Public Accounts Committee on Feb. 8th, 2017

[Gina Wilson]

I think a lot of those examples that you've provided are a good indication of precisely why we need to improve our ability to report horizontally, match up the costing framework with the performance reporting, and so on.

I think it was made pretty clear on Monday that we have a ways to go on that front. Deputy Malcolm Brown was here and spoke at length about the need for us to improve our ability to do just that, and he has made some commitments along those lines. We'll be able to report back to you as to whether that has in fact—

[Paul Lefebvre, Liberal, Sudbury, ON]

Thank you, and I appreciate that, but—

[The Vice-Chair (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

Paul, I am sorry. You're more than over time.

[Paul Lefebvre, Liberal, Sudbury, ON]

Okay, I'm way past. I'll come back to it.

[The Vice-Chair (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

Mr. McColeman, please, you have seven minutes.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Thank you, Chair.

Thank you to the witnesses.

My first question is to the Treasury Board about the document we received that documents the Auditor General's recommendations and then the departmental response. I want to refer to this, the first two columns. It reads:

The Treasury Board of Canada Secretariat should improve its guidance on the management and reporting of horizontal initiatives to clarify roles and responsibilities for lead and partner departments and agencies responsible for reporting accurately and completely on horizontal initiatives; clarify guidance for lead and partner departments and agencies reporting a consolidated view of progress, results, and costs for initiatives over the years; and clarify the requirements of a financial costing framework for horizontal initiatives.

The departmental response was quite interesting when I read the words, and I'll read it to you. It said, “Agreed”. Then it goes on to a fairly lengthy narrative after the word “Agreed”. It reads, “The Treasury Board of Canada Secretariat will update its guidance on the managing and reporting of horizontal initiatives...”. This is where I want to ask for some clarification. The next words are, “as appropriate”.

It puts in a condition that the Auditor General did not put, which is appropriateness, and then, “to clarify the expectations for the lead and partner departments and agencies involved in horizontal initiatives.” I'll end it there because there's a quite lengthy narrative that goes on beyond that.

It appeared to me when I read this—and I'm asking you in a forthright way—that the Auditor General's recommendations were pretty clear, and you agreed to them, but then there was the need to, I suppose, clarify the conditions under which the Treasury Board Secretariat would do these things. I find that to be somewhat of a rewrite of what the Auditor General had recommended be accomplished.

Am I correct in my interpretation of the narrative you provided after you agreed that these things should be done?

[Brian Pagan]

Thank you, Mr. McColeman.

I believe that you are correct in saying that the Treasury Board Secretariat agrees with the recommendations of the Auditor General.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Right.

[Brian Pagan]

There are three areas in which we are going to pursue improved guidance. They are clarifying the roles and responsibilities of leads versus partners, clarifying guidance with respect to a consolidated view of reporting, and clarifying financial costing and reporting.

We have existing guidance we can build from. My understanding of “as appropriate” is that there's no condition there. We are to take what we have and to refine and hone that guidance so that it is crystal clear to departments what is required with respect to the utilization of resources allocated for horizontal initiatives and how to report those initiatives.

Our existing guidance identifies an end-to-end business process. It starts with identifying the need. Can you solve it vertically, or do you need to work horizontally to solve an initiative? It sets out how you would go about identifying that need and the consultations required. Then it explains the process around a cabinet approval. One of the key requirements is to identify how we're using resources already allocated to departments, and how those new incremental resources would be brought to bear to solve this horizontal approach.

The third step is to create an inventory of programs. There are some 1,300 or 1,400 programs out there in the Government of Canada. In some cases we need to create new ones, but in others we can leverage existing resources. The approach to horizontal initiatives is meant to tap into what is out there already, what we can draw from, and what existing programs, performance information, and data can be brought to bear to support the desired outcome.

Then we get into Treasury Board approval processes and the allocation of monies from Treasury Board approved by Parliament through the estimates.

Then we have guidance on performance measurement, and we are very clear in the guidance that there is a distinction to be made between the lead and the partner department. I believe we can further clarify what the lead department requires from partners and how they are to roll up that information in terms of a consolidated view. Then there's guidance on execution, program implementation, annual reporting, and then finally a close-out report.

I think that provides a very healthy starting point from which we can work with our partners, confirm what is clear and remains in place, and perhaps identify where they may need some additional support and guidance in terms of putting appropriate reporting in place.

What we heard on Monday was that there is some need to work with departments on more specifics on performance measurement, performance indicators, and perhaps a clearer distinction between moving beyond inputs and outputs and into outcomes.

[Phil McColeman, Conservative, Brantford—Brant, ON]

I'm happy to hear your response to the question. However, it does beg the question, to go back to this of who in your department would have written this departmental response. Are you aware of this document? Who would have written it?

[Brian Pagan]

I am, yes, absolutely. As always, these are team endeavours. We have a responsibility centre within my sector that liaised with the AG on this audit and worked very closely in understanding the recommendation and crafting a response. This would have been brought to me for my approval, and ultimately the secretariat president would agree to the commitments that TBS makes with respect to the OAG recommendation.

[Phil McColeman, Conservative, Brantford—Brant, ON]

The response you gave today at this meeting is very different from what I read. I appreciate that response because, interpreted the way it reads, this document means that you agree with the recommendations of the Auditor General but you're going to do it your way, and you're telling the Auditor General that there are conditions. It talks about how you will update the guidance and clarify the roles and expectations of the reporting of consolidated progress and such. It goes on to talk about your doing that, which is very different from the wording the Auditor General gave you.

I appreciate your clarification here today. If this is the information we're getting at committee to better understand that your department is taking the proper initiatives, this document was very misleading compared to your testimony here today, in my opinion.

[Brian Pagan]

I'm glad to have clarified that.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Okay?

[Brian Pagan]

Yes.

[Phil McColeman, Conservative, Brantford—Brant, ON]

I'm glad you've clarified it.

[The Vice-Chair (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

If I may, we'd ask the department if we could have a revised action plan, at least on that issue, to answer—

[Brian Pagan]

I'm sorry, Madam Chair. I missed that.

[The Vice-Chair (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

Could we have a revised action plan to respond to Mr. McColeman's comments, in the language that was used?

[Phil McColeman, Conservative, Brantford—Brant, ON]

Thank you.

How much time do I have?

[The Vice-Chair (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

You are done with your time, sorry.

Madam Cheng.

[Nancy Cheng, Assistant Auditor General, Office of the Auditor General of Canada]

Madam Chair, perhaps I can clarify a little.

The column that's called “Response” is the official departmental response to our recommendation. It is included in our audit report. Perhaps the member is seeking clarification on the action that they're going to take. If they're going to revise this at all, it should be the other columns to clarify what they think they would be doing, as opposed to changing that column.

At this juncture, that's captured and cast in terms of the official response. It doesn't serve a lot of purpose to change that column, because it's already in our report.

[The Vice-Chair (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

It's duly noted, thank you.

Now it's Mr. Christopherson's time.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you very much, Madam Chair.

Thank you all for being here today. This is a rather extraordinary meeting. It's not usual for us to take four hours on one chapter. You can understand the importance we're placing on this.

In the earlier meeting—and I won't do it again—we went out of our way to make the case that Mr. Lefebvre has outlined so adequately in terms of the seriousness, and how it seems to be pervasive everywhere that the indicators needed to make accurate determinations are not there.

Yes, at the last meeting we focused a lot on what they were going to do about it, because they were the agencies. But I want to spend a little bit of time today with Treasury Board, because at the end of the day Treasury Board carries the biggest piece of responsibility.

By way of evidence, I would point to the report of the Auditor General, on page 5, under “Findings, Recommendations, and Responses”, “Achieving results from the Beyond the Border Action Plan”, paragraph 1.15, under the heading, “Overall message”, which reads:

Overall, we found that departments and agencies had not developed performance indicators to assess how initiatives have enhanced security and accelerated the legitimate flow of trade and travel.

In the comments from the Auditor General the other day, he was a little more blunt and a little tighter in that message. He said:

Finally, the Treasury Board of Canada Secretariat did not give departments and agencies specific guidance on costing and measuring program results, which led to different interpretations and inconsistent financial information. We concluded that although departments and agencies met many of their commitments under the action plan, they achieved limited results for the intended benefits. They also had few performance indicators to use in assessing results.

That's all the responsibility of Treasury Board, to give these agencies and departments their marching orders on how they should be doing this, yet, Mr. Pagan, you roll in here today and the best we get is—and I'm quoting you—that in his 2016 fall report, “the Auditor General found that there was room for improvement in this guidance.”

Wow, talk about understating the issue.

Now, I appreciate that in your comments with Mr. McColeman, things may be fleshing out a little bit.

I'll start with a general question. How did we get to this situation? How could something so obviously important go so long without being seen? Why are we here?

[Brian Pagan]

We're here because the Auditor General has produced a recent report that assesses progress on the beyond the border action plan and has identified some scenarios for improvement. As I said in my remarks, we agree with those recommendations.

If I can be very specific about our responses, I did indicate in a previous reply that this is an ongoing journey for us in two respects. Performance information and results-based management in the Government of Canada is an ongoing priority for the public service, making sure that we get the best value for resources provided. It has benefited from the recent attention of the new government. We have a new TB policy on results that aims to clarify and simplify the expectations of departments in reporting to Parliament.

Specifically, with respect to horizontal initiatives, I know this issue surfaced to a certain extent on Monday, but I think it's important to reiterate here. Our accountabilities are vertical. In a Westminster system, ministers are responsible to Parliament and Parliament appropriates funds for departmental programs. We recognize certain challenges where that vertical accountability is not always the best way to organize—