Public Accounts Committee on Oct. 29th, 2020

[Karen Hogan]

Absolutely they will, which is why I am hopeful that funding will come soon.

As I mentioned, having a decision about our funding is one thing. Then you need a parliamentary vote, and then you need the funds to flow to us. All of that adds to the time it takes for us to ramp up and be ready. As I mentioned, we've taken some actions to start our recruitment processes, but we do have to be careful. We can't over-commit when we don't have the funds yet.

We are ready, but delays, unfortunately, are inevitable.

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

You've already mentioned in your comments the calculated risk about hiring. Surely, with the pressure of COVID, I hope that.... Do you feel you will be successful, using COVID as a means?

[Karen Hogan]

I am very optimistic. COVID has taught us that we don't need to have all our auditors in a location where we have bricks and mortar. We have our main office here in Ottawa, and we have regional offices across the country. COVID has demonstrated to us that we can recruit and hire individuals from across the country, not just in the provinces where we might have a building. We're hopeful that this will bring a group of individuals who have never thought it possible to work for our office.

[The Chair, Conservative, Kelly Block]

Thank you, Ms. Hogan.

We will now move to Mr. Blanchette-Joncas.

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

Thank you, Madam Chair.

First, I want to say hello and thank you to Ms. Hogan.

Ms. Hogan, I congratulate you again on your appointment to the position of auditor general. You are a graduate of the Quebec university network. Quebeckers are proud of you being auditor general.

Ms. Hogan, we see that the government is currently too lax about the issue of underfunding. At our meeting last May, you said that you would continue to work on that aspect and that you were asking the government for the money you need to do your work. It was mentioned earlier that, since 2016, 15 requests were submitted to the government to increase the funding provided to the Office of the Auditor General. In May, you talked about a mechanism that would help avoid having to constantly keep requesting money from the government. Do you have a mechanism to suggest that would make your funding statutory and permanent?

[Karen Hogan]

As you mentioned, we have been asking for an increase to our funding for years. As I said earlier, I really see openness and progress in terms of access to funding now that we are at mid-term. The mechanism that will ensure we have access to funding is one that is independent and will avoid us requesting money from the department again. I intend to continue with those steps in the long term, but so far, our efforts have mainly focused on immediate funding. As soon as we have established that process, we could discuss how to have an independent and stable mechanism for the future.

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

That's great.

Ms. Hogan, speaking of money, your predecessor, Sylvain Ricard, who was acting in that position, was asking for an additional $10.8 million for the Office of the Auditor General's annual budget, which was $88 million. You said earlier that you requested an additional $25 million in July. What explains that increase from $10.8 million to $25 million?

[Karen Hogan]

Thank you for your question.

The explanation can be found in the passage of time. The $10.8 million was based on projections done by Mr. Ferguson, in 2017. Costs have obviously increased with time. When it comes to IT, we have really not invested in our technological systems over the years. In terms of technology, we are not just talking about a gap, but rather a cumulative lack of growth and, the longer we wait, the more it will cost to modernize our systems.

I would also like our performance audits to return to their pre-2017 levels. As a newly appointed auditor general, I would like to improve other aspects, such as our way to communicate our reports and modernize our communications with Canadians, so that our reports would be more accessible.

Those are the three main components that have contributed to the increase.

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

Thank you for the clarifications.

Last May, we were already looking into various government programs that had to be implemented quickly to respond to an unprecedented and unique situation. You then mentioned that, when the government must make decisions quickly, the risk of error is higher and the margin of error increases. You said that mechanisms should be implemented to identify potential abuse and fraud.

Since we spoke in May, what have you done on your side to implement mechanisms to identify the source of problems and avoid their recurrence?

[Karen Hogan]

It is not up to our office to implement those mechanisms. Departments must ensure to have the necessary mechanisms to detect payments made in error. I know that the department that is managing the CERB has those mechanisms.

As I said earlier, in the case of the audit on the CERB, we will begin by implementing controls. However, we have to wait a little to allow mechanisms the time to detect fraud and payments made in error. The department needs information and time to identify payments made in error, and to react and collect data.

I promise you that we will carry out that audit, but it won't be done right away.

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

Okay.

Ms. Hogan, you had a rather global vision in the past as assistant auditor general.

What priorities have you identified in terms of areas requiring improvements since you have been in your new position?

[Karen Hogan]

Are you talking about our office's priorities?

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

Yes.

[Karen Hogan]

I think modernization is one of them. Our IT has to be modernized, but also our methods, especially the way we publish our reports. That is part of discussions on our board of directors, and our entire team agrees on the areas where the office should move forward.

I think that the pandemic has also shown us that....

[The Chair, Conservative, Kelly Block]

Thank you very much, Ms. Hogan.

We will now need to move to Mr. Green.

[Matthew Green, NDP, Hamilton Centre, ON]

Madam Chair, I thank my friend from the Bloc Québécois for his solid questions.

I want to allow you the opportunity to continue in that vein, to identify what you consider to be urgent and important. When you state that you want to modernize the systems and principles, what exactly do you mean by “modernize”?

[Karen Hogan]

Thank you for following up with the same question.

We need to modernize our IT systems in order to.... If I look at audit work, we already have systems that allow us to do data analytics, but that side of the audit world is evolving rapidly. Artificial intelligence is being used. There are large amounts of data, so we need to make sure we have the systems and capability to analyze the data that the government is generating and using to inform its decision-making.

[Matthew Green, NDP, Hamilton Centre, ON]

Ms. Hogan, who would be the gold standard internationally in using the most cutting-edge technology to provide what you just described to us?

[Karen Hogan]

That's a great question. I'm not sure I know who the gold standard would be, but I can tell you that we are consulting internationally with other countries and other audit offices across the world. We are not going to be developing our own programs; we are not going to recreate the wheel. We are going to find out what's working well in other audit institutions and make sure that we can adopt software and tools that are already being used and are proven to be effective.

We also want to modernize our own processes. As I said, the way we communicate is really important, so that our audit work can reach more Canadians rather than just be used by the departments we audit. Outreach is important, so that Canadians understand that the government is honouring its commitments to them.

[Matthew Green, NDP, Hamilton Centre, ON]

Let's pull this back and internalize it. You talked about the use of the information with our committees. Would you care to comment on whether you feel that all of our departments and committees are using the data you provide them in meaningful and effective ways?

[Karen Hogan]

Well, the data that we provide to committees is really our audit reports, and the best way you can use them is to study them in a timely fashion, to invite departmental officials to discuss how they plan to address the recommendations we may have identified, and ask them for action plans. It shouldn't, however, be a “one and done” deal. You should make sure that you follow up with them, because the outcome is really to improve the lives of Canadians and the programs and services that are provided. Sometimes a continuous pressure is needed.

[Matthew Green, NDP, Hamilton Centre, ON]

According to the 2018-19 departmental results report, 58% of reports presented to Parliament were reviewed by a parliamentary committee. It has your target as being 65%. How can parliamentary committees, other than our committee, of course, the gold standard of the Standing Committee on Public Accounts, be encouraged to further review your reports to guide their work?

[Karen Hogan]

When you look at that statistic, you see that it might make it look like reviewing our work went down. But you also have to recognize that in the past we did not table all of our special examinations on Crown corporations. We have started to table those with Parliament, so that they're all accessible in one place for committees to study. It looks a little worse than it really is.

[Matthew Green, NDP, Hamilton Centre, ON]

That's fair. We'll keep that for the record.

There was talk about fair mechanisms. You started down that line on fair mechanisms for funding. Certainly having to go to the Department of Finance currently to get your funding.... Back in May, you talked about the need for long-term, predictable funding. What are the independent mechanisms that could be implemented, and what are similar mechanisms that are used in other jurisdictions?

[Karen Hogan]

There are independent funding mechanisms that can be used. As an example right in our own country, some of the provinces function that way, and other countries, I believe Australia and the U.K., function that way as well.

One of the options would be for a special committee or the public accounts committee—the committee to which we as an office typically come—to have an opportunity to review our funding and ensure that we get access to funds in a timely fashion. This would allow us to rightsize—not just upwards, but upwards and downwards—to deal with perhaps temporary issues, for example the pandemic.

If a special request is there to audit something that would be above and beyond our planned work, an independent mechanism that's a little more agile than the traditional mechanism used for the departments and agencies would enable us to respond better and deliver better quality faster to Parliament.