Evidence of meeting #14 for Public Accounts in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was year.
A video is available from Parliament.
12:05 p.m.
Comptroller General of Canada, Treasury Board Secretariat
I'll refer back to Mr. Sabia's answer to that. In a sense, yes, when we go through these complex accounting transactions there is usually a consultation, and my folks are implicated. I have to admit that in this case, we agreed that the Department of Finance had to do their due diligence, reminding people that there was legal advice that was asked for to ensure that they had the proper authorities to use that mechanism to complete the payment.
I have to say that—
12:05 p.m.
NDP
Matthew Green NDP Hamilton Centre, ON
Just to be clear, the Treasury Board president approved this payment without parliamentary approval.
12:05 p.m.
Comptroller General of Canada, Treasury Board Secretariat
The Treasury Board president did not approve this payment. This payment came out of the Department of Finance, and the Treasury Board president does not approve such—
12:05 p.m.
NDP
12:05 p.m.
Comptroller General of Canada, Treasury Board Secretariat
No, not on that particular item. My office, the Office of the Comptroller General, was involved in the discussions around the authorities to be used. Our job was to make sure the chief financial officer had done her due diligence to establish the mechanism by which the payment was to be made. We agreed that the due diligence had been done, and they were proceeding in a prudent fashion.
12:05 p.m.
Conservative
The Chair Conservative Kelly Block
Thank you very much, Mr. Green.
We will now move on to the next round of questioning, our five-minute round, starting with Mr. Chiu.
12:05 p.m.
Conservative
Kenny Chiu Conservative Steveston—Richmond East, BC
Thank you, Madam Chair.
My first question is regarding the Auditor General's report on the Department of Finance spending without parliamentary approval. I was wondering if you could actually give us a little bit more context to that line, please.
12:05 p.m.
Auditor General of Canada, Office of the Auditor General
It's the issue we've just been talking about. It had to do with an agreement about Hibernia and the need for proper legislative measures to be in place before payment was made under that agreement. The mechanism used by the government is one that we believe was not the most appropriate, given the inclusion of a Crown corporation in that transaction.
However, as I mentioned earlier, we believe it has now been resolved. They have included that payment in the supplementary estimates (B) and hence have received parliamentary approval for it.
12:10 p.m.
Conservative
Kenny Chiu Conservative Steveston—Richmond East, BC
Thank you.
I'm going to switch over to a list of questions about the DND, the Department of National Defence. What factors have contributed to DND understating its accounts for so many consecutive years? This is for any witness.
12:10 p.m.
Comptroller General of Canada, Treasury Board Secretariat
Obviously, this is stemming from a long-standing observation and recommendation from the Auditor General.
I think this committee has also heard from National Defence on this particular issue. The Department of National Defence is very decentralized, managing very imposing amounts of inventory. The department actually agreed a while back with the early observations of the Auditor General to put in place an action plan to address this.
We always understood—and I think this committee also understood—that it was going to be a number of years before everything was completely back to normal. The Auditor General has, over the years, recognized that DND is delivering on their action plan. However, there's still some work to do. As I said, it's a very large, decentralized department.
Furthermore, there is employee rotation.
People moving around a lot obviously means the training has to be perfect. It means the inventory counts have to be done in a timely fashion. It means the directives need to be clear to the employees doing these counts. The systems are being looked at to.... We talked about automation, which I think would make things easier.
Again, I think it's simply the magnitude of the issues at hand. The good news is that there is a lot of ground that has been completed over the last eight years.
12:10 p.m.
Conservative
Kenny Chiu Conservative Steveston—Richmond East, BC
Thank you.
In my previous career, I actually worked for a company that had a project with DND. It was called “the Canadian Forces supply system upgrade” or CFSSU. That was in the nineties, when we actually looked at that, to upgrade the Canadian Forces supply system. The last time I checked—it's been many years, almost two decades.... I'm surprised we're still hearing issues that you identify as contributing factors to this problem.
I'm interested to hear from you what long-term actions are being planned. What has been taking place to remedy the spending behaviours of DND? Two years from now—or one year from now—are we going to hear the same problem from DND?
12:10 p.m.
Comptroller General of Canada, Treasury Board Secretariat
I'm hoping the improvements will continue. I think there is an expectation that most of the remaining items will be completed this year or the following year. Hopefully, we should see an improvement in how the inventory is managed.
I'm not going to hide the fact.... I've worked at the Department of Fisheries and Oceans, where we had the Canadian Coast Guard. It's very complicated. The action plan will be done. The challenge will be to maintain these controls in the future to make sure they work. Hopefully, the next audit will show that they will be capable of maintaining the right controls in place and adjusting any controls that they need to.
12:10 p.m.
Conservative
January 26th, 2021 / 12:10 p.m.
Liberal
Iqra Khalid Liberal Mississauga—Erin Mills, ON
Thank you very much, Madam Chair, and thank you to the witnesses for being here today.
I found your initial statements to be very informative. There are a few questions based on what you said. Mr. Huppé, you talked a bit about how the public accounts could be improved, and you specifically talked about the impact of increased reporting. Could you tell us a bit more about that specific aspect of what you were thinking?
12:15 p.m.
Comptroller General of Canada, Treasury Board Secretariat
Actually, we initiated these discussions with the previous auditor general, and we kind of agreed. I know Karen does also. We haven't looked at the form of the public accounts in quite a while. The environment has changed. We have a lot more automation. There are a lot more reports being posted on departmental websites, so there is some duplication. For example, in volume II you would see the financial statements of the departments that operate under a revolving fund. Again, the audits of these revolving funds are published on their respective websites.
There is also this notion of ex gratia payments. We're divulging in these books, line by line, every ex gratia payment over $100 and grouping ex gratia payments under $100. These limits have been there for up to 40 years in some cases, so we know that $100 is not worth the same today as it was before. Is there an opportunity to trim down and readjust certain fields? Our thinking was that we would start.... The pandemic stopped us a bit, but we will continue to see what the improvements could be, and we would welcome the engagement of this committee in helping us to work through these proposed changes in the future.
12:15 p.m.
Liberal
12:15 p.m.
Auditor General of Canada, Office of the Auditor General
Roch is quite right. We started this conversation several years ago with my predecessor Michael Ferguson and the comptroller general's office.
Individuals who sit down to try to understand the public accounts are likely a little overwhelmed by 1,200 pages. If you want to encourage people to use those financial statements and find some useful information in them, then I agree that reducing some of the volumes and eliminating some of the duplication of financial statements that are available in other locations would allow those who prepare the public accounts to hopefully do so in a more timely way.
A lot of that information could even be available online so it's more searchable than in these printed volumes or in a PDF. I do think there's an opportunity to improve reporting for the country.
12:15 p.m.
Liberal
Iqra Khalid Liberal Mississauga—Erin Mills, ON
Ms. Hogan, I'll ask one more question.
You spoke about a better way of data collection and research. How would a disaggregated data system inform this whole reporting mechanism? How could we improve public accounts, and what is the impact on government spending?
12:15 p.m.
Auditor General of Canada, Office of the Auditor General
I'm not sure I implied that it would be disaggregated. The financial statements are exactly consolidated statements, bringing all of the financial information of departments, agencies, Crown corporations and federal entities into one spot. The financial statements are actually the best place to aggregate all the information together.
It's the information that appears in volumes II and III, which likely already appears in other locations, that isn't really integral to understanding the financial statements but just tells a broader story that maybe not everyone wants to read in those three volumes. It's not about eliminating information; it's about making sure it's in the right place.
12:15 p.m.
Liberal
Iqra Khalid Liberal Mississauga—Erin Mills, ON
Thanks so much.
Madam Chair, do I have much time left?
12:15 p.m.
Liberal
12:15 p.m.
Conservative
The Chair Conservative Kelly Block
I am so sorry for that. I guess I need to pay—or that was for staying unmuted.
Thank you very much, Ms. Khalid.
We will now move to our next round of questioning. It's a six-minute round.
I've just been asked to remind folks to speak a little more slowly. That is why we were having some problems with interpretation.
We will move to our next six minutes with Mr. Lawrence.
