Public Accounts Committee on March 31st, 2014

[Michael Ferguson]

Again, I think it's important to understand that we have the financial audits and we have the special exams that we have to do according to legislation, so that's all covered. Then what's left over, essentially, if you want to look at it that way, is what we put toward performance audits. The amount of effort we put into performance audits, as I've said, hasn't reduced. If Parliament decided it wanted more performance audits, we're really at...Parliament telling us how many performance audits they want to do, and the way they do that is essentially by setting the budget.

So we can continue to do 30. Remember that performance audits are not just a function of our being able to do them, they're also a function of the departments being able to have the capacity to accept auditors in. That's another aspect of it. So within this budget, we're able to continue on with the 27 to 30 audits. If Parliament wanted us to do more, that would require more money.

[Glenn Thibeault, NDP, Sudbury, ON]

Thank you for that clarification.

[The Chair, NDP, David Christopherson]

Great. Thank you both.

Now to our last spot, I understand, Mr. Woodworth, you want to be sharing your time with Mr. Hayes.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

That is correct. Thank you, and I want to thank Mr. Thibeault for driving home the point that I made earlier about the fact that you are doing a fine job and fulfilling your mandate with efficiencies. I've appreciated that.

I want to unpack a little bit the comment made at paragraph 7 of your comments today about 72% of the 25 performance audit recommendations that you've followed up on that year having received a grade of satisfactory progress. The first thing I want to ask is this. Does that mean you did not follow up on all performance audits, only a sampling of 25?

[Michael Ferguson]

In fact, the 25 refers to recommendations, so it may be that a number of those recommendations were contained in one performance audit. It would be significantly fewer than 25 audits that we followed up on. So, yes, the answer is that we did not follow up on all of them. We just followed up on a sample.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

Would it be a fair thing for us as legislators to assume that this sample gives us an indicator of the larger context, if I can put it that way?

[Michael Ferguson]

Again, really when we're deciding to do follow-up work, it would be one of two things. Either we've said let's follow up on a particular report and look at all of the recommendations that we made in that report and see whether the department has implemented them satisfactorily, or if we're doing another area that overlaps a bit, we may just pick out some of the recommendations we made in a previous audit and follow up on those. But certainly when we are following up on any particular recommendation, it's because we felt that those were important recommendations to follow up.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

Does your research or do your follow-ups indicate any systemic difference in departmental progress depending upon whether or not the department was actually summoned to a committee of Parliament? In other words, does it appear in your work at all that there's any systemic difference in consequences or follow-up whether or not the department has been summoned to appear?

[Michael Ferguson]

We haven't done that analysis, so my comment is going to be anecdotal. But certainly I believe that if a department appears, for example, in front of this committee on a follow-up audit when we have judged progress on certain recommendations to be unsatisfactory, I think that probably, in the words of the chair, does cause the deputy minister to have a bad week. From that point on, we usually see good effort on the part of those departments to make sure they are implementing our recommendations.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

I appreciate that you have more right than most people around this table to talk in terms of anecdotal evidence, but I was really looking for any concrete indication.

I accept your answer that really it's not something you study.

[Michael Ferguson]

It's not something we study.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

I will turn the balance of my time over to Mr. Hayes.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

Thank you, Mr. Chair.

Ms. Sachs, you mentioned there was $12 million in professional contracts, and I'm assuming professional contracts are consultants. I'd like to understand how you assess the need for a professional contract. Did you look at the cost comparison between hiring staff, or did you just determine that you didn't have the expertise and that, therefore, you needed to bring in a professional contract? Is it reasonable that many departments probably go through the same thing when they are forced by necessity to bring in professional contracts?

[Lyn Sachs]

The general rule for having a professional contract is that on an audit, for example, there has been an assessed need for an expert. In the case of an actuary, for example, we have thought this through many times. Should we hire an actuary? But we have decided we don't have the system to maintain and motivate an actuary full time.

We may want a professional doctor for whatever reason, if, for instance, we're looking at health services. So usually, therefore, expertise is added to an audit. A percentage of our professional contracts are to help us during the peak season. Like any other auditing firm, we have a peak season in the summer. We cannot staff ourselves up to meet those peak times, because then we wouldn't be sure what to do with them during the rest of the year. So part of that is there.

Part of the $12 million is also for transportation. We're travelling across the country. It's a mixture of those.

Every audit has a budget. For these contracts, we follow very stringent rules for whether we go through an RFP, and we have various standing offers.

[Bryan Hayes, Conservative, Sault Ste. Marie, ON]

Thank you, Mr. Chair.

[The Chair, NDP, David Christopherson]

Very good, thank you.

That exhausts our rounds.

Mr. Ferguson, if I might, in your indicator table 2, on page 3, under “Our work is completed on budget” under performance audits, you targeted 80%, but you failed to reach that. You reached 69%, but you did make reference to the Senate audit requiring some rejigging within the office, and you said that one of the things that were affected was performance audits. So it's quite possible that this is the only reason for that number to be so low. Would you be good enough to comment on that, please?

[Michael Ferguson]

That's the percentage of audits completed on budget. That would indicate that we may have had a couple of performance audits for which the scope changed, meaning that we might have had to put more resources on those audits than we originally thought we were going to have to. As soon as that happens, we still deliver the audit, but it costs us more than we originally thought it would.

[The Chair, NDP, David Christopherson]

Okay, so you have reason to believe you'll hit the 80% that you've targeted for 2014-15?

[Michael Ferguson]

Certainly that's our intention—to get back to the 80%.

[The Chair, NDP, David Christopherson]

There is one last thing, if I may, before we release you.

I continue to share your concern about the environment commissioner's reports not being looked at the way they should. Part of it is the culture of this place. It's just not been the history of committees to do this. Yet, one of the most pressing issues facing the planet is climate change and we are not looking at these reports, which are basically the same thing that you do for us, except that they are from the environment commissioner, focused on the environment.

As I understand it, the committee doesn't have a culture of saying, “We're going to choose so many chapters and we'll hold hearings”. They did the general, “Here's the report with all the chapters”, and that was the end of it. Now we're hearing in your report that there are even fewer hearings being held by other committees.

I share your concern that this is happening and I believe it has to change. Obviously, that's not easy or it would have changed by now.

Do you have any thoughts on how we go about changing the culture of this place, so that the environmental reports are seen in the same light as your reports?

[Michael Ferguson]

Certainly, all of the reports that we issue under the commissioner are done with the same rigour. They are audits, just like every other piece of work that we do.

We continue to have a relationship with that committee, and in fact, the new commissioner is planning to meet with each and every member of that committee individually to talk about the work of the commissioner with the goal of hopefully encouraging them to have hearings.

We continue to work on that, but so far we have not seen much uptake. We haven't seen any uptake in terms of the committees holding hearings on those chapters.

[The Chair, NDP, David Christopherson]

I'm glad to hear that. Let's hope that brings about some of the change we need.

Colleagues, that concludes the hearing.

I have a couple of questions to put to you.

Shall vote 1, less the amount already granted in interim supply, carry?

AUDITOR GENERAL

Vote 1--Auditor General--Program expenditures..........$67,947,936

(Vote 1 agreed to)

Shall the Chair report the main estimates to the House?

[Some hon. members]

Agreed.

[The Chair, NDP, David Christopherson]

Does the committee want to do a substantive report based on the OAG's departmental performance report and report on plans and priorities?

[Some hon. members]

Agreed.