As Bill pointed out, the estimates aren't about spending, but about authority. So they are prospective. By contrast, the public accounts are about spending and are retrospective. Once we've been through the supply process and the money has been spent, it comes time for the government to account for how that money was spent and to make it transparent to Parliament and Canadians. That's where the public accounts kick in.
On page 11 of the deck, the public accounts are defined as the annual report of the Government of Canada for the fiscal year ending March 31. They gets presented in three volumes. The financial statements are contained in volume 1, and continued in volumes 2 and 3 are many other disclosures required by law, policy, or convention. All of these are tabled in the House of Commons.
On page 12, the source of the authority is the Financial Administration Act, sections 64.(1) and 64(2). It is basically there. The authority goes to the Receiver General of Canada for the preparation of the public accounts, and to the President of the Treasury Board for tabling it. It is for the President of the Treasury Board and Minister of Finance jointly to determine the form and content.
On page 13 of the deck, there is a little more detail. Volume 1, as I mentioned, contains the financial statements of the Government of Canada, the report and observations of the Auditor General, financial statements discussion and analysis, and then details on certain financial statement components.
The financial statements are prepared in accordance with the public sector accounting standards, which are promulgated by the Public Sector Accounting Board in Canada. Essentially that's what the Auditor General is talking about when he issues an opinion, whether the financial statements are fairly presented, as the term “fairly presented” would be defined or implied through the application of the public sector accounting standards.
The financial statement, discussion, and analysis, as anyone who has looked at any set of financial statements, corporate or public sector, would know, is fairly dense and technical. The financial statement discussion and analysis is very helpful, because it tries to comment on the financial statements and interpret them and make them a little more accessible to those who are not qualified accountants as such. That is its purpose.
Volume 2, as I mentioned, has more details. It includes comparisons of actual spending, by ministry, to that in the estimates. This raises another point. The estimates documents that Bill was talking about are done ministry by ministry. The public accounts do provide a consolidated view of government in volume 1, and detailed views, ministry by ministry, in volume 2. Volume 3 contains financial statements of revolving funds and other information required by the Financial Administration Act, treasury board policies, or various sources.
All of the public accounts are available in their entirety on the web, and most of the public accounts are also printed. There is an exception, in that a portion of volume 3 is not printed because of its voluminous nature. Nevertheless, it remains part of volume 3 and is available on the web.
On page 14, there is a bit of a discussion about the actual process for producing the public accounts. It's a huge coordinated effort that involves the Treasury Board Secretariat, the Receiver General of Canada, all departments and agencies, and the Office of the Auditor General. We really do have to plan and coordinate together to make all of the pieces come together in accordance with the tight timeframes dictated by tabling and whatnot.
The OCG's role, my role, is the determination of the application of public sector accounting standards and comes into play largely with the treatment of new or unusual transactions. Much of what goes on is routine, but we'll get involved in those kinds of things also.
The Receiver General performs the physical consolidation of all of the material that individual departments produce. All of that material is done in prescribed format. There are many entities, something like 165 entities, if you added them all up. So there is a need for a certain amount of standardization to be able to pull the accounts together, and that's the job of the Receiver General.
Moving to page 15, the Department of Finance is the author of the financial statement discussion and analysis piece that appears in volume 1. They also prepare an annual financial report, which is a summarized version of what goes in the public accounts.
We've already heard from John about the Auditor General's role, and of course this committee's role, in reviewing the public accounts once they're ready.
In terms of the whole process, Bill and I have mentioned part of it. On page 16 you will see it all laid out. The interesting thing is that just because of its duration, it ends up spanning a number of calendar years, and even fiscal years.
If you see a particular cycle, starting with the budget.... Here we used Budget 2010 to illustrate this, a budget that appeared in March 2010. The main estimates appeared in March 2010 and the supplementary estimates in May and November of 2010. When Budget 2011 rolls around, a portion will be an update or a forecast of how the 2011 year is appearing, because that will inform the setting of next year's budget. Then in the fall, the annual financial report and the public accounts come out. So as you can see, the whole process, from when granting authority is provided to when final accountability is rendered, is a fairly lengthy cycle.
From page 17, I just want to mention that something new has occurred this year. It's not strictly speaking part of public accounts, but it's certainly part of the same family. Here I refer to the production of quarterly financial reports. In the past, as I have said, there's been annual information at the consolidated level, and at the individual department level for year ends. For interim or in-year financial information, the Department of Finance did produce, on a consolidated basis, information about how the year was progressing. What was missing was the ability to look at individual departments in-year to see how the year was progressing.
The innovation we now have is quarterly financial reports, which requires departments and crown corporations, for the first three quarters of the year, to produce a quarterly financial statement. Then in the fourth quarter, of course, we have the appearance of the public accounts, which wraps up the year.
Treasury Board policy instruments were used to prescribe the form and content of the reports, and the first publication of QFRs came this past August.
That concludes our discussion of the supply and accountability process. I also have a deck, which you should have, on internal audit.
Do I have permission to pass to that topic?