Evidence of meeting #69 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 meeting.
A recording is available from Parliament.
Auditor General of Canada, Office of the Auditor General of Canada
Unfortunately, we don't have that information, but we can get it to you. Each time, it was basically temporary funding. There was no overall long-term funding plan. Each amount was received separately.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
Do you get the impression that this project and other IT projects have something in common? Don't bidding contractors have to abide by deadlines and a specific budget? Commitments were made, but the project was not completed, and when they ran out of money, they asked for more. That's not a very impressive way of doing things. You also talked about good governance and estimates. Wasn't there a problem in that area as well?
Auditor General of Canada, Office of the Auditor General of Canada
The table on page 15 contains the estimated costs and the real costs of the projects. We said that two projects were well planned and well governed. Those two projects cost less than expected. It was estimated that the 2006 Census On-Line project would cost $14.5 million, but it ended up costing $12.3 million. The initial estimate for another CRA project was $22 million, but it ended up costing only $11 million.
However, the initial budget of another project was $16 million, but that was revised upward to $53 million. The Secure Channel project had an initial budget of $96 million, but it was reviewed and increased to $400 million. As for the AgConnex project, it was cancelled. The budget for these projects had to be increased, which underscores the importance of rigorous planning and a thorough cost evaluation.
I sometimes get the impression that the estimated costs are too low. The final cost is realistic, but the estimated cost might not be. You need planning and competent people to manage the projects.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
When the initial cost of a project is $96 million and it ends up costing $400 million, are you able to determine whether or not $400 million is a realistic figure?
Auditor General of Canada, Office of the Auditor General of Canada
We have no way of knowing.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
Therefore, there is a potential for unwarranted or unexplained expenditures or poor management decisions.
Auditor General of Canada, Office of the Auditor General of Canada
That is possible, but since there was no rigorous plan in place, the initial $96 million estimate would also be questionable.
Bloc
Jean-Yves Roy Bloc Haute-Gaspésie—La Mitis—Matane—Matapédia, QC
I agree, but poor planning can also leave the door open to a number of possible interpretations, that you would be powerless to discount.
Auditor General of Canada, Office of the Auditor General of Canada
That is correct.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
Thank you, Ms. Fraser.
I have no further questions, Mr. Chairman.
Conservative
The Vice-Chair Conservative Brian Fitzpatrick
Thank you.
You've concluded your questions, Mr. Laforest? Okay, we'll move on to Mr. Christopherson.
This is the last questioner.
Conservative
The Vice-Chair Conservative Brian Fitzpatrick
I would say that you have three minutes for sure, but at the discretion of the committee, we might give you a couple more minutes, if you're well behaved and everything works out.
NDP
David Christopherson NDP Hamilton Centre, ON
All right.
I want to ask about the Auditor General's comments regarding small projects versus big projects. Again, the second part of paragraph 3.22, on page 7, says:
We are concerned that although research clearly indicates that small IT projects are more likely to succeed than large ones, departments and agencies are again undertaking large IT projects. Because the portfolio of large-scale departmental IT projects is growing, we believe that a strong governance and management framework is critical if the government is to avoid the past mistakes.
I have two questions. First, Madam Fraser, I want to pursue a bit when you said that you witnessed projects being approved and money flowing, without the business case being made. Of course things take on a life of their own. I'd like a little response from somebody on that. This was at the very end of my questioning last time.
Who is making those kinds of decisions and under what authority? Does that not violate somebody's procedures, either those at Treasury Board or internal somewhere? That's one question.
The second question is broader. Why are we going to the larger projects? The simple answer would be because it's so big and the government is so big. But clearly there was an attempt to try to break things down into more manageable projects as an approach, as a policy. If I read this properly, it suggests that we were moving away from this and trying to keep things as small projects.
Please answer the first question first.
Auditor General of Canada, Office of the Auditor General of Canada
Well....
NDP
David Christopherson NDP Hamilton Centre, ON
You can add to it, if you want.
I was looking for them to tell me. Thank you.
Deputy Chief Information Officer, Chief Information Officer Branch, Treasury Board Secretariat
Thank you, Mr. Chair.
In terms of how those decisions are made, and why they are made without a complete business case, we agree that business cases need to be improved.
Let me clarify that when decisions are made, they are based on a very complete and fulsome Treasury Board submission. Although we agree that the business case portion of this should be improved, and we specifically want it to improve its focus on things such as options, analysis, and outcome management, we also want to state that very clear plans are made, in terms of how money is spent and on what things. There has to be a detailed project plan that also deals with risks and things like that. Those are all the pieces that have to be there as part of a Treasury Board submission before we will let it go forward.
So we agree with the Auditor General that the full business case, looking at business outcomes and how to achieve them, needs to be in place. That's one of the areas of focus that we have in our action plan.
NDP
David Christopherson NDP Hamilton Centre, ON
I'm sorry, but we've been told that before. That's not new. See, you're getting me angry now. You've been there before. You've had the advice from other audits that you ought not to be doing that. Now you're telling me, oh yes, we see this as a problem now, and we're going to go do it.
We've already been there twice, sir. Now we're on the third go-round with these things being submitted.
So either the business plans are important, as the AG said, and you respect that, or they aren't, in which case make the case that we ought not to have them. Please don't tell me that all of a sudden, everything is just fine and dandy, because it hasn't been, sir.
Deputy Chief Information Officer, Chief Information Officer Branch, Treasury Board Secretariat
Mr. Chair, we agree that improvements have to be made. I would like to make a distinction between a business case, which has all the options with all the details and the cost-benefits, and the outline of the details, as to how those outcomes are going to be achieved.
We believe that we have improved over the last number of years. The standard has improved, in terms of getting projects that deliver the benefits they should be delivering. We agree that we have to keep improving, but we have also made very significant improvements over the last number of years.
Have we met the required bar? We agree with the Auditor General: we have to keep improving on that.
NDP
Deputy Chief Information Officer, Chief Information Officer Branch, Treasury Board Secretariat
In terms of the second question, on whether we should be doing smaller or larger projects, I pass it over to the chief information officer.
Chief Information Officer, Treasury Board Secretariat
On the question of smaller versus larger projects, if you look back at the 1960s, 1970s, and 1980s, a lot of what we were doing was automating very specific functions in organizations, such as pay systems, tax, and some of those more specific functions.
As we move into the current age, the types of things we do today are very much cross-functional, cross-organizational. So on a security basis, you hear about interoperability. You hear about the need for all these agencies to work together. Some solutions require a tremendously more significant and substantial initiative to make them go forward.
Obviously the challenge is to break them down into bite-sized chunks. But we can't avoid the kind of work we're into today that says the government is a big enterprise, and there's a need to share information and data. I use security as a good example, but there are other good examples.
We need to pull in all of our financials, so we know what the government is doing holistically. Those require much more sophisticated, larger, interoperable solutions across this organization. These are also occurring in industry. The challenge here is to do them in bite-sized chunks.
If you take a solution off the shelf, such as one from SAP, try to stay with the solution and not modify it.
So there are a lot of lessons learned. We understand how to do that; we need to do it better.