Public Accounts Committee on Feb. 21st, 2007

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Mr. Gauvin, a consultant was hired by your St. Andrews golfing buddy, Mr. Crupi, to handle staffing for the pension outsourcing project. The Auditor General stated that this person circumvented staffing regulations and was paid $443,000 for work over an 18-month period. Since the RCMP maintains its own staffing unit, why was this condoned by you and not reported by you to the Pension Advisory Committee?

[D/Commr Paul Gauvin]

Mr. Chairman, this was not in my area of responsibility. It was under HR. It was under Mr. Ewanovich at the time.

As I understand it after all these investigations, the reason they hired a consultant was that HR was overloaded and couldn't provide the service at the time. So the consultant was hired to provide staffing and classification services that normally would have been looked after within the organization. All those charges have been reversed and credited to the pension fund.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Wrzesnewskyj. Thank you, witnesses.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

I referenced a couple of documents, so I'll pass those on to the clerk.

[The Chair, Liberal, Shawn Murphy]

We'll get them translated and circulated.

I just want to point out to members that if there are questions to which you think you're not getting fulsome answers from the witness, do not hesitate to ask the witness to provide the information from other sources within their departments or offices.

Ms. Brunelle, you have eight minutes, if you will.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Good afternoon, ladies and gentlemen.

Mr. McRoberts, you said that the RCMP charged about $1.3 million to the pension and insurance plan for work of little value, but that only $270,280 had been reimbursed or credited to the pension plan.

My first question is the following: In your view, why is that?

You've said that it is your understanding that the RCMP has reviewed your estimate, refined it and made additional adjustments to the plan since the end of the field work.

What should we make of that? That out of an initial charge for unjustified expenditures of $1.3 million, only $270,000 has been reimbursed? Did I understand correctly?

[Hugh McRoberts]

The amounts were an estimate that we generated based on our work. Tracing those amounts through and then providing a basis for how they should be returned to the appropriate fund was a difficult task. We in the RCMP, at the end of the audit, as indicated in exhibit 9.1 in the chapter, had been able to identify about $270,000. We have been informed, as I indicated in our opening statement, that additional work has been done, and additional reimbursements have been made.

Perhaps the RCMP can identify specifically what they've done. We do not have detailed audit knowledge of that, unfortunately.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Could the RCMP answer that question?

[D/Commr Paul Gauvin]

Up until now, we have reimbursed $759,000 to the pension plan. That leaves a balance of $373,781.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Is that balance still being reviewed?

[D/Commr Paul Gauvin]

It is still being reviewed, but most of that amount represents funds that were paid to Public Works, to what is called Consulting and Audit Canada, for services provided to the pension plan administrators.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Therefore, the review is intended to determine whether the services provided were appropriate, in terms of the expenses that should be charged to a pension plan.

[D/Commr Paul Gauvin]

Yes, that is correct.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Mr. McRoberts, you then state in your report that disciplinary action should have been taken, but that had not been done because the time limit had elapsed. The RCMP has told us the same thing.

I am wondering whether this case should be dropped, once and for all. Is it too late to take disciplinary measures? Should we forget this case, or have a sufficient number of corrective measures been taken to prevent such a situation from occurring again?

[Hugh McRoberts]

We're comfortable that the RCMP's response to the recommendations or the matters raised by the internal audit and the OPS investigation was adequate. They have indicated that on the additional matters we identified, they agreed with us, and they will be acting to respond to those.

Will this prevent it from ever happening again? It will increase the likelihood that it won't. At the end of the day, however, when we are dealing with matters that involve management override, I think one goes beyond the realm of controls and goes into the realm of ethics and values. That then becomes another area.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

What do you mean by ethics and values? To me, those seem like very philosophical words to talk about real money in a pension plan.

[Hugh McRoberts]

The issue that arises here is that you can control so many things, but if the ethics and values of senior management are not sufficient so that they control themselves from overriding those controls, then, in essence, no matter how many locks we put on the treasure chest, eventually they'll get in.

[The Chair, Liberal, Shawn Murphy]

You have three minutes remaining.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

I understand that sometimes standards are not applied, but your statement suggests that the RCMP had begun to review the insurance plan administration. Obviously, you can have all the rules possible, but there will always be people who, depending on their ethics and values, will try to break them or find ways to get around them. That is why it is so important for you, as an auditor, to prevent and warn us of such misconduct.

You have asked to review the outsourcing of the pension plan administration. Do you find that that was done correctly?

[Hugh McRoberts]

In the original business case that we referred to for the outsourcing of the pension and insurance administration, we were not satisfied, given the rapid escalation of costs after the initial business case, that there had been a proper challenge and review of that business case. As a result, we have recommended that all significant business cases in future should be subject to a stringent internal review by the RCMP before they go forward. They have agreed with that.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Thank you.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Ms. Brunelle.

Mr. Williams for eight minutes.

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

Thank you, Mr. Chairman.

This Auditor General's report is a serious indictment of the administration of the RCMP, which is there to uphold the laws of the land. When they don't even uphold their own laws, what confidence can the general public have in our institutions?

I'm looking at paragraph 9.23 of the Auditor General's report, Mr. Chairman, which says:

Human Resources staff claimed that because of work pressures, they allowed the NCPC Director to hire casual employees on his own rather than following the regular staffing process.

Basically, the rules don't need to apply just because the guy is busy. Is that an appropriate response, Ms. George?

[D/Commr Barbara George]

It certainly isn't, Mr. Chair.

We have to remember that these decisions and these actions occurred several years ago. I'll repeat again that two individuals resigned and have left. Since then, there have been no less than four probes of these matters—

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

Madam George, I'm trying to get to the issue of administration at the senior levels of the RCMP. Canadians right across this country hold the RCMP in high regard and expect a high standard of ethics. When somebody says, “I'm busy, so the rules don't apply to me”, and you say that's okay, what do you say to the Canadian people?