Public Accounts Committee on April 1st, 2008

[Yaprak Baltacioglu]

If it is pre-employment, if he or she fills out a form and we then hire that person—

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

Is it a conflict of interest? I'm trying to figure out how it can be a conflict of interest, Mr. Chairman. If I work in the private sector filling out CAIS applications and I apply to the Government of Canada to get hired to process CAIS applications, that seems to be a conflict of interest. All I'm saying is that you have to think it through.

[Yaprak Baltacioglu]

It will be a conflict of interest if you end up processing the same form you filled out. There is a potential conflict of interest.

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

All I'm trying to say, Madam Deputy Minister, is that these are the issues you have to address and you should have a policy. You said you spent five years in policy at the PMO. You should have a policy to be able to say exactly where the defining line is, what is a conflict of interest and what isn't. So I leave that for you to figure out.

Paragraph 4.27 of the Auditor General's report deals with this $90,000 overpayment that they discovered after 20% of the applications had been addressed. Mr. Chairman, you raised this point.

Since you didn't bother going back and telling the 20% of the applicants that you might have blown it and made a mistake in processing their applications, are you going to do it now? And the next question is, is it statute barred? Are they able to apply?

[Yaprak Baltacioglu]

We did go back and reprocess the 20%.

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

This was after the Auditor General pointed it out to you?

[Yaprak Baltacioglu]

Yes, sir, and we reviewed 11,930 applications; 182 applications have been reprocessed with changes to the participants' payments.

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

Paragraph 4.49 of the Auditor General's report talks about how CAIS payment errors can affect other programs. Therefore, do you have a policy in place so that when you do detect that you've made a mistake in processing the application on CAIS, you go over and check the other applications for the other programs? They may have made a mistake there too. Do you have a policy on that now?

[Yaprak Baltacioglu]

Yes, we do, sir, absolutely.

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

Was it in place before?

[Nada Semaan]

Yes. For example, if an error was made on a 2003 or 2004 CAIS and we processed the CITY payments using those, we'd go back and reprocess all the CITY payments that used that data.

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

Do you agree with that, Mr. Lennox?

[Andrew Lennox]

No, we did not look at that specifically. So I can't confirm or refute that.

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

Okay, you didn't check it out.

Paragraph 4.66, Mr. Chairman: “We found some inaccuracies in the database the Department uses to record the results of the on-farm audits...about 90% of the audits of the 2003 program-year payments resulted in changes to the original payment.” That's 90%, Mr. Chairman.

“About 30% of the audits changed the payments by $5,000 or more.” It doesn't say whether it's up or down. But nonetheless, 90% of the audits are finding mistakes. Did somebody ask what's going on?

[Nada Semaan]

Yes, that is one of the key areas in terms of the continuous improvements. As those field audits are finding out what's happening, that is going to help fix some of the error rates. In addition, though, those field audits are anticipated to have a higher adjustment rate because they're validating the producers' source books and records, not our processing. So it's taking a look at their data and what they've put into the application based on that. So adjustments end up being made. Those are ongoing.

For example, the move from the six-page to the one-page was to take a look directly at the inventory evaluations where we had asked for opening and closing balances. After going for those field audits, we identified that it's better. Once they've closed their audit book, the next year would be the open audit. So we are very much looking at that.

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

I hope some progress is being made, Mr. Chairman. I think they've got a lot of work to do, and I think they've heard some comments around here that are not too flattering to the department. So I hope the Auditor General doesn't take too long before going back again to check this out.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Williams.

You've got a point of clarification, Mr. Sweet.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

It's just a quick question, Mr. Chairman, from paragraph 4.96 on page 22 in the report. A timeframe is mentioned that the department was promised. I don't mind whether it's the DM or ADM who responds to it, but it says, speaking about targets: “This task will be completed by December 2007 and will include, for example, targets related to the producer participation in CAIS and to timeliness of payments.”

Was that accomplished?

[Nada Semaan]

Yes, and there were two points. One was the service standards. We have negotiated across all administrations on a common service standard. We've just finished putting the systems in place and are about to start reporting on it.

The other one was in terms of taking a look at the performance metrics and evaluating how clearly they can measure up. Those are going into our departmental performance report. In addition, on March 31, 2008, a report was tabled in Parliament on FIPA, on the effectiveness of all the programs underneath it, including CAIS. That was tabled in Parliament March 31.

[The Chair, Liberal, Shawn Murphy]

Okay, colleagues, that concludes the rounds.

I'm going to invite Mr. Lennox. Do you have any closing comments or remarks, Mr. Lennox?

[Andrew Lennox]

Thank you, Mr. Chair.

I just want to thank you for having the hearing on the CAIS program. I don't want to commit my colleague, who's now responsible in the Department of Agriculture, to going back and doing the follow-up, but we will be doing that work in due course.

[The Chair, Liberal, Shawn Murphy]

Okay.

Madam Baltacioglu, do you have any closing comments or remarks?

[Yaprak Baltacioglu]

Thank you, sir.

We have promised some documentation to the committee. We shall get that to you. As well, we had some recommendations from the committee on how we could improve the systems, especially on conflict of interest, and we will be looking at that, sir.

[The Chair, Liberal, Shawn Murphy]

Well, certainly, on behalf of the committee, I want to thank you all for your appearance here today. Agriculture is probably one of the most complex but also one of the most important industries we have in Canada. I think everyone around the table wants to have an adequate, efficient safety net. I know there have always been changes, and it's always being improved upon.

Again, we want to thank you very much for your appearance here today, and we wish you all the best.

Okay, colleagues, that concludes that part of the meeting. The only other item we're going to deal with—the witnesses don't have to stay if they don't want to, but they're welcome to if they wish—is the tabling, discussion, and approval of the minutes of the steering committee meeting, which was held yesterday. Those minutes have been circulated.

I want to point out a minor amendment. Paragraph 8 talks about a meeting on chapter 10. Again, this will be subject to the discretion of the steering committee and the committee, but tentatively we talked about chapters 8, 9, and 10, three chapters, on the environment. So you can amend chapter 10 and insert 8, 9, and 10.

Having made that amendment, is there any discussion on the minutes as circulated?

Yes, Mr. Williams.

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

Mr. Chair, why are we having a three-hour meeting on untendered contracts with Finance Canada? Is it three hours?