Thank you, Mr. Chair.
We are pleased to be here and would like to thank you for giving us the opportunity to discuss our 2006-07 report on plans and priorities, as well as our 2005-06 performance reports.
I'm accompanied today by John Wiersema, Deputy Auditor General; Rick Smith, Assistant Auditor General responsible for strategic planning and professional practices; and Jean Landry, our acting Comptroller.
As the legislative auditor, we provide objective information, advice, and assurance that parliamentarians can use to scrutinize government spending and performance. Our financial audits provide assurance that financial statements are presented fairly, in accordance with Canadian generally accepted accounting principles or other relevant standards.
Our special examinations assess the management systems and practices of crown corporations and provide an opinion on whether there is reasonable assurance that there are no significant deficiencies in the systems.
Our performance audits examine, against established criteria, whether government programs are being managed with due regard for economy, efficiency, and environmental impact and whether measures are in place to determine their effectiveness. We make recommendations to address the most serious deficiencies identified.
All of our work is conducted in accordance with the standards set by the Canadian Institute of Chartered Accountants. It is guided by a rigorous methodology and quality management framework and is subjected to internal practice reviews and to external reviews by peers. All of this provides assurance that you can rely on the quality of our work.
During 2005-06, the period covered by our most recent performance report, we used $76.8 million of the $79.6 million in appropriations available to us and had the equivalent of 577 full-time employees. There's an attachment that details this. Our net cost of operations, taking account of services provided without charge by other departments and other smaller adjustments, was $85.3 million.
With these resources, the office carried out the following activities:
- it produced 18 performance audits of federal departments and agencies and 4 related-products; this number is lower than normal because, as a result of the 2006 election, our status report for February 2006 was postponed to May;
- it performed more than 100 financial audits, including those of the Government of Canada, Crown corporations, and the three territorial governments;
- it completed 11 special examinations of Crown corporations; it assessed the performance reports of three federal government agencies;
- it assessed the actions of 13 federal organizations in implementing 25 commitments from their 2001 and 2004 sustainable development strategies, and reported on the adequacy of government direction in preparing the 2004 strategies, and;
- it monitored 32 environmental petitions, 90% of which were responded to by ministers within the time limit specified in the Auditor General Act.
Our performance report contains a number of measures of what was achieved through our work. The performance highlights page of that report notes the following during 2005-2006:
We participated in 22 parliamentary hearings and briefings, 13 of which were with this committee. This is a decrease from 37 the previous year, and is mainly due to the dissolution of Parliament.
This committee endorsed 74% of our performance audit recommendations that it reviewed. Our target was 75%.
We met or exceeded our targets for the percentage of key users of reports and audited organizations that considered that our findings were reported in an objective and fair manner and that our reports were clear and concise.
We reported eight financial and performance audit internal practice reviews, all of which concluded that our audits were conducted in accordance with our quality management frameworks.
Our employee survey indicated that 82% of our employees believe the office is better than average or one of the best organizations to work for, and 92% say they feel proud to work for the office.
We have noted two key areas where improvement is necessary. By 2005, departments and agencies had fully implemented 44% of the recommendations we had made four years earlier. We would like to see a higher level of implementation. To that end, we have updated our guidance to staff to improve the recommendations we make, and we provided input to the Treasury Board Secretariat's review of departmental responses to our recommendations, as recommended by this committee.
Second, just over half the special examinations we completed in the current round were transmitted more than a month after the statutory date. One of our management committees is overseeing the development of an action plan to redress this situation for the upcoming round.
Our report on plans and priorities identified four priorities for 2006-07. Following the election, our first priority was to inform new and returning members of Parliament about our role, our mandate, and our work. We are continually looking to improve how our audit reports, testimony, information, and advice can best meet Parliament's needs.
In 2005, Parliament expanded our mandate. As a result, we are including foundations in our performance audit work and are expanding our financial audit and special examination work to a larger number of crown corporations.
We are continuing to modernize our audit practices to make better use of information technology and to focus our audit work on areas of highest risk. And changes to professional standards require an additional investment in methodology and training.
Recruitment and retention of qualified people to carry out our mandate is an important issue for the office. We face a higher workload, more retirements, and an increased demand in government departments and in the private sector for people with the skills and experience we need. We are developing a multi-year recruitment and retention strategy to respond to these pressures.
In earlier Estimates documents, and in discussions with several parliamentary committees, we had presented the need for a new funding mechanism for officers of Parliament. I am pleased that the Advisory Panel on the Funding of officers of Parliament was recently reconstituted for this purpose on a pilot basis, and that I had the opportunity to appear before it on November 23.
At that meeting, we were seeking the Panel's recommendation to increase our funding for 2007-2008 by approximately $4 million for ongoing expenses and about $2 million for one-time investments in technology (see Attachment 2). Our request for these new funds was primarily as a result of new and additional work resulting from recent expansions to the mandate of our Office and additional work that has been requested under our existing responsibilities. I am pleased that the panel has supported our request, and that the Treasury Board has approved this new funding.
In the longer term, our key budget unknown is the cost associated with the government's initiative to audit departmental financial statements. Additional unknowns are related to changes contained in the Federal Accountability Act and potential international audit work in support of the interests of Parliament and the Government of Canada. We will continue to monitor our financial requirements as these initiatives unfold, and we may need to consider seeking additional funding for future years.
My staff and I appreciate the continuing support that we have received from this committee. As I said in my introduction to our most recent performance report, your endorsement of our work is highly valued by me and my staff, and we look forward to continuing to serve parliamentarians in the future.
For members' information, I have attached the list of performance audits planned for reporting in 2007 and a preliminary list of topics for 2008. I hope this list will be useful to you as members of this committee. In fact, it may be of interest to all members of Parliament. In that light, unless you object, I would like to post this list on our website and continuously update it.
I thank you, Mr. Chair. My colleagues and I would be pleased to answer any questions that members may have.