Public Accounts Committee on May 16th, 2007

[David Christopherson, NDP, Hamilton Centre, ON]

Below that, just to continue the theme, the percentage of crown corporations and large department senior managers who find that your financial audits add value rises to 66%, but again the target is only 75%. So you're expecting that 25% of the people in those positions are not going to see this as value added. That's such a big number. The culture should be so predisposed to seeing all of this as motherhood...that number jumps out at me.

The last one shows that 44% of performance audit recommendations were implemented four years after their publication. That is disappointing. We talked about this before. I know you've made it one of your priorities, and that's good, but the target is only 50%. We're not exactly shooting for the moon there.

[Sheila Fraser]

No, but the reality is we have been trying to make our recommendations better, more concrete, and more relevant, and we've been asking for action plans. It will take time, because we're measuring them four years after the fact, so we're still dealing with recommendations that may not have been as good as they could have been and with departments that may not have produced action plans at the time. So I would hope that over time this number will grow.

[David Christopherson, NDP, Hamilton Centre, ON]

Very good. Thank you so much.

Thank you, Chair.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Christopherson.

We'll move now to Mr. Williams for seven minutes.

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

Thank you, Mr. Chairman.

First of all, congratulations on being awarded the contract with the International Labour Organization. That is kudos to Canada. I believe you also audit the International Civil Aviation Organization headquartered in Montreal.

Is the audit you do on the ICAO a public document?

[Sheila Fraser]

I believe it is. It is certainly presented to the assembly where all the countries are present. There is an annual meeting, and I believe they post it on the website, but I'm not sure. I can check and let you know.

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

Could we contact your office for a copy of it?

[Sheila Fraser]

Sure.

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

Okay. Perhaps you could just take that as a notice to send one along. I'd appreciate that. Thank you.

On the performance audits that Mr. Christopherson was talking about: too low numbers; percentage of performance audit recommendations implemented four years after the publication, 44%; and percentage of significant deficiencies that continue from one special examination to the next, 10%. They may be low numbers, but I think they indicate that some of their problems are not being addressed. Do you have a plan to improve that? Do you need our assistance as the public accounts committee to help you do that?

[Sheila Fraser]

Certainly we have gone back and looked at the quality of the audit recommendations we made. The committee has been very helpful to us in making sure that departments have realistic and reasonable action plans.

Committee members may recall that when we looked at this the last time the Treasury Board Secretariat indicated it was undertaking a review of departments. We've been informed that review was halted or discontinued. The committee might want to ask the Treasury Board Secretariat if they have any plans, because it really is about implementation in departments. It really is government's responsibility, if they say they are agreeing to these recommendations, to get on with it.

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

We would think so, but obviously they're not. When 44% are not taken up, that's a significant number of items that are being completely ignored, and 10% of significant deficiencies are not being rectified.

Can the public accounts committee assist in this area, or what should be done?

[Sheila Fraser]

On the performance audits, the committee can continue to help by making sure there are action plans in place and by asking the Treasury Board Secretariat if they are planning any action or have any study that they discontinued.

On the question of significant deficiencies, that is an interesting question of the role of the public accounts committee vis-à-vis crown corporations. We were just mulling that over today. The special examination reports go to the boards of the crown corporations; they are not tabled in Parliament. They are not always made public. There is now a policy that these should be posted on websites.

We are contemplating an annual report to Parliament on the special examinations we have done and the results of them, because some of them had very significant deficiencies and Parliament was not necessarily made aware of them.

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

I think we need to find a way, Mr. Chairman, whereby that information can be brought forward and tabled in Parliament, because I don't think we can allow significant deficiencies to go unaddressed.

On another issue, this is unusual that the Office of the Auditor General is quite prepared to accept criticism of itself: “Percentage of special examination reports delivered on or before the statutory deadline”, only 45%. So on 55% you missed the statutory deadline. I see your target is 100%. Are you going to get there?

[Sheila Fraser]

Oh, yes. I was not pleased that we were missing statutory deadlines, so we are tracking this very rigorously and making sure—

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

It's interesting that you say that, because a number of us at the committee just came from a seminar where we were speaking on departmental performance reports and the concept of the negative information having to be presented as well as the positive information. I compliment you for putting that negative information on the table and being prepared to address it. This is good.

A number of years ago you tabled a report setting out the criteria by which you would evaluate departmental performance reports. I was hoping that your analysis on a random basis of departmental performance reports would be a standard part of your report. Can we look forward to that so that departments know that they may have to come to the public accounts committee and explain to us why they forgot to put in the negative information?

[Sheila Fraser]

Currently we have two projects under way in the office. One is around reporting, what the office's expectations should be on reporting to Parliament and on departmental performance reports.

I think we have noted in our past audits that there was an improvement in departmental performance reports, but over the last few years there has been very little improvement and very little has changed. We can continue to do these audits, but if it isn't going to change behaviour, we have to think of a different way of doing this.

So we're in the process of looking at that, and we would certainly be glad if parliamentarians have views on this. I know Mr. Williams does.

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

I have a strong view on this. I feel that if you were to point out to us that these departmental performance reports are what I call “self-serving fluff”, and the deputy minister, now that he is an accounting officer as per the definition by the public accounts committee, has to come and explain why only the self-serving fluff is presented to us and the bad news has been eliminated, he might be encouraged to ensure it's in, in subsequent years—motivated—because I want to ensure that Parliament and Canadians are informed in a balanced presentation.

The departmental performance reports are the annual report of a department. They are the historical report of the department. They're not just used by Parliament; they go to academia and anybody else who has an interest in that particular department. It's important and fundamental that these present the facts as they are, and for them to think that it's a glossy thing with no criticism of themselves can't be allowed to continue. I do think we should find a way, including engaging the public accounts with the Auditor General, so that departmental deputy ministers feel obliged to ensure that this information is there.

[The Chair, Liberal, Shawn Murphy]

Thank you, John.

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

Are you cutting me off, Mr. Chair? I was just getting on a roll.

[The Chair, Liberal, Shawn Murphy]

Oh, you're doing good.

[Sheila Fraser]

Mr. Chair, I'd certainly be glad to look at the issue with the committee as to how we can do that.

I would just remind the committee that we currently do formal assessments of three performance reports. We have never had a hearing on it. We have never been asked a question about them. So we start to wonder ourselves, what is the value—because these things are not without cost and energy—of doing these assessments and pointing to performance reports that are perhaps less than stellar and nothing happens? So we'd be glad to undertake a discussion with the committee about how this can be improved.

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

We're coming up short, too, Mr. Chairman, so we'll be looking for your leadership.

[The Chair, Liberal, Shawn Murphy]

I think as Ian Clark once said, there's no performance reporting on performance reporting. I think that's his quote, and that's a true statement.

Ms. Sgro, do you have some questions?

[Judy Sgro, Liberal, York West, ON]

If we still have the time.

[The Chair, Liberal, Shawn Murphy]

Perhaps five minutes, yes.