Public Accounts Committee on May 14th, 2019

[Sylvain Ricard]

I don't believe so.

Mr. Hayes, do you have anything to add?

[Andrew Hayes]

We discussed our request with people at the Department of Finance. However, budget discussions take place in secret at the cabinet level. We don't know why we didn't receive all the funding we asked for.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

I see. I think we may need to delve a bit deeper.

You told the committee that your funding has remained relatively steady over the past few years.

As far as your office's independence is concerned, do you have total independence when deciding which issues you will and will not study, or does someone else make those calls? If you are the one making them, how do you go about it? Do any third parties try to influence your decisions?

[Sylvain Ricard]

I'm going to answer your question as it relates to two or three activities.

How do we choose which audits we are going to perform? We start with a risk analysis, which involves looking at the full range of government programs and identifying priority areas. We also examine issues that members of Parliament and the public ask us to look into. It is that input that informs our decision-making. I'm referring to the performance audits that are reviewed by the committee.

The financial audits and special examinations we conduct are legislation-based. Those activities are set forth in legislation, so we have no discretion in that regard. Once a year, we have to audit the financial statements of 80 to 90 federal and territorial institutions. We also have to examine the federal government's public accounts, which is, in fact, our biggest financial audit.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

My next question ties in with the previous one. When you have a limited budget because of inadequate funding, do you ever have to drop audits you were planning to perform? If so, do you decide which ones to walk away from, or do you discuss it with others? How does that process work? It is those decisions and that process I'm interested in.

[Sylvain Ricard]

As we mentioned earlier, we had to cancel five performance audits that we were planning.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Why those five? That's what I'd like to know.

[Sylvain Ricard]

As my colleague said earlier, those five audits were dropped because they were the least important, for lack of a better term.

Let me be clear, though. That label is a bit artificial. In our view, all of the audits we plan to undertake will add value and have an impact. Our audit selection process is based on a residual risk assessment of government programs. The reason we choose one audit topic over another is that it presents a higher level of residual risk.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Thank you.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Ayoub.

Mr. Davidson, please.

[Scot Davidson, Conservative, York—Simcoe, ON]

Thank you.

Picking up on the five audits that were cancelled due to the budgetary restraints, one that I deem important would be cybercrime. It's a current issue.

Were any of those five audits started at all and then you just looked at it and said, “We're out of money; we can't proceed with them”? Had any been under way, or were they deemed of least importance early and weren't started?

[Sylvain Ricard]

I'll let my colleagues answer this, but for the most part it depends upon the way you define “started”. As I noted earlier, there's a whole planning process. Part of the planning is also part of starting the audit but they were very early in the process.

[Scot Davidson, Conservative, York—Simcoe, ON]

Just getting back to your IT, have you run into any audits thus far—let's say when auditing the Department of National Defence or something else—that cause you to say, our software now is severely inhibited because it just doesn't interrelate, audits in which you have had to do more manual work because of software not interrelating?

[Sylvain Ricard]

What I'm going to offer here is to say this. Over the last two years we have started on a small scale to invest in software for data analytics. We see huge potential coming out of that. As I mentioned earlier, it's so powerful that we decided to use it for our own management of our own organization and to do data mining on our own internal data.

We have two or three individuals who specialize in that business. We could use 20 and make much more relevant and better audits. We still do the audits; we do the minimum. You may have read in the departmental plan that we reproduced the last message from the former auditor general to the staff in which he refers to adding value at three levels—transactional and so forth. Without those more modern tools you remain at the base. You issue your audit report at the end of the year, but you just deliver a basic audit report, no value added, just bare bones.

[Scot Davidson, Conservative, York—Simcoe, ON]

Thank you.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Davidson.

Madam Mendès.

[Alexandra Mendes, Liberal, Brossard—Saint-Lambert, QC]

Thank you very much, Mr. Chair.

I'm starting to get some answers, and that helps. What I've just gotten from finance is that in budget 2018 the investment of $41 million is over five years, so the $8 million is recurring every year.

[Sylvain Ricard]

Yes. It's an annual increase.

[Alexandra Mendes, Liberal, Brossard—Saint-Lambert, QC]

Okay. It's an annual increase and will come every year. It's $41 million over five years that is invested in the office.

[Sylvain Ricard]

Our annual ongoing level of funding has been increased by $8 million.

[Alexandra Mendes, Liberal, Brossard—Saint-Lambert, QC]

For five years.

I've asked our analyst to to come out—

[The Chair, Conservative, Kevin Sorenson]

Do you want to clarify that?

[Sylvain Ricard]

I don't remember seeing something that says that after five years it's being removed. I think it's a more a matter of—

[The Chair, Conservative, Kevin Sorenson]

It's ongoing?

[Sylvain Ricard]

—the planning horizon at finance being over five years. It shows, therefore, for five years.