Evidence of meeting #6 for Public Accounts in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was year.
A video is available from Parliament.
4:35 p.m.
Assistant Auditor General, Office of the Auditor General of Canada
Mr. Chair, the management letters are intended as a management communication. It was never, I guess, drafted or written with it in mind that it was going to go to a full committee discussion.
4:35 p.m.
Liberal
Kirsty Duncan Liberal Etobicoke North, ON
No, sorry, that's not what I'm asking. Just what is the process for follow-up to ensure that recommendations are implemented?
November 20th, 2013 / 4:35 p.m.
Assistant Auditor General, Office of the Auditor General of Canada
You're referring to our recommendations?
4:35 p.m.
Comptroller General of Canada, Treasury Board Secretariat
I think Ms. Cheng has indicated that first of all, there are.... In your first questions, you referenced performance audits. I think it's important to point out that this would not be classified as a performance audit. This is an audit of financial statements.
4:35 p.m.
Comptroller General of Canada, Treasury Board Secretariat
Notwithstanding that, as we see in the observations attached to this, the Auditor General does make recommendations.
4:35 p.m.
Comptroller General of Canada, Treasury Board Secretariat
So what we do inside a department when we receive an Auditor General's recommendation is.... First of all, they often point to a direction rather than specific action, so we have to translate that into some sort of specific action. We would make a plan. We would then execute the plan. Some mention was made of audit committees. Perhaps I can just explain the role of an audit committee in this process, because they do have a role.
4:35 p.m.
Liberal
Kirsty Duncan Liberal Etobicoke North, ON
I'm concerned that it's been ten years for one group where there are serious concerns, and it's going to be another three years. Is it possible to table what the follow-up process is?
4:35 p.m.
Comptroller General of Canada, Treasury Board Secretariat
Are you asking for a process in general? I thought your question was about a process in general. Now you're returning to one specific instance. So perhaps if you wish to know about one program—
4:35 p.m.
Comptroller General of Canada, Treasury Board Secretariat
All right, so the process in general, as I started to say—
4:35 p.m.
Liberal
4:35 p.m.
Liberal
Kirsty Duncan Liberal Etobicoke North, ON
Thank you.
How accurate do the government's consolidated financial statements have to be to receive a clean audit opinion?
4:35 p.m.
Assistant Auditor General, Office of the Auditor General of Canada
Mr. Chair, in order to receive a clean opinion, we have to conduct sufficient audit procedures to make sure that there are no material misstatements. In that process we look at the different cycles of businesses, we look at the various financial statement line items, and we have audit procedures to audit them.
Because the Government of Canada is composed of many, many activities in more than 100 departments and agencies, we then decide on the larger ones that we would do more work on, and the smaller ones, it stands to reason, we would do less work on. We roll up all of those findings into an overall account to sort of say what some of the differences are that we found.
For example, in concluding the 2011, 2012, and 2013 public accounts, we had discussions with the government and the government made $1.5 billion worth of adjustments to the financial statements in terms of the statement package that you see here. When we find differences, we discuss them with management and make sure they understand why we say that those are the differences. When they come to an agreement on that, they make adjustments to the financial statements.
4:40 p.m.
Liberal
Kirsty Duncan Liberal Etobicoke North, ON
I'm going to come back to that.
Is a balanced budget in the 2015-16 fiscal year realistic?
4:40 p.m.
Assistant Auditor General, Office of the Auditor General of Canada
That would not be something that is within the scope of the audit of the public accounts.
4:40 p.m.
Liberal
Kirsty Duncan Liberal Etobicoke North, ON
Fair enough.
Can you table with the committee what the requirements are to receive that clean audit opinion?
4:40 p.m.
Assistant Auditor General, Office of the Auditor General of Canada
It would be very difficult to table a process as such. In the auditor's report, we clearly indicate that we follow Canadian auditing standards so, essentially, we'd be tabling the standards.
4:40 p.m.
Assistant Auditor General, Office of the Auditor General of Canada
I don't think it's a practical way to help the committee.
4:40 p.m.
Liberal
Kirsty Duncan Liberal Etobicoke North, ON
Thanks.
In your report, you say you continue to find significant errors. Can you elaborate, please?
4:40 p.m.
Assistant Auditor General, Office of the Auditor General of Canada
This would be when we conduct the inventory observation at year end—or close to year end—at DND. We notice that there are quantification differences and there are pricing differences. So when we actually accumulate those kinds of findings, they amount to fairly significant differences—over $100 million, for example, in the case of DND. Overall, the adjustments are about $1.5 billion, and I think DND's share is about $200 million or $300 million.