Public Accounts Committee on April 5th, 2017

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

Thank you, Chair.

I want to extend my compliments to you, Mr. Ferguson, regarding the actual presentation of this information. I know when you do audits, you go in and you bring us back information, and you give the departments information. Do you give them best practices in terms of presenting things? This presentation today and the materials you provided, for me, are a template for other parts of government to use. Do you recommend those kinds of things when you're doing audits?

[Michael Ferguson]

We don't say to departments, “Here's how we do it, so you should do it this way.” We point out where we think the way they're presenting information isn't conveying the information clearly. We hold ourselves to the same standards. We always go back and look at what we're doing and ask ourselves whether we're preparing things clearly.

You will see in our indicators that on some things we didn't meet our targets, and we're not trying to keep that information from Parliament. We set some targets—some of them we meet and some we don't meet. We feel that our job is to report to you what our situation is. We try to point out to departments when we feel that they aren't living up to those same standards, but we hold ourselves to the same standards we hold departments to.

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

When I look at the raw numbers, it appears that you're continuing with a pretty level budget, not much increase in spending, yet you're doing more audits, whether or not they're of a different nature, in your projected business plan. Given that there are internal pressures to meet increased payroll costs and other added expenses that come along in your budgeting process, you're keeping it level. How do you explain being able to manage in this fashion over your planned period for the business plan you've presented us?

[Michael Ferguson]

One thing we are doing right now is that we are going through a thorough review of our budget level to get a good picture of what the next number of years will look like for us. Regarding the year in question, in terms of the budget, things are staying more or less the same in respect of our number of full-time equivalents. Maybe we increased the number of audits a little bit, but some of that can be based on when an audit gets released, as opposed to all of the work on the audit. The number of hours on audits is essentially the same.

In the year in question, we are having to use up our carry-forward. In past years, we didn't use all the money allotted to us and we had an amount that was carried forward. When a department doesn't spend everything allotted to it, it can carry that amount forward. For the last number of years, we've been able to keep rolling that forward without ever having to use it. The idea was that if we ever needed to use it on a big one-time expenditure, that's what we would do.

For the 2017-18 year, we're going to end up using that carry-forward to keep our operations at the same level. That indicates that we may end up being under more severe budget pressure by the time 2018-19 comes around, but we're working through that right now. We are doing a full analysis of our budget, and we are trying to work that issue through the system. Things are tightening on us because we have had to use that carry-forward.

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

Can you give us a ballpark figure of what that carry-forward amount would have been?

[Michael Ferguson]

It would have been around $3 million.

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

Still, on a budget of this size, it's admirable that you're able to keep your costs under control. Payroll is perhaps the major cost, and that's ever-increasing. Congratulations on that front.

Those are all my questions, Mr. Chair.

[The Chair, Conservative, Kevin Sorenson]

Thank you.

We'll go to Mr. Weir.

[Erin Weir, NDP, Regina—Lewvan, SK]

Thanks very much for appearing before our committee for a bit of an abbreviated sitting. I wanted to ask about some of your targets, specifically the target of having 65% of your reports reviewed by parliamentary committees. I'm wondering how you or your office arrived at that figure.

[Michael Ferguson]

Actually, we probably put that in as a target a couple of years ago. It would have been based on looking at historical trends and how many reports we produce. First of all, we would probably have asked ourselves how many of our reports the public accounts committee would have the capacity to look at, also taking into account that our reports are of value in some instances to other committees. Then there are the reports of the commissioner of the environment and sustainable development, which go before the environment committee.

We would have put all of that together based on historical trends as well as the number of meetings we thought the public accounts committee would hold. At that point, we would have determined that about 65% of the audits we produce, given the number of audits we were producing, would be of sufficient interest to parliamentarians that these audits would end up being the subject of a committee hearing.

[Erin Weir, NDP, Regina—Lewvan, SK]

When you say it's based on historical trends, you noted in your opening remarks that there had been a significant increase, in just the past few years, of the percentage of your reports reviewed by parliamentary committees. Are you suggesting that historically it was closer to 65%, and it had fallen lower in recent years, and now it's coming back?

[Michael Ferguson]

If you go back over a 10-year period, I think that, yes, you will see a wide variety in the percentage of our audits that were subject to a committee hearing. Some of that, as was asked in the previous question, may have been because of election years, when there aren't as many sitting days for committees. We've had to factor some of those types of things into it as well.

[Erin Weir, NDP, Regina—Lewvan, SK]

Does it make sense to conceive of 65% as an annual target, or is it more an average that we would expect over time, with potentially significant variance from one year to the next?

[Michael Ferguson]

If the number of sitting days is reduced for whatever reason, then obviously the 65% would have to be adjusted. I think the 65% would be our target for any year when there are a normal number of sitting days.

[The Chair, Conservative, Kevin Sorenson]

I'm going to cut us off here, just to be safe, so that everyone gets the chance to get to the vote. The bells are ringing and the lights are flashing. We will come back immediately after the vote. We still have six minutes to get there. I will pick up with Mr. Weir again. You still have time.

We're going to suspend. I apologize to our guests for this. This happens on occasion. With a minority government, it happens much more, but with this Parliament it seems to happen a fair bit as well.

[The Chair, Conservative, Kevin Sorenson]

We'll call this meeting back to order. We've just come back from votes, so we have quorum.

We'll now go back to where we ended up.

Mr. Weir, you still have nearly five minutes left.

[Erin Weir, NDP, Regina—Lewvan, SK]

Thank you very much.

I'd like to ask about your executive committee. I believe you've reduced the size of it and you plan to further reduce the size. I wonder if you could just tell us about how that might affect the functioning of your office.

[Michael Ferguson]

Sure. In fact we now have the executive committee down to the size we were targeting. When I originally joined the office, the executive committee was about 18 members. It's now down to nine members, which we think is the right size for our size of organization.

Also, as you see in our document, we talk a lot about roles and responsibilities. Over the course of probably about the last three years we've looked at the organization, the levels in the organization, and we've determined who we believe should be doing what. We felt there were people at fairly high levels in the organization who we weren't allowing to do the jobs they were capable of doing. Now that we've properly defined the roles and responsibilities, we've been able to reduce our senior executive group from 18 members to nine.

[Erin Weir, NDP, Regina—Lewvan, SK]

Do you feel that's the right number because that's the minimum number you need, or do you think it's easier for that size of a group to make decisions?

[Michael Ferguson]

I think it's certainly easier for that size of a group to operate as an executive team. I think it also establishes the right number for direct report all the way through the organization of people reporting to people. I think when we had 18 members, the executive committee was too much in the details, rather than actually just managing and letting the auditors deal with the details.

[Erin Weir, NDP, Regina—Lewvan, SK]

At the risk of getting into detail, I did want to ask you about the reduction of your planned spending by $2 million from 2017-18 to 2018-19. I just wonder what explains that decrease.

[Michael Ferguson]

Which numbers are you referring to, for the record, so I know which numbers I'm dealing with?

[Erin Weir, NDP, Regina—Lewvan, SK]

It's the planned spending figures. I think they would include those services that come from other departments and agencies that may not be billed for.

[Michael Ferguson]

Again, without knowing exactly which numbers I'm dealing with, certainly from year to year, for example, one of the things we get in our budget is an amount for things like employee benefits. When we get an actual amount, it is based on just the value of the employee benefits for that year, but then the next year we will have an estimate again in the main estimates and it can change significantly.

I think probably some of that may be a matter of estimating the actual employee benefits and estimating what those employee benefits might be. It might also be putting a value on some of those services provided without charge, because again I think the numbers you are looking at are all in the estimates. It's not just our main estimates. Sometimes some of those estimates of additional costs we get without charge may vary, depending on what value we put on things like accommodation and that sort of thing.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much.

Our time is up, Erin.

We'll now move back to the government side with Mr. Maloney, please.