Public Accounts Committee on April 23rd, 2009

[John Wiersema]

Thirty.

[Sheila Fraser]

--thirty staff each year to be part of the audit staff, which is where most of the entry level is, of course. A person must have either a professional accounting designation or a master's degree.

We have a student program as well. They train with us. The accountants could be one or two years away from getting their designation.

For the others, it's a program we have developed ourselves for the performance audit practitioners.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you very much.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Saxton.

Monsieur Desnoyers.

[Luc Desnoyers, Bloc, Rivière-des-Mille-Îles, QC]

Thank you, Mr. Chairman.

Ms. Fraser, in your opening statement, you referred to the 2009, 2010 and 2011 audits. In 2009, you refer to the acquisition of military vehicles. I suppose these are trucks. In 2010, you refer to the acquisition of military helicopters. In 2011, you mention military equipment.

What exactly is military equipment?

[Sheila Fraser]

I'm not sure that we've exactly defined the nature of that equipment, but I could check with the team. We want to proceed with a series of audits. We talked about that, but we're hesitating between the possibility of conducting another audit on the acquisition of equipment and the possibility of auditing unsuccessful acquisition initiatives. Some requests for proposals were not successful.

[Luc Desnoyers, Bloc, Rivière-des-Mille-Îles, QC]

Of course, I would tend to tell you what to do—

[Sheila Fraser]

Your questions are always welcome.

[Luc Desnoyers, Bloc, Rivière-des-Mille-Îles, QC]

—about military aircraft. I note that there's no mention of National Defence for spring 2010. The military aircraft could therefore be one of the files. I'm convinced that my colleagues would support the idea of such an audit being conducted, particularly since only 24 performance audits are scheduled for 2010. So there would be room for an additional audit. You referred to 25 audits. So you could deal with aircraft, which are military equipment. That should generate significant impact in Canada and Quebec, particularly during this period.

[Sheila Fraser]

Mr. Chairman, I see there are also auditors on the committee side.

[Luc Desnoyers, Bloc, Rivière-des-Mille-Îles, QC]

I raised that point and I'm probably going to address it again with the Chairman and the committee in order to ensure that this audit is eventually conducted. My question also concerns cuts. You're talking about lowering the number of audits from 30 to 25 and the number of reports from three to two and of cutting travel costs. So I'm concerned about the impact that will have in the present context. A major economic crisis is indeed ongoing.

If the crisis worsens in the coming months, current budgets will not necessarily cover all the expenses that would have to be made. Major audits will be necessary because a lot more money will be spent. A lot more controls will be required. Based on what you say, there were more audits when we spent less, but there will be fewer when we plan to spend more. There will be staff cuts. You said earlier that you anticipated surpluses. The purpose of my first question is to determine what the impact of these measures will be. If there are staff cuts, how will that affect your office? I think there could be a major impact on the work that would have to be done, but that will not be done in the years to come. Will there be layoffs?

[Sheila Fraser]

First, with regard to staff, there won't be any layoffs. I made a commitment to my staff on that subject. We believe that, given the normal turnover at the office, we will be able to get back to the desired level by the end of the year. This is a very temporary situation, and we're talking about some 20 positions. We've taken a proactive approach to the internal audit services of various departments. We asked those people whether they needed staff in the short term for interesting projects. It is indeed important that our people be able to do meaningful and interesting work. Some 15 departments responded. They're asking for 60 auditors. So there's fairly significant demand for experienced audit personnel. I'm sure we'll be able to manage the situation.

If this can reassure the committee, I will add that the departments' internal audit services have vastly improved. They do much more work now. I believe we can increasingly rely on those services. For example, an audit of the economic plan is planned. We don't expect to do all the work in all the departments ourselves. We want to work together with the internal audit services, which I believe should do the audits in those departments. By working with them, we'll be able to be more efficient and to ensure that the audit program is adequate for our purposes. We'll be able to use their work to report results to Parliament. I think the internal audit services within government should increasingly be reinforced so that the Office of the Auditor General makes greater use of their work. That would enable us to become more effective and efficient in our own work.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Desnoyers.

Mr. Kramp, you have five minutes.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

I have seven questions, if I can get to them here. We'll give it a quick little try.

There seems to be a little bit of a different perception of your evaluation from either the members here or the senior managers. I take a look at our perception as parliamentarians as 97% of your objective and indicators, and yet your percentage of senior managers who find your financial audits add value is down around 55%, on your report card, appendix 1.

The percentage of parliamentary committees that find your work to be of value is 97%, and I think we all agree. We're very, very pleased and impressed with your contribution.

[Sheila Fraser]

If I could just clarify, these are essentially the deputy ministers of the departments we audit.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Yes.

[Sheila Fraser]

They are not always happy with our audits.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Well, that's my point. Is this because the senior managers are doing their jobs so well that they don't need to improve the program, or is it because they're resentful because their performance is inadequate and you've identified these weaknesses?

[Sheila Fraser]

I think very often the surveys we do are completed by personnel within the departments and not necessarily the deputies themselves. Some of the comments we get back indicate they might not be very happy that we have picked their area for audit or raised the issues we have audited, and that's why you can see we don't expect 100% satisfaction from that group of people.

We would hope it would be higher, and whenever there is an issue that is raised, either by a committee chair of a crown corporation or a deputy minister, I follow up on that to make sure.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

I think we as parliamentarians would like to see that quite a bit higher, and we would like to see them expect to have their efficiencies vindicated rather than their problems identified.

My second point, under your budget, is about the percentage of audits that meet the budgeted hours. Right across the board on everything, whether it's performance, financial, or territorial, everything is well below, at consistently low hours that are there versus the hours you budgeted for. Well, if you used the hours you budgeted for, would that mean you'd be 25% over your budget? You're 25% to 30% below your budgeted hours all across the board. So if your budgeted hours actually met your own expectations, does that mean your budget would be utilized by 25% more?

[Sheila Fraser]

I'm not sure I understand the question, Chair. I can tell the committee I'm certainly not happy with this performance. We have to do much better. I think it's unacceptable that we have this kind of performance, but we have an appropriation that is given to us. We do not exceed our appropriation, so the hours that are spent...I think one thing, too, you have to recognize is that if we have an entity that we think will take 100 hours to audit and it takes 120 hours, that will show up as not being—

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Okay, so that's where your trade-off will come in then?

[Sheila Fraser]

So it's not total hours. If you look at the total hours, it's not as bad, perhaps, but still, this is not acceptable, and we have improved significantly. I can tell you the performance audits are almost at 100% for meeting budget now.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

I have just a couple of real quickies. You mentioned you have a very few that are actual poor performers, people who are not operating quite up to your standard. Are they penalized?

[Sheila Fraser]

We will work very hard to find those people a place where they can contribute, be successful, and it may not be within our office.