Public Accounts Committee on Feb. 27th, 2020

[Andrew Hayes]

It's not from the environment angle. I can answer it quickly, and then maybe Mr. Ricard will want to add something.

We have requested $10.8 million over the last couple of years in the budget process. The predecessor of this committee wrote a letter last year to recommend that we receive that $10.8 million and that there be an independent funding mechanism to deal with future budget requests. That would be what we consider right now as a need for our organization.

[The Chair, Conservative, Dean Allison]

Thank you very much, Mr. Longfield.

We will come back to the opposition side.

Maxime, sir, you have six minutes.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Good morning, Mr. Ricard. Thank you for your presentation and for being here today. I also welcome the members of your team.

I'd like to ask you a specific question about the Phoenix payroll system.

In May 2018, you submitted a report on this subject. Do you plan to provide an update on this report soon?

[Sylvain Ricard]

There are two parts to my answer.

We are considering a performance audit in this regard. However, the fact remains that each year, when auditing the government's consolidated financial statements, we do some work related to payroll. For the past few years, we have been observing changes from one year to the next. This will likely be addressed if the committee decides to hold a hearing on the public accounts or the government's financial statements.

In one report, we commented on the results of our financial audits, and there is a section on the results related to Phoenix. This is what we noted during last summer's audit of the government's financial statements.

[The Chair, Conservative, Dean Allison]

Mr. Green, you have six minutes.

[Matthew Green, NDP, Hamilton Centre, ON]

I appreciate the six minutes allotted in a formal way. It's still very introductory for me.

I'm just picking up on the two comments that I heard. One was the reduction in the number of audits, and then there was the obvious question around the budget. It seems to be pretty simple, to me, that the department is under-resourced, so we hope to see the independent, predictable, ongoing operational funding that you've identified as required to provide oversights.

The question I would have is.... I don't even know if you can answer the question, so I won't ask it because it's probably not fair, or at least I won't ask it in this format. However, if you want, just comment perhaps in a very high-level way in terms of how you were audited by this international peer review. There's a work plan that's put out. I don't know if you want to comment on the recommendations that were put forward there and what steps, if any, you've taken to address some of those recommendations.

It seemed good to me. I'm not very fluent in auditor language yet, but it seemed it was pretty good. Maybe if you want to take your time to toot your own horn on that, you have probably about four minutes.

[Sylvain Ricard]

Rather than inventing, I'm going to use the wording of the report to start. As a starting point in terms of auditor's vocabulary, as I mentioned in the opening statement, the peer review team found that the OAG adhered to relevant legislation and professional standards in the execution of its mandate and that our system of quality control was suitably designed and effectively implemented.

What that means in plain auditor's language—we call that a clean opinion. It means that we got a report confirming not just the design of our way of doing business but how it was implemented, meaning that in the real audit—pulling out some of the files they looked at—they found that we were doing the work in line with the design and that the design was appropriate, given the type of business we are in.

Obviously it is a major undertaking to go through such a review. The result of it is that you have an organization that is proud of its good work. That is something that is being requested once per 10 years, once per an AG mandate. It's too bad that the former auditor general could not be here to speak about the good results himself, but clearly the organization is very pleased with that and it is reassuring for senior management in the organization to receive such a message.

To play along the same rules we suggest others should play by.... As you saw, even though it was a clean opinion, there were some suggestions. Back in September, we quickly prepared an action plan to deal with those suggestions. As you saw in the action plan, there is a timeline. There is accountability. We are taking seriously the follow-up of that. We updated the action plan in February, so the executive committee in the office will regularly get updates on the progress of it.

[Matthew Green, NDP, Hamilton Centre, ON]

I would like to reserve my opportunity to probably re-ask this in another way at another time, but the way I can frame it for today's committee is this. Given the cuts back in 2011 and the reduction in audits, I'm just wondering for my own edification, from my municipal experience, what that looks like in terms of the reduction in FTE complements and staffing.

[Sylvain Ricard]

You're referring to the reduction in 2011, the amount that we're not getting now?

[Matthew Green, NDP, Hamilton Centre, ON]

That's correct, yes, both. You had general budget restrictions in terms of the complement, and you've identified that you want new leadership to come on, but it begs the question, would that be considered enhancement or a restoration to previous FTE levels?

[Sylvain Ricard]

In terms of the needs today, that is $10.8 million. As a rule of thumb, it's probably 100 employees or something like that. It is significant. I'm sorry to keep repeating. As I said to PACP last year.... I know you were not there, but I'm just saying it was referred to before. We need to get our technology and our IT security in a good place, being able to do all our attest audit mandates that were added, the increase in government spending that makes us having to do more audit work. At the end of the day, we had no choice but to reduce the performance audits to 14. We don't feel good about that, obviously, because—and I don't want to speak for the committee—that's hopefully one of the key tools that this committee is using or will be using, but you will have less of that.

I don't know if that answers your question.

[Matthew Green, NDP, Hamilton Centre, ON]

I'll probably ask it again, just to put it out there.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're going to start with our second round, which will be five minutes.

We're going to move to Mr. Uppal for five minutes.

[Tim Uppal, Conservative, Edmonton Mill Woods, AB]

Thank you, Mr. Chair.

Thank you for coming and bringing along your team.

Just to pick up on what my colleague was talking about on the funding itself, the funding that you're talking about, the reduction about a decade ago, that was voluntary from the office itself, when that reduction was happening. Since then, you have made a request for funding, you said. Have you had a response to that request for additional funding?

[Sylvain Ricard]

Not knowing how familiar members are, maybe I'll briefly give a fuller story.

We made a first submission in the summer of 2017 for an increase to the budget of 2018. The request was $21 million in two tranches, because we can't absorb all of it at once. We got approval for $7 million at that time. It was part of the first tranche.

[Tim Uppal, Conservative, Edmonton Mill Woods, AB]

It was a third of it.

[Sylvain Ricard]

The second tranche never happened. It was not confirmed in the budget of 2018, so in budget 2019 we asked more or less for the second part of it, and we got nothing. Again, the result of that is putting pressure on the organization in terms of what we can do, and our capacity to deliver all our mandate, ensuring that we get access to all the tools we need, given everything that is changing that you talked about, data analytics and artificial intelligence. We keep hearing and talking about those things, but this is not fake. This is happening out there.

[Tim Uppal, Conservative, Edmonton Mill Woods, AB]

Absolutely.

[Sylvain Ricard]

We need to be ready and equipped to do that, including having the tools and training the people. As you said, way back then, the reduction was done on a voluntary basis at that time. Our systems were stable. Our audit tools had just been implemented. Since then, it's all out of date. In fact, just to speak in very clear language, we still have a key system in the office that is running on DOS with those F keys.

[Some hon. members]

Oh, oh!

[Sylvain Ricard]

That's not supported anymore, and it creates all sorts of issues.

[Tim Uppal, Conservative, Edmonton Mill Woods, AB]

Thank you.

In 2017, you made a request for $21 million, and a third of that was agreed to, and then another request was made and no funding was provided. Have you made another request for this coming budget?

[Sylvain Ricard]

Yes, we filed a request. I'm not sure how at ease I am to speak to it, because it's through the budget process.

Andrew, I don't know if you....

[Andrew Hayes]

Thank you.

Indeed, we've made the request in response to the call that departments get for funding requests. We made the request in January.

I will mention that one reason why an independent funding mechanism is important to us is that it is awkward to work our funding through a department that we audit regularly.

[Tim Uppal, Conservative, Edmonton Mill Woods, AB]

Absolutely. That makes sense.

Did you make a request for a specific amount?