Public Accounts Committee on May 15th, 2006

[The Chair, Liberal, Shawn Murphy]

Colleagues, I'd like to start the meeting.

I want to welcome everyone here. I especially want to welcome Auditor General Sheila Fraser and Mr. Ste-Marie.

This is a special meeting called by a request of five members of the committee. It's to deal specifically with the alleged leak that was talked about at our meeting last Thursday.

We'll start with opening remarks by the Auditor General. Following that, with the committee's permission, I propose that we just follow the same format of eight minutes, eight minutes. Although we're only here for an hour, I think it will work out the same.

Madam Auditor, the floor is yours.

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

Thank you, Mr. Chair.

With me today is Assistant Auditor General Jean Ste-Marie. We thank you for this opportunity to discuss a newspaper article that claims to contain information from a report scheduled to be tabled in the House of Commons tomorrow.

I would like to begin by saying that I take my relationship with Parliament very seriously and that my office takes every reasonable step to ensure that our reports are not disclosed publicly until tabled in the House of Commons. Premature disclosure represents a disregard for the statutory right of the House of Commons to receive the report.

This is not the first time one of our reports has been leaked to the media, but overall it is not a common occurrence. Since 2001, eight audit reports, including the one we are discussing today, have been the subject of leaks by journalists before they were tabled in the House of Commons. This represents a very small proportion of the 128 reports I have tabled during this period. Nonetheless, I consider eight leaks too many.

When the 2006 status report is tabled tomorrow, you will notice that the information published in some newspapers on May 11 is not entirely accurate in some important respects. We believe the journalist who wrote the article did not possess a printed copy of the report but was passing on information that he received verbally.

Let me now outline some of the safeguards we have in place to protect the confidentiality of our reports at three critical stages in the process--when we consult the organization being audited in order to validate the facts as we are finalizing our report, when we brief government officials and ministers, and when the report is at the printer.

With regard to the security of the report when it is being printed, we ensure that the personnel employed by the printer handling our reports have all the appropriate security clearances and enforce a rigorous control of printed copies of our reports.

Our own policies as well as our professional standards require us to consult the departments and agencies we audit about the contents of our reports. We consult them more or less continuously over the course of the audit. The purpose of this consultation is to produce a report to Parliament that is based on accurate and complete information.

Draft audit reports represent one of our greatest security risks as they summarize our findings. We have put in place a number of safeguards to protect our draft reports from public disclosure during the stage when we are consulting the department or agency in order to validate the facts in our reports.

Our Office's Code of Professional Conduct requires that all staff be familiar with and observe the security requirements set out in the Security Policy and Guidelines issued by the Office. Under this policy, audit principals are responsible for ensuring safe storage of draft reports and restricting access to them.

Draft reports shared with departments and agencies for the purpose of validating facts and discussing our observations and recommendations are considered “designated information” and are labeled “Protected A”.

When we provide draft reports to the organization we audit, we send a letter outlining the following safeguards: that this document be treated with appropriate discretion until it is tabled in the House of Commons; that it should not be copied; and that all copies provided should be returned to the Office or destroyed. If they choose the latter option, they must provide my Office with a certificate to that effect.

Each draft report that we provide to the departments and agencies that we audit is marked, on each page, “Not to be copied. Draft document for the purposes of fact verification and comment only. Property of the Auditor General. Protected A.” Every copy sent to the entity is numbered to facilitate its tracking and retrieval.

In the last few weeks before tabling, we meet with senior officials of the Treasury Board Secretariat and the Privy Council Office. The purpose of these meetings is to assist these central agencies in their coordination of government-wide oversight. In the last few days before tabling, as a courtesy, we also offer briefings to ministers responsible for the departments and agencies we audit, since they will be responding publicly to our reports. In the case of all briefings, we rely on the discretion of those involved.

As you can see, my office takes steps to protect the confidentiality of our reports before they are tabled. In our opinion, there has been no breach of a law that would require us to report this incident to the RCMP. Rather, there has been a breach of the government security policy.

That concludes my opening statement, Mr. Chair. I would be pleased to take any questions the committee members may have.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mrs. Fraser.

Before I start the first round, I would ask members to exercise a degree of caution in their questions. There is a certain amount of speculation going on here. It's not the purpose of this committee to speculate. Again, I'd urge caution in your examinations.

Mr. Wrzesnewskyj, eight minutes.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Thank you, Chair.

I'd like to thank the Auditor General for coming to this meeting. In fact I'd go further and thank her for all the work she has done.

The offices of government in general--and many politicians--unfortunately are not held in the sort of esteem we'd wish, but your offices certainly are. I believe all the MPs here share in that public admiration of your offices. That's why we treat with such seriousness any erosion of the confidence that the public has in those offices, with the potential for these sorts of leaks. The purpose behind calling this meeting is to see whether or not we can go through a process that hopefully will arrive at a result and find the culprit or culprits in this particular case. It is also to try to guarantee that this sort of thing becomes not only a rarer and rarer occurrence--it's a very rare occurrence as is--but in fact something that never takes place.

I'd like to begin by requesting, Auditor General, would it be possible for your office to provide a flow chart, once the particular report that was referenced in the article has been tabled, of all the individual people who may have had this report or a draft of this report in their hands?

[Sheila Fraser]

Mr. Chair, that probably would be feasible, but I hope you recognize that many, many people have either had a draft of the report or have seen parts of the report. Even for third parties outside government who are mentioned in the report, it is part of our process to share with them the text that concerns them. People have been briefed on the report.

I don't know how many people we're talking about, but certainly it's dozens and dozens and dozens of people.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

But it would be possible to provide this type of flow chart.

[Sheila Fraser]

With difficulty.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

This sort of flow chart, I would envision, would have three different bodies. Obviously there would be your offices, and you've made it quite clear that you've done the investigations in your offices. Then there are the outside contractors, printers, and finally government officials.

With the government officials component, I heard a number bandied about, that there were six reports handed over to the department and signed for. Would it be possible to provide that component, as opposed to the other components, a little more expeditiously?

[Sheila Fraser]

To my knowledge, there were more than six reports provided to the department and various people within the department. There were also several drafts during the process. I'm not sure how many drafts there actually were, but there were a number of drafts throughout the process that were shared with the department.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

At the meeting on Thursday, you stated that your departmental security officer is conducting an investigation. Has that investigation concluded?

[Sheila Fraser]

Yes. I received a draft report from our departmental security officer, who essentially looked at our internal procedures to make sure there was no breach within our own office and within our procedures.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

You also said that meetings took place with senior officials of Treasury Board Secretariat and Privy Council Office. What would have been the methodology? Would they have been given reports in advance of those meetings? Was information passed on in a verbal manner at these meetings? How exactly does that take place?

[Sheila Fraser]

This is a standard practice that's been conducted in the office for many years, to my knowledge, where before the tabling of a report--a couple of weeks, perhaps two to three weeks before--the people who are responsible for the various audits meet with senior officials of the Treasury Board Secretariat and the Privy Council Office who have previously received drafts of reports, either through the departments or through us if the audit concerns them. We are available to them to respond to questions or issues that they would like clarified.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

So I guess it would be safe to assume that perhaps a couple of ministers have had an opportunity to see this report.

[Sheila Fraser]

And it's also part of our standard practice to brief any minister whose department or agency is contained in the audit report. Those briefings generally occur certainly no sooner than the week before tabling and often a day or two before tabling.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

When will the security officer report be made available?

[Sheila Fraser]

I have a draft report now. I would expect that he will be completing that over the next few days.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

You had also stated at the last meeting that you have suspicions as to where this leak occurred. Did the report that was provided to you in draft form confirm those suspicions?

[Sheila Fraser]

I'm not sure that those suspicions could ever be confirmed, quite frankly, unless the person who spoke puts up his hand or the journalist reveals their source, both of which I expect are very unlikely to happen.

The departmental security officer essentially looked at our procedures and went through all the different procedures that the teams should have followed. He concluded that our people had followed the procedures. Our procedures, as I mentioned in the opening statement, largely deal with the physical security of the actual report itself, and so he mainly focused on that aspect of it.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

In point 14, you touched on the issue of RCMP involvement. During the last meeting there was an innuendo or a question whether perhaps the printers may have been the source of this. Advance information and advance copies of this sort of report have tremendous potential value. Has it ever occurred in the past that perhaps a contractor, realizing the value of these sorts of reports, could have sold information?

[Sheila Fraser]

To my knowledge that has never occurred. I think I would have been informed if that had ever occurred.

I would remind members that there are serious inaccuracies in the information in that story that is purported to represent the report. If it was a question of a physical copy of the report being available, one would presume that it might have been more accurate.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Wrzesnewskyj.

Monsieur Sauvageau.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mrs. Fraser, Mr. Ste-Marie, I concur with Mr. Wrzesnewskyj who qualified your work as exemplary.

My question is as follows: in paragraph 3 of your statement, you mention that of the 128 audit reports tabled, eight have been the subject of leaks since 2001.

Can you tell us what happened to cause these leaks? Did your Office investigate these incidents? Did you uncover the source of the leaks? Each time a leak occurred, did you tighten up your distribution procedures?

[Sheila Fraser]

Each of these leaks was investigated by staff in my Office. In the majority of cases, reports were not leaked by someone who had received an actual paper copy. Rather, we believe the information was leaked by a journalist who obtained verbal information from a particular source. I personally know of a few cases in which discussions were held with senior departmental officials. In another case, I had conveyed to the clerk my concern over some leaked audit information.

[Benoît Sauvageau, Bloc, Repentigny, QC]

To your knowledge, were those parties responsible for the leaks ever sanctioned?