Public Accounts Committee on May 19th, 2020

[Karen Hogan]

I think we all have to recognize that we've all had to adjust the way we work. That includes making modifications to typical processes and typical controls, so absolutely we would expect to see that happening, but we would not expect to see the absence or removal of all of those important steps in ensuring that funds were properly spent with proper authority, with due regard for the use of public funds.

No, I would expect to see change, and we will all consider that, but they need to still be there, those controls.

[Lloyd Longfield, Liberal, Guelph, ON]

Great. Thank you.

[The Chair, Conservative, Dean Allison]

Thank you, Mr. Longfield. I appreciate that.

I'd like to ask a couple of quick questions, Ms. Hogan.

In your bio, you commented on some of the recommendations you've made. I know it's sort of one of those contentious issues that has been difficult because it's so big and large. Talk to us about some of the recommendations you made around Phoenix. Did you feel that you had some good responses from the government or the bureaucracy in looking at that?

[Karen Hogan]

Thank you.

I was the author of the Auditor General's observations, which would be published in the Public Accounts of Canada on an annual basis and are now published in our financial commentary report that supports this committee. We often found that when it came to processing pay there were numerous errors. It comes back partially to data quality. As mentioned earlier, any new system is only as good as the information that you put into that system.

Information needs to be accurate, and information needs to be entered in a timely fashion. We did make a few recommendations about the shared responsibility across the entire government to ensure that individuals are properly paid. It is truly that responsibility across all departments.

[The Chair, Conservative, Dean Allison]

Thank you.

I know that a lot has been talked about on budgets and stuff, and I know that it's almost unfair that you come in here trying to be confirmed as the new AG and hear, “What's your plan for the budget?”

Should you be confirmed, and as we move forward, I guess my question, which maybe a lot of the committee is wondering about, is this. You probably wouldn't have a problem putting together budgetary requirements, given the fact that's been mentioned by a number of members, which is that we have all the performance audits and then a number of audits that Parliament has asked for, and now, on top of that, we have this COVID response. Before now, we heard you guys were already short $10 million or $11 million. I'm hoping that in the coming days and weeks—because I think it has been alluded to by a number of members—you wouldn't be opposed to putting together a number again to say, “Listen, we were short $10 million before, and with these huge responsibilities we have coming this year, we think we may need to look at that.” Obviously, you'll need some time to reflect upon that.

I'm going to guess that maybe our committee would be able to have a meeting again later to bring you back when you've had a chance to look at what's going on in the department. I know you are familiar with it, but now, if you should get the role of the AG, you will have new responsibilities. It may be unfair that we've asked you questions about budgetary things, but at the same time, you've been well aware of them just by being in the department.

Would you be willing to come back to committee in the coming weeks and months to talk about the challenges you see with all the additional things that have been asked of you, including performance audits, as has been mentioned by a number of members here throughout this committee?

[Karen Hogan]

Thank you, Mr. Chair.

Should I be appointed Auditor General of Canada, I would be very happy to come and meet this committee any time you'd like to invite me, to respond about decisions I have made, talk about our office and talk about the work we do.

It is incredibly important for me to establish an excellent collaborative relationship with this committee, as together we play an important role in helping ensure that accountability and transparency are there and that the government is held to account. Any time you'd like to have me, I would love to be here, should you appoint me Auditor General.

[The Chair, Conservative, Dean Allison]

That's great. Given some of the questions, should you be confirmed in that role, I'm sure that a lot of members would love to have you back to talk about some of those things.

Mr. Fergus, I'm going to turn it over to you, sir, for five minutes.

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

Mr. Chair, thank you once again for giving me a chance to ask this outstanding candidate some questions.

Ms. Hogan, to follow up on my last questions, which were about IT, I'd like to give you an opportunity to tell us more about your thoughts on using artificial intelligence in auditing.

In your long career with the office of the Auditor General, have you heard of any other cases, either in Canada or internationally, where auditors general have used AI to conduct audits?

[Karen Hogan]

As you know, the auditing field is evolving incredibly quickly when it comes to technology. I've had many discussions with representatives of accounting firms and other auditor general offices across the country, and we share our best practices. In our office, we use data analysis quite often to do our audits. I know that's done around the world and in every other auditing field.

There are two important factors. Number one, you need to have the right data. Number two, our auditors need to have the necessary computer skills, and we need to have the necessary computing capacity. There's always room to improve those two aspects in our office with regard to any audit.

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

If I understand your answer correctly, your office doesn't have the technological resources it needs to do your audits efficiently. Is that correct?

[Karen Hogan]

Well, technology is used in all of our audits. All of our working papers are electronic, and we store most of our data electronically. In the years leading up to our request for more funding, we sometimes had to make rather difficult decisions: either invest in technology, or hire an auditor to add value to the government. We often opted to invest in hiring an auditor.

Now is the time to seek more balance and make a major investment in our technology. As I mentioned, part of the money we received in 2018 was used for this, but the work hasn't all been done yet. We need to keep that on the horizon, because, as you all know, technology is going to play a key role in the lives of all Canadians.

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

Mr. Chair, how much time do I have left?

[The Chair, Conservative, Dean Allison]

You have about two minutes left.

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

Okay.

When you were answering the questions from Mr. Blois and Mr. Sorbara, you mentioned the staff of the Auditor General's office. The office has 575 employees, if I'm not mistaken. I would imagine that under the current circumstances, it's very hard to continue your work from home. Again, this raises the idea of making use of IT.

You're in contact with the other auditor general offices in Canada and around the world. How is Canada doing? Are we doing better or worse than other auditor general offices?

[Karen Hogan]

I'll share my personal opinion, which isn't based on any criteria or facts that I can cite.

Our office is doing well, but there are certain challenges I'd like it to overcome so that we can continue to grow, build our skills and improve our work and our audits. That way, we could improve the products we deliver to the committee and the recommendations we make to the government. Technology is one area where all organizations should be striving to make improvements.

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

I have one last short question. Do you think you'll let your employees telework more from here on out?

[Karen Hogan]

Our employees already had the option of working remotely. What's different for us right now is that we can't visit organizations to do our audits. But we're seeing amazing results: our employees are engaged, and they're getting their work done in spite of constraints imposed by their personal lives.

As a leader, I've always felt that telework is a good thing to offer to employees. I'm going to make sure the office continues to offer that option if I'm appointed Auditor General.

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

Thank you very much.

[The Chair, Conservative, Dean Allison]

Thank you very much.

Does anyone have any final questions? I know we're almost out of time. We have to suspend for a second to talk about this. We had a very fulsome discussion today. I thought it was a great discussion.

Ms. Hogan, we really appreciate your taking the time, and I think you'll probably get another invitation at some point in the not too distant future as well.

Can we suspend, then, if there are no additional questions for Ms. Hogan?

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

I have one last question, Mr. Chair.

[The Chair, Conservative, Dean Allison]

Do you have a quick question? Go ahead, sir.

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

Ms. Hogan, the current situation is unprecedented, and it comes with its own set of unique challenges. There have already been plenty of media reports about potential fraud in relation to the many financial aid measures offered in response to the COVID-19 pandemic. Are you planning to do a quick investigation into the implementation of these measures and the political decisions that guided them?

[Karen Hogan]

Thank you for your question. As I said earlier, it's important for Canadians to receive the money they're entitled to on time.

In any audit, we need to examine the risk of fraud. If we suspect or know that fraud has occurred, that increases the risk, which means we need to expand our sampling or the work we'll have to do.

I'm fully aware that many organizations have had to make decisions on the fly. When that happens, it raises the possibility of errors. When we audit the programs, we would expect to see a mechanism in place for detecting errors. If errors have indeed been made, we would expect to see a process for fixing them, including repaying the full amount that was paid out if necessary.

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

Thank you, Ms. Hogan.

[The Chair, Conservative, Dean Allison]

Thank you very much.