Evidence of meeting #55 for Public Accounts in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was contracts.
A recording is available from Parliament.
Chief Risk Officer, Public Works and Government Services Canada
I moved in July or August of 2005.
Liberal
The Chair Liberal Shawn Murphy
That would be two years ago. Instead of shooting bullets, I guess you can say you're dodging bullets here today. Your department is here. It stinks, as Mr. Marshall said. It's a scam to avoid government regulations, and it is what I consider to be a shameful example of the expenditure of public moneys—and no reflection on you, sir. You weren't there, and you're not to take any responsibility for what happened, but my question to you is looking at it in hindsight from your many years of experience and your competence.
We expect better and we expect Treasury Board guidelines to be followed. We expect the Financial Administration Act to be followed. We expect checks and balances. Why was it that this was allowed to happen? Why did the system fail?
Chief Risk Officer, Public Works and Government Services Canada
Let me start by saying I'm not here to dodge bullets, sir. The part that I would like to talk about is what we did to fix the problem, and we haven't got to that yet.
Liberal
The Chair Liberal Shawn Murphy
I didn't mean that personally. I meant the department. The department is here.
Chief Risk Officer, Public Works and Government Services Canada
Not at all, sir.
The issue here is that internal controls that are established are designed for normal processes. When there is collusion, especially when there is collusion between employees of two separate departments, individual internal controls in the individual departments really don't function that well. You have to have somebody who can connect the dots between the departments to go there.
As Mr. Marshall said, what happened here was absolutely not acceptable. I sat in executive committee meetings and I sat in senior management meetings, and all the senior management in the Department of Public Works were appalled. This was not the way the Department of Public Works did business. It did not meet our standards. You can do all the churning and you can use all the words and say, “He did..., and he did...,” but there are managers who have to be accountable and it didn't work.
For us, the situation was simply this: What do we do? We have an organization here that provides a very important service to the Government of Canada. Over 100 government departments come to this organization for services. They provide audit services and consulting services, and the actions we took then were structural. We said, “We have to separate this organization.” We broke the auditing from the consulting. We got rid of their mandate to do contracting, because contracting should be done by the specialists in our contracting unit. We took some dramatic action in terms of public service HR, the number of things that Mr. Marshall has listed in the opening statement, from reprimands to termination. Very few departments go there. Then, sir, we did a lot of work to strengthen quality assurance and quality control so that we never see this happen again. We put in our energies into looking at an organization that provided a service and we determined that the important thing was not the structure of the organization that had led to these weaknesses but the service we provided, where we could provide it differently and better, and with better controls.
My last issue we really have to think about some time, that part of the issue here was that they were revenue dependent. CAC had to bill for its services. Rules dictate behaviour. We were in a situation where they could not control their cost. Somebody else was negotiating the salaries. They had limited control over the overhead they were being charged but they had to produce revenue. It's not an excuse. It's not a reason. It's never an acceptable reason to do what happened here. But in the context, you have to remember that.
Thanks.
Liberal
The Chair Liberal Shawn Murphy
There's one other area I want to get on the record here—and this is back to you, Mr. Crupi. This is a question that really hasn't been answered, and I'd like an answer, although maybe you can't give it right now. According to all the records that I've read, I'll just quote one report that you should have been dismissed for cause. Whether you were dismissed for cause or weren't, that's up in the air, but the basic question is that I understand now you're working for the Communications Security Establishment. Did you have to get security clearance to get that job? And the second area of that point is, how did you get the job?
As an Individual
Josée Derickx.
I had to go through a very rigorous security process. I'm concerned about telling you of the process because it's a security agency and I don't know the secrecy issues. I can't answer the question, but I would suggest to you it's more than what any other agency in government would go through. If you want to ask them what I went through, I'm sure they could answer it. I'm just concerned. I went through a whole security process with them, I passed that security process, and I don't work there any more, sir. I was asked to leave the next day.
Liberal
The Chair Liberal Shawn Murphy
Would this get into the situation we're dealing with? Would this be part of it? I'm still surprised this happened.
As an Individual
On why I was asked to leave? Would what be part of it, sir?
Liberal
The Chair Liberal Shawn Murphy
My question is in the security check that you had. Would all this come out?
As an Individual
Absolutely, this came out. I disclosed everything. If you check the processes I went through, you might be surprised as to the veracity of what I'm telling you here, sir.
Liberal
The Chair Liberal Shawn Murphy
Thank you very much.
On the second round, I think we have time for five minutes.
Ms. Sgro, for five minutes.
Liberal
Judy Sgro Liberal York West, ON
Mr. Crupi, I have a variety of questions for you.
You hired an assistant, Ms. Suzanne Beaudin, through a contract arrangement in which she was paid over $200,000 for 54 weeks of work. Proper staffing rules were not followed in this instance, according to the KPMG report. Why did you hire this individual? Why did you not follow proper procedure?
As an Individual
First of all, she was hired for human resource strategy. Part of her function in human resource strategy was to assist our managers in getting the right resources and tools in place. If our managers were having trouble with staffing, she would help move them through that process, but her main task was human resource strategy, which was imposed upon us in a very rigorous and robust way by the Treasury Board. We were just going to allow, through normal attrition, the staff to move on. That human resource strategy was brought to the pension advisory committee table, where it was approved and endorsed. The costs of that strategy were also approved and endorsed by the pension advisory committee.
She was never hired as an assistant. She was not hired to do staffing. She was hired to do human resource strategy.
Liberal
As an Individual
No, she was hired as a consultant. She went through the proper consulting processes. She bid on jobs and she was hired. I wouldn't have gone through staffing to hire that individual.
Liberal
Judy Sgro Liberal York West, ON
Going through the KPMG report, Mr. Crupi, your name is there numerous times as being someone who was an expert on the contracting policies as related to government contracts. How did you choose to use your knowledge and hire and retain contractors that were preferred? How did you manage to keep moving from PWGSC to CAC and so on, with no one seeming to have any concerns about your level of ethics?
As an Individual
I've never taken a procurement course in my life. I've never suggested I was a procurement expert. I've said it here a number of times. I've had an exemplary record with Public Works for over 25 years. There were no missteps. I've never been sanctioned. When I moved to the RCMP, I was recruited to the RCMP to work on not just this project, but I was also responsible for payroll and for pensions and for systems. This project was an additional add-on to my regular job. At no time was I a procurement expert or trained in procurement. I hired someone to do that because I wasn't trained in it.
Liberal
Judy Sgro Liberal York West, ON
Clearly it looks like everybody else in the government thought you were an expert in it.