Public Accounts Committee on May 4th, 2015

[Michael Ferguson]

We have a process within the office whereby we're tracking these strategic objectives. We've identified a number of different initiatives under each of those strategic objectives that need to be put in place. For example, the third one is developing and maintaining a skilled, engaged, and bilingual workforce. We are in the process of finalizing our new official languages strategy. We have a gap analysis exercise under way to determine where there might be some gaps in the training that we offer to our staff.

We have a number of initiatives under way on each of these. We have an overall project management group that is following our progress on each of them, making sure that for each of the activities we lay out the date we expect to have it completed, follow whether we are on track to do that, and report that to the executive committee.

So we've identified the activities related to the strategies, and then we have essentially a project management approach to make sure that we're delivering on those activities.

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

It's essentially an ongoing process with follow-up and this type of thing.

[Michael Ferguson]

It's very much an ongoing process. As I said, overall we have 12 strategic areas. We have identified for 2015-16 that three of those will be priorities. I expect that as we move forward into additional years others of them will become our priorities as we make progress on the three that we have identified.

It's very much an exercise of identifying all of the activities we need to do under each of those priorities, and then making sure we're making progress on them.

[The Chair, NDP, David Christopherson]

Time has expired and you're right on the button. Thank you.

Monsieur Giguère, you have the floor, sir.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Thank you, Mr. Chair.

First of all, I would like to reassure Mr. Hayes, who asked a very relevant question.

When I spoke with the Auditor General, it was not in a partisan fashion. I think that the Auditor General—and he can confirm this—can talk to any MPs who wishes to do so. In my case, I had a document that was published by the Conference Board of Canada and it was a faulty document. I therefore asked the most appropriate person to help me with this, and the Auditor General acted as he would have done for any other MP. I therefore do not think that I have overstepped my boundaries.

Mr. Ferguson, with respect to point 7, you mentioned that you carried out a follow-up concerning ten recommendations and that only five of them were implemented, when your objective was 75%. Were the recommendations that were adopted the most important ones, or did these people only adopt the easiest ones?

How do you explain this lack of follow through? When someone receives a recommendation from the Auditor General, it should be fully adopted. You set an objective of 75%, but the result was only 50%? Is that because of administrative incompetence among the individuals who need to follow these directives, or is it simply political sloppiness?

[Michael Ferguson]

I'll start by giving you the details of the recommendations, if that's helpful. For five recommendations, we deemed that the follow-up was unsatisfactory. We did a follow-up audit on two of these recommendations that had to do with internal controls over financial reporting. That was in our 2013 fall report, and it was following up on recommendations we had made in 2011, during the audit on internal controls over financial reporting. In two of our recommendations from that, we deemed that the activities of the organizations involved were not satisfactory.

The same report, the 2013 fall report, had a chapter on preventing illegal entry into Canada. In that, we followed up on a recommendation we had made in an audit in 2007, the follow-up to which we had deemed unsatisfactory. That was a recommendation to CBSA about improving the results of their monitoring of the lookouts they had put in place at the border.

Also in the 2013 fall report of the Commissioner of the Environment and Sustainable Development, there was a follow-up on two recommendations we had made in 2005 related to the ecological integrity of national parks. Again, these were all recommendations contained in audit reports that we had presented to Parliament. Sometimes we do a complete follow-up, so we look at all of the recommendations we have made in the past and we do a complete follow-up to say whether or not the progress was satisfactory. Sometimes we do an audit in a similar area, so we may pick one recommendation from the past.

We do those audits when we expect the organization has had enough time to carry out the actions they said they were going to. In this case, they had carried out only 50% of them, and we deemed that to be unsatisfactory and reported that assessment to Parliament.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Generally, when you make a recommendation, the representatives of a department will not say that they are not favourable to the recommendation and that they won't follow it. As we have observed in your reports, in general, recommendations are fully accepted. These are important recommendations, Mr. Chair, and individuals accept them fully. As a result, theoretically, these recommendations should also be fully implemented.

Mr. Ferguson, you say that you give them a reasonable amount of time to implement these changes. In that case, should there not be a sanction? Do you recommend that the individuals who have not met their commitments be called before the committee? How do we correct this situation?

[Michael Ferguson]

I think we probably established the target at 75% to recognize that occasionally it does take a few years to put in place improvements to deal with some of the recommendations. That is why our target was not set at 100%. But certainly, given that we have taken that into consideration in setting the 75%, we do expect departments to meet that.

Departments do agree with our recommendations, but that's why it's important for us to do this type of follow-up work. It's easy for them to agree and it's easy for them to say they're going to do something, but then there has to be a way of making sure they're actually doing it.

When the committee is choosing which audits to have hearings on, it is very important to consider whether any follow-up audit we have done has shown that a department's progress in complying with the recommendations has been unsatisfactory.

[The Chair, NDP, David Christopherson]

Mr. Falk, you have the floor now, sir.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Auditor General and your officials, for attending here today.

In your opening statement at point number two, you indicated that you completed 29 performance audits in the year 2013-14. Can you also give me the number of performance audits you completed for years 2012-13 and 2011-12?

[Michael Ferguson]

I'm just trying to see if I have that information. I'm not exactly sure where I.... I don't think I have that information with me right now in terms of the number of performance audits in each of those previous years. If anybody in the room finds it in the next few minutes, I'll give you the numbers. I can bring them back to the committee later on, if you would like.

[Ted Falk, Conservative, Provencher, MB]

I'll just explain why I'm asking.

In point number eight you give us percentages of the performance audits provided in your reports for every year that were reviewed by a committee, but there is nothing to make it relative to anything in particular, whether the number of audits was consistent from year to year, or whether for some reason there was an anomaly and the percentages changed.

[Michael Ferguson]

Well again, I certainly could say that the number of performance audits that we have completed has been in that 25 to 30 range, and I think it has been there quite consistently within that range.

It's not like one year we do only three performance audits, and then in another year we do 40 of them. We're consistently in that 25 to 30 range.

[Ted Falk, Conservative, Provencher, MB]

Okay, thank you. It would be nice to have that information, though, so that we can actually benchmark what the percentages are actually referring to.

[Michael Ferguson]

Sure, and we can get that total in terms of the number of audits. We'll go back a couple of years on that. Is that what you're asking for?

[Ted Falk, Conservative, Provencher, MB]

Well, your point number eight suggested that the committees are doing progressively less work, and I'd just like to confirm that with the actual data.

[Michael Ferguson]

What I will provide, going back probably to 2010-2011—

[Ted Falk, Conservative, Provencher, MB]

Your statement refers to 2011-12 and 2012-13.

[Michael Ferguson]

Okay, so going back to 2011-12 and 2012-13, we'll provide the number of performance audits that we completed in those years—probably a list of them—and then also indicate on which of those performance audits there was a hearing.

[Ted Falk, Conservative, Provencher, MB]

Thank you, and that would just give these percentages some relevancy.

[Michael Ferguson]

Sure.

[Ted Falk, Conservative, Provencher, MB]

I have another question. In the past your office has participated in peer audits with other auditors general. You've conducted audits on them, and they've also conducted audits on you. Can you speak a little bit about your experience with that and how you fared?

[Michael Ferguson]

The norm on that in terms of somebody doing a peer review on us is that there is one done during the mandate of each auditor general. The last peer review on our office was done in 2010, which was before my mandate started. We expect to do one probably later on in my mandate—maybe in 2018-19, somewhere out there—and have one done on our office to keep within that requirement of once within every mandate.

In terms of our activity, we participated in 2013 on the peer review of the United States Government Accountability Office. That peer review was led by Norway, but we also participated in that.

The year before, in 2012, we participated in the peer review of the Comptroller and Auditor General of India. That one was led by Australia, but again, we had members on the team, because when a peer review is done, there is one national auditor general's office that is the lead on it, but then the team is put together of members from other offices in order to have that different view of practice. Every time we participate in that, it's very helpful to our auditors.

The last time—as I said, in 2010—that there was a peer review done on our office, it indicated that we had let our audit methodology perhaps get out of date. We hadn't been in a process of making sure that our audit methodology was being kept up to date. After that was done, there was a project put in place in the office to renew our audit methodology to make sure we brought it up to date, and now we have an ongoing process to prevent it from becoming outdated again. That was probably the biggest change we made on the basis of that peer review.

They're always very good exercises in terms of, when you're on the receiving end, helping you understand what you need to be improving on, and when you're participating in it, it helps you learn from the practices of other organizations and it gives you exposure to how they conduct audits.

[The Chair, NDP, David Christopherson]

Thank you. That's time, Mr. Falk.

If I might though just to assist you, Mr. Falk, the last time we had the review, it was Australian-led. At the end of the day we actually held a hearing. The Auditor General was brought in the same way as we would bring in a department only the Australian auditors acted in the capacity that Mr. Ferguson acts in for us, and suddenly he's on the dime.

As you would expect, any organization run by people is not perfect. It's an interesting exercise, and as the Auditor General mentioned, it also helps him understand what it's like on the other side and gives their people a sense of fairness going through as they are dealing with the government of the day, knowing that the same rules they apply to others are going to be turned around and applied to them.

Overall, it worked very well. It was a very interesting meeting, and if you were here at that time, you would have found it fascinating, the depths they went into when they analyzed other national auditors general.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair. I wasn't here for that time, but I will be here for the next one.