Public Accounts Committee on April 24th, 2018

[Michael Ferguson]

The issue is strictly related to workload.

Like several other departments, we have a lot of work to do, of course. Employees must respond to various requirements from our administrative service, for instance. We also did a compliance assessment for all of our standards, regulations and policies. We determined that there were some gaps in our practice, for instance as regards official languages. We are now putting in place certain activities to manage and reduce our employees' stress level.

I think the situation is comparable to the one regarding the Phoenix pay system, which you asked about. Thanks to the work done by people like Ms. Seally and her team, we have found ways of managing these problems. This requires a lot of work and effort on the part of our staff. I am of course very grateful for all of the work employees have done to resolve various issues related to our large workload.

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

Thank you very much.

Before I give the floor to Mr. Chen, I want to congratulate you for having kept your pay advisors. According to everything we've seen, that was an excellent idea.

Mr. Chen, for seven minutes.

[Shaun Chen, Liberal, Scarborough North, ON]

Thank you, Madam Chair.

I want to start by thanking the Auditor General, his assistant AG, and the principals here today. Your work is tremendous. You have clearly commanded the respect of this committee and of the departments through your objectivity, impartiality, and professionalism in carrying out your work honestly and with integrity, speaking to how government can improve the services it provides to Canadians and how it can be held more accountable and continue to strive to improve itself and the work it does for the public.

In your report today, Mr. Ferguson, you did what I would have expected an auditor to do. You highlighted areas where you believe that the work of your staff and your team can be improved. Specifically, you talked about the fact that your audits, and quality assurance processes themselves are subject to external independent reviews.

Can you tell me a bit more about who is retained to conduct those reviews, as well as examples of what might be found with respect to improving the work you do?

[Michael Ferguson]

I guess that goes back to Monsieur Deltell's opening comments about who audits the auditor, essentially.

There are a number of things we do to ensure the quality of our work. Professional accounting standards require us, first, to have a system of quality control. We will have quality reviewers, for example, on audits to ensure that the practitioners are following what they are supposed to do.

We also have a team of three people who are engaged in a quality review of our own files. They're our own people. They are attached to our internal audit shop, and they look at our audit files to ensure that our audits were done in accordance with standards and that our audit files support our findings. Those people, in quality review, do that for both our performance and financial audits.

On the financial audit side, the various institutes of chartered professional accountants will come in and inspect our files from time to time to ensure that we are conducting our files in accordance with auditing standards as well. They're not part of our office, but are, for example, the Ontario Chartered Professional Accountants. This will happen in all of our offices. We have offices in Halifax, Montreal, Ottawa, Edmonton, and Vancouver, so any of those offices can be subject to a review by the provincial institute in those provinces.

We also have an external audit done of our financial statements. The external auditors are appointed by Treasury Board, not by us. They audit our financial statements.

Finally, about once every 10 years we ensure that we bring in a team of people to do what we call a “peer review”. The last one was led by the Australian national audit office. It came in to ensure that we were following proper auditing standards in our work. That was done almost 10 years ago, so we are in the process now of having another one. It's in the planning stage. It's being led by the auditor general of South Africa, and will include representatives from other national audit offices. I've forgotten which ones right now. There are a number of different ways that, both internally and externally, we subject ourselves to review.

[Shaun Chen, Liberal, Scarborough North, ON]

Outside of accounting practices and how you conduct your audits, do you have folks looking at the governance and the management practices of your staff?

[Michael Ferguson]

That would be done internally. I mentioned in my opening statement that we did some work on our IT and IT security. The people responsible for our IT environment hired somebody to help them do a self-assessment of whether we were complying with Treasury Board policies on IT security, whether we were doing everything we were supposed to be doing on IT security.

At the same time, we kicked off an internal audit to make sure that self-assessment would be done the right way. The internal auditors reported directly to me on their findings; they didn't report to the team that was involved in doing the IT security. In the course of that, we found a number of places where we needed to improve our IT security. In conjunction with that, we also identified that we had not complied in the past with everything we were supposed to comply with on official languages. We identified these weaknesses in our IT management. We kicked off another project to look at our compliance overall, wherein we did an inventory of all the things we are supposed to comply with to see if we could say that we complied with them.

We have quite a bit of work under way on our whole governance. We have an audit committee ourselves made up primarily of three external members. That's another way that we ensure there is proper governance of the office. We have a number of those under way. Most of it is probably internal, as opposed to somebody external doing it.

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

Sorry, Mr. Chen, but I have to cut you off.

Mr. Nuttall, you have for five minutes.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Thank you, Madam Chair.

Thank you to the Auditor General and your team for the work you do, which is a continued success.

We've had an opportunity to look at quite a number of reports over the past while. I've only had an opportunity to sit on this committee since September, but I am very proud of the work done by your department. Obviously, it's done with great leadership and great staff throughout the organization.

I know that Mr. Lefebvre touched a few minutes ago on the 2014 percentages related to committees seeing the reports from the Auditor General's office. Were they more in line with the 2016?

If you don't have that information, I understand.

[Michael Ferguson]

I believe we do have those numbers. Over the last couple of years we have seen an increase in the number of hearings we have.

In 2014-15, 42% of our reports had a hearing with the public accounts committee. In 2015-16, it was 47%. Then last year, the number of reports we presented and the number of reports Public Accounts heard was 100%. If you look just at this committee's performance, it went from 42% to 47% to 100%. In terms of all of our audits and all committees, in 2014-15 it was 44%; in 2015-16 it went up to 59%; and then in 2016-17 it went up to 72%.

Yes, between 2014-15 and 2015-16 there was a slight improvement. Then it was really in 2016-17, particularly through the work of this committee.... I'm very grateful that you said you're proud of the work we do, but I think you should be proud of the work this committee does. It's only because of the work this committee does on the work that we do that we can get results. Seeing that this committee is very engaged in all the work we do, I think that is going to add to our ability to have an impact.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Certainly. The reality is that we're able to do our job pretty effectively and efficiently, in comparison with the past weeks, because the work that is coming before us has been very solid.

To get away from that, I have two questions that I'd like to hear answers to. Within the department, where do you believe the greatest opportunity is to find efficiencies or to increase the effectiveness of the service that's provided to other departments?

[Michael Ferguson]

Within our department?

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Yes.

[Michael Ferguson]

I think there are a couple of things. Trying to understand how we can add more value is something that we are very much focused on. I think Monsieur Deltell rightly pointed out the cost of each of our audits. The way I keep putting it to people is that if departments had to pay for our audits, and if I went to a deputy minister in a department and said, “Here's your invoice for $1.4 million”, how many deputy ministers would say, “Wait a minute, I'll get my cheque book”? How many deputy ministers would say, “Well, wait a minute, I don't think I got $1.4 million worth of value out of that.” I think that's a question that we need to ask ourselves on every one of the audits we do.

In terms of getting more efficiency and more value on our performance audits, it's very much about being able to identify where things need to be improved in an organization, and helping other organizations make those improvements. I think in our financial audit, we need to find ways of spending less time on getting the audit opinion out, while still respecting auditing standards. The only financial statement audit that you people are probably aware of is the one that we do of the Government of Canada. As I said in my opening statement, we do 89 financial statement audits.

We need to reduce the amount of time we spend on just getting to that two-page audit opinion on financial statements, and we need to find ways to spend more time on internal controls or other ways to add value in our financial audit.

I think there are still lots of opportunities for us to be able to increase our value proposition.

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

I'm sorry, Mr. Nuttall, but I now have Mr. Arya now for five minutes.

[Chandra Arya, Liberal, Nepean, ON]

Mr. Ferguson, congratulations that 62% of your staff are women. I think you are a good role model for other departments.

How diverse are your employee ranks in terms of indigenous people, visible minorities, and people with disabilities?

[Susan Seally]

I can answer that.

We do an employment equity report every year of the four under-represented groups protected under the Canadian Human Rights Act. As you know, the statistics on women are very good. When it comes to persons with handicaps, visible minorities, and indigenous people, we meet the market availability in all of the groups, with the exception of visible minorities, where we're slightly below.

[Chandra Arya, Liberal, Nepean, ON]

It is because of the bilingual requirement?

[Susan Seally]

That's a good question. I don't think it is, because—

[Chandra Arya, Liberal, Nepean, ON]

I'll tell you that among a lot of Canadians who are multilingual, but not including knowledge of both official languages, there's a strong feeling—not a feeling, it's a fact if you ask me—that they are shut out of federal government employment.

In your strategy to take care of the directors or senior auditors, I am speculating that if two chartered accountants apply and one is bilingual and the other is unilingual, my guess is that you'll automatically recruit the bilingual person.

[Michael Ferguson]

When we are doing our recruiting, something like competency in both official languages might be a deciding factor. If one candidate is clearly better than the other and it is not a position that requires a level of proficiency in both official languages, then we will hire the person with the competencies. It is our plan, at that point, to try to help them get to a point of learning their second language, remembering that we have a requirement for our supervisors—

[Chandra Arya, Liberal, Nepean, ON]

When it comes to senior auditors and directors, most of those positions are bilingual, and then automatically it will go to a person who has knowledge of both official languages.

[Michael Ferguson]

If it is a supervisory position, a person supervising other staff, then those staff that they supervise, by law, have the right to be supervised in the language of their choice.

[Chandra Arya, Liberal, Nepean, ON]

When it's unilingual people who have a knowledge of multiple languages but don't speak both English and French, they get shut out.

[Michael Ferguson]

If it is a bilingual-required position and somebody does not have the requirement—

[Chandra Arya, Liberal, Nepean, ON]

I'm sorry to cut you off.

What was your budget and actual spending last year for language training?