Good afternoon, Mr. Chair, and thank you very much.
Thank you for inviting us to appear before the committee today to discuss the two reports that we tabled in the House of Commons on June 9, 2011.
Mr. Chairman, you indicated that this is the sixth meeting of the committee in this Parliament. This is the first opportunity that we've had to meet with this committee, so I would like to congratulate all the members of the committee on their election or re-election to the House of Commons and indicate that we're very much looking forward to working with this committee in this Parliament.
I'm accompanied by Wendy Loschiuk and Ronnie Campbell, assistant auditors general, who were responsible for a number of the chapters that were included in the two reports that were tabled today.
With your permission, Mr. Chair, I'd like to now give you a brief description of the chapters in each of the reports that we've tabled.
I am going to start with our Spring Report. The first chapter deals with the expenditures for the G8 and G20 summits. We found that Parliament was not clearly informed of the total amount of funding requested by departments.
Fourteen departments asked for funding over two fiscal years in seven separate requests. This made it almost impossible for Parliament to know the total amount of money that was being requested. Government should ensure that parliamentarians have a clear picture of the total funding being requested for initiatives involving many departments such as this.
At the time of our audit, departments were projecting expenditures of about $664 million for the two summits, just over half of the $1.1 billion that was approved by Parliament. Because of the short timeframe to prepare for the summits, departments had to prepare budgets quickly, often with limited information. As a result, the funding requests significantly overestimated the amounts needed.
I turn now, Mr. Chairman, to the G-8 legacy infrastructure fund. Parliament received a request for $83 million for the border infrastructure fund. It was not informed that $50 million of that amount was intended to fund infrastructure projects in the region hosting the summit. When government presents a request for funds to Parliament, it should be transparent about the intended use of the money.
Thirty-two projects were approved for funding by the former Minister of Infrastructure on the advice of the former Minister of Industry. Public servants were not involved in the selection of the projects.
I am very concerned that documentation was not available within the federal government to explain how or why these 32 projects were selected. Supporting documentation is important for transparency and for accountability.
I will move now to the reserve force pension plan. This plan had been under discussion and development for more than 10 years, yet the Department of National Defence dropped the ball. As a result, many reservists could face delays of seven years or longer to find out what their pension benefits will be. The department did not have enough staff or adequate systems in place when the plan came into force in 2007; this led to significant backlogs.
About 9,000 reservists in the plan have sought to buy back past service. At the time of our audit, fewer than 400 of these requests had been processed.
Reservists play a critical role within the Canadian Forces. They should not have to wait this long to receive the pension services they are entitled to.
I will now move to the chapters in our 2011 status report. Our status reports answer the question: has the government made satisfactory progress in acting on problems identified in past audit reports. We are reporting satisfactory progress in two of the six areas we examined, those two being financial management and control, and internal audit.
The opening to the status report, “Matters of Special Importance”, was Mrs. Fraser's final message to Parliament as Auditor General. In it, she noted areas where the government has made progress and two areas where she reported action is needed.
The first chapter of this report deals with financial management. With annual spending of about $275 billion, the government clearly needs good financial management.
We are pleased that the government has enhanced its financial management capacity with a significant increase in people with financial expertise.
Internal audit is another area where we found satisfactory progress.
Strong internal audits can help an organization achieve its objectives, improve its management practices, and make it more effective. I'm particularly pleased to see the significant improvements made in internal audits. I'm also impressed by the role departmental audit committees are playing in strengthening internal audits and in improving management practices.
Let me turn now to large information technology projects, one of the areas in which the government's progress has been unsatisfactory.
Continued investment in information technology is needed to deliver services to Canadians. Developing these systems is complex and expensive. It needs to be managed well.
We note improvement in certain areas. However, action is needed in planning and monitoring projects, and measuring results—areas that are still weak.
The government's progress has also been unsatisfactory in the area of programs for first nations on reserves. I am very disappointed that conditions on reserves have worsened and are well below the national average.
The education gap between first nations living on reserves and the general Canadian population has widened. Houses are in poor condition, and the housing shortage on reserves has increased. More than half the drinking water systems on reserves still pose a significant risk to the communities.
A preface to this chapter provides an overview of the structural impediments that have hindered progress on reserves.
Improving conditions on reserves will be a difficult challenge. It will take first nations and government working together in new ways to resolve these issues.
Turning now to the national police services, the RCMP provides specialized services used by police forces across Canada. These include fingerprint identification, DNA analysis, and other services important to public safety in the criminal justice system. The RCMP has made unsatisfactory progress in addressing longstanding issues that affect its ability to provide these services. We are concerned by the lack of progress in this area. The federal government, working with provincial, territorial, and municipal partners, needs to decide which police services should be provided and how they should be delivered and funded.
I'll turn now to the chapter on regulating medical devices.
Canadians rely on Health Canada to ensure that they have timely access to safe and effective medical devices. These devices range from bandages to pacemakers. They play an important role in the quality of health care. The department's progress in regulating the safety and effectiveness of these medical devices has been unsatisfactory. Health Canada needs to improve its on-time performance, use foreign reviews to reduce delays, and ensure that it adequately monitors the safety and effectiveness of medical devices available in Canada.
The last chapter in the status report includes the main points of special examination reports on four crown corporations. They were issued in 2010. We report on whether or not there were significant deficiencies that could prevent these corporations from achieving their objectives.
We are pleased to note that there were no significant deficiencies in two of the corporations we examined: the Canada Deposit Insurance Corporation and Telefilm Canada. We did, however, find significant deficiencies in the National Arts Centre Corporation and the Freshwater Fish Marketing Corporation.
Mr. Chair, that concludes my opening statement. We will be happy to answer any questions you may have.