority work in our Ottawa office, and we also have offices in Halifax, Montreal, Edmonton, and Vancouver.

In 2004-2005, we used $72 million of the appropriations available to us and the equivalent of 590 full-time employees. Our net cost of operations, taking into account services provided without charge by other departments as well as other small adjustments, was $82.5 million.

These figures are measures of our inputs, that is of our use of money and staff. Our last Performance Report for the year ending March 2005 provides details of our outputs—the volume of work that we produce—and a broader perspective on what our work achieved.

Like most federal departments and agencies, we report our planned priorities and performance to Parliament through two central documents: our Report on Plans and Priorities and our Performance Report. The Report on Plans and Priorities for 2006-2007, which is part of the government's Estimates process, will be tabled in the fall this year. I look forward to discussing both of these documents with this committee later this year. Because the Report on the Plans and Priorities is not available for review today, we have attached some financial information on past and projected spending to assist you.

Let me comment briefly on our spending plans.

Parliament has not yet approved main estimates for the current year, and to put our current budget in context, attachment 1 provides a six-year summary. You will see that our main estimates are fairly constant over the period. In addition, you will note that each year a budget carry-forward from the previous year is provided through supplementary estimates. For 2006-07, we will be presenting supplementary estimates representing a carry-forward of some $3 million, to be added to our main estimates of $73.7 million.

We believe that with the current level of funding we will be able to properly fulfill our current mandate. However, the office could face financial pressures in the future as a result of our expanded mandate for financial audits and special examinations of additional crown corporations. Furthermore, the proposed audits of departmental financial statements could also affect our resource requirements. We will continue to monitor our financial requirements as these initiatives unfold, and we may need to seek additional funding at some future date.

In previous estimates documents, and in discussion with several parliamentary committees, we have argued that a new funding mechanism is needed for agents of Parliament. I am pleased that the advisory panel on the funding of officers of Parliament was established for this purpose on a pilot basis, and I look forward to appearing before the panel once it is re-established.

I would like to say a few words about the new “follow the money” mandate included in the Accountability Act. First of all, let me say that I appreciate this confidence. Now I would like to explain to the members of the committee how we would intend to carry out this mandate.

It is management's job, in departments and Crown corporations, to ensure that grants, contributions and loans provided to individuals or institutions outside the federal government achieve their intended purposes. They do this by establishing the systems and procedures needed to ensure that these funds are used appropriately.

Our role as government's external auditor is to determine whether those systems and procedures are in place and how well they are working. We then report to Parliament on the adequacy of the systems and we provide recommendations where improvement is needed.

We do not believe it is our role to routinely audit recipients of grants and contributions. As previously noted, this is the responsibility of the managers of those programs. Therefore, I expect that we would rarely exercise this option.

Since I expect to follow the dollar only in very rare and unusual circumstances, we are not seeking additional funding to carry out this expanded mandate.

Finally, Mr. Chair, my staff and I appreciate the continuing support that we have received from this committee, and we very much look forward to working with all of you.

My colleagues and I would now be pleased to answer any questions committee members may have.

Thank you.