Good morning Mr. Chairman and thank you for the opportunity to explain my involvement with the accounting for certain costs of the Canada Firearms Centre.
I should note at the outset that I appear before you today as an individual—the person who was the Acting Comptroller General for part of the period in question. For this hearing, I do not represent the Office of the Auditor General, nor any government organization.
To put things in context, I should also note that I joined the Treasury Board Secretariat (TBS) as Deputy/Acting Comptroller General on November 17, 2003. I submitted my resignation on February 17, 2004, effective March 5, 2004. I took holidays between March 1st and 5th, 2004 and rejoined the OAG as Deputy Auditor General on March 8, 2004.
As disclosed in the Auditor General's report, I recused myself from all involvement in the Auditor General's audit, as I had been involved in matters that might arise in the course of the audit. I was, however, interviewed by the audit team late in the audit in my capacity as the former acting Comptroller General.
I would like to begin by referring you to paragraph 34 of the Auditor General's report entitled “Government Decisions Limited Parliament's Control of Public Spending”.
It reads, in part:
Senior accounting officials of the Treasury Board Secretariat continued to maintain that all CFIS II costs and other estimable liabilities incurred in 2003–04 should be recorded and charged against the Centre's voted appropriation that year. They held that this was consistent with the requirements of transparency, full disclosure, and good accounting practices—as well as the PAYE policy, which had been applied by all other government departments since it was established in 1991. These officials also stated that legal advice should not determine the correct accounting treatment.
This was my position as the acting Comptroller General. It is well documented in TBS files. My position and recommendation on the proper accounting for the amounts in question was clear from the onset of discussions through to my departure from TBS. Documentation in TBS files also indicates that discussion on the proper accounting continued well after my departure, when the decision not to record the amounts in accordance with the policy was implemented.
I was a participant in the mid-February 2004 meeting referred to in paragraph 35 of the Auditor General's report. While it was not my role in the meeting to command any particular recommendation or decision by those responsible, my position on the accounting for the amounts in question was not only clear, it was a source of tension on the issue. It was likely also the reason the meeting was called.
Although the Auditor General notes in her report that the recollections of participants in the meeting differ significantly, I can state categorically that I did not change my position during or after this meeting. Documentation in TBS files confirms this. However, in the end, my position and recommendation were not followed, either in the decision not to seek supplementary estimates or in the ultimate accounting that was used for these costs. It was apparent to me before, during, and after this meeting that these decisions were being driven by considerations other than good accounting practices.
Thank you, Mr. Chairman. I would be pleased to answer any questions members of the committee may have.