Public Accounts Committee on May 11th, 2010

[Sheila Fraser]

I was referring to a territorial corporation which does economic development and has a portfolio of approximately $18 million, which is quite a large amount of money. The records are really inadequate. There have been personnel turnovers and a lack of controls over long periods. The government is very well aware of the situation. We are trying to improve things. Often, in such a situation, you need several years before you can redress the situation.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

My other question concerns your relationship with our committee. I know that you have tabled several audit reports over the course of the year. I know that you are probably aware that we have been able to catch up with the backlog with regard to studying your reports.

Does the fact that we work expeditiously mean that the department is adopting the measures you propose more easily?

[Sheila Fraser]

It is difficult for me to answer that question. We have not done any analysis of the committee's report and the actions undertaken by the departments. I would say that in most cases, the departments respond well to our audits and to our recommendations. The fact of appearing before a committee puts more emphasis on the need to produce an action plan and to demonstrate results. It is very important for us that the committee hold hearings, ask for action plans and ensure a certain follow-up of what the departments do. I'm convinced that without that, we would not have the same success level as we currently have.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

I think I have two minutes left. To conclude, I'd like to know whether you have any suggestions to make to the committee on the type of studies we should undertake, in addition to the reports you submit. Would you like us to undertake certain studies?

[Sheila Fraser]

I'm going to think about that one, Mr. Chairman. I won't venture to make any suggestions today.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

Thank you.

[The Chair, Liberal, Shawn Murphy]

Thank you very much.

Mr. Christopherson, seven minutes.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you, Chair.

Thank you very much for your presentation today.

I have a few questions. In your opening remarks you commented that you're obviously going to have to adjust your workload as a result of the constraints, but I can't imagine that is going to be helpful in terms of giving us better auditing overall at the end of the year. You can only go so far doing more with less.

[Sheila Fraser]

We think we will be able to manage this year. Obviously, we have reduced the number of performance audits that we are doing. We are looking to try to reduce any sort of discretionary spending in all of the areas that we can. Unfortunately, it comes into areas such as language training and outside training, areas where a reduction is not sustainable over the long term. We can do a temporary reduction, but it is important that our people continue to get the training and the knowledge they need, so this is not sustainable over a long term.

Other than that, we are obviously looking at all of the areas that I think all government departments are looking at, travel and things like that, but people do have to travel to do these audits. I think we will be all right for the next year. Obviously, as this goes forward in the three years, these reductions compound. If it becomes very problematic, we will obviously have to come back to the committee.

The other area that I think will be challenging for us is, as I mentioned, the market for financial accountants. This is a very competitive market, and with the salary caps that we have, I am concerned that we are going to be quickly non-competitive in that market and have difficulty getting experienced people. For the moment we are managing the situation. We have the staff that we need, but we will have to pay close attention to this going forward.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you.

I assume the issue of the problems with getting information is tied to what was supposed to be a tabling of a report yesterday.

[Sheila Fraser]

That's correct.

[David Christopherson, NDP, Hamilton Centre, ON]

That got cancelled, and the pressure of doing that broke this wide open.

[Sheila Fraser]

I think it helped to focus senior people on the issue, yes.

[David Christopherson, NDP, Hamilton Centre, ON]

I would hope, Chair, that we would pass a motion asking for an update on that, since getting information these days is a focal point of all of Parliament.

I for one would like to know that they haven't just managed to pacify you for the short term. I'd like to hear back, and I'm disappointed to hear it's happening at all. We still have the response of the government to one of our audits that we've got to bring up once we get this other matter cleared up. I won't use some of the rhetoric of Mr. Lee, but he is certainly correct in terms of the difficulty and the whole issue around information. There's nothing on the government side to be proud of in terms of their approach to all of this.

Going forward, I noticed on your appendix, towards the bottom of the chart, “Percentage of performance audit recommendations substantially or fully implemented four years after their publication”, as reported by departments, and we were at an 84% accuracy in 2007-08, at 90% in 2008-09, and then you reduced it to a target of 75%. Let's see, your target in 2008-09 and then your actual was 90%, if I'm reading this correctly, but your target for 2010-11 drops to 75%.

Help me understand.

[Sheila Fraser]

We have always kept a target of 75%, thinking that is a reasonable expectation of performance. Quite frankly, I think to get 90% is probably unsustainable going forward.

[David Christopherson, NDP, Hamilton Centre, ON]

Why?

[Sheila Fraser]

Because departments' priorities change, realities change.... You have an economic recession and they may not be able to do some of the things they had previously agreed to. We always thought--and we've had this 75% for quite a long time--that was a reasonable expectation of what we should be expecting from government in implementing recommendations.

[David Christopherson, NDP, Hamilton Centre, ON]

This is just a thought. If you stay at 75%, and they continually get to anything over that, there's not a lot of pressure for them to increase, really, because they have a nice easy one--“Yes, we can reach that number, don't worry about it.” I'll leave that with you.

The one underneath it, “percentage of significant deficiencies that are addressed in one special examination to the next”, I had trouble understanding exactly what that was about, including the footnote 5. Can you help me understand that line, please?

[Sheila Fraser]

When we do special examinations of crown corporations we have to give an opinion as to whether the systems and practices indicate essentially that the organization is well managed. When we think there is an issue of importance, we call it a significant deficiency. We have had cases, mainly lately, related to the need for long-term funding for crown corporations. That has come up in several.

What has happened.... Previously, special examinations had to be conducted every five years. It is now every ten years. We are questioning whether this indicator is still relevant if the special exam cycle has gotten much longer. It's not like a financial audit from year to year that you can track. I would expect that over a ten-year period things will have changed a lot. We need to look at this indicator and how we can get a better sense of whether issues are being addressed. Perhaps it's through some kind of follow-up on a more timely basis.

[David Christopherson, NDP, Hamilton Centre, ON]

I had some trouble getting my head around “Percentage representation relative to workforce availability for”, and then it lists four bullet points. I tried, but you lost me. What are you talking about there?

[Sheila Fraser]

This is the federal government's commitment to employment equity. In our office we have to measure these four groups within the office, as compared to the labour market availability in the area where we work.

If we take, for example, women, we are at 118% of workforce availability. Say it is 50% of the workforce that is women. We have 50% times 118%. So we have more women in the office than in the workforce.

Where we need to obviously improve is in members of visible minorities. We are below the workforce availability or the labour market availability here. So we have strategies that we put in place to try to increase the representation of visible minorities within the office.

[David Christopherson, NDP, Hamilton Centre, ON]

By tying this to the “finding professional auditors”, does this tie in at all to foreign-trained professionals? Is there a whack of people available that you could utilize, or that we could utilize throughout government, if we had the ability to recognize foreign-trained professionals, as we're finding particularly in the health field?

[Sheila Fraser]

I know generally in accounting in the private sector there are a lot of foreign-trained accountants who are coming into the country. We have to give priority, actually....

[Lyn Sachs, Assistant Auditor General, Office of the Auditor General of Canada]

We give priority.

[Sheila Fraser]

We give priority to Canadian citizens, and of course in certain areas, because of security requirements and all the rest of it, we have to be careful. But I don't think we have very many, if any.

Perhaps Ms. Sachs can respond.