Public Accounts Committee on April 23rd, 2009

[David Christopherson, NDP, Hamilton Centre, ON]

As a preamble to this meeting, to have that meeting with them to--

[Sheila Fraser]

Absolutely. I think we can probably explore some ways to provide that to you.

On the targets, we've taken a number of measures. First of all, just to make people much more sensitive to the fact that this is important, we've announced that this will be part of the performance pay plan for the coming year. When you affect people in their pocketbooks, they really do start to pay attention to this sort of thing.

We are putting more review into the budgets themselves, and we are also giving courses on project management within the office, so hopefully all of these things will help. I think it's just encouraging people to be a little more thoughtful when they do their initial budgets. When we do the budget we do not change the budget as we go into it. If there are large problems, there will be a discrepancy noted. It is to be expected that there will be problems in some of the audits, either new accounting standards that are badly understood by the entities we audit, or significant errors, which we find from time to time. I would say too that the percentage for the territorial agencies and organizations is much lower, and that is largely due to an issue of capacity in those organizations.

The timeliness you will see is also much lower. We have many cases where we are issuing statements that are in fact two years old, where we send in teams and the organizations are not ready and we pull out the team. There's a capacity issue in the north. We're trying to work with them to resolve it, but they do not have the same capacity as the crown corporations.

[David Christopherson, NDP, Hamilton Centre, ON]

In the same chart, in appendix I attached to your opening comments, concerning getting your projects completed on time, for “federal organizations—without a statutory deadline”, It's 70%; the actual in 2007-08 was 81%, and then you dropped to 70% as your target. There's no actual here for 2008-09 yet, but the target was 70%, and the repeated target for 2009-10 is 70%, and yet the actual in 2007-08 was 81%. So you hit 81% and then recalibrated your target to be 70% in the next two years.

[Sheila Fraser]

I can only agree with the member that it should be higher. I don't really have an explanation. I don't know quite—

[David Christopherson, NDP, Hamilton Centre, ON]

I should quit right now. This doesn't happen very often.

[Some hon. members]

Oh, oh!

[Sheila Fraser]

No, I agree with you. I think you're right. We should not be targeting lower than our performance of the previous year.

[John Wiersema, Deputy Auditor General, Office of the Auditor General of Canada]

The only comment I would add, Mr. Christopherson, is that we didn't recalibrate the target to 70%. It was 70%, and we maintained it at 70%. But we've demonstrated we can do better, and we should consistently do better.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you.

Thanks, Mr. Chair.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Christopherson. Thank you, Mr. Wiersema and Ms. Fraser.

Mr. Weston, you have seven minutes.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

It's a hard act to follow, when the audited auditor feels chastened by my colleague.

Thank you, Mr. Chair.

Again, thank you for being here, Madam Fraser and colleagues. I'm going to apologize in advance for an early departure today for a flight I have to catch.

The tradition of auditing the auditors goes back to Roman times, and the question you asked, Mr. Christopherson, I remember from my Latin class days, “Who audits the auditors?” It really is remarkable that we get to sit here and participate in that tradition, particularly when people say, as they often do, that we don't have the checks and balances in Canada that the nation to the south has. Here we are participating in a very important check and balance. Thank you again for the work you do.

My first question is about the peer review by Australia that you mentioned. When will it occur, and when might we have the opportunity to have the presentation you suggested?

[Sheila Fraser]

Mr. Chair, I will let Mr. Wiersema respond on those timelines.

[John Wiersema]

Thank you, Mr. Chair.

The Auditor General has been in contact with the Auditor-General for Australia. I have been in regular contact with the Deputy Auditor-General for Australia. We have been having some initial discussions on the terms of reference for the peer review.

They intend to make their first preliminary planning visit to us on site and to start to scope out the peer review in, I believe, June of this year. At that point, we will start to finalize the terms of reference of the peer review, and I think we would be more than prepared to share those terms of reference with the committee at that time. The details of what other countries will be involved are still under discussion. Australia has not made final decisions on that question. We expect they will make a further visit, during which the majority of the audit work they will be doing would take place, this fall and perhaps over the early winter.

We very much wish to have this peer review completed, reported with the Auditor General's response, and made public by the summer of 2010. The summer or fall of 2010 is when it will be completed.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Perhaps, Madam Clerk, we could be reminded of that, to make sure we get an opportunity to participate. I think it's a valuable exercise for our committee.

There are reductions mentioned at paragraph 12, Madam Fraser, and they follow from an earlier paragraph in which you say you are doing your best in difficult economic times to reduce expenses. I thought that was laudable and wondered whether there were any things you learned from that exercise that could be leveraged in other areas of government.

[Sheila Fraser]

I'll tell you some of the actions we've taken.

As you can appreciate, most of our financial audit work arrives all at the same time. We have a very significant peak of work, because the majority of year-ends are March 31. The period from May and June through July is an extremely busy period for us. In the past, we have spent up to $800,000 on contracting generalist financial auditors to help us through that period.

This year, we set an objective not to use any contract help, and we deployed all of the accountants in the office on the financial audits. We moved timelines so that some work might be delayed to accommodate other work. At this point, we are there. We may have to go to some contracting, because we may lose some of our staff in the normal turnover, but this is one thing we're doing: very significantly reducing the contract spending.

There are a number of other initiatives. I can perhaps ask Mr. Greenblatt to tell you a little about some of the other things we have done.

[Ira Greenblatt, Assistant Auditor General, Corporate Services, Office of the Auditor General of Canada]

Thank you.

We looked across the board. I asked all the corporate services groups to come back with a 15% cut in their budgets, and they all did that. We took a look at performance pay, and we made cuts to our management performance pay plan in line with some of the decisions that had been taken elsewhere in government. We cut things such as some technology projects we had planned to do this year and had talked about for a long time. We postponed those and cut those out of the budget for the coming year.

As Madam Fraser said, we cut $800,000 in contract budgets. We looked at travel for both administrative purposes and--strongly--for audit purposes. We pared that down everywhere we could. There were a lot of small things, a few bigger things, such as the $800,000 Madam Fraser mentioned, and some of the technology projects, coupled with a number of small things across the board.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Mr. Greenblatt, you mentioned travel. Were there any specific policies on travel that you recommended be applied to your department that might be applicable elsewhere?

[Sheila Fraser]

We generally follow the government's travel policy. One difference we have maintained for several years is that we do not allow any travel in business class within Canada. There are some provisions that would, under government travel policy, allow for business class travel, especially for our teams that would, for example, go up to the Yukon or the Northwest Territories. They are in travel status for quite a while--for a number of hours. That is not new. We are encouraging people to use upgrade certificates and those sorts of things.

[John Weston, Conservative, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

You have performed very well as an employer, as identified in appendix I, page 3. Your staff declared that you were either the best place to work or better than average.

What one thing could you point out that applies to your department that might make us all better employers?

[Sheila Fraser]

I'm really proud of those results, I have to tell you. We had a response rate of 92%. You know, this isn't 20% of the people saying that they like to work there. I think the main issue is that we really paid attention to human resource management. In our management performance pay system it used to be one number. Now, 50% of the performance pay is for product and 50% is for people management. We put a focus on that, and we have paid a lot of attention as well to what the staff were telling us through the employee surveys.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Weston. Thank you, Ms. Fraser.

Before we go to the second round, there are a couple of points I want to cover. First, Ms. Fraser, your office has gone through the process with the panel on funding and oversight of the independent officers of Parliament. It came forward with the figure that's going to be voted on by this committee this afternoon. In your opinion, do you have sufficient resources to fulfill the mandate given to you by the Auditor General Act?

[Sheila Fraser]

Yes, Chair, I am comfortable with the level of funding we are receiving.

[The Chair, Liberal, Shawn Murphy]

Second, in what I believe is your performance report dealing with special examinations, you've identified a crown agency that has been deficient in two special examinations in a row. What agency is that?

[John Wiersema]

Mr. Chairman, if you're referring to the performance highlights—

[The Chair, Liberal, Shawn Murphy]

Yes.