Public Accounts Committee on Oct. 17th, 2011

[The Chair, NDP, David Christopherson]

I declare this meeting of the Standing Committee on Public Accounts open for business.

Welcome, everyone.

As we agreed earlier, the purpose of this meeting is to have a briefing, to get some background and to understand procedures, especially for new members. But having been a veteran member it's amazing how much you learn each time you go around, and I'm expecting to learn more again today.

First, with the indulgence of our guests, if they would excuse us for one moment, I will ask members if they could turn their minds to the third report of the subcommittee from October 5. It reads,

That, pursuant to Standing Order 108(3)(g), the Committee undertake a study of Chapter 4, “Programs for First Nations on Reserves” of the 2011 Status Report of the Auditor General of Canada; and that the usual witnesses be invited to appear on Wednesday, October 19, 2011.

We had agreed to this verbally before we broke for constituency week. This is to ensure that what we're doing is legal.

With that, may I have a motion?

So moved by Mr. Kramp.

Is there any discussion?

(Motion agreed to)

On Wednesday we will do that. Thank you, committee members.

Now back to our main reason for being here today, our guests. I will ask you to introduce yourselves, and I understand there are opening remarks. We'll start with John.

Members, again, would you hold your questions until we've had all of the introductory remarks and then we will open the floor in the usual rotation. Is everybody okay with that?

[Some hon. members]

Agreed.

[The Chair, NDP, David Christopherson]

Good.

Mr. Wiersema, you have the floor, sir.

[John Wiersema, Interim Auditor General, Office of the Auditor General of Canada]

Would you like me to proceed right into my presentation, Mr. Chairman, or would you like the introductions first?

[The Chair, NDP, David Christopherson]

Yes, let's do a quick introduction and then come back to you, John, for your opening.

[John Wiersema]

My name is John Wiersema and I am the Interim Auditor General of Canada.

[Michelle d'Auray, Secretary of the Treasury Board of Canada, Treasury Board Secretariat]

I am Michelle d'Auray, Secretary of the Treasury Board.

Secretary to the Treasury Board.

[James Ralston, Comptroller General of Canada, Treasury Board Secretariat]

I'm Jim Ralston, Comptroller General of Canada.

[Bill Matthews, Assistant Secretary, Expenditure Management, Treasury Board Secretariat]

My name is Bill Matthews. I am the assistant secretary in charge of the expenditure management sector at the Treasury Board of Canada Secretariat.

[The Chair, NDP, David Christopherson]

Excellent. Thank you very much, and on behalf of the committee, welcome today. We thank you. We'll be working with all of you. I know you all, and everyone here will get to know everyone too, as we go forward.

With that, Mr. Wiersema, you have the floor now for your opening remarks, please.

[John Wiersema]

Thank you, Mr. Chair.

I am happy to have the opportunity to discuss our role and mandate with you today. Before I start my presentation, I would like to say a few words about our independence.

Our office has been around since 1878. It started out as part of government. There have been several changes in our mandate over the years, some of which served to strengthen our independence. Today, we have the independence that we need and this independence is key to maintaining our credibility. I will come back to the subject later on.

The independence of our office is one of the key messages in my presentation today.

As I said, I have a deck today, Mr. Chairman. There are 21 slides in the deck. I believe you have it in front of you. I will try to go through this deck as quickly as possible to allow as much time as possible for questions and discussions.

I have worked with the office for quite some time so I can talk about the work of the office for a long time. If I take too long, Mr. Chairman, I would ask you to hurry me along.

[The Chair, NDP, David Christopherson]

If I may, John, with the understanding of the committee, we have a five-minute rule. Given the nature of this kind of meeting I'm suggesting perhaps a little latitude, and, John, we'll use our discretion as we go along.

Are committee members in agreement with a little latitude?

[Some hon. members]

Agreed.

[The Chair, NDP, David Christopherson]

With that, John, please proceed.

[John Wiersema]

Thank you.

On page 2 of the deck, Mr. Chairman, I provide an overview of my presentation. I'll be talking about the mandate of the work of the Office of the Auditor General, our audit products, our processes, our accountability, and how we measure the impact of the work of the office.

On page 3 we set out the legislative framework within which the office of the Auditor General works. Obviously, the key piece of legislation that governs our work is the Auditor General Act. It outlines our powers and responsibilities. It provides the mandate for the financial audit work that we do in government departments and agencies. It provides the mandate for the performance audits, the value-for-money audits, that the Office of the Auditor General does. It also sets out the role of the Commissioner of the Environment and Sustainable Development.

Members may know that Mr. Scott Vaughan is Commissioner of the Environment. Mr. Vaughan's mandate is set out largely in the federal Auditor General Act. He operates within the Office of the Auditor General and conducts, on my behalf, all the environmental auditing work of the office.

Our mandate with respect to the audit work that we do in crown corporations is set out in the Financial Administration Act. The Auditor General of Canada is the auditor of record for all crown corporations, except for two. The Financial Administration Act also sets out the Auditor General's mandate for the performance audits known as “special examinations” that we do in crown corporations.

The Federal Sustainable Development Act requires the government to prepare a sustainable development strategy and submit it to the Commissioner of the Environment and Sustainable Development for comment. The commissioner comments on the government's draft sustainable development strategy and then he conducts audit work related to that strategy and to the individual departmental sustainable development strategies under that act. There are many other statutes that also govern the work of the office, but the key ones are those three: the Auditor General Act, for departments and agencies, including the Commissioner of the Environment; the Financial Administration Act for crown corporations; and the Federal Sustainable Development Act.

Slide 4 sets out how we fit into our system of parliamentary democracy. As members are well aware, Parliament authorizes government programs and government spending. The government provides an accounting back to Parliament of its results and spending, and the Office of the Auditor General provides a report to Parliament on how effectively government has managed these programs.

I should also point out, Mr. Chairman, that the Auditor General of Canada is also the legislative auditor of the three territorial governments in Canada: Nunavut, the Northwest Territories, and Yukon. We largely play the same role that we play for the federal parliament with respect to those three territorial governments.

My presentation today will focus on the work that we do on behalf of the Parliament of Canada. I won't be speaking very much about the work that we do in the territories, but I'd be pleased to answer any questions that you might have in that respect.

Slide 5 talks about how we differ from government departments. This slide illustrates the legal provisions in the Auditor General Act and other legislation that ensure our independence. First and foremost, the Auditor General is appointed for a 10-year mandate. As a result of recent amendments to the Auditor General Act, that appointment now has to be confirmed by resolutions of both houses of Parliament. The Auditor General can only be removed on address of both the House of Commons and the Senate, so the Auditor General has a great deal of security in the tenure of the position.

I would point out, however, that the interim Auditor General is only a six-month appointment, which—not to make too fine a point of it, Mr. Chairman—comes to an end on November 30, 2011, some six weeks from now.

[The Chair, NDP, David Christopherson]

In how many hours?

[John Wiersema]

The Auditor General has a great deal of flexibility to choose what subjects to audit. I will talk about this a little more in our presentation. We have a fairly sophisticated audit planning system to choose what we are going to audit. One of the most important decisions we can make is the decision what to audit. We have a lot of processes and systems behind all of that.

I get cards and letters daily from Canadians. I get hundreds of requests for audits from Canadians and individual members of Parliament. We consider all of those requests. We feed them into our planning process. The ultimate decision as to what to audit is made by the Auditor General of Canada. We couldn't begin to respond to every one of those requests that we get for subjects to audit.

I will contrast that very briefly with the requests from a parliamentary committee. If we get a parliamentary committee request to do an audit, which has all-party support, that will obviously go right to the top of the list.

With respect to all of the other hundreds of requests we get for audits, we consider those in our planning. Sometimes we are able to accommodate them; often we are not able to.

The Auditor General, in technical terminology, is called a separate employer. That means the Auditor General has the freedom to recruit, classify, and compensate his or her employees separately from the processes of government. That provides the independence we need in the staffing of the office. As a matter of policy, we try to align our compensation policies with those of the government. However, obviously we have complete freedom within the legislation—the Public Service Employment Act—to hire our own staff.

Finally, as you know, Mr. Chairman, we submit our reports directly to the Speaker of the House of Commons. We do not report to Parliament through any ministers of the crown, as a government department would. We report directly to the Speaker of the House of Commons and submit our reports to him or her. As you know, Mr. Chairman, by the Standing Orders those reports are automatically referred to this committee.

Page 6 of the deck talks about our budget. You provide us approximately $89 to $90 million per year of funding for the work of the office. In the current fiscal year, that comprises about $84.5 million for main estimates, and then a supplementary estimate of $4.4 million, which is largely for technical adjustments and the carry-over of previous year's lapsed moneys.

Our main office is in Ottawa. We have probably over 450 people in our office in Ottawa. The rest are spread out in our regional offices. We have regional offices in Vancouver, Edmonton, Montreal, and Halifax. Our offices in Vancouver and Edmonton focus most of their work on the territorial legislatures. They do most of the work we do in the Yukon and the Northwest Territories. The work we do in the Nunavut territory is largely run out of our Ottawa office.

We have about 630 to 650 employees, depending on which day you count them. More than 400 of those employees are auditors. All our auditors are either professional accountants, chartered accountants, certified management accountants, or certified general accountants, or they hold at least a postgraduate degree in the discipline we've hired them in. They will have at least a master's degree.

Page 7, Mr. Chairman, outlines our audit products. In the interest of clarity, we do four types of audits. We do financial audits in government. We audit the Public Accounts of Canada, which are arguably the largest set of accounts in the country, with $280 billion of revenues and expenses depending on the year and whether or not the government has a surplus or a deficit. The audit we do of the Public Accounts of Canada is our single largest audit each year. It requires over 30,000 hours of audit effort. It involves audit work in each of the large departments that form part of the Public Accounts of Canada.

Then as I indicated earlier, we also do about 120 financial audits per year, including the audits of all parent crown corporations, which include CBC, Canada Post, Export Development Canada, Atomic Energy of Canada, and so on. The only two federal crown corporations that the Auditor General does not audit are the Bank of Canada—the central bank—and the Canada Pension Plan Investment Board.

The performance audits, Mr. Chairman, are what this committee is most familiar with. We do between 25 and 30 of those audits each year. We table those audits in the House of Commons, or the Speaker tables them in the House of Commons on our behalf, and they are referred here. The committee considers many of those audits in its deliberations.

I mentioned special examinations of crown corporations. Those are the performance audits that we do of a crown corporation under the Financial Administration Act, and the scope of those audits is set out in legislation. They basically ask the question, “Is this crown corporation well managed?” Under the legislation, crown corporations are required to submit to the board of directors of the corporation those reports that we present. The board of directors is required to submit those reports to the minister responsible for the corporation, as well as to the President of the Treasury Board, and they're also required to disclose them on their websites.

As a practice, we in the Office of the Auditor General will present the summaries of those special examination reports in a report that we provide to Parliament. You'll recall that in the status report we tabled earlier this year we presented the summaries of four special examinations of crown corporations.

Finally, the fourth key area of activity in the office is obviously the work of the Commissioner of the Environment and Sustainable Development, Mr. Vaughan. He conducts all the environmental audit work of the office, the sustainable development monitoring and the reporting work of the office. Mr. Vaughan's section of the office comprises about 10% of the auditors in the office. His budget is about 10% of the overall budget of the office.

In financial audits, as I've indicated on page 8, we provide a professional opinion, not unlike what you would see in the private sector, on whether or not you can rely on the organization's financial statements, whether those financial statements are fairly presented. The biggest one of those audits is the audit of government's summary financial statements, the Public Accounts of Canada, as I mentioned earlier. This requires over 30,000 hours of audit effort in government each year. Also, we do the annual audits of all crown corporations, except for the two I mentioned, along with similar audits in the three territorial legislatures. So we do about 120 of these financial audits each year.

On page 9, you'll see the performance audits, formerly called value-for-money audits. These audits answer whether the particular program or area of government activity being audited is well managed. Is it managed with due regard for economy and efficiency? Do they have measures to determine the effectiveness of the programs? We basically conduct those audits using audit criteria. The audit criteria are the standard against which we assess management's performance.

For the most part, what we try to do is to audit government's management of government programs against its own rules, against the rules that are set by the Treasury Board of Canada. Are they complying with the government's own rules in the management of the program? Where there are no clear rules, we will refer to best practices that might exist in industry, but largely, in a good number of those audits, they are just audited against the government's own policies and rules.

The Office of the Auditor General does not have a mandate to conduct effectiveness evaluation. We do not determine if government programs are achieving their objectives; that's government's role. We determine whether government has the means to determine whether or not a program is effective, but we do not audit effectiveness in the first instance. The example I might use there is the work that the Auditor General's office did on the gun registry: we audited whether or not that registry was being properly managed. The Auditor General never expressed a view as to whether or not the gun registry was a good or a bad public policy initiative. That is not the role of the Office of the Auditor General.

On page 10, special examinations of crown corporations, as I've mentioned, are a type of performance audit of a crown corporation. The scope of the audit is set in legislation, the Financial Administration Act, to include the corporation as a whole.

We do those audits of the crown corporations at least once every 10 years. Parliament changed the cycle of those special examinations a few years ago; we were previously required to do them every five years. In discussions with government, we supported an amendment to that legislation to lessen the audit burden on crown corporations, such that audits are now required only once every 10 years, or at such additional times as the minister responsible for the corporation or the Auditor General of Canada determines are necessary.

I mentioned the fact that the crown corporations are required to make those reports public, including the sitting minutes of the President of the Treasury Board.

Turning to page 11, the environmental auditing is lead by the Commissioner of the Environment and Sustainable Development, Scott Vaughan, who focuses his efforts on the government's management of environmental issues. He does a lot of work on the government's sustainable development strategies, and monitors the government's implementation of those strategies.

He also administers an environmental petitions process. Under the Auditor General Act Canadians can submit petitions dealing with environmental issues to the Office of the Auditor General. The Office of the Auditor General forwards those petitions to the responsible minister, and the legislation gives the responsible minister 120 days to respond to those petitions. We monitor the minister's responses to those petitions and we present, once a year, in our report to Parliament a summary of the petitions we have received from Canadians. These petitions also help us to determine which audit subjects dealing with environmental issues we might select in the future.

Turning to page 12, I'm going to start talking about our audit process. The next few slides refer to this process. The key messages I want to leave with you here are about what we do to ensure that we are relevant to Parliament, that our audit work is important to Parliament, and about what we do to satisfy all parliamentarians--this committee in particular--that our reports can be taken for granted, that you can trust our reports and have confidence in what we report to Parliament.

Page 13 refers to how we select the audit topics. Obviously, one of the most important decisions we can make in doing an audit is deciding what to audit in the first place. Government is incredibly large and complex, with many business lines. We can't profess to audit all of it every year, and it's even difficult to cover the enormity of government activity over a 10-year period of an Auditor General's mandate. So we have quite a sophisticated risk-based planning system for choosing what to audit. The key factors are the risks to the achievement of the organization's objectives, the significance to Parliament, and adequacy of the level of our coverage of government activities.

We invest significant resources in this planning exercise. And as I indicated earlier, Mr. Chairman, we pay particular attention to the requests we get from parliamentary committees. The hundreds of other requests that we get for audits, we feed into that planning process and do the best we can to accommodate all of those—but we're not able to do so.

As I indicated earlier, there are some limits to the mandate, limits that I believe are entirely appropriate. I have no concerns with these limits. The Office of the Auditor General does not comment on policy issues, which are the prerogative of Parliament and of the government. We are the auditors of the federal government: we do not audit municipalities, we do not audit first nations, we do not audit the private sector. We focus our activities on how the federal government manages its affairs.

Page 14 asks how do we ensure audit quality? One of the most important things that we have to do when we present our reports to Parliament is to give you the assurance that you can have confidence in that report, that you can rely on the findings of the Office of the Auditor General.

How do we do that? First and foremost, we follow auditing standards set by the accounting and auditing profession in Canada. We do not set our own auditing rules; we follow the standards that are set by independent standard-setters. We have highly trained professionals, highly qualified professionals, who conduct the work. I mentioned earlier that all of our auditors are professional accountants and have at least a master's degree in their particular discipline.

We have quite a sophisticated and, frankly, Mr. Chairman, quite expensive quality management system in the Office of the Auditor General. We have a comprehensive set of audit manuals, audit methodology, and tools. For those who were members of this committee in the previous Parliament, you'll be aware of a project that we're about to complete in the office that we call our revised audit methodology. We are updating all of our audit manuals for each of our product lines to bring them into line with state-of-the-art practices in the private sector. Our financial audit practices, I believe, are among the best in the world. When we roll them out this fall, our performance audit practices and performance audit manuals, I believe, will be the best in the world.

I'm very proud of the quality of the methodology we have behind our audit work. But that said, it's expensive. We have a code of values and ethics in the office to which all staff are expected to adhere. In particular, coming back to my theme about independence, all auditors in the office are required to certify they are independent for every audit they work on, and they have to certify their independence once a year through a formal annual certification process.

We use a lot of experts or outside advisers in our audits, including for virtually every one of our performance audits and special examinations. We engage experts from outside the office to give us advice on what to audit and how to report, and we subject the office to external reviews. I'll talk about that in a few minutes, but the Office of the Auditor General has been reviewed at least three times by external people to confirm the quality of the work we do.

Next is page 15, with six to go, Mr. Chair.

How am I doing? I'll go more quickly.

[The Chair, NDP, David Christopherson]

Yes, you might want to keep motoring through.

[John Wiersema]

The Auditor General has a number of advisory bodies that provide advice to the Auditor General personally. We have a panel of senior advisors made up of former politicians--very credible and senior politicians. Mr. Broadbent is a member of our panel of senior advisors. Mr. Joe Clark is a member of our panel, as is Gordon Ritchie. We meet with them once or twice a year to get advice on our performance audits.

I have an independent advisory committee, made up of the most pre-eminent accountants in Canada, to give us advice on our financial audit practices. We have a panel of advisors on aboriginal issues. We'll be talking about aboriginal issues later on this week.

The Commissioner of the Environment has his own advisory panel on environmental issues.

We have an audit committee chaired by a retired private sector public accountant who is very familiar with the public sector. We've had that audit committee in place for the better part of two decades. It advises me on the management of the office.

As to our accountability, members of this committee will be aware that we appear at least once a year before the PACP to explain the management of the office and to talk to you about our report on plans and priorities and our performance report. So we are held accountable once a year before this committee.

We have been working to encourage the formulation in the Standing Orders of an advisory panel on the funding of officers of Parliament. As officers of Parliament, we think our funding should be determined primarily by parliamentarians. I like Michelle d'Auray, but I don't think she is the person who should be determining the funding of the Office of the Auditor General. So we have been working toward the creation of an advisory panel that would oversee the funding and administration of all officers of Parliament.

The Office of the Auditor General is subject to an annual financial audit by a private sector accounting firm. We are subject to the scrutiny of the other officers of Parliament. The Privacy Commissioner and others can come in to look at the work of the Office of the Auditor General. The Office of the Auditor General is proactive in its disclosure of all the administrative functions in the office. I would point out that under the Access to Information Act, we are prohibited from disclosing audit information. The audit information we collect is not subject to access to information requests, which I believe is appropriate to protect the integrity of the audit process.

I mentioned that we've had three peer reviews. In 1999 an accounting firm reviewed our financial audit practice. In 2003 the national audit office of the U.K. led a review of our performance audit practice. In 2010 we had a review done of all of the work of the office, led by the Australian national audit office. That report was discussed with this committee in the previous Parliament. The conclusion of that report was that Parliament could rely on our work, but there were some things that we needed to improve as well.

As for the impact that we have, there are a number of performance measures reported in our departmental performance report. The key one has to do with the implementation of our recommendations. The good news is that if you look at our status reports on the follow-up of our previous work for the last three years, we've reported satisfactory progress in implementing the Auditor General's recommendations in seven of thirteen areas. That's not bad, but it could be better. We will continue to work to improve our own follow-up and reporting on the implementation of our recommendations.

Members will be aware that the government is undertaking a strategic review, or deficit reduction action plan, looking to achieve savings of $4 billion by 2014-15. The Office of the Auditor General has voluntarily decided to conduct its own review. We are in the process of finalizing that review now. I would like to present the results of the strategic review that we have done of the Office of the Auditor General and discuss them with this committee in the coming weeks. I'll be sending you and the chair of the advisory panel on funding of offices of Parliament a letter shortly on how we propose to proceed with our strategic review.

[The Chair, NDP, David Christopherson]

Good.

[John Wiersema]

In conclusion, Mr. Chairman, we're one part of a three-cog wheel. We work with Parliament, this committee in particular, and with government in trying to improve the public administration of programs in Canada. We believe that by working effectively together we can make a difference for Canadians.

Thank you, Mr. Chairman. I apologize for taking too long.

[The Chair, NDP, David Christopherson]

That's all right. It was expected.

Thank you.

Briefly—because you did step into the role—thank you on behalf of the committee for the work you're doing. It needs to be underscored that you had huge shoes to fill—impossible ones—and we all know that, but you've done a fantastic job, John. We appreciate it very much.

I know it interfered with your personal plans, and for those of us who are familiar with those plans, it certainly says a lot that you continued your public service to make sure that we had someone of your calibre until we could make a permanent replacement.

Thank you, again, so very much.

[John Wiersema]

Thank you, Mr. Chairman.

[The Chair, NDP, David Christopherson]

Madam d'Auray, you have the floor—an easy act to follow.

[Michelle d'Auray]

Thank you for that, Mr. Chairman, and for the opportunity to appear before the committee.

It's my first appearance in its new constitution, so congratulations to you all. I'm sure I'll be back a few times.

Given your interest, I will give a brief overview of the roles and responsibilities of the Treasury Board Secretariat. But given your expressed interest in the expenditure management system, especially the estimates and supply processes, the public accounts audit, and financial management, my colleagues, Jim Ralston, the Comptroller General, and Bill Matthews, the assistant secretary of expenditure management at the Treasury Board Secretariat, will be picking up on my presentation to talk about their areas of responsibility.

I will start by setting out the functions of the Treasury Board and its secretariat.

The Treasury Board is a committee of cabinet which was established in 1867 and given statutory powers in 1869. It sets the government's administrative and management policies; authorizes and reports on expenditures and sets program and other authorities; and establishes the workplace and workforce policies for the government, including the terms and conditions of employment for the core public administration. It is in essence the government's management board, the budget office, and the people management office. Given the committee's mandate and interests, I will focus my remarks on the management board and budget office roles.

The secretariat is the departmental arm of the Treasury Board. It supports the board in fulfilling its mandate by performing an enabling function, as we call it; a challenge and oversight role; and a leadership role in driving and promoting management excellence. By working with senior officials in departments and agencies and with various communities of practice, as we call them, such as deputy heads, financial officers, information officers, and heads of human resources, it enables organizations to develop the tools, the capacity, and the processes they need to fulfill their management responsibilities.

In driving and modelling management excellence, we support effective management of people and the development of leadership practices. In exercising our challenge and oversight role, we review and assess requests for expenditure and other authorities that are brought to the Treasury Board. We assess government-wide expenditures against priorities, and we provide Treasury Board ministers with our recommendations and advice. We aim to ensure that government is well managed and accountable and that resources are allocated to achieve results.

With regard to the management board function, there has been a significant shift in the way in which the Treasury Board Secretariat exercises its roles and responsibilities. We have moved away from the prescription of centrally-driven and detailed rules, policies and directives, to principles-based frameworks and policies, focused on the appropriate allocation of resources (human, financial, and material) to achieve planned results, with the concomitant reporting mechanisms. The accountability for implementation, compliance and reporting rests with each organization and its deputy head.

The secretariat uses a variety of tools to assess an organization's management capacity, the most comprehensive of which is the management accountability framework, or MAF. Through this process organizations self-assess, or report, against 14 areas of management; and secretariat officials play a challenge role and rate the organizations against their expected performance. These areas of management cover the most important elements of financial, human resources, and material management, but they also include management of information technology and security, for example, as well as values and ethics.

The MAF's objectives are to clarify management expectations of deputy heads and support an ongoing discussion on management priorities and best practices; to provide a comprehensive perspective on the state of management practices and challenges in the federal government; and to identify government-wide trends in order to help deputy heads set priorities and resolve core issues.

For example, as you will hear from the Comptroller General with regard to internal audit, our audit policy requires that organizations have an internal audit function, with appropriate professional certification, that reports directly to the deputy head to establish its independence from the daily operations of the organization; an organization must also establish an audit committee made up in large part of people independent from the public service. Beyond using the MAF to assess whether these elements are in place, the OCG also assesses, for example, whether the organization's audit plan offers sufficient coverage and is aligned with its stated risks.

In taking a more risk-informed approach to our policies and compliance requirements, we've also been consciously reducing the reporting burden on organizations. For example, we have significantly streamlined many of our policy reporting requirements by combining them in large part with the annual assessment of organizations through the management accountability framework.

We are also increasingly moving to electronic and web-based reporting and publications—as evidenced by the new quarterly financial statements and detailed tables in the Public Accounts. Our minister is strongly encouraging us to reduce the paper burden on organizations and parliamentarians, and we will be piloting the move away from paper tabling to electronic or virtual tabling. With regard to our budget office role, we have also made significant changes—focusing on the allocation of resources to the government's priorities, and reporting on expenditures against performance and results.

Organizations are required to have a resource management and program activity reporting framework against which resources are attributed and indicators measure performance. These are the elements that members of Parliament will see in organizations' reports on plans and priorities, and which are set out every year in the performance reports on how we achieve those results.

More recently, as I just mentioned, organizations have also been required to post on the web their quarterly financial statements outlining actual expenditures against planned expenditures, and to set out any significant risks or issues that could effect their plans. The first quarterly financial statements were posted on each organization's website on August 31, and the next posting will be at the end of November.

We are one of the few countries in the world with such a comprehensive and public results-based reporting system.

In keeping with our budget office role, and with our goal to align resources to priorities, over the past four years, the secretariat has overseen the strategic review process, during which organizations’ program expenditures were reviewed to reallocate funds from low to higher priorities and to reduce overall program expenditures. Starting in 2007 and concluding in 2010, 98% of the government’s program expenditures have been reviewed, and ongoing savings of $2.8 billion have been achieved. This year, we will be reviewing all direct program expenditures with a goal of achieving savings of at least $4 billion by 2014, as part of the government’s deficit reduction action plan.

Mr. Chair, we've seen the changes and evolution in the enabling, leadership, and challenge roles played by the secretariat, as reflected in the way the Office of the Auditor General sets its priorities in auditing organizations and in its appreciation of the government-wide responsibilities of the secretariat. We've been pleased to note the OAG's increasing openness to relying on the work of internal audit in organizations, in recognizing the roles and responsibilities of deputy heads in the management and oversight of their organizations, and in the secretariat's movement away from prescription to more results-based and risk-informed management policies and directives.

All in all, Mr. Chair, we are seeing, and have seen, significant improvements in the management of public resources.

My colleagues will further elaborate on how the secretariat supports organizations in Parliament with regard to expenditure management and internal audit.

This concludes my remarks and I will ask Bill Matthews to continue with his presentation on the estimates process.