Public Accounts Committee on April 29th, 2008

[Sheila Fraser]

First of all, we do not audit transfers to provinces, because each province has its own legislative auditor. If there are conditions tied to this transfer—and depending on those conditions—we could ask the federal department how it verifies whether or not these conditions have been met. Nevertheless, we will not be going into a province to do this. We would ask the department what it does to provide follow-up. Our work is always tied to the department and the federal government.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

You assess the relevance of a federal transfer.

Thank you, Mr. Chairman.

[The Chair, Liberal, Shawn Murphy]

Merci, Monsieur Laforest.

Mr. Lake, you have five minutes.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you.

Thanks, Madam Fraser, for coming today. It's always a pleasure to have you here.

I want to start by following up on what Mr. Holland was asking about. He was talking about the 46% fully implemented and the 25% substantially implemented. Do you track the 28% that are not implemented, in terms of the reasons given for not implementing?

[Sheila Fraser]

No, we haven't. We know which ones they are. We obviously have a database of all the recommendations. We go back when we do our follow-up audits, because we know that some of those will follow in our follow-up audits, where we are judging the progress as not satisfactory.

We don't always go into the reasons why. We have done it in one particular case. When we did a pretty extensive follow-up in the Department of Indian and Northern Affairs, we tried to determine why some recommendations were put into practice and others weren't.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

It would seem that there would be a big difference between someone not following up a recommendation because they didn't agree with it and their not following it up because they're just not doing their jobs.

[Sheila Fraser]

In all of these cases where we are following up recommendations, it is because the department has said they have agreed. I guess one could ask the question whether they really agreed. It's easier to say you agree at the time than to say you don't agree.

We are certainly trying to work more closely with departments to discuss recommendations earlier on in the process as well, to make sure they are recommendations that they feel are doable and that they believe will address the question. I would not be honest if I were to say that there aren't recommendations with which government says they agree when probably fundamentally they don't.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Right.

Do you ever take a look at the recommendations you have made retrospectively and assess almost a measure of the quality of the recommendations? Do you have a process for that?

[Sheila Fraser]

Yes. We had a fair bit of work done about a year and a half or two years ago, because we realized that a part of the issue might be the recommendations themselves. If they are not clear enough, specific enough, or are too general, maybe too sweeping, how can you actually ever implement something like that?

We gave more guidance to the teams as to how they should write the recommendations. That is when we said, too, that we have to start at the time.... It used to be almost at the very end of the audit that we would be working on the recommendations. We said the teams have to move the issue up, and work much more closely with senior management as well in developing the recommendations.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

When Mr. Sweet was asking questions, he was talking a bit about your external audits, the peer reviews that are done for you. I think you said your last one was in 2004.

Who does those?

[Sheila Fraser]

When we did the one on the financial audit practice, it was a major accounting firm, because they obviously are familiar with financial audits.

When we did the performance audit, we went to our international colleagues and had an international team—it was led by the National Audit Office of Great Britain, with the audit offices of France, Norway, and the Netherlands—do the review of our office.

We were the first to actually do that kind of peer review. Since then, it has become a practice that has taken hold. We have done and are actually about to finish the second one.

The review led the review of the GAO in the U.S. We are also leading the review of the European Court of Auditors and have participated in several others. So we will be asking international colleagues to do the review at some future time.

What was very striking to me was how very different the systems of audit actually are. One would expect perhaps that auditors general are all the same. Well, we're not. Even within the Westminster system, the way we operate is quite different from that of our colleagues, say, in the U.K.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

I guess I have time for one more question. I'll make it a kind of two-part question just to get two in here.

Just taking a look at appendix I here, you show that 92% of parliamentary committee members find that your performance audits add value. I know it's only 8%, but still it adds up to about 24 or 25 members across the whole House who maybe don't find they have value.

Do you have any feedback on what you might improve?

The second question is regarding your target for the number of parliamentary hearings and briefings you're going to participate in. I see that you participated in 64 in 2006-07, but your target is only 40 for 2008-09. I'm wondering how you're going to accomplish that.

[Sheila Fraser]

First, on the parliamentary committee members, we surveyed four committees; we didn't do a survey of all parliamentarians. So the 8%, I think, was two or three people.

And we didn't get a lot of feedback on it. It was not only public accounts, for example; we did the Senate national finance committee and the two environment committees. I can understand that some people may not think it's particularly useful to them, if they're studying legislation, or the kind of work may not have lined up with their work plan.

Concerning the number of hearings, 64 was a record. We have never done that many. We think 40 is more in line with what we've done in past years. But in the current parliamentary calendar, I'm not sure we're actually going to meet that. We'll have to see.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

It depends on what it looks like at that point.

[Sheila Fraser]

It depends on whether the committees call us, in part. We will try, obviously, to get committees interested in our work, but whether we attend or not will depend on whether there are other projects that committees are working on.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Lake.

Mr. Christopherson, you have five minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you very much, Chair.

There is one more area I'd like to follow up on. In your opening remarks, in paragraph 19, you state:

Presently, management and other policies that government central agencies issue apply to officers of Parliament in the same way they apply to government departments and agencies. This is a concern to us and other officers of Parliament. It does not recognize the independence of officers of Parliament and the management autonomy needed to protect our independence.

Of course, the distinction between officers of Parliament and virtually everybody else is that you answer to the House as a whole, to Parliament. You don't answer to the government, and others do. If I'm understanding this, there are edicts being sent out, and your concern is that you're being expected to follow those—“you” being the officers of Parliament—and this is a concern.

Can you expand on that so that I can more fully understand what your concern is?

[Sheila Fraser]

I'd be glad to.

In the Financial Administration Act there are a number of schedules that list departments and agencies. We and other officers of Parliament are on the schedule we call 1.1, which lists all the departments and agencies, including the Office of the Auditor General and others.

When the Treasury Board Secretariat issues a policy, it will say it applies to all the entities listed in schedule 1.1. They don't think that maybe officers of Parliament should not be subject to some of the conditions or some of the policies.

Recently, for example, there's been a draft communication policy going around that would have all communications strategies, all communications—everything—go through the Privy Council Office. Well, I can tell you, there is no way that my press releases about my report are going to go to the Privy Council Office or that our communications strategies are going to be vetted by the Privy Council Office.

Government, I think—the Treasury Board Secretariat—recognizes that this is an issue. They recognize now that it's a question of how we resolve it. There has I think been an understanding over many years that you just don't apply it; but then, of course, I have an internal audit that tells me “you should have had all your hospitality expenses signed by a minister”, and I'm saying no way.

So I say I want this clarified, and all of the officers of Parliament also agree; we're working together on this.

We have identified, as I mentioned earlier, about 25 policies in which we believe there are certain conditions that are problematic, that have a role for a minister or a central agency that we think is inappropriate. We are working with the secretariat and we hope we can resolve it with them. If not, we will certainly be back to Parliament.

When we brought it up with the advisory panel on oversight and funding, they were very supportive of the officers of Parliament, saying that yes, this was an important issue, that we should be resolving it.

We would like a clear decision by the Treasury Board that these particular items do not apply to us and that we would have some compensating or other mechanism, probably more disclosure, on those items.

[David Christopherson, NDP, Hamilton Centre, ON]

Is that the unanimous position of all the officers of Parliament?

[Sheila Fraser]

Yes.

[David Christopherson, NDP, Hamilton Centre, ON]

Are there any who are bowing to the edict now and are going to appeal it, or are they all taking the same approach as you, which is that this is not right, I'm not going to do it, and we'll work on...?

[Sheila Fraser]

I think they're pretty much not. Some of them are a little different from us, because they are subject to certain procedures or rules that we are not.

For example, the Office of the Auditor General has the status of a separate employer, so we do our own hiring, our own classification. The other officers of Parliament are not, so they have to follow the human resource regime, which poses certain issues for them as well, in addition to us.

But I would say generally that I think we're all on the same page on this, and I sense that the Treasury Board Secretariat certainly understands the issue. How we're going to resolve it may be a bit more problematic.

[David Christopherson, NDP, Hamilton Centre, ON]

Well, given the fact, Chair, that this is a body of accountability—that's entirely what we do—and that this issue is about accountability, it seems to me this is one we would have an interest in staying very close to.

Perhaps I could ask the Auditor General, through you, to provide us with a briefing note that outlines what she has just said, but also the timeframes expected. Then I would request to her--and if I need to put this in a motion, Chair, I can--that maybe, on a timely basis, she come to us with an update.

If there's a problem with your relationship, then we can extrapolate that to others, and I don't think there's any other body, outside of government itself, that's as well-equipped to deal with the issue of accountability, independence, and the relationship between officers of the House and Parliament itself than this body. Perhaps we are in a position to accept some leadership on this and make sure it is resolved in a way that's acceptable.

[The Chair, Liberal, Shawn Murphy]

If the Auditor General agrees to provide that information, she will.

[Sheila Fraser]

I'd be pleased to. I've already indicated I would do so.