Public Accounts Committee on Feb. 27th, 2020

[Andrew Hayes]

Yes, we did.

[Sylvain Ricard]

It's the same amount we put last year. That's on the public record. It's $10.8 million.

[Andrew Hayes]

I'll just maybe add one point.

The difference in our request this year was that we did submit, along with our request, the letter that the public accounts committee wrote to support our request last year. We haven't increased our request from the year before, but the support of the committee was emphasized in our submission.

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

Okay, thank you.

You mentioned in your opening statement that your office itself decides which audits to do. Some of them are mandated. Recently there was a request from Parliament to do so. That would be a request. What goes into your decision-making on which audits to do?

[Sylvain Ricard]

Just to clarify, when we say we choose what to audit and how to audit, we're talking about the performance audit. It's basically risk-based. We analyze the various programs. We take the time to get to know the programs and the risk that comes with them. Obviously, at the end of the day, it has to be a priority process. We can't do everything. That's an even bigger challenge these days.

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

Thank you.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're going to move back over to the government side.

Mr. Blois, you have the floor for five minutes.

[Kody Blois, Liberal, Kings—Hants, NS]

Thank you.

Thank you very much for being here this morning to answer some questions from our committee members.

I want to talk about budgets.

In the document you handed out, you talked about how the main estimates for this year are $88.2 million, $78 million of which is voted and $10.2 million is statutory. You've talked about the independent piece coming from Parliament.

In past Parliaments before 2015, was this a similar practice?

[Andrew Hayes]

In past Parliaments, we actually haven't had to make funding requests as we do right now. If we rewind the clock further—and I'm going to be ballparking here—there was a discussion about an independent funding mechanism in the mid-2000s. There was a blue ribbon panel struck at that time intending to deal with all agents of Parliament and their requests for funding, and also with the application of central agency policies that might impair their independence.

For the Auditor General's office, we haven't needed to come to request funding since I can remember, and I've been with the office for 15 years. From that perspective, I can't say what was different in the previous Parliament or how the previous Parliament would have dealt with it, because we weren't in that space.

[Kody Blois, Liberal, Kings—Hants, NS]

Thank you.

We had the chance to look over the external audit that was done of the Auditor General's office. As Mr. Green mentioned, it was largely very positive. Certainly we commend you on the work that's been done. One of the highlights or themes I found was about how in some cases the audits were exceeding the budget. There were some recommendations for ways in which the Auditor General's office can ensure those audits don't go over budget.

Can you speak to how many of the audits traditionally go over budget—if it's a certain percentage—and whether or not there can be some cost savings? There have been talks about the fact that $10.2 million has not come forward and that has taken the studies from 25 to 14. How many efficiencies can be found from some of the recommendations that are being proposed?

[Sylvain Ricard]

I don't want to take too much of your time, so I'm going to try something here. I may have information in our performance report. That's normally something that comes out of the hearing the committee holds on our planning and result documents. I'm going to go on memory here. There are not many that go over budget, and for the most part, it's caused by elements that we found during an audit, something we basically have no choice but to spend more time on. On the financial audits, it could be caused by the fact that an organization may have had staff turnover, and the staff were not quite ready to support us in our audit work, which created challenges. It could be that there was a major transaction that we found and had to spend more time on. It could be in the financial statement of the government. It could be about Phoenix.

For the most part, those are the types of situations for which we spend more time and go over budget. Those were not cases where we would have decided not to spend the time; we had to spend the time to be able to finish the audit work.

[Kody Blois, Liberal, Kings—Hants, NS]

I certainly appreciate that. I know you talked about unforseen work being an instance where the audits could go over performance. I do note that on page 17 of the report. But sometimes there were also audit issues and errors, certainly on the administrative side.

Mr. Chair, I would like to turn my time over to my honourable colleague.

[The Chair, Conservative, Dean Allison]

You're very generous; you're giving him only 40 seconds.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you very much, Mr. Ricard. I have a question that follows up on Mr. Hayes' answer.

Given your 15 years of experience with the Office of the Auditor General, I imagine that you faced the budget cuts of 2011. Can you remind us of the amount and explain how the office was able to adjust its activities in response to these cuts?

[Sylvain Ricard]

When we voluntarily reduced our budget in 2011, we returned $6.7 million to the government, in large part by cancelling, through legislative changes, our obligation to perform certain financial audits.

At that time, we also delayed some investments in technology because we felt it was the right thing to do. Since we didn't need the funds, we thought it was reasonable to return them, keeping in mind that we were going to ask for them again the day we needed them. That's what happened in 2017, when we reached a turning point and decided that we absolutely needed additional funds.

[The Chair, Conservative, Dean Allison]

Thank you very much.

I like how that last question was snuck in.

We're going to move back to Mr. Steinley, for five minutes.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Thank you very much, and I appreciate your all being here this morning.

You touched on the transportation of dangerous goods audit that's coming forward. I'm from Saskatchewan. There were a couple of big train crashes in Saskatchewan—in Guernsey a year ago, and then again last month. Could you touch on that? I think it's coming out in May. I'm just wondering how much of that's going to be based on rail transportation and other transportation systems, and how it will look moving forward.

[Andrew Hayes]

We are completing our audit work right now and working with the departments. I can tell you that within the scope of our audit work, it is the Department of Transport and also the Canada Energy Regulator. We are looking at transportation of dangerous goods by all manners, including rail, air, road and pipeline. Our audit work was done before the most recent rail accident, but we are looking at the systems and practices of the departments to ensure that everything is managed appropriately and that if enforcement measures are necessary, they're being carried out and monitoring and oversight are appropriate.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

The recommendations that would be coming out would be based on the safest mode of transportation for our goods, recommendations on improving those systems or building upon them, such as creating more capacity in one system or another, getting some more pipelines built, talking about the TMX and things like that moving forward, so that we could have more goods travelling on one system or another and which one would be safer.

[Andrew Hayes]

Our recommendations will be focused on the actions of the departments and agencies. It will not make policy recommendations on what should or could happen.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Once again, back in Saskatchewan there was a pipeline leak two years ago by North Battleford. Is there something that's going to be looked at in terms of how to prevent something like that from happening again, based on actions the department could take in regulating that?

[Andrew Hayes]

When the audit comes out, you'll see that we were talking about the role of the Canada Energy Regulator from start to finish in the process vis-à-vis the rigour and due diligence that they carry out throughout the process. We reviewed files, and once we have settled the audit findings we'll be able to speak specifically about how both the Department of Transport and the CER managed the files that we've looked at.

[Warren Steinley, Conservative, Regina—Lewvan, SK]

Picking up from what Mr. Blois said earlier about finding efficiencies, and going through the peer review audit, it wasn't mentioned how many audits went over budget. Can we have an actual number and a bit more reasoning on that?

[Andrew Hayes]

Go ahead.

[Martin Dompierre]

Basically, when we conduct the audit, as we plan the audit specifically, teams assess the scope of the audit to determine what will be examined.

As we proceed with the audit, as Assistant Auditor General, we approve these budgets. We make sure that the teams have sufficient hours to cover the audit. There's an oversight role we play in terms of ensuring that, as the team engages specifically in the audit, we allow the review to increase, or decrease in some cases. It happens sometimes that we decide to do an audit and the scope is too large and the capacity might not be there, and we focus specifically on certain elements. Therefore, we might be reducing the scope or expanding the scope, but at the same time, the team needs to come to us to specifically approve these budgets.