Public Accounts Committee on March 26th, 2007

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

But this is over and above his annual salary?

[Marc O'Sullivan]

Yes.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Okay. I don't have time to dispute that policy with you.

Mr. Stewart, do you remember signing for your payout of your leave time? Do you remember certifying that you never took any leave year after year and were paid out for that? You did this a number of times. Do you remember that?

[Ron Stewart]

Do I remember every one of those signings, like what day they were?

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Well, do you remember the last one? That you certified that you took no leave and were paid out for it?

[Ron Stewart]

I can't remember signing it, no.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Sweet.

Before we go to the second round, I just have a couple of questions from the chair to you, Mr. St-Jean. These questions aren't personal because you weren't appointed when these situations were going on.

You're part of Treasury Board, and it's my understanding that the role of Treasury Board is to provide financial direction, guidance, and oversight to these departments. Its role is to ensure that the departments and agencies have the capacity, that the people in there are trained, that they understand their roles, that transactions will be done in accordance with the Financial Administration Act, Treasury Board guidelines, that there is a properly functioning internal audit, and that the reports coming out of the agency are all in accordance with the Financial Administration Act. Obviously, in this case, this was not done.

I have three questions. Do you agree with me that Treasury Board failed Canadians? My second question is why? And my third question is, have steps been taken that this will never happen again?

[Charles-Antoine St-Jean]

Maybe I could start with the third question. There have been steps taken to prevent a recurrence of such events. When I took over the position of Comptroller General in June 2004, there were essentially two mandates I received. One was to assess and diagnose the health of financial management, and also to do the same with internal audit. There were issues with both processes, both functions, and we've taken steps to address this.

In terms of the clarity of the role, now the policy framework spells out the roles and responsibilities of the key players. Deputy heads, CFOs, ADMs--these are now being put in front of the President of the Treasury Board.

There was also the issue of internal audits that we see were not conducted in small departments and agencies. Until then, there was no authority for TBS to conduct horizontal audits in the small departments and agencies because of the difficulty of protecting the independence of those organizations. That particular authority was granted as of April 1 this year to the Treasury Board Secretariat, my office, and now we're conducting internal audits on some of those processes, including, right now, one in travel and hospitality. Another one that is coming up is delegation of authorities; another one will be coming up. So the steps are being taken to address that.

In terms of why these things happened, when I came out with these new policy frameworks I was very clear about the need for clarity of roles and responsibilities. That is now being addressed by the new policy framework. Some of them have been enacted and some will be shortly.

Maybe my colleague who's here from PCO could speak more about the upcoming guide in terms of the roles and responsibilities of the deputy head, which is now being updated, and say why those things happened. They were not clear, absolutely not clear. They weren't getting—

[The Chair, Liberal, Shawn Murphy]

My first question, Mr. St-Jean, was do you agree with me that Treasury Board failed in this particular file?

[Charles-Antoine St-Jean]

I would not be prepared to make that comment in those terms. It was the lack of clarity of roles and responsibilities.

[The Chair, Liberal, Shawn Murphy]

But whose job was it to clarify the roles and responsibilities? My understanding is that it would be Treasury Board.

[Charles-Antoine St-Jean]

Roles and responsibilities of the deputy head, responsibility of machineries, responsibilities of PCO, the roles and responsibilities of other officials, TBS--like I said, the Office of the Comptroller General was not there at the time.

[The Chair, Liberal, Shawn Murphy]

Okay. I have just one other question to you, Mr. O'Sullivan.

It's my understanding that to finance this particular agency, funds were appropriated from the general revenues. At the end of the year, if there was a surplus or if they saw a surplus coming, they would take the pot of surplus and divide it among all employees on an equal basis. They had to do a very complicated arrangement on a per-hour basis. If you were entitled to $2,000 and you were making $10 an hour, you would put in for 200 hours of overtime. If you were making $20 an hour, you'd put in for $100 an hour.

I have two questions. It seems to me that this is a fundamental violation of organizational values and public sector ethics. Are you as disturbed as I am? What has Privy Council done to make sure this will never happen again?

[Marc O'Sullivan]

With respect to the actions of staff of the Correctional Investigator, I'm not in a position to respond to that, because our section is responsible for Governor in Council appointees—i.e., Mr. Stewart—but not for the staff of the Correctional Investigator's office.

There is an issue there that Howard may—

[The Chair, Liberal, Shawn Murphy]

Does somebody want to answer the question?

[Howard Sapers]

I'd be happy to.

[The Chair, Liberal, Shawn Murphy]

Okay, go ahead, Mr. Sapers.

[Howard Sapers]

First of all, I think it's important to understand the almost unique context in which the Office of the Correctional Investigator exists. It's been given a very particular mandate by legislation that Parliament awarded to it, and it's been given a policy framework by government, including, through order in council, the delegation of all human resources-related material. So everything that would normally be done by the Treasury Board has been delegated to the Office of the Correctional Investigator as an independent agency and a separate employer, where the employees are not part of the core public service.

Secondly, when the office was created in 1977, it was created under the Inquiries Act. All of the other employees in the office were on personal service contracts to the Correctional Investigator at the time. That didn't change until 1993, so those relationships that you were talking about had been long-standing.

When it comes to those awards of extra payments, it is clearly within the authority of the Office of the Correctional Investigator to make awards for extra payments, as it is in the general public service, either at the executive level in terms of performance bonuses that we've heard Mr. O'Sullivan speak about or other kinds of awards that can be made.

The Auditor General was quite correct in coming to the conclusion that those particular payments you referred to were not properly documented and were mischaracterized as overtime. However, they were payments that were made in terms of resolving long-standing issues in the office, and they were payments not just for overtime but also for extra services that were performed above and beyond the level and scope of the work that most of the employees were ordinarily involved in.

They took place over three periods, and the financial flexibility the office had at the end of those particular years was a factor in the decision to make the awards at that time. That flexibility wasn't available in the office, in my understanding, prior to those years.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Sapers.

We're going to go to the second round, colleagues, of three minutes, and I will unfortunately have to be very tough on the time.

It's to Monsieur Simard, for three minutes.

[Raymond Simard, Liberal, Saint Boniface, MB]

Thank you very much, Mr. Chair.

I'll ask my questions in sequence.

Madam Fraser, in your introduction you indicated that the Office of the Auditor General received anonymous tips. I'm assuming that if you had not had this tip-off, given the lack of internal controls, we would never have discovered these deficiencies, would we?

[Sheila Fraser]

It is certainly very unlikely that we would ever have conducted this audit if we had not—

[Raymond Simard, Liberal, Saint Boniface, MB]

I would imagine, again, that this tip-off would have incited you to immediately audit other similar agencies. Did you find similar deficiencies?

[Sheila Fraser]

What is interesting here is in fact that the complaint we received was about human resource practices within the office. That came in, interestingly enough, the day after we tabled the report on the Office of the Privacy Commissioner.

So the audit was initially looking at human resource management practices. It would have been in 2003 that we received the initial complaint. That audit went on until 2004. As Mr. Sapers said, we met with management, explained the issues, and they took corrective action.

[Raymond Simard, Liberal, Saint Boniface, MB]

I guess your audit revealed a lot more than human resource issues.

[Sheila Fraser]

That's right. It—