Thank you.
Mr. Chair, thank you for the opportunity to present results of chapter 7 of our May 2006 status report, “Acquisition of Leased Office Space”. I'm accompanied by Bruce Sloan, principal, who is responsible for this audit.
PWGSC manages 6.6 million square metres of rental space and spends $3 billion annually to manage real property. As the department handles as many as 500 leased transactions every year, it needs complete, accurate, and timely information to support its decisions. The department's commitment to achieve the government's cost reduction goal makes strong management practices even more vital for the real property branch.
This audit has raised a number of important issues that affect the cost of office accommodation, and let me elaborate on those.
PWGSC client departments and the Treasury Board currently share the responsibility for decisions that affect the cost of office accommodation. The shared responsibility makes if difficult for PWGSC to impose and enforce government-wide standards for the quantity and quality of office accommodation.
In our report, we have noted instances where the department has not always enforced these standards, resulting in additional costs for taxpayers. The committee may wish to ask the department about the steps it will take to ensure that its standards are enforced.
A second factor that has an impact on the cost of office accommodation is the fact that the current funding mechanisms do not always allow the selection of the most cost-effective accommodation options. In our current audit, we found that the department had made satisfactory progress in identifying the most cost-effective options to meet the accommodation requirements of its customers. In assessing the various options for office accommodation, PWGSC considers the full cost of each option over the expected life of the requirement. Accommodation requirements often are for 15 to 25 years and include crown construction, lease-purchase, purchase, and lease.