Public Accounts Committee on May 19th, 2020

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you very much, Ms. Hogan.

Your predecessor, Mr. Ricard, repeatedly criticized the lack of funding. You've also mentioned it.

He said that the Office of the Auditor General of Canada did not have the operational funding it needs to properly examine the government's $250 billion worth of new expenditures.

Do you agree that the office needs about $11 million to be effective?

[Karen Hogan]

I haven't had a chance to look at the data, but I'm sure that the figures are correct. What's more important in the short term is to have the funds required to conduct the three audits we need to do and to fulfill the other mandates required by law. We must also adopt a long-term vision to ensure that our system will be a bit more predictable with respect to our funding.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Ms. Hogan, speaking of those three audits, I moved the motion calling on the Office of the Auditor General to conduct an audit of the Liberals' infrastructure plan. Do you know whether this audit has begun?

[Karen Hogan]

As far as I know, yes, the audit has begun. As I mentioned, I'm part of a steering committee on COVID-19, but I did not participate in the planning phase for the investments. If I'm appointed Auditor General, one of my first tasks will be to get myself up to date with the help of the team.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Do you anticipate meeting the deadline set for the office when the House of Commons adopted this motion? Do you plan to submit a report by early 2021, at the latest? Do you think that will be possible?

[Karen Hogan]

Honestly, there could be some delays. This is not because we aren't working hard, but I mentioned earlier that working and auditing remotely is new for everyone: for us and for the departments. We occasionally encounter some difficulties. However, we are moving forward and we are pushing our team as hard as we can, because it's very important to get Parliament some information as quickly as possible. However, right now I can't guarantee that we'll meet the deadline.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

I liked what you said in your opening remarks about how people rely on the Auditor General to cut to the heart of matters.

In a number of reports from the Parliamentary Budget Officer, he was critical of the Liberal government's management of and lack of transparency on infrastructure. However, the Auditor General did not take the initiative to conduct the audit we're talking about. The House of Commons had to ask him to conduct it.

In the future, how will you decide when to audit government actions? In addition, what relationship do you think the Parliamentary Budget Officer and the Auditor General should have?

[The Chair, Conservative, Dean Allison]

Ms. Hogan, you have about 30 seconds left.

[Karen Hogan]

All right. I'll do it quickly.

I don't know the Parliamentary Budget Officer, and I look forward to meeting him.

I'm relying on the existing rigorous process to establish the scope of the audits and to determine which topics we'll examine. I'm also committed to increase dialogue with parliamentarians, with this committee and with the deputy ministers. I think we need to look at everyone's concerns before choosing what to audit.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Thank you.

[The Chair, Conservative, Dean Allison]

Mr. Sorbara, the floor is yours, sir, for five minutes.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. Chair.

Good morning to everyone. It's great to see so many of my colleagues doing well and making their way through this very unique and extraordinary time.

Congratulations, Ms. Hogan, on your appointment. It's very well deserved. I read through your biography, and as someone who sat on the user advisory committee of the Canadian Accounting Standards Board for about 10 years, I well understand the importance of financial statements, of ensuring their integrity and transparency, and of using them from a multiple-stakeholder standpoint.

I want to focus this morning on some of your remarks that you provided in your opening remarks. First of all—about the sixth paragraph in—you make a comment: “Having been fortunate [enough] through my career to experience the audit relationship both as the auditor and as the person responsible for preparing financial statements, I believe I was uniquely positioned to understand the challenges these entities faced.”

Can you quickly elaborate on that? I think that is a very nuanced point. It's very important to your job as the Auditor General in terms of the team that you'll manage going forward.

[Karen Hogan]

I do agree that it is a unique and privileged position to have seen both sides of that audit relationship and what it might bring.

What I've learned as someone being audited is that you need to honestly approach the audit relationship with the desire to learn. It's not personal. If the end game is to improve outcomes, transparency and accountability, working with your auditor is a great way to get there.

As an auditor, what I've learned to appreciate is that the folks whom we come in to audit have very busy lives at work, and we're adding to that work, so preparing, planning and agreeing with them well in advance is essential to the delivery of a good audit. But also, then, it drags to the results. The recommendations should be focused on results and not just adding process or change for the sake of changing.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

I would absolutely agree with that.

One of the things is that when you have an audit done in the private sector, from whichever accounting firm, usually they'll give some language at the end when signing off on the audit; they don't provide a glowing recommendation. That would be great, I think, when the AG's reports are issued and where the government has done well, without giving them a pat on the back but at the same time recognizing the extraordinary efforts of our public officials, our public servants, in delivering programs.

For example, we put together the Canada emergency response benefit. It's being delivered to over eight million Canadians. Canadians can receive those funds in three days. When an audit takes place of such a program, where the AG is not seen as cheerleading—because we don't want that—we want to say, hey, the AG reports that it's been a transparent and effective program. Is there room in the AG's work for that type of verbiage to be utilized?

[Karen Hogan]

If I'm appointed Auditor General, I would absolutely approach every audit with a balanced view. I believe that focusing on improvements is one of the main outcomes, but I also know that, as in everything I've done in the past, what I would do in the future would be to report the good, the bad and the ugly. We need to know what's out there. We need to know what's being done well and where things can improve.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Okay.

You commented about the two key areas or aspects you would focus on in your position as the Auditor General. In one of them, you spoke to the modernization of the office. In the government currently, we have a minister of digital transformation. We know that new technologies are being utilized across the world; here we are, in a virtual Zoom committee meeting.

I'd love to hear your thoughts on that, because change management is very difficult to do, and change management in a hierarchal organization is even more difficult to do, especially with so many stakeholders involved. I would love to hear your idea of what modernization may look like from a high-level standpoint. You've been in the organization for many years and have worked with some great Auditors General in the past, and I look forward to seeing you in that role, but if you can comment on that, it would be wonderful.

[Karen Hogan]

As you know, the auditing and accounting world is constantly changing. There are new standards issued that we constantly have to adapt to and help to ensure they're properly reflected in external reports.

I won't lie to you and say that there isn't change fatigue in every organization; however, it is definitely something that our organization is used to doing. We gear up for what is one of the largest changes every 10 years in welcoming a new leader who we know will bring some change to an organization. One of the luxuries is that if I'm appointed Auditor General, I know our organization and I know how it handles change and how we've lived through it in the past, and I'll hopefully be able to support our organization in doing that in whatever fashion it needs.

As you mentioned, digital transformation is something that everyone across the world is dealing with right now. I think we'll all learn as we go on that front.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Mr. Chair, how much time do I have left? I'll just continue....

Finally, my last comment would be that if you can take away something—

[The Vice-Chair, Liberal, Lloyd Longfield]

Actually, as vice-chair, if I can interrupt, it looks like we've lost our chair, and that was six minutes.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Was that six minutes, Lloyd?

[The Vice-Chair, Liberal, Lloyd Longfield]

Yes, it was.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you very much, Vice-Chair, for letting me know about that.

Congratulations, again, Ms. Hogan. I look forward to meeting you in person when it is safe to do so.

[The Vice-Chair, Liberal, Lloyd Longfield]

We'll go on to the next speaker, from the Conservatives.

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

Thank you very much, Mr. Vice-Chair. I don't know where the chair has disappeared to, but these are the difficulties, as we were talking about, of technology with some of these committee meetings being done virtually.

Congratulations on your nomination, Ms. Hogan. I have a few questions. I'll focus on what's going to happen and what the process is when past audits have been postponed due to lack of funding and the pandemic experience. Is there a priority list for which of the audits that were postponed will be done first? Do you have an idea what order they would be prioritized in?

[Karen Hogan]

As I mentioned earlier, we have a few audits that are ready to go. Of the ones that have been postponed, some are well under way, so obviously we will prioritize completing those audits, the ones that should have been tabled, I believe, in the fall of 2020.

Going forward after that, who knows? It's difficult to speculate. A great deal of our attention and effort will be focused on investing in Canada and COVID-19. It's hard to predict how long that might take and when we might be done doing those audits. It's important that we give them the attention and the time needed so that we can learn from it.