Good afternoon, everyone.
Thank you, Mr. Chair, for the opportunity to discuss chapter 3 of our 2011 spring status report on internal audits.
Mr. Chairman, we found that satisfactory progress was made in the area of internal audit. I'm very pleased to say that the government has significantly strengthened its internal audit capacity since we last reported on this issue in 2004.
We noted a number of factors that contributed to the improvement. First, we noted that the government had established an independent audit committee in each of the 24 largest departments and agencies. These committees include individuals from outside government who have impressive qualifications.
We also noted that internal audit activities are reporting directly to the deputy head. This direct reporting has strengthened internal audit's independence within departments.
Mr. Chair, we found that departmental internal audit groups are looking at the right things when they develop their audit plans, that is, they are developing risk-based audit plans for their work.
Last fall we reported on how internal auditors were adjusting their plans in response to the economic action plan, and in completing that particular audit we were able to rely on the work of internal audit in several instances.
We noted as well in our report that the Office of the Comptroller General has provided good direction and guidance to departmental audit groups and departmental audit committees.
As we indicated in our report, while there has been considerable progress, few departmental internal audit activities have undergone an external quality assessment, as required by professional standards. In response to the one recommendation we made in this report, each department committed to undertake such an assessment by a certain date.
Your committee, Mr. Chair, may wish to ask departments if they're on track to meet this commitment.
The government, Mr. Chair, has made a significant investment in strengthening its internal audit capacity. In my opinion, it's important that the government maintain that investment. We would encourage government not to repeat past decisions to reduce funding for internal audit in an attempt to save money. Internal audit is an important management tool, particularly in times of fiscal restraint.
Mr. Chair, that concludes my brief opening statement. We would be pleased to answer the committee's questions.