Public Accounts Committee on Feb. 18th, 2016

[Paul Lefebvre, Liberal, Sudbury, ON]

I'm new to this committee and to Parliament, but in business circles we usually have a strategic plan, targets, benchmarks, an evaluation review, and then we start over. Can we assume that every program, every department has a strategic plan, targets, and benchmarks as to the what and the how, and can that have an effect on how some are successful and some are not successful?

[Michael Ferguson]

When we go in and do an audit, we set criteria. Our criteria on the governance side, on how something is managed, will often include those types of things. I think if you look at the audit in here on military housing, you will see we identified that they don't have that overall plan in place. I think you'll see in the case of Canada pension plan disability that they did put in place a plan for the transition to set up the social security tribunal, but when you look at all of the assumptions in that transition plan, they just weren't realistic. They assumed that each member of the tribunal would be able to make 29 decisions a month. They're making only six and a half. They assumed that the tribunal would have roughly 90 employees when they started. They had only 21 on day one. That was a case in which they did some transition planning, but it just didn't capture what the reality of the situation was going to be.

In our audits, we expect to see those fundamentals of program management. In these reports, we bring to you situations in which either it is happening or it's not happening.

[Paul Lefebvre, Liberal, Sudbury, ON]

On the project management side, can we assume there are people with project management backgrounds in each of the departments and programs, and that they're the ones who can help make sure the programs and the plans are taken into account and ensure that they're promptly put forward?

[Michael Ferguson]

There are a number of people throughout the civil service who have those types of skills. I think it's always a bit of a risk though to assume that every department has all of those skills at the level they might need for whatever they're trying to do at any given time. A number of those skills exist, but in terms of making sure that the government programs are delivering, if we were all willing to assume that all of that was happening, we wouldn't need audits.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much.

Mr. Godin, you have five minutes. Go ahead.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Thank you, Mr. Chair.

Mr. Auditor General, my fellow members around the table and I were elected by Canadians, our constituents, to keep a vigilant eye on the government's activities on their behalf. Since we can't fix all the problems at the same time, if possible, could you or your team list the priorities that have the greatest impact, from most to least? Which ones should be dealt with soonest? Which files should we focus our efforts on in terms of making improvements and ensuring progress?

As I said, we can't solve everything all at once. Are you able to tell us which recommendations are the priorities that should be implemented first?

[Michael Ferguson]

As a general rule, we make our recommendations in order to fix the problems. We make a lot of recommendations, and all with a view to fixing significant problems. It's not really possible to say which is the most important recommendation. As a general rule, our goal is to make recommendations that can be implemented.

I think in general, we are always trying to take that approach to the recommendations, which is that there are things that can be put in place that aren't unrealistic. I don't think you will hear us say, for example, that you need to put in place a new computer system to deal with a problem, because it can be a long complex process to put that in place.

We're trying to identify things that can be done realistically within a reasonable time frame. This committee will therefore do a number of things that one would expect of a department: bring an action plan forward, say how they're going to do it, and put those things in place within a reasonable time frame. We're trying to make those recommendations real and realistic so they can be implemented.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

I'm not asking you to do our job for us. I know that we have distinct mandates, but I'd like you to help us by identifying the targets, which, as you said, can all be achieved in the immediate and medium terms. They're quite realistic. They aren't major recommendations; there are just many of them.

I appreciate that it's a bit tough for you to identify them, but let's look at what's really important. Which recommendation would have a positive impact on the day-to-day lives of Canadians soonest?

[Michael Ferguson]

I think if you look at the different audits that we have brought forward here, they have dealt with a number of different topics. They involve a number of different departments. We've made recommendations. The departments have agreed with all of those recommendations.

To every one of our recommendations, the departments have replied. Their reply is in the report. In some cases they will even have said that they're going to have it done by a certain date. I think it's the usual practice of this committee to get an action plan from the departments.

You know, it's not like there's only one department that has to try to put all of these recommendations in place. There are many different departments. We try to keep the number of recommendations we make reasonable. We're not making 30 recommendations to each department.

I think the expectation of this committee should very much be simply, for each of these audits, to get an action plan from the department, get the department to tell you when they're going to do things and by what date they're going to do it, and probe that so that they seem to be telling you a reasonable time frame and it's giving you something that you can hold them accountable to.

I think there is a diverse number of topics and a diverse number of organizations. I would say your expectation should be that they will tell you how they will do every one of them and that you will follow up on that. I wouldn't say to put these ones to the side, but I think it's reasonable to say, “Okay, we expect all of these to be implemented.”

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Ferguson.

We'll now move back to the government side and to Mr. Sidhu.

[Jati Sidhu, Liberal, Mission—Matsqui—Fraser Canyon, BC]

Thank you.

Mr. Ferguson, report 5 looks at housing in our country. With our aging population, we have a huge issue with housing. There are people living cheque to cheque. If they don't receive one cheque, they're homeless next.

The way I see it, in terms of the armed forces housing issue, it seems that they have a lot of funding. With due respect to our men and women in uniform, who put their lives on the line for our safety, how do we rectify this? Does it need to be looked after in the budget? You touched on the action plan. I want you to put a little more light on this and on how we address this issue. They were allocated $6 million to be spent in two months.

Those kinds of issues are a bit troubling to me when a lot more people in our country need housing besides the armed forces personnel.

Thank you.

[Michael Ferguson]

I think the first issue we raised was that National Defence still hasn't identified who among its members should be getting access to military housing, what type of housing that should be, or where it should be.

For example, we identified in paragraph 5.27 in that report that an external panel was brought in, and that external panel's recommendation was for 5,800 military housing units in 30 locations across the country. They said that's what the inventory should be: 5,800. After National Defence looked at it, they didn't agree with what the external panel recommended and they came back with a requirement of almost 12,000 units across 24 locations.

There, you have two different organizations looking at the issue of what the size of the inventory should be. One came back with a number that was twice as big as the other one's number, so I think the very first thing is to simply get an answer to that question. What is it we're trying to provide? Where do we need to provide it, and whom do we need to provide it to?

Their policy says things like if the local market is deep enough to be able to provide housing, then there's no need for the military to provide housing; the local market can provide housing. But despite the fact they know that in locations such as Halifax and Valcartier the local markets are deep enough, they're still providing some housing there.

Again, these are all things that just need to be looked at from that sort of overall planning and policy point of view. It's just doing the analysis and getting an answer to those questions—who, where, and what—in terms of looking at that whole inventory of housing.

[The Chair, Conservative, Kevin Sorenson]

Ms. Mendès, you have a minute.

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

My general understanding of what you've been telling us this morning is essentially that our job, as the committee, is to follow up with the departments on how they will implement the recommendations contained in the report. The general message I took away from your presentation is that we need to make sure that the departments follow through on these recommendations within a reasonable time frame.

[Michael Ferguson]

We will do follow-up audits from time to time on the same topic. Again, I think the thing that's important for everybody to understand is that it takes us about 18 months from the point in time when we plan an audit until the point in time when we can bring it here to you and have that all done.

We also need to give the departments some time to put the recommendations in place, right? If we're making recommendations for January 1, 2016, probably we need to give them a couple of years to get that all resolved, and then we might come back and do an audit, and then it would be 18 months. Even if we were going to do a follow-up audit on these topics, the absolute soonest we would be back here would probably be four years.

That's why it's important.... This whole thing isn't just about us, right? This whole thing is very much what I'll call a partnership between what we do and what the committee does. The committee has the ability to get those action plans from the departments, and the committee can call the departments in periodically and ask them what's going on.

Yes, we'll come back and do some follow-up audits on it, but if the only way that these things are going to get dealt with is that we're going to come back with an audit, then it's going to be a very slow process to actually get things dealt with.

[The Chair, Conservative, Kevin Sorenson]

Thank you.

We'll now move to Mr. Christopherson, for three minutes, please.

[David Christopherson, NDP, Hamilton Centre, ON]

Thanks very much, Chair.

Thank you again, Mr. Ferguson.

I'll just pick up on that last point. For emerging democracies, it's been the experience of those of us, like me, who have done election observation missions that once you get a relatively free and fair election that reflects the political will of the people, the very next thing you need in a parliament is to establish an independent, fully funded auditor general system matched up on the political side in partnership—to echo the Auditor General's words—with a public accounts committee that knows what it's doing and doesn't get itself constantly tied up in partisan politics. As you can see, we haven't really talked much about partisan politics here, and yet we've been talking about a big part of politics, which is accountability and transparency.

I take this opportunity to urge the new members particularly. This committee travels only once a year. We're not a big travel committee. We have an annual conference for all the public accounts committees in Canada—provincial, federal, and territorial—and we match it in parallel with the auditors general who meet annually, too, and then they hold separate meetings. Then we hold joint meetings to build on that relationship between the two components. When these are working right, Parliament is serving the people the way it should in terms of accountability, and when it breaks down, which is usual—it's hard to make these things work right—the people are really the ones let down, and it's often for partisan reasons.

I probably have no more time left for questions, but I will just try to focus on report 4 and information services. They identified that they would save $56 million a year. You've identified in the audit, Mr. Ferguson, that they went ahead and booked those savings before they really had them.

How would that be handled in the normal course of events? As well, since I don't have a lot of time, if the way they did it is in any way problematic, why would that not be picked up by an internal audit?

[Michael Ferguson]

Well, it was problematic from the point of view of the $56 million, which was supposed to come from the email transformation initiative. Improving how email is delivered was supposed to generate savings, but what happened was that initiative wasn't complete and in fact still isn't complete. That initiative wasn't complete, but the $56 million was taken out of their budget.

That automatically meant that Shared Services Canada needed to figure out other ways to deal with that. I don't know specifically what it was, but it would mean that the organization would have to do that.

When there was this intention that there would be a budget reduction based on savings from a project, but that project isn't complete, then there isn't an alignment between the work and the budgeting. That would cause the organization to have to figure out other ways to deal with what was then essentially a $56-million reduction in funding, without an equivalent $56-million reduction in costs.

[The Chair, Conservative, Kevin Sorenson]

Your time is up. Thank you.

We'll now move back to the government side.

We have Madam Shanahan.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

I'm also trying to get my head around how to choose the priorities. There are so many competing priorities.

One thing I'm looking at is on the scale of competing priorities. Anything that's a risk to persons or to public security, I think, is number one. Second is risk to resources;, in other words, the money spent. Then I like to look at whether the problem is actually solvable, because there are some problems that we cannot solve. That's where I look at whether there is a realistic way of solving the problem.

As I go through the list of the reports here, I think we get an opportunity to read the full report that's available to us. These are the reports you've chosen, but the full audit report is how big?

[Michael Ferguson]

On any given audit, we try to keep each audit to anywhere between 75 and 120 paragraphs, not pages. We try to do a couple of things: we try to make them accessible so that they're not too long, and we also try to make sure that our recommendations are in fact—like you were talking about—solvable. We try to make sure, when we're making our recommendations, that they are realistic and that they are things that can be implemented. We're always trying to put the emphasis on that.

In terms of the audit reports themselves, we're trying to be respectful of the fact that you folks have lots of things to read, so we try to keep them as concise as possible and as easy to navigate as possible. This one I'm looking at is essentially 100 paragraphs long. We issued seven, so there's a lot of information there. We are always cognizant of the fact that we need to try to deliver our message as concisely as possible.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

That's obviously going to be our work in the weeks and months ahead: to question further and to dig deeper.

Have I captured essentially the three things that we need to be looking at?

[Michael Ferguson]

The first thing you captured was essentially that whole question of the risk, the risk to security, the risk to resources, and those types of things.

Yes, that's fundamentally something we're looking at, but we also make an assessment of what the controls are around that. Sometimes we may look at something that is inherently risky, a risky activity such as national defence. Things that the military does are inherently risky, but if we look at something National Defence does, we could say they seem to have adequate controls around it. They have ways of minimizing, or managing, or dealing with that risk, and we think that they're probably doing a good job of that.

We might say that even though that's a risky area, the controls look all right. We might look at something that is maybe a little less risky but where the controls are not there, because we think that means the end impact is not as good as it needs to be.

We will do that additional thing and not just look at the risks, but also look at the types of controls that are in place. We always try to make sure when we're making recommendations at the end that they are things that can be implemented.

Throughout my career I've been on both the giving and receiving ends of Auditor General recommendations. I think I understand the importance of being able to go to a department and say, “You need to do these things.” The department can look at us and say, “Yes, we agree that we need to do them and it's doable.”

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you.

[The Chair, Conservative, Kevin Sorenson]

Thank you.

We'll now move to Mr. Godin, for three minutes