Public Accounts Committee on May 13th, 2015

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

Mr. Matthews, you are going to be the keynote speaker at the CPA Canada awards of excellence in public sector financial management event. I think this would be a riveting topic for your keynote speech, don't you?

[Bill Matthews]

I don't know how much time they're giving me.

[Voices]

Oh, oh!

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

To go on to more serious questions, this question is actually going to be directed to Ms. Cheng.

You reviewed eight reports. There are probably numerous reports that you could have reviewed. I'm trying to understand why you chose the eight reports that you did. I think you mentioned in your opening comments that six out of the eight were for accountability and transparency. I think you stated that they were meeting their purpose. You chose a couple of others.

How many reports could you have chosen? I want to get an idea of what is out there and why you chose these particular reports. What criteria did you use to select these?

[Nancy Cheng]

Mr. Chair, we counted about 60 such recurring report requirements. There are ad hoc requests as well, so we're not counting ATIP requests or parliamentary requests in terms of information needed from departments and agencies. Working with the Treasury Board Secretariat, because they didn't actually have a complete inventory, we sat down with analysts to try to figure out what was the quantum there. On a recurring basis, there are about 60 of them.

At the outset, we would not have had a complete list to choose them from, nor were we trying to be representative in the selection. We wanted a bit of a combination of different natures. One for transparency, which seems like a good one, is the proactive disclosure of contracts. Larger contracts often should be subjected to public scrutiny, so information like that is put out there and people can see it for transparency purposes. Weighing that with some that would support accountability requirements and some that might be also for internal purposes as well, we wanted to have both the Treasury Board and the Public Service Commission, so that's why the staffing accountability report was chosen.

There wasn't a particular magic formula that we used, but we wanted a combination of different types of audit reports to choose from.

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

In terms of the level of reports we produce as a government, the quality of reports, and the relevance of reports, how do we compare with other jurisdictions? I know we didn't audit that, but you might have a sense of that. I'm going to put that question to Mr. Matthews, as well as maybe Ms. Donoghue, but I'll ask you first.

[Nancy Cheng]

Mr. Chair, that's not within the scope of the audit. We did not look at elements of that kind, so I have no comments to offer to you.

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

Okay.

[Bill Matthews]

I can only speak to the financial management piece. I keep fairly close contact with my colleagues in other countries. Canada's federal government has more reporting requirements than our counterparts do.

The quarterlies are the ones that step out. Other countries don't have the quarterly financial reports by department. Some provinces do, I think two if I recall correctly, but I'm going from memory. Other federal governments do not have that type of requirement.

We provide more on a departmental level than they do. I'm not aware of any other country that has a database that is as sophisticated as the one we have to query things. You can get transactional data, but to be very blunt, it's not as slick and not as user friendly.

[Christine Donoghue]

When it comes to staffing systems, the models vary quite a lot across the world. We're unique in the way we function with having a central commission but having it very decentralized by having delegated authorities to deputy heads.

The commission is often visited by a lot of delegations from across the world because they want to know how our system functions. They are generally amazed by the fact that we have so little reporting but so much data that is available and the way we conduct our business.

A lot of the information is also generated internally by the needs of deputy heads, which are not necessarily things the commission asks, but there is a huge accountability aspect surrounding staffing in the federal government.

It's very hard to compare, but basically we are seen as a model and we definitely are being studied by a lot of emerging economies that want to have better usage and better non-partisanship within their public services as well.

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

Chair, how's my time?

[The Chair, NDP, David Christopherson]

Not good. You have about eight seconds.

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

That's fine. Thank you.

[The Chair, NDP, David Christopherson]

Thank you very much. Well done.

Moving back over to Mr. Allen, you have the floor again, sir.

[Malcolm Allen, NDP, Welland, ON]

Ms. Cheng, I'm looking through your opening statement. In paragraph 7, and I think you referenced in the exchange with Mr. Hayes, there being 60 recurring reporting requirements. I think what you're talking about in here is the sense.... I'll just read it:

Furthermore, we found that the Secretariat has not maintained a comprehensive inventory and schedule of the 60 recurring reporting requirements.

What would be the importance of having that schedule or that inventory? Does it really matter whether they do or they don't? Is it important?

[Nancy Cheng]

Mr. Chair, from our perspective I think it would be an important inventory to have. First and foremost, you get a sense as to what kind of reporting burden you are putting on the various organizations out there. The schedule also helps them to anticipate when things might be coming down and when requirements might need to be fulfilled.

It's all in the spirit of trying to make sure it's an efficient way of getting information from the departments of agencies to help the central agencies do their respective tasks and also support accountability and transparency.

In all that exercise it's important to know what you're dealing with and when you have to deal with them. It would be an important and useful tool to help the reporting organizations.

[Roger Scott-Douglas]

Mr. Chair, I might add a small point. There is not a single composite inventory of all reporting requirements, the 60 the Auditor General mentions in the report. I should make clear a couple of things.

All Treasury Board policies that have reporting requirements are obviously publicly available, and that's all policies identified specifically in a section on reporting. It isn't as though individually these things aren't known.

We do think it's of great value. The predictability point that Nancy made where people have an understanding about what reports are due, when they are due, and all that kind of thing is, I think, an important way of reducing the burden. We've undertaken to make that inventory publicly available along with the schedule of those reports.

[Malcolm Allen, NDP, Welland, ON]

I appreciate your stepping in because I was coming to you with the next question around that specifically. I want to clarify it because I think you may have written one thing in the report, which was a response where you said you would get this cleared up by, I think, March 2016.

In your remarks you laid out the five bullet points of the things you want to do, which kind of includes the inventory, although it will take some time to put these in place.

I recognize, sir, those were opening generalized comments. I'm assuming the recommendation in the Auditor General's report and your response to it is that you intend to have the inventory ready by 2016. Is that correct?

[Roger Scott-Douglas]

Most definitely. In our management action plan tabled with the committee, we've certainly made it clear that it's our intention to do that. We'll move as quickly as we can, and every hope and expectation is that we'll get it done quickly.

This is just a terribly small point. One of the things that is very important is that if this inventory is going to be really useful, it be done in a way that is readily accessible to the people we're requiring to do it, so we're tagging all the reports and requirements to be available online. People will be able to link back directly to the policy. All of that takes just a little bit of time. It's not just putting a list; it's going to be a very interactive thing when we have it done so that it's truly useful and produces—

[Malcolm Allen, NDP, Welland, ON]

I fully understand that. The Auditor General wouldn't have asked that it be done if he didn't think it was useful. I've been here for a long time, and I know that they don't normally ask you to do things that are unhelpful or not useful.

Ms. Cheng, the other piece that you talked about is the quarterly financial reports that Mr. Matthews touched on. We are one of the few jurisdictions that do them. You said in your remarks that the reports, the quarterly ones, could be improved to better support accountability to Parliament. Could you tell me what that thought process was, how that would come about? What do you see, as the Auditor General's office, as to how we can make them of more value specifically to Parliament?

[Nancy Cheng]

Mr. Chair, as Mr. Matthews has pointed out, the purpose is really to try to help parliamentarians understand the end-year use of the funds. If appropriation dates are going to serve that purpose, if they're going to be more meaningful in terms of what the financial performance of a financial entity is, then an appropriation-based accounting would not necessarily be appropriate. So, really, it's for a better understanding as to how Parliament intends to use that information and what the best way is to provide that information.

Mr. Matthews also alluded to a database. Is that a better way to do it? In other words, it would be important to determine the real purpose of the quarterly financial statements, have a better understanding of them, then decide whether the form and the manner prescribed right now under the Treasury Board accounting standards, the TBAS, were the most meaningful way to meet that.

Right now as it stands, status quo doesn't seem to be serving one purpose or another, so it's basically just a form that people try to accomplish, providing some narrative and providing some use of appropriation information on a quarterly basis. The departments don't seem to be making much use of it. It's not clear to us how Parliament's making use of that, and the only thing that we saw was the PBO, and even then we thought that the format wasn't particularly all that helpful to them. So status quo, if it requires work from departments and agencies, and it doesn't seem to be serving a really good purpose, that's what we encourage the Treasury Board to look at to see if we can make improvements on that.

[The Chair, NDP, David Christopherson]

Very good. Thank you. Time's expired.

Mr. Aspin, you have the floor, sir.

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

Welcome to our officials.

I have a couple of questions for the Treasury Board officials, and perhaps Mr. Scott-Douglas, Mr. Matthews, or Ms. Whittle might want to chime in.

Both questions are specifically directed with regard to personal or commercially sensitive information.

Can you explain to us how the report on proactive disclosure of contracts is reviewed to ensure that personal or commercially sensitive information is not inadvertently released?

[Bill Matthews]

Certainly. I'll take that one, Mr. Chair.

Basically, the reporting instrument in question here is proactive disclosure, as was mentioned, of all contracts. Any contract above $10,000 has what's called a deeming provision, so the contractor is aware by signing the contract that the contract details will be proactively posted on the government's website on a quarterly basis. Obviously, there are certain exceptions to that, and what we're looking for is to make sure that we do not disclose anything that's personal information, like a SIN, or anything commercially sensitive that would basically take away a competitive advantage that an organization has carved out for itself.

The way most departments work in this fashion is—there's no requirement to do this—deputy heads of every organization that we're aware of as accounting officers actually approve the disclosure on a quarterly basis. The current system works quite well; we're not aware of any complaints, but it's obviously something we have to keep an eye on. It was one of the first concerns flagged when we started this practice several years back.

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

Thank you.

Can you explain to us as well the process departments go through to ensure that personal information is not inadvertently released through mandatory reports, such as those examined in this particular chapter?