Public Accounts Committee on May 25th, 2010

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

It's certainly relevant to this discussion because we are asking if the process will be decentralized enough to address the requests that countries will make of CIDA.

[The Chair, Liberal, Shawn Murphy]

Keep your question to the decentralization--

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

It's what I'm doing.

[The Chair, Liberal, Shawn Murphy]

Mr. Dion, I don't think we need to get right into the actual--

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

I'm inviting Madame Biggs to be--

[The Chair, Liberal, Shawn Murphy]

I know where everyone wants to go, but we're not going there, so continue on.

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

What is your answer?

[Margaret Biggs]

Whether or not the responsibilities are at headquarters or decentralized in the field, it is the same issue. It is a hypothetical question. I don't believe it's a question we've ever faced. These issues are usually aligned in the context of a health system, not on specific aspects, and that's where we have focused our efforts.

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

I understand your answer to the question is no, they will not have this latitude because of government policy.

On the ratio of full-time staff here in Ottawa and on the ground, the report of Madame Fraser said the vast majority are here at headquarters. Will that change with the new decentralization process?

[Margaret Biggs]

I'm going to ask my colleague, David Moloney, to speak to this. He's leading our work on decentralization and business modernization.

[David Moloney, Executive Vice-President, Canadian International Development Agency]

As part of the decentralization work, we are looking at every single program-related function to determine where it's most effectively carried out, whether it's at headquarters in Gatineau or in the countries where we are working. We expect to move a substantial portion of the functions out of headquarters and into, in particular, our countries of focus. So yes, that ratio will shift noticeably in terms of a smaller proportion of the total staff at headquarters and a larger proportion in the field.

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

You have as a priority sustainable economies. Can you define “sustainable”?

[Margaret Biggs]

Sustainable has two meanings. First, it's sustainable in the sense that it's going to be self-sustaining in terms of being private sector led and inclusive in terms of making sure that the economy isn't just being fuelled by assistance dollars but that it is going to be self-generating. Secondly, it means sustainable in terms of its impact on the environment, ensuring that it is environmentally sustainable, making sure that it is part of a sustainable environmental framework for the country in question. So it would have both an economic and an environment aspect to it.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Dion.

That, colleagues, concludes the second round.

We are now going to call for any closing remarks from both the Auditor General and Ms. Biggs. I want to thank you for your attendance here today.

Ms. Fraser.

[Sheila Fraser]

Thank you, Chair.

I'd just like to thank the committee for their interest in this report and for this second hearing. As we indicated in the first hearing in December, we believe that CIDA's action plan will address the issues that have been raised. I must admit that I was very pleased to see that the commitments have been met and much has been done in the last six months.

Thank you.

[The Chair, Liberal, Shawn Murphy]

Ms. Biggs, do you have any closing comments you want to make to the committee?

[Margaret Biggs]

Chair, thank you very much for the opportunity to come back and take you through our action plan and the steps that we've been able to accomplish since we met in December. In December, I believe I tabled with you an interim report card, if you will, from the OECD on the steps that CIDA had taken to make many of the same changes the Auditor General indicated in her report. I think at the time I gave us a B-plus in terms of the interim report from the OECD, but I think the proof will be in the pudding, and we aim to follow through on all of these commitments.

Thank you very much.

[The Chair, Liberal, Shawn Murphy]

On behalf of all members of the committee, I want to thank you for your work and for your attendance here today.

Colleagues, what we're going to do now is suspend for one minute. During the suspension, we're going to ask the visiting auditors general to come to the table. We're going to spend the last 40 minutes in a dialogue with the various auditors general. I believe our auditor is going to stay.

So the meeting is suspended for one minute.

[The Chair, Liberal, Shawn Murphy]

I will now call the meeting back to order.

On behalf of all members of the committee, I want to extend a very warm welcome to some very distinguished visitors we have from various countries in Africa and the Caribbean. To conduct a formal introduction, I'm going to turn the floor over now to Mr. Ron Thompson. Ron is the chair of the Canadian Comprehensive Auditing Foundation, and that is the organization that is organizing this trip of the auditors general.

Mr. Thompson, the floor is yours.

[Ron Thompson, Chair of Board of Governors, Canadian Comprehensive Auditing Foundation]

Thank you very much, Mr. Chairman.

Distinguished members of the PAC, Ms. Fraser, I'm very grateful to all of you for inviting our visitors from abroad to see first-hand how the federal PAC interacts with the Auditor General to help close the accountability loop in our country.

Joining us at the table are Mr. Leigh Trotman, Auditor General of Barbados; Mr. Deodat Sharma, Auditor General of Guyana; Mr. Anthony Gatumbu, Auditor General of Kenya; Ms. Averil James Bonnette, Auditor General of Saint Lucia; Mr. Hoang Hong Lac, Deputy Auditor General of Vietnam; and Mr. Nguyen Van Quoc, Director, International Relations, and Mr. Lac's translator.

Our colleagues are in Canada to help us celebrate the 30th anniversary of the fellowship component of something called the international legislative audit assistance program. They're also here to learn from each other, as we seek ways to strengthen this program in the decade or so ahead. It's a working trip, if I can put it that way, Mr. Chair.

Under the fellowship component, auditors from developing countries come to Canada for 10 months to study how we do legislative auditing in this country. Upon returning home, they work with their auditors general to implement what they've learned here. The program is funded by CIDA, with CCAF, the organization that I chair, as executing agent.

The Office of the Auditor General of Canada has been very supportive of this program for a very long time, providing both technical and on-the-job training for participants. Over the past 30 years, we've had well over 150 fellows from over 45 countries visit Canada as part of this fellowship component. The office of the Auditor General of Quebec and, more recently, legislative audit offices in Alberta and British Columbia have also supported the program.

With that, Mr. Chairman, perhaps I will turn things back to you. As I understand it, we're going to have an informal question and answer period up to about 11 o'clock.

Thank you once again to all of you for having us with you this morning.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Thompson.

Again, a very warm welcome to everyone.

I've circulated a brief PowerPoint presentation on the role and responsibilities of the Canadian public accounts committee. I plan to go over that and spend about six or seven minutes to give you a framework of the workings and role of this particular committee. Before I do that, I want to say a couple of things.

First of all, in my preliminary remarks I did say that we have a number of visiting auditors from countries in Africa and the Caribbean. Of course, one member pointed out that Vietnam is neither Africa nor the Caribbean, so I want to extend my apologies.

Second, and more important, I want to preface my remarks by saying that in any discussion we have here, and we've done this with many different countries before, we've found it very helpful to have a dialogue as to how our individual political systems operate, exchange best practices, and learn from each other. Certainly, there's no right way or wrong way. We can all learn from each other as to how the systems operate and how we can make our own particular system better.

What you've seen in the last hour and fifteen minutes is the Canadian public accounts committee in operation. That, again, is simply the way we do it, and I'm not pretending for a minute that this is the right way or the wrong way, but that is the system that has developed in this country. I'm going to take you very quickly through it.

I want to point out, first of all, that all the countries that are represented, with the exception of Vietnam, are members of the Commonwealth and are based upon the Westminster system. I understand Vietnam has a more congressional system.

I don't intend to read this, but I want to go over this PowerPoint very briefly.

On page 2 we have our system of democracy, which is similar to that of a lot of the other countries represented at this table. The government is comprised of a prime minister and a cabinet. The executive council is accountable to the prime minster and Parliament for the operations of every individual department. The prime minister and cabinet are collectively accountable to Parliament, and through Parliament to the Canadian people, and to continue to govern, the government needs the confidence of the House.

On page 3, in the Canadian system we have the accountability of the expenditure of funds, and I divided it into two areas. The pre-expenditure accountability, of course, starts with the budget document and is tabled by our Minister of Finance. It is the political financial agenda of the government. We then have the estimates, or the appropriations, which are approved by Parliament. As part of the estimates process, we have the individual departmental performance reports and individual departmental reports on plans and priorities; in other words, what they plan to do over the next two years.

On the post-expenditure accountability, after the money has been spent, we have the departmental and agency financial statements. We have the consolidated financial statements of the Government of Canada, which are usually tabled in Parliament in October of each and every year. That's audited by our Auditor General. Then we have the various performance reports, usually between 25 or 30, that are completed by the Office of the Auditor General, and many, usually around 60% to 70%, are reviewed by this particular committee. Over the last hour and fifteen minutes you saw one being reviewed, that of the CIDA agency. The public accounts committee is very much concerned with post-expenditure accountability, and it works very closely with the Office of the Auditor General.

On the next page you will see the members of the House of Commons. I'll not get into that, except to say that in our system it's certainly not the role of a member of Parliament to govern. We're here to approve legislation, approve the raising of money through taxation, approve appropriations, and, perhaps most importantly, to hold the government to account for its delegated and statutory authorities.

The public accounts committee, as you can see, is comprised of 11 members of Parliament and is reflective of the composition of the House of Commons. We have two members of the Liberal Party, two members of the Bloc Québécois, one member of the New Democratic Party, and on this side we have five members from the governing party, the Conservative Party.

I, the chair, am from the Liberal Party. That is the practice that's adopted in most Commonwealth countries, I believe, that the chair of the public accounts committee be a member of the official opposition.

On page 6 we have an overview of the Standing Committee on Public Accounts. Our mandate and structure is, of course, to review reports of the Auditor General of Canada and to report and inquire on any post-expenditure of the taxpayers' money. We are fundamentally different from any other parliamentary committee in that we do not have a policy focus. We're dealing with the administration of government and we're not dealing with policy. You've probably seen an example of that in the exchange over the past hour, when I think some of the members wanted to go in certain areas that might have been classified as policy, which is not part of the mandate of this particular committee.

This committee meets twice a week. Each meeting lasts two hours. We're assisted by three staff individuals. To my right are two analysts who work for the Library of Parliament, which is not part of government. It's funded by the Parliament of Canada. To my left is the clerk of the committee, and she's in charge of all scheduling, arranging for witnesses, etc. She, like the analysts, works for Parliament, not for the Government of Canada.

The role of the committee, as I said, is to hold public hearings. They are open to the public. Anyone can attend. We hold hearings on the public accounts of Canada. We hold hearings on approximately—this varies from year to year—60% to 70% of all performance reports issued by the Office of the Auditor General.

We don't normally deal with estimates, but one exception is the estimates from the Office of the Auditor General. She comes to this committee for her recommended appropriations. She presents to this committee her office's departmental performance report and her office's report on plans and priorities.

Unlike in other countries, the Office of the Auditor General is not part of this committee. She does not set our agenda. Likewise, we do not set the agenda established by her office, although we can make recommendations.

If you want to thumb to page 8, you'll see that for most hearings before this committee, the witnesses are the Auditor General or, if she is not available, a senior designate. In most hearings, we do have the deputy minister, the most senior public servant, representing the department or agency. It's very unusual for this committee to call in ministers. It's usually the ministers who set the policy, but the actual administration is the responsibility of the senior public servants.

After each hearing, the public accounts committee will prepare a report. We do that in camera, in private, and that report, once it's agreed upon by the committee, is tabled in Parliament. The government then has 120 days in which to respond to the report of this committee.

I should point out also that this committee has developed a fairly elaborate follow-up process in which we follow up on the recommendations as to how the government is doing. They agree to do a number of things--as you could see with the previous witness--and we as a committee follow up to determine whether or not they actually do what they agreed they would do.

We have a smaller group comprised of five individuals representing all parties. That is referred to as a steering committee. They recommend future committee business. Those reports have to be adopted by the committee at large.

The second point is that approximately 95% of our committee time is devoted to dealing with, inquiring into, and reporting on reports from the Office of the Auditor General. On occasion, we get into larger issues that might take us multiple meetings, but in most instances we devote one two-hour meeting to a report. Then we take at least one meeting or half a meeting to write the report.

I should point out—and I don't know the situation in your own individual countries—that approximately four years ago, Canada adopted the accounting officer concept, which states that every deputy minister or agency head is designated as an accounting officer, and that person is personally accountable to Parliament for the three points, basically, on page 10: ensuring that all funds are spent in compliance with all government policies and procedures; that proper accounts are maintained and prepared; and that the effective systems of internal control are established and maintained.

Because of this provision, we want the accounting officer before us dealing with any performance report, because the accounting officer is personally accountable to Parliament for the compliance of the expenditure of government funds. It's my view that this concept has greatly assisted the committee and public servants in delineating personal responsibility and answerability.

The relationship between the public accounts committee and the Office of the Auditor General is close and mutually supportive. The public accounts committee is there to support and provide a public forum or an interface for the findings and recommendations of the Office of the Auditor General. The committee has an obligation to ensure that the Office of the Auditor General is independent and remains independent and that the office has sufficient resources to do the work that it is mandated to do.

On the other hand, both the public accounts committee and the Office of the Auditor General are separate institutions with separate roles, and we govern ourselves like that.

As I indicated previously, the Office of the Auditor General is accountable to Parliament, and that is done through our committee. Once a year, we devote at least one committee meeting to dealing with the estimates from the Office of the Auditor General and her performance reports and her departments' or agencies' reports on plans and priorities. Of course, that meeting would be reported to Parliament.

The challenge this committee faces, and I'm sure you face the same challenge—maybe, maybe not—in your own countries, is that there is a declining media interest, I find, in the work of the public accounts committee. The media seem to be more focused on opinion rather than reporting or providing informed analysis on what is going on in Parliament. There's not a total lack but a limited understanding of the oversight role of Parliament. And of course, in my view, there's a lack of alignment between the accountability and the motivations and the resources of most members of Parliament.

That's just a little bit of background on the role of this committee.

You have seen us in action for an hour and 15 minutes. I'm now going to throw it open for discussion and dialogue and any questions. We can keep a list, but perhaps before I do that, I might ask Ms. Fraser if she has any comments to follow up.

Ms. Fraser, is there anything you would like to add?

[Sheila Fraser]

I would just add, Chair, that our appearances before this committee and the attention the committee gives to our work is absolutely crucial to us. We see that government does respond and actions are taken.

I think we had a good example today of an action plan being presented, which is something the committee started to ask for a few years ago, and commitments being made. Through the follow-up work that we do and that you do, we see that government responds to our audit recommendations. Changes are made and management is improved, which is what we're all here about in the end.

So I would confirm that we have a very good and close working relationship, and that working relationship is absolutely critical to us.

Thank you.

[The Chair, Liberal, Shawn Murphy]

Mr. Thompson, do you have anything you want to add before I throw it open?

[Ron Thompson]

Not at this time, Mr. Chairman. Thank you.

[The Chair, Liberal, Shawn Murphy]

We have 20 or 25 minutes. We'll just have a dialogue and we'll keep a list here. Please keep your comments relatively brief.

I'd certainly like to hear from some of the visiting auditors too. So perhaps we can go back and forth.

Mr. Dewar, you have the floor.