Public Accounts Committee on May 25th, 2010

[Paul Dewar, NDP, Ottawa Centre, ON]

Thank you, Mr. Chair.

As noted by my name tag here, I'm not usually on this committee. I'm on the foreign affairs committee. I will apologize in advance, because I have to leave from here to go to the foreign affairs committee.

I actually have a question for you, Mr. Thompson, through the chair. I'm impressed with this. I'm really glad to see that this is happening and has been happening for a while, because as we look at strengthening capacity overseas in countries we're involved in, I think one of the areas where we have an expertise is this area.

I'm just curious as to how you go about finding partners or choosing people to work with. Presently, how many are you working with?

[Ron Thompson]

There is quite an extensive process, and we're going to make it a stronger process to select countries and candidates. We go out, working with the Auditor General and others, and interview not only candidates from countries but also the office in those countries to ensure the office wants to change, that it's at a point in its development where change is possible, and that the candidates who are being looked at are people who can come and bring about that change once they go home.

There is a fairly strong process of interviewing before we select a country to invite here. We want to have several people from one country over a period of years to build a critical mass in that audit office, and of course we are guided a bit by CIDA and whether the government of the day wants to have development take place. CIDA funds this, and of course we want to work along with them.

Currently we have quite a few fellows here in Canada, and we have about 11 this year, not all with Ms. Fraser's office. Some are with the Auditor General's Office in Quebec. Certainly in Alberta we have our colleagues from Vietnam there, and others. This is a bumper year in terms of spreading the involvement with legislative audit offices. That is just starting, and it has been quite successful.

[The Chair, Liberal, Shawn Murphy]

Does anybody at the table want to comment?

I've met the Auditor General of Kenya, Mr. Gatumbu, before in Kenya. Can you bring us briefings from Kenya on how things are going there?

[Anthony Gatumbu, Controller and Auditor General, Kenya National Audit Office]

Thank you, Chairman.

I have two inquiries that I would ask the committee to share with us. I am aware that the public accounts committee has an effective mechanism for monitoring implementation of its recommendations. However, what are the ultimate reprimands and other ways available in the unlikely event that an agency does not implement its recommendations?

Mr. Chairman, I also have a second question relating to the role of the public accounts committee in its relationship with the Auditor General's Office. To what extent does this committee influence the audits that are taken by the Auditor General?

[The Chair, Liberal, Shawn Murphy]

I will attempt to answer that.

First of all, we have a system of follow-up, and we do follow up with the recommendations and we follow them for two, three, four, five years to determine whether or not the government department or agency has done what it has agreed to do. First of all, if they don't agree to the recommendation, that's the end of it. But I want to make it absolutely clear that we are a committee of accountability. We have no way of enforcement. All we can do is bring publicity to it. We can report to the House. We can report to the media, but if the government does not do it—and of course it has happened that they've agreed to follow certain recommendations of the public accounts committee and we find out five years later that they haven't—we can't enforce it; we can bring a lot of publicity and we can report to Parliament. The Auditor General herself can go back and do follow-up audits, which could possibly bring more embarrassment to the department for not doing what they agreed to previously.

Regarding your second question, Ms. Fraser is probably better able to answer that, but it is my understanding that all we can do—and we have done on occasion—is make a recommendation that she look at this. Sometimes she does, sometimes she doesn't. She has her own criteria and her own protocol as to what audits are undertaken by her office and what are not.

Perhaps I will get her to answer that question.

[Sheila Fraser]

I would say, Chair, that it has happened on occasion that the committee has made recommendations. The most recent example was when we were reviewing the operations of the passport office and the committee asked us to go back and do a follow-up sooner than we normally would have. Generally when the committee makes a request like that we try to accommodate it.

We tend to get requests from other standing committees. In addition to the public accounts committee, we appear before other standing committees of the House and the Senate. In a typical year we will do as many hearings before other committees as we do with public accounts, so often we will get suggestions for audits from these other committees as well.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Mr. Chair, I want to warmly invite our guests to ask us questions, because they are here to study our system. I'm sure they have questions to ask.

I warmly invite you to do so. Please.

[Hoang Hong Lac, Deputy Auditor General, State Audit Office of Vietnam]

First, I would like to thank the chairman for his presentation, and the other members of the PAC.

Today our delegation is very honoured to take part in this discussion. After the discussion in this morning's session, we realize that the relationship between PAC and the AG's office in Canada has many things similar to our country. We would like to discuss and share our experiences to clarify these details regarding the relationship between the PAC and the AG's office.

Our national audit office, our state audit office, in Vietnam was set up 16 years ago, in 1994. In 2006, a new law was adopted by the National Assembly concerning state audits, and this came into force on January 1, 2006. The office, which was established by the National Assembly, is an independent office. We always operate in accordance with the law.

We have a centralized office of the central government to the district level, to other countries. At present we advise the units under our control and we have 1,500 staff. Our functions mainly focus on three types of audits: financial, compliance, and performance audits. We follow principles in our work; we are fair in our work and we only follow the law.

We now mainly focus on two types of audits. We are looking for work to focus on and perform audits on in the near future.

We do audits in all organizations and agencies, and we use the state booklet.

Coming back to the relationship between the National Assembly in Vietnam and our office, we are pleased to clarify more details. We have an executive committee that functions similar to the PAC here. We submit the audit report to the National Assembly and also to the government and the other agencies. We submit the audit report to all members of the National Assembly. First we make the report to the executive committee of the National Assembly. We have a very close relationship with the financial and executive committee of the National Assembly, but we are totally independent of each other. We also have many relationships that are similar to the relationship between the PAC, the national assembly, and the Office of the Auditor General of Canada.

I would like to ask a question. Can you give more detail about what kind of work the PAC and the Auditor General's office cooperate together on? For example, on consulting to make audit plans, could the PAC make requests to the Auditor General's office during the process of the audit planning?

Thank you.

[The Chair, Liberal, Shawn Murphy]

Although it's a little different political system, it certainly sounds like the office of the Vietnamese Auditor General operates similar to our system, and the Vietnamese public accounts committee operates similar to our system.

Again we're talking about the relationship. I believe every country does it differently, but in some countries the auditor sits right with the chair, asks questions, and is there when the agenda is being set by the committee. But in this jurisdiction the relationship is more independent. We can only make recommendations to the Office of the Auditor General. That office has its own criteria, and sometimes those recommendations are accepted and sometimes they're not. Other than making recommendations, we cannot influence the agenda of that office.

Mr. Shipley.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you.

Welcome to our committee. Just to comment, I was glad, when I looked at it, that you were able to be a part of our earlier discussion.

One thing that has happened at this committee, and I've been involved now for just two years, is that the Auditor General—and you represent that function or you are the Auditor General in your country—has to come to Parliament, which includes the representatives of all parties, with an incredible amount of credibility.

Our Auditor General—I say this not because she's sitting here, but just because she is our Auditor General—has that, and she has the respect, I believe, of all parties because she is thorough, she is reasonable, but she also brings a business sense and reasonable, understandable recommendations, which come to this committee through the agency or the ministerial departments that she is auditing.

When the Auditor General came to the agency with recommendations, recommendations sometimes were done and sometimes were not; nobody was seeming to ask why or why not. As I think you would see this morning from the agency in front of us, there is a lot of respect for the recommendations and a lot of movement on those recommendations, because now they know that the public accounts committee, if they fall behind, is going to ask them back to be accountable for why they didn't. Maybe they're going to have a good reason to explain why they couldn't, but that's all part of the accountability.

I just want to say that putting an action plan in place, recording what your status was, and then reporting back to the parliamentary committee has been very substantial in this, and it has come about by working together. I think, as the chairman has described, the independence of having the Auditor General not sit up with us and not be a part is very good, because it tells you that she's not collectively arm in arm with the public accounts committee but is actually independent and comes with those recommendations to an agency or a ministry.

[The Chair, Liberal, Shawn Murphy]

Does anyone else at the end of the table wish to speak?

Mr. Lee.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Thank you, Mr. Chair.

And I welcome the visiting professionals.

We, in this committee, sometimes take a lot of things for granted as we go about our work. In order to make the work of the Auditor General effective, there are a number of things that have to be in place, and it's all interconnected.

These are some examples. We need an Office of the Auditor General that is professional, non-partisan, and highly skilled. Without that, the quality of the audits is not there. We need a professional public service that is capable of understanding and implementing the guidance and scrutiny offered by the Auditor General. We have a very good professional public service in Canada—not the politicians, the public servants.

We need a free press so they can shine the light on these issues, report the issues, and show Canadians what is happening.

We need a government in power that is accountable to Parliament. The government must be present in the House of Commons to be accountable for all that it does.

Lastly, on our end there must be a committee that has a quality work plan that involves shining the light on many of the issues the Auditor General raises—not all of them; we don't have the time to do them all. We look for the important ones and we listen to what she says. We shine the light, we have public hearings, and we follow up.

Our chair and our staff ensure that when we take on an issue we try to follow up. Months later we follow the progress of the public service to the recommendations of the Auditor General. Sometimes we have our own recommendations, but usually they coincide with those of the Auditor General.

Those are about half a dozen separate things that must be in place in order for the three-headed audit procedures you have to work effectively.

Thank you, Mr. Chairman.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Lee.

It is close to 11 o'clock, and I believe Mr. Trotman has some remarks.

Mr. Trotman.

[Leigh Trotman, Auditor General, Office of the Auditor General of Barbados]

I want to ask a question. How does the public accounts committee measure its impact? And do you have research staff supporting the public accounts committee?

[The Chair, Liberal, Shawn Murphy]

I don't know if I can answer the first question, but I can answer the second. Yes, we do have research staff.

The lady and the gentleman to my right work for the public accounts committee. Prior to every meeting they do probably a five- or six-page briefing note on the performance report, and they prepare suggested questions. Then after the hearing they will do up a draft report. After the hearing we've had here today they will take all the questions and answers, which are all transcribed, and do a draft report. That comes back to the committee, and the committee will change it and adopt it. The committee will usually spend at least one and a half hours on each report. Then it becomes the committee's report. So we do have research staff.

To question the effectiveness of the committee, that's for others to determine or adjudicate upon. I speak with a certain amount of bias, but I think it's a reasonably effective committee. But again, others can decide that. I think it's a very important and fundamental role of Parliament to hold the government to account. The whole area of post-expenditure accountability is the role of the public accounts committee.

As I say, we couldn't do it without the work of the Auditor General. But again, that office needs us to be the interface between that office and Parliament, and through Parliament to the Canadian people. I think we perform a very vital function in Canada. Others may disagree.

Madame.

[Averil James Bonnette, Director of Audit, Office of the Director of Audit of Saint Lucia]

Good morning, everyone, Mr. Chairman.

I have one question and I just want to ask it really quickly. Looking at your slide presentation, I noticed your challenges, and I got particularly interested in the ones relating to the role of Parliament, particularly the limited understanding of the oversight role and the lack of alignment.

Is anything being done, or what measures have been taken, to address some of those challenges?

Thank you.

[The Chair, Liberal, Shawn Murphy]

If we had two or three days we could go into that discussion. It's a very lengthy and complex issue.

We operate on the Westminster system.

These are my own thoughts alone. It's always been my view that the fundamental role of a member of Parliament—and I'm talking about a government member and an opposition member—is to hold the government to account. Sometimes that does not really align with the motivations, the abilities, or the resources of a lot of members of Parliament, but not all. The government members, of course, are concerned about making the government look good. The opposition members are concerned about exposure of scandal. Sometimes the whole accountability gets lost in the equation.

What can be done to correct the problem? I'm sorry, I really don't have a very simple answer to that question. Again, it's just to continue to work on it.

Mr. Kramp.

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

Just further to Mr. Murphy's comments, we find that whenever there is either a new member and/or a replacement member who does not necessarily understand the role of public accounts, we can sometimes shift towards more partisan issues. This is why I personally believe the committee would work better if we had members in the respective parties who were firmly entrenched with the responsibilities of accountability and oversight and who clearly understood their role as one that clearly demonstrated the faith and the confidence in the authenticity of government, rather than simply the partisan role, which is normal in a democracy.

We've seen that over a number of occasions. I can honestly say the majority of our members here on this committee, and people I've been associated with in the past, have handled the responsibilities of this committee very well. It's only occasionally when a member comes in, in a fill-in role, that they think of it as following the normal operation of the committee they're on. The public accounts committee works totally differently from any other committee on the Hill. That is why it just takes a little bit of understanding and moving it forward.

If we can pass that message along to more and more parliamentarians, then I think we will probably have a more effective committee of public accounts.

[The Chair, Liberal, Shawn Murphy]

It is after 11. I'm going to call upon Madame Beaudin, then Mr. Thompson.

[Josée Beaudin, Bloc, Saint-Lambert, QC]

Thank you very much.

I would like to know what you think of initiatives such as the one that Barack Obama recently implemented in the U.S. through the White House site. It has to do with establishing a direct line with the public and creating an open government. What do you think of that initiative?

Should that kind of initiative be used elsewhere? Should there be open and direct sites such as that one, so that the government is open to the public?

[Ron Thompson]

Mr. Chairman, we're having a little trouble with the translation. It didn't come through, I'm afraid, for our colleagues.

[The Chair, Liberal, Shawn Murphy]

What I think I'll do.... I'm going to ask Mr. Thompson for his closing remarks, and perhaps after the meeting, Madame Beaudin, you can continue this discussion. It is 11:10. I apologize for that.

Mr. Thompson, do you have any closing remarks?

[Ron Thompson]

I apologize as well, Ms. Beaudin. We did have a little technical difficulty, so perhaps we can talk a bit later.

Very simply, Mr. Chairman, we're past 11 o'clock by quite a little bit.

Thank you very much, Mrs. Fraser and committee members. Really, accountability comes to life here in this country of ours, colleagues, and I think it's done very, very well. It's been quite unique for our colleagues to see an actual hearing being conducted and then to have an opportunity to interact with members of the committee afterwards.

Thank you so very, very much. I know they'll take back the lessons learned here to good effect in their countries.

[The Chair, Liberal, Shawn Murphy]

Before I close, I want to again thank you for coming. As I said before we started, there's no right way or wrong way. We all do things differently, but we can all learn from each other.

I want to thank everyone for being here. Enjoy the rest of your trip in Canada and have a safe trip home.

[Voices]

Hear, hear!