Public Accounts Committee on March 11th, 2021

[Karen Hogan]

When it comes to our physical space, we have not made any changes to our physical space yet. That was at the request of Treasury Board as we all sort out what's going on. We're in an active dialogue with them continuously about what our physical space might look like. What we've communicated to all of our employees is that flexibility is going to be our way forward.

We definitely see a hybrid workforce going forward. What I can tell you with regard to the individuals we've hired in the last year is that about a quarter of them, I believe, are in cities where we do not have bricks and mortar. We have regional offices across the country. Traditionally we would hire only in those cities or make people relocate, and we have not done that. We are just looking for talent across the country and telling them that they can work from home right now, and we're going to sort out what that might look like in the future.

Currently, the majority of our workforce is at home. We do have certain facilities, individuals and IT folks who are in on a more regular basis. We do have people who regularly require access in order to access secret documents in our building, but for the most part, we are all working from home, respecting public health guidelines and doing our part.

What we see as the way forward, though, is that it will likely be hybrid. You'll be in. You'll be out. You'll be at entities. You'll be at home. You'll be at work. Work is what you do, not where you go.

[Len Webber, Conservative, Calgary Confederation, AB]

Exactly. Exactly. So I don't see any plans in your department for any renovations or any expansions of office space in the near future?

[Karen Hogan]

I think as we will likely downsize, we'll have to do some reconfiguring; that's for sure. But right now, we've done nothing. We've closed off places actually so that if individuals go in, they can't get access in large numbers.

[Len Webber, Conservative, Calgary Confederation, AB]

Right. Okay.

I just want to quickly go to an area that was brought up earlier about your future audits, of course, pandemic-related audits that you mentioned.

We all know that you do audits of government departments and Crown corporations and such and even provincial audits. I'm just curious to know whether an audit of your department has ever been done and who would do that. Who audits the Office of the Auditor General? I'm just curious. When was the last audit, and who did it? Can you just talk a little about that?

[Karen Hogan]

Absolutely. Everybody wants to know who audits the auditors.

We have a few audits. We have an annual financial audit, like most entities do, which is carried out by an accounting firm that is independent from us, and we rotate firms on an occasional basis. That's the financial side.

We have an internal audit shop that carries out traditional internal audit work across our office. We also have peer reviews. I was in the office when Sheila Fraser and Mike Ferguson launched their peer review, whereby supreme audit institutes from other parts of the country would come in and review our office. I committed at the beginning of my mandate that before I was done, we would do a peer review as well. The peer review really looks at the entire office—our performance audits, our internal operations and our financial audit work.

I also want to add that because we are a teaching office for CPAs, we are regularly inspected by provincial institutes as well as to how we mentor and train our students and whether or not we adequately support them to get their designations going forward. So there are a lot of people looking at us.

[Len Webber, Conservative, Calgary Confederation, AB]

Excellent. Thanks for that.

Madam Chair, I think I'm out of time.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Webber. That was a great question.

We will now go to Mr. Longfield for five minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Thanks, Madam Chair.

Thanks, Ms. Hogan and your staff, for being here. Thanks to my colleagues for a great meeting and great discussions.

I want to build on some of the areas that Mr. Lawrence and Mr. Green were touching on, which was how we work better together and what we could do to help your work. You're definitely helping our work with some of what you're discussing today.

There are two areas for me in terms of how we work together. One is SWOT analysis. It's something I lived and breathed for about 30 years in business. The particular part of the SWOT analysis is the threats as you're auditing.

We had an impassioned discussion about indigenous water supply and clean water for all Canadians. One of the threats that the elders brought up with me—one elder in particular in Sioux Lookout—was to stop making the water dirty and then we would have a better shot at having clean water. There are things like the clean water agency or ways to stop water pollution at its source. You look at the process, but the actual threat might be outside the process.

Could you comment, Ms. Hogan, on how we could address the external threats to the audits you're performing?

[Karen Hogan]

That's a great question. I didn't think that was where you were going when you were asking that question.

I have a few things on that. You wanted to know how you could help support better. I think when you bring departments and entities in front of you, it's definitely keeping the constant focus on the quality of their data and on the importance of knowing what data they need, how they collect it, store it, retrieve it and use it. Really, it's about having a data strategy. I think every organization should have one. That's a really important one.

It's to continue to push accountability and transparency, and actually getting answers that are focused on outcomes and staying focused there.

If we had issues about access, we would come to you and we would hope that you would be able to help us address access issues from that front.

For external threats.... It's a great dialogue, which I've even started with the commissioner of the environment. It was interesting to hear your comment about water. I do think that's a focus that we must have when we look at audit selection. Then it's the kinds of questions that you might ask when we come here.

We often have a hard time getting to some of the root causes in our audits, so asking the departments about that and challenging them to think that way would go a long way. It will likely take some time to change that headspace, but we should be able to do that together.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

At the environment committee yesterday, we had Mr. DeMarco talking about hiring people within his department to do a better job of getting to the root cause of some of the environmental audits being done. He also mentioned all of the support staff—the legal people and the people in the background—who support the audits because there has been a public discussion about the need for a separate group of people auditing environmental concerns. He was allaying some of those concerns by saying that we have some investment happening right now. They're developing more expertise on the environment.

How that gets communicated out to the public is another question that I might have. What are your main focus areas as you're building out your staff? Are you really developing a centre of excellence idea around the environmental audits?

[Karen Hogan]

Jerry DeMarco has been with the office, I think it's been, five weeks now. Andrew Hayes, who was the interim commissioner, and I have had many dialogues with him about that.

We are focused on building a centre of excellence, but recognize that to some degree we need to mainstream SDGs in our audits to encourage all of government to mainstream them. That's the best way to focus on actually achieving some of those outcomes.

We have to do that on the audit side because I think it's the expectation that everyone start thinking about the impacts of what they do on the environment, on society and on the economy.

[Lloyd Longfield, Liberal, Guelph, ON]

In terms of conflicting pieces in audits, I met earlier today with some researchers on translational research on drugs, where the pharmaceutical companies won't invest if they're in a country where they're not making money. You have conflicting programs that will also somehow have to be sorted out.

I think I'm out of time. I just put that as another one. The opportunity is how we manage the conflicting programs.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Longfield.

We will now go to the two-and-a-half-minute round of questioning, starting with Mr. Blanchette-Joncas.

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

Thank you, Madam Chair.

Ms. Hogan, during your opening remarks I was pleased to see your enthusiasm when you mentioned the possibility of taking stock of past audits. We know that in the context of the pandemic, we made historic investments.

Your office already did a study, in December 2008, on federal transfer payments to the provinces and territories. Would it be relevant, or even feasible, to conduct an update of that study soon?

[Karen Hogan]

I confess I am not aware of this study; we have so many reports. However, I thank you for bringing this study to my attention. I will look into it.

We do try to take stock of several reports. It's not always easy to take stock of certain recommendations. Sometimes it's easier to review measures that are more easily verifiable than some broader action.

We will definitely go back to doing more follow-up. Given the pressure on our resources, this is one of the areas we had neglected. Now we want to increase the frequency of follow-ups, because a follow-up allows us to make changes. I hope it will be possible to do a follow-up every year. Once you see our new product, I hope we will be able to update it regularly. Maybe it will be every 18 months. Either way, we hope for more frequent follow-ups than once every five or six years.

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

Ms. Hogan, I would like to specify that this study conducted in 2008 focused on transfer payments, particularly for social programs.

As you can see, the federal government currently makes transfers to the territories and provinces, including Quebec. I think it would be relevant to look at that, to see how that fits into the current pandemic context where there are record investments.

How can we proceed, if we want to undertake this kind of study?

[Karen Hogan]

We review transfer payments every year as part of the audit of the public accounts of Canada. That said, a study is a little different than an audit. But I did note your suggestion. I don't know what else to say about it.

[The Chair, Conservative, Kelly Block]

Thank you very much.

Thank you very much, Mr. Blanchette-Joncas.

We will now move to Mr. Green, for two and a half minutes.

[Matthew Green, NDP, Hamilton Centre, ON]

Thank you very much.

I want to provide you with an opportunity to address security issues.

In your 2019-20 departmental results report, you stated that the security team had one security incident during the year, where a third party released content from one of your draft audit reports, and that you conducted an investigation and immediately put mitigating factors in place.

What was the nature of the breach and the reasons it happened, and what were the measures put in place to mitigate the risk of something similar happening?

[Karen Hogan]

I might turn to Andrew to add some details, but I think I should be able to answer all of your question.

The nature of the breach was that an individual who was an adviser on a financial audit, an academic, released some of the contents of our audit report before it was tabled in the House. As soon as that happened, we did an investigation. We alerted the individual that they were in breach of the confidentiality clause they had agreed to when signing on to become an adviser on one of our audits.

We take any pre-release of our reports very seriously. We believe it's important that they be released to Parliament as a whole, all at once, and that any individual who might provide us with advice or guidance throughout the process needs to respect that need to keep the information embargoed.

I don't know, Andrew, if—

[Matthew Green, NDP, Hamilton Centre, ON]

Are they still a consultant with you? What happens with something like an NDA when there is a disclosure breach? Are they now on a blacklist, or are they excluded?

[Karen Hogan]

Andrew, do you think you could add to that?

[Andrew Hayes, Deputy Auditor General, Office of the Auditor General]

Yes. That adviser was on a very specific audit. That person had very specific expertise. It's not somebody we have used regularly, and we haven't used their services since.

If that were to happen with somebody who was regularly contracting with us, we would enforce the confidentiality provisions. If they weren't able to continue to maintain confidentiality, we wouldn't use them anymore.

[Matthew Green, NDP, Hamilton Centre, ON]

I'm satisfied with that. I think it was important for us to have the opportunity to address that as a committee. I say this because what happens is that this stuff, the political nature or sensitivity of the information you are handling and the relationships involved in a very small town called Ottawa, can become very problematic. I'll say, without knowing all or the details or getting into them, that I would caution the department from being potentially impugned by the indiscretions of consultants it brings on. Perhaps there could be a better onboarding orientation process or a clearer NDA process to ensure that it doesn't happen again.

[The Chair, Conservative, Kelly Block]

Thank you very much, Mr. Green.

We will now move to our five-minute round of questioning, starting with Mr. Berthold.