Public Accounts Committee on Oct. 22nd, 2020

[The Chair, Conservative, Kelly Block]

I call this meeting to order.

Welcome to meeting number two of the House of Commons Standing Committee on Public Accounts.

I have some things I'd like to go over.

Pursuant to the Standing Order 108(3)(g), the committee is meeting today to receive a briefing on public accounts committees. During the first hour, we will hear from representatives of the Canadian Audit and Accountability Foundation, CAAF. During the second hour, four former chairs of this committee will brief us on their previous work on this committee.

Today's meeting is taking place in a hybrid format, pursuant to the House order of September 23, 2020. The proceedings will be made available via the House of Commons website. So you are aware, the webcast will also show the person speaking rather than the entirety of the committee.

To ensure an orderly meeting, I would like to outline a few rules to follow.

Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice at the bottom of your screen of “floor”, “English” or “French”.

For members participating in person, proceed as you usually would when the whole committee is meeting in person in a committee room. Keep in mind the directives from the Board of Internal Economy regarding masking and health protocols.

Before speaking, please wait until I recognize you by name. If you are on the video conference, please click on the microphone icon to unmute your mike. Those in the room, your microphone will be controlled as normal by the proceedings and verification officer.

I will remind you that all comments by members and witnesses should be addressed through the chair.

When you are not speaking, your mike should be on mute.

With regard to a speaking list, the committee clerk and I will do our best to maintain a consolidated order of speaking for all members, whether you are participating virtually or in person.

Now I would like to welcome our witnesses. We have Carol Bellringer, president and chief executive officer; and Lesley Burns, director of oversight.

You may proceed with your opening comments.

[Lesley Burns, Director, Oversight, Canadian Audit and Accountability Foundation]

Thank you. I appreciate the opportunity to be here to speak with you this morning.

As we were asked to do this as a workshop, I would like to kick this off with a round table and ask each of the committee members to summarize in one word what the first thing is that comes to your mind when you hear “public accounts committee”.

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

Accountability.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

I thought of the same thing: accountability, transparency.

[An hon. member]

Audits.

[Len Webber, Conservative, Calgary Confederation, AB]

You both took both my words, damn it.

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

Performance.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Excitement.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

I'm going to add “following up”.

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

How about we use the word “examination”?

[An hon. member]

Clarity.

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

I would add the word “expenses”.

[Matthew Green, NDP, Hamilton Centre, ON]

I'll say “deliverables”.

[Lesley Burns]

Nobody said “boring”, so we're off to a great start.

Several people said “accountability”, and I think the committee would be more appropriately named the “accountability committee”, since that is a lot of what you do.

We are here today to support your understanding of how the committee works, because it is a very unique committee.

I want to start off by saying thank you for having us back. I was here in March just before everything shut down.

I also want to recognize the presence of the whips here today, because it is very important. We appreciate the fact that you are here showing your support for the committee as it is a unique committee.

Today I have the honour of being here with Carol Bellringer, our foundation's new president and CEO. She comes with a tremendous amount of experience in oversight and in audit, most recently as the auditor general of British Columbia.

I'll hand it over to you, and maybe you can share with us what comes to your mind when you hear “public accounts committee”.

[Carol Bellringer, President and Chief Executive Officer, Canadian Audit and Accountability Foundation]

Thank you, Lesley.

It's interesting, because I was trying to think of that word. I thought you were going to ask them what came to mind about how they felt about being on the committee. My word was “disappointed” because I have to tell you that it's the best committee out there and I'm disappointed that I can't be joining you as a committee member.

I have a lot of experience on the other side. I was the auditor general in Manitoba for two different terms. It's one of those things that people do ask me often, if I didn't sort of figure it out the first time. Also, I then moved on to British Columbia. I've watched the Manitoba and B.C. public accounts committees in action, and I've had the pleasure of serving both of those committees as the auditor general. I've been involved with Dr. Burns and many others with the foundation I now work with and with the history of performance audits and how accountability with the committees has evolved over the years.

The foundation has been around for 40 years now, which matches the amount of time I've been in the auditing industry. I remember back to those early days when it used to be called the Canadian Comprehensive Auditing Foundation, CCAF. The “comprehensive” was brought out and it was the then auditor general James Macdonell and his colleagues in the private sector accounting firms who really came together and said that it's not enough for the public sector to know what numbers happen during the year, that is, the financial statement results; they have to know what they mean and they have to have more information to help them understand whether or not programs were delivered appropriately.

That was the start of it all, and it's evolved to a very mature place today. The foundation is in the unique position of having a lot of knowledge from the audit side. We have great support from all of the legislative auditors across Canada, and we do international work as well. Much of it is funded by Global Affairs. Currently we're doing work in Rwanda, Senegal, Guyana and Vietnam.

We also have that unique position of spending a lot of time with oversight bodies. Our work with the public accounts committee has been since the beginning. Bringing together both audit and oversight has been something the foundation is very proud of. It's always an interesting time seeing how things evolve.

There's an annual conference. For those of you who don't know about it, now you will. It's a joint conference of—and you're going to hear a ton of acronyms from the accounting profession. When your auditor throws them at you, just ask her what they mean. The CCOLA is the Canadian Conference of Legislative Auditors. They meet regularly as a group across Canada. CCPAC, of course, is the Canadian Council of Public Accounts Committees. The CCOLA and CCPAC meet once a year rotating around the country. This year was the remote one that was held in Victoria. I missed that one as I had just left my position there. It's a great time to meet your colleagues in the field and to bond with your auditors.

We have a set of slides that have been distributed to you. We'll follow them loosely. In terms of where we are, I just went through slide 2 on what the foundation is all about. We do a lot of research and training both in Canada and internationally.

As Lesley pointed out, I'm very pleased to have been invited to your committee.

Today, we're going to go through some general information about much of the research that has been collected. It is a gift from our esteemed colleague Dr. Burns. She's done a lot of work in this area. We have a lot of documents and background that we'll go through. We'll also talk a bit about performance audits.

Again, it's a bit of what it is and what it's not, and some examples of that. We hope we'll have quite a bit of time at the end to answer your questions about what would be of interest to you.

I'll hand it back now to Lesley.

By the way, Lesley, if I'm doing this wrong, just tell me and I'll go back to the slides.

[Lesley Burns]

Thank you.

As you see in slide 4, the public accounts committee is the committee responsible for overseeing that parliamentary decisions have been implemented in the way Parliament intended them to be. An effective PAC can have a huge impact on how the public sector is run, and they do this by ensuring that recommendations issued by the Auditor General are implemented.

You might be thinking that your constituents don't care about your work on the public accounts committee, and sadly for me, a lot of them might not have heard of it. However, if you take a minute to sit back and maybe even jot down what your constituents' biggest concerns are, I think you'll agree with me that all these concerns have something to do with spending implications and that your constituents do care about how their tax dollars are spent.

Your role on PACP is different from that on other committees. You won't be discussing the creation of policy, and you shouldn't be discussing policies at all.

As an example, there's no point in talking about whether a hospital should be built once it's already built. Instead, your focus might be on the process of how it was built. Is there actually a hospital there? Is it a liquor store? Was the process followed the way Parliament intended it to be? Your actions on this committee will improve how the public service is administered and how programs are administered, and that will have a lasting impact on the programs that follow. It's like creating the road. We may all be driving down the same road, so if you get those bumps out now, those bumps will be gone for the future. This can only happen if the deficiencies that are identified in the audit reports are corrected.

In the United Kingdom, the public accounts committee is a very sought after committee. Unfortunately, I don't always hear the same in Canada and across our provinces. You will be hearing later from four of your former chairs. They will discuss the impact that this committee had on them and the importance that they feel it can have, not only for Canada but also for themselves as politicians. In the U.K., the committee is often a stepping stone for promotion.

There are a few benefits to the committee. You'll learn a lot about how government functions. This will likely improve your overall understanding of many different departments in government because you'll be engaging in a number of different topics. One week you might be talking about immigration, and the next week, about drinking water. Your scope is very broad, but you're not expected to become an expert in all these topics on your own. You'll have support, because you're part of a system.

Slide 5 shows the system of accountability that you're part of. It shows the relationship between the audit office, government departments and Parliament. Working together, they can uphold an effective public administration.

It's the Auditor General's role to conduct audits of government departments. These audits are going to be evidence-based. They're independent and they're thorough. Audit reports will provide you with impartial and in-depth information. They study the audited organization in great detail, often spending thousands of person hours investigating the topic. That's time I'm willing to bet you don't have and your staff doesn't have, but these insights are all available for your use.

It is a symbiotic relationship. The public accounts committee depends on high-quality audit reports and the Auditor General requires the public accounts committee to be effective and to ensure that audit recommendations are taken seriously. It's not a mistake that Parliament is at the top of this diagram, because ultimately government agencies and ministries are not accountable to the audit office. They're accountable to Parliament and to PAC, because you are representing Parliament. You are the ones who are elected by the citizens of Canada.

Too often we hear a very well-intended elected official who's frustrated by reading in an audit report that deficiencies have been pointed out year after year, sometimes for as many as 13 years, and they haven't been fixed. That frustrated elected official will turn to the Auditor General and say, “Why haven't you done this? Why haven't you fixed this? You keep pointing out the problem.” The reason is that it's not the Auditor General's job. It's your job as an elected official. Most auditors general are too polite to say that. Again, the public service is accountable to you, not to the Auditor General. The Auditor General is there to provide you with the information you need.

When the system works, the result is more accountable government. As part of the system, the public accounts committee has various steps that need to be followed in order to hold the government to account. If you go to slide 6, I just want to give a reminder, before we move on to this, that public money has no party. You often hear when you're on the public accounts committee that you should be hanging up your party colours when you walk in the door—or, in this case, I guess, when you log on.

The federal committee is very fortunate, because you have an effective process in place. I'm going to talk to you a little bit about good practices. In these, in all of the foundations, you check those boxes. Often when we go into committees, there are practices that aren't being followed. We're working with those committees to figure out a way to build those practices within the environment they're operating in. It makes it more difficult for them to be effective and to function. But that's not what we're here to do today. As I said, you have all those practices in place.

If you go to slide 8, you'll see a list of activities. I won't go through all of these in detail, but this is a process that, based on our good practices, a public accounts committee ought to be following. I'll go into detail on a few of these in a few minutes, but I just want to highlight, again, that the federal committee is a model across the country. You are really looked up to and, if I do say, envied. You have highly qualified support staff who can lead you through all of this. In fact, one of your analysts literally wrote the book to guide support staff on the support they can be giving to the country. You also have a unique practice that was started when Mr. Sorenson was chairing the committee—namely, a legacy report that will help guide you as new committee members to where the committee left off before so that you can have a continuation and not a complete break from where the committee was previously.

Slide 9 is our good practices guide. I'm highlighting this just to let you know that we're not pulling these ideas out of thin air. This is based on numerous conversations with members of public accounts committees, in Canada but also globally, on the academic research on what makes committees, and in particular public accounts committees, effective.

You'll see that we have broken this down into three sections.

Slide 10 looks at foundational practices. Those are often things that tend to be based on legislation. Those are in place federally.

Slide 11 outlines the actions. The committee is following very good actions to be where you want to be.

Slide 12 talks about outputs. This really comes down to what you as individuals want to accomplish with the committee. If you want the committee to be ineffective, there are many ways you can do that, but you'll want to keep in mind that you are a cog in that system of accountability. If you're not doing your part, the rest of it fails. I can't remember offhand what the budget of the Auditor General's office is, but if you're not doing your role, you might as well not even be paying that, because all that hard work is far less effective. They really need you to be working with the department for any deficiencies that are pointed out.

You might be wondering what exactly you will be doing. I'm going to hand it over to Carol in a minute to talk about performance audits and some of the audits to give you a little more insight into that.

Prior to doing that, I want to point out that one of the activities you'll be spending a lot of your time doing and delving into the audit reports will be in hearing.

This is a public opportunity to get more information on what an audited organization is doing. You'll invite two main groups of people. One of those groups is representatives from departments. Typically that's a deputy minister, because that is the accounting officer who has the responsibility for administering the department. I think Mr. Murphy will probably discuss that in more detail. It is not the minister, despite people saying, “The buck stops with the minister. Why isn't it the minister?” It's not the minister because the minister is responsible for setting the policy direction. You'll not be focusing on policy; it's the administration of policy.

The other group that you'll be calling is a group from the Auditor General's office. With them you will be looking to find more insight into the audit findings. Your questions to the Auditor General would focus a little more on the scope of the audit so you can have a better understanding of the issues they have found.

I'm going to pass it over to Carol now and she can discuss a little more specifically exactly what the reports from the Auditor General's office will give you, what they will include and how you might want to be looking at them.

[Carol Bellringer]

Thank you, Lesley.

There's something Lesley already spoke about that I wanted to emphasize. The federal public accounts committee as well as the federal audit office are really held in high esteem, both within Canada and around the world. I'm not saying that just because I'm here, but from many years of observing that.

There's no question that it's a big responsibility—and I'm not trying to scare you off of something you've been appointed to—but you also have great support within your administration, and you have great support from former colleagues. As I say, it's backed by a lot of history, but it is something that as a provincial auditor general I certainly looked at, and I relied upon the work of the federal office to help me. They have a larger office, have a larger staff and they do tend to lead. When there are changes in practice, they start out of the federal audit office.

The tone from that office is very important for all of the rest of us. It will be a component in your relationship with the auditor. Again, I don't minimize the importance of that. For me, as auditor general in British Columbia and in Manitoba, the work with the public accounts committee was the best part of the job, and it was for the staff as well. They would come to the hearings and support the work they had done. That's what makes it feel like very important work. Without that moment of.... There are two elements of it that I often think about. One is that you keep that report from gathering dust on a shelf. It's what keeps the findings and the recommendations from the audit alive. Again, until it's brought into fruition within the auditee—it could be a ministry or external—and until those recommendations are implemented, the change for the benefit of the public is not made. That combination is very important.

We don't talk a lot today about the relationship with government as well, and again, not on the elected side, but on the appointed side within the organizations that are being audited, and it's an important one as well. There was a book written about 30 years ago now called Cordial But Not Cosy. The author was a woman named Sonja Sinclair. She wrote about the federal Auditor General's office. It's about that important relationship with those who are being audited, where you hold the big stick as the auditor but you have to work in a collegial fashion with those you're auditing, because influencing that change is more than just writing a report and bringing it to the committee. It's a long process. I'll get into some of the details of what's involved in doing that kind of audit, but again, it's a relationship with those you're auditing, and then a relationship with the oversight body, with the public accounts committee.

It's a lot about people and it's a lot about how they work well together, but the independence of the Auditor General's office is critical. They also need the support of the public accounts committee to help them remain independent. They speak truth to power, and it can be tough at times, but it's absolutely a critical component of the work they're doing.

[The Chair, Conservative, Kelly Block]

Thank you, Ms. Bellringer.

I note that our time is passing by quickly, and I know that we have members that probably would like to ask some questions. If you are getting close to the end of your presentation, we look forward to being able to ask those questions.

[Carol Bellringer]

Thank you. I will do that, then. I'll move through performance audits quickly.

The next slide is what one is. It is looking at programs within the public sector. It touches upon economy, efficiency and effectiveness. Those are the key words you're going to hear. You're going to hear a lot around environment as well. It is introduced often as the fourth “E”. It goes beyond, as I had mentioned before, what was spent and deals with how it was spent and what was supposed to happen.

I'm sorry, I don't know the number but turning to the slide “Performance Audits Assess...”, what was supposed to have happened? What were the intended results? Were the systems designed to achieve that? Also, within the organizations, what kind of oversight do they have?

Again, Lesley mentioned some of this, but as for what they don't assess, they don't assess the merits of policy. That's often a tough one in practice. It's easy to say that the audit doesn't get into the policy itself, but that boundary is one that they often will bump up against, so it's something to watch for.

You do need to go further than just saying.... Was the hospital built would be a good example. Yes, this is probably something we look at more often in the provincial sector, but was the hospital built? At the same time, it is important to know what the rationale was behind the decision, in the context of whether appropriate planning was done, whether there was need for it or whether it's something that goes to nowhere. It doesn't get into the policy of whether or not you supply hospitals; rather, any other dimension to that could be looked at in the performance audit.

There's a list of the core elements. You'll see those in every audit that's brought before you. It's important to read the report in as much detail as you have time for. You won't understand absolutely every element of it. You have researchers there to help you do that. However, it's important to know what they looked at.

It's a blank page when you start an audit. You have to determine what you're going to look at in the first place. Then once you're in there, you have to decide, based on risk and significance, which area we're going to pick. Then they will describe that to you in the audit report so that you can fully understand what was looked at.

If it's not in the report, they didn't look at it. It does become important to know what the scope of the audit was. That will form the foundation for the questions you're able to then ask the witnesses, those who are responsible for delivering the program, on how things are going now and whether they have remedied these recommendations, and so on.

The action plans that are put in place as a general course of business at the federal level are the envy of the provinces. Not everybody has those. They're slowly being introduced across the country as the normal course of business.

The follow-up piece is very important. It's important that the report doesn't sit on the shelf. The other part is you don't want the official to leave the room, going, “Phew, that's over. Now I can go back to business as usual.” You don't want them to just wait the report out.

These are important components of what the committee can help prevent.

As Lesley pointed out, the list is comprehensive. You're going to get everything from national defence to respect in the workplace; special examinations, which are a comprehensive look at your Crown corporations; and financial information, so understanding what the public accounts means.

Lesley, I think it's back to you for good practice six.

[The Chair, Conservative, Kelly Block]

If I may, we have 20 minutes left in our time. That basically is going to leave each party with the opportunity to ask one round of questions.

Unless there are any other real compelling comments that you would like to make before we now open it up for questions, I think I should move the committee to that opportunity.

[Lesley Burns]

We can go directly to questions.

[The Chair, Conservative, Kelly Block]

Okay. I do have a speakers list.

Yes, Mr. Fergus.

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

Thank you, Madam Chair.

It's not a point of order at all.

I just think this is important. I would really like to get a handle on this. I don't know if it's too late to create extra time for us to hear this, outside of our regular meetings, because to me this is really setting the table for me doing my work for the rest of this Parliament on public accounts.

[The Chair, Conservative, Kelly Block]

Go ahead, Mr. Longfield.

[Lloyd Longfield, Liberal, Guelph, ON]

Yes, Greg said the same thing I was thinking. Even though I've seen it once already, this is very foundational for me, if it's possible for us to get through it.