Public Accounts Committee on May 5th, 2022

[Karen Hogan]

Okay.

I think everybody plays a very important role in terms of accountability. I take my role very seriously, and I feel privileged to have been in this position for a decade.

When there are expenditures that are not budgeted for, we check their financial impact during our audit of the public accounts of Canada. We always check for unforeseen expenditures in this way.

In terms of the operational audit, that is, to see if the money has been spent and if there is value added, we check whether the expenditures are in our pool of issues. If they are, we will look at them after the fact, not when they are made.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Okay.

We've seen many unforeseen expenditures in recent years, such as the government's purchase of the Trans Mountain pipeline and other expenditures to help certain areas affected by natural disasters.

To what extent did the Office of the Auditor General audit those expenditures? Did it audit some or did it review most of them?

[Karen Hogan]

That's a very good question.

In the past three years, much spending has been related to the pandemic. We performed detailed audits of the programs related to the public health situation and we continue to do so. As far as that is concerned, I'd say that we've reviewed the majority of unanticipated funding.

With respect to the pipeline, we are the joint auditors for the financial information. We audit the financial aspects of the expenditures, but we don't do performance audits because it's a Crown corporation.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Okay.

Here's my second question for you.

In terms of government spending, knowing how big a vehicle Crown corporations are, do you feel that an audit by accounting standards and the International Financial Reporting Standards is adequate for you to compare, look at or add up expenditures, if I may put it that way?

In other words, do you consider the audits of Crown corporations to be sufficient? Could we improve on them, by standardizing what's required from departments and Crown corporations, for example?

[Karen Hogan]

First, as Auditor General of Canada, I believe I should be the auditor for all parent Crown corporations. I see that as essential to ensure that I understand all government spending.

The financial audits are sufficient for us to issue our opinion on financial statements. The information you were looking for when we appeared last Tuesday was really about the supplementary information. I must admit that it's hard to keep track of all consolidated government spending when there are major programs related to Crown corporations. You have to look at the Crown corporations' annual reports to be able to gather all the information.

There is indeed a gap in terms of consolidated information on specific topics. I believe the comptroller general said that he'd like to work with you to get a better sense of your needs and expectations.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

That's right.

Mr. Chair, since I only have 10 seconds left, I will stop here.

Thank you.

[The Chair, Conservative, John Williamson]

Thank you very much, Ms. Sinclair-Desgagné.

We'll turn now to Mr. Desjarlais.

You have the floor for six minutes, please.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

I want to thank the Auditor General for being with us today.

I really want to just highlight how thankful I am for your remarks at the beginning related to what I believe to be a very historic moment for the Auditor General's office in the sense that this was their first strike. Coming from the workers' movement and coming from labour, I'm sure you probably expect that I will ask questions related to this deeply troubling reality facing our public service, which is the fact that many employees are feeling that the environment that's currently being provided is inadequate to their success and to their productivity.

Coming out of that strike, of course, I've worked very closely with members of the public service, particularly the Public Service Alliance of Canada, in trying to make sure there's accountability for employers across the board.

You mentioned that the goal in this healing process is, in many ways, to foster “a diverse and inclusive environment where the health and wellness of staff is paramount, where employees have opportunities for learning and growth, and where culture helps attract and retain diverse, skilled, and engaged professionals. This includes providing safe, flexible, hybrid working environments with the tools needed to enhance collaboration.”

Coming from the workers' movement and from collective bargaining myself, I know that oftentimes when we settle a collective bargaining process, the employer may at times take that opportunity, since the strike is no longer valid, to discipline members within that action group.

Can the Auditor General confirm to me today that there is no such disciplinary action for those who participated in the strike?

[Karen Hogan]

I am not aware of any activities that actually require discipline right now. I do know that many employees were quite emotional during the strike, as is understandable. We reminded all our employees that they are always public servants, and that they need to maintain and respect our code of conduct and code of ethics when they're at work and when they're not at work.

However, I am not aware right now of any disciplinary action against any of our employees.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much for that response.

Just to confirm, in the instance where a potential disciplinary action is taken, are you directly informed?

[Karen Hogan]

It would depend on the nature of the disciplinary action. There are always work plans to help improve productivity of individuals. I would not be made aware of all of those plans.

I would be made aware of disciplinary actions that might have an impact on salary compensation or would result in revoking security clearances or terminations.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

How do you intend to truly foster a healing environment, considering that the level of mistrust between the employer and the employees at this time is quite fragile, in the sense that your conduct in your office has resulted in the very first strike?

[Karen Hogan]

I think that the level of mistrust you talk about has been long-standing in our organization. For many decades, the organization has operated in a bit of a silo fashion. I think many departments could say the exact same thing. In fact, I find in many audits that there are areas in departments that just don't talk to other areas. It's something that we need to address as an organization, absolutely. I firmly believe that every member of our organization is valuable and contributes in very meaningful ways to delivering all of our audits.

Our healing process will include dialogue with all of the members of the organization, so they can contribute to how we would like to work better and be better together. It has already started. We have hired services from Health Canada to help us in this endeavour. So far, I'm hearing very positive feedback about the openness, the willingness and the desire for people to talk about what's gone on over decades and how we can be different going forward.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

My final question relates to the audit service group. They were told in many instances during the strike that they were not professionals of the department. This has resulted in their feeling very much as though they have very little respect in the workplace.

Do you seek to remedy this? Are they professional employees?

[Karen Hogan]

I can't speak to the comments that every individual within our organization might make, but I fully believe that all of the individuals in our organization are professional. Everyone brings a very different, unique competency to the organization. We have communication specialists and procurement specialists and contracting specialists. Everyone is a professional in their field and should be recognized as such.

Now it's about the entire organization recognizing the value and the diversity of skills that each member brings to the table. How can we leverage that to just be a better organization, going forward?

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

There is the need for a cultural shift—I hope you can see that—in the sense that a lot of people, a massive amount of the audit services group, felt this way. It was a massive group, and they continue to feel this way. I'm concerned. I don't have confidence in the office's ability to truly respect their employees, which means they won't have the true ability to audit the departments that Canadians need them to in the sense that we have full integrity in them.

In the sense of the audit services group's feeling of not being respected, is there a special plan to ensure that the audit services group feels included and respected, and that the management truly understands what they're going through? The feeling of disrespect is probably the most common thing I heard on the picket line, just outside our office here, for weeks and weeks and weeks. They told us how disrespected they felt.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Desjarlais. The time is up. The auditor will have to try to answer that in a future round of questioning.

I'm turning to the second round now. I do believe there is consensus to go through the second round, at which point we will turn to the votes on the estimates and then suspend for an in camera meeting for the last 15 minutes.

If that's not the case, if someone objects to that, could you talk to the clerk? My understanding is that we'll do this last round and then turn to committee business.

I'll turn now to Mr. Duncan.

You have the floor, please, for five minutes.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

Thank you, Mr. Chair.

Thank you to the Auditor General for being here again today. Welcome back.

I want to pick up on some of the comments. We've spoken about the budget. Different members have raised this. The expenditures for the office went from $87.6 million to $114 million. I'm looking here at the tables that were provided to us. The number of employees increased by about 180 employees. The number of audits that are to be tabled, as you get onboarded and ramped up, is obviously something, but I want to speak to the efficacy—Mr. Lawrence was raising this as well—and the follow-up that I believe is lacking.

I want to make sure that perhaps.... Of those increased resources, how much is really going to following up on some of the reports that have already been done and the recommendations that have been given, to make sure that departments are actually doing what they said they were going to do?

I want to give an example, if I could, through the recent correspondence we've received from Indigenous Services Canada regarding their progress on the Auditor General's report in 2018. Recommendation two talks about the negotiation of regional education agreements. In the report that public accounts did in 2018, it concluded that “Indigenous Services Canada has not satisfactorily measured Canada’s progress in closing the socio-economic gaps between on-reserve First Nations people and other Canadians, that it has not adequately reported on this progress, and that it has not made proper use of data to improve education programs”. That was back in 2018.

We recently received correspondence from the department, through the chair, that says they're still unable at this point to finalize some of these numbers, and they're asking to have until March 2023. That's five years after this original report that criticized them for not being able to do reporting properly and use data properly. It's taken five years to put some of these reports together.

I'm wondering if you could speak about the teeth you have and the staffing resources you're dedicating to following up with these departments and perhaps being a bit more assertive, saying to the department, “Excuse me; this is unacceptable that it's taking five years and a scathing report to get certain key aspects back.”

[Karen Hogan]

I do recognize the need for us to follow up on important audit work. Now, every audit we do is important, so it's hard to do a follow-up on every single audit.

We have devoted a team, as I mentioned, to a new product that we launched this past year on following up on results measurement. That team will be updating that, right now, on an annual basis, and we'll try to do it more regularly if we can. It is picking certain key results or certain key recommendations and going back to departments and asking them to demonstrate to us whether or not they have taken the appropriate action.

I encourage you to visit our website to take a look at that. It is a new product, in its infancy, and we hope to keep working on it. Throughout our audit selection, we pick certain topics to go back and revisit. In fact, there is an audit coming out on Correctional Services that follows up on three previous audits. We do try to find topics and devote a whole audit to them as well.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

In the increased funding that you've been provided, the increased number of human resources, the actual numbers, full-time equivalents or whatever the number may be, what percentage are you dedicating to following up?

Here's the problem: Websites are great and posting it online is great. I find myself, as a member of public accounts, getting overwhelmed with reports and numbers and datasets. What resources are you going out...where you're using your voice to go back to a department? In this case here, with five years to properly respond to a report that ripped them for not being able to adequately report or use data properly, they're proving it right in the sense that it's taken five years to do this.

Yes, you're tabling it online and you're saying the department needs an extra year. What resources and teeth is your office using to say, “Excuse me, but no, we're not going to post something on the website. We're going to follow up and go back to public accounts and say Indigenous Services Canada is being completely unacceptable in their time frames and reasoning. We criticized their need to get their act together. They still haven't done that in some regards.”

What resources are you dedicating to provide us or Canadians, through your voice, to not just provide transparency on what's not being done but on how it's being done?

[Karen Hogan]

I actually don't have a percentage to give you to tell you what resources we devote to follow-up work. We don't really line up or staff ourselves that way. I could probably look into it and tell you how much we've done over the past year. Then we'd have to be intentional about planning in order to provide you with a specific percentage.

There's a dual role, however, the committees play in addition to us, so I was really happy to see that there will be another hearing on drinking water. Unfortunately, we don't have the resources to go in and do a follow-up, so we're going to be there to hear what the department has to say and maybe eventually get to a follow-up. As I say, an audit takes a good 12 months and there are so many areas to cover.

[The Chair, Conservative, John Williamson]

Thank you very much, Ms. Hogan.

I have to move on, but I appreciate those remarks. It was a good round.

We are turning now to Ms. Yip.

You have the floor for five minutes, please. It's over to you.

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

Thank you, Ms. Hogan, for the important work that you and your team do in holding the government and agencies to account, and also informing Canadians about what your office does through communicating through social media as well as through the website.

My first question is in regard to revenue. It is in reference to volume II, section 8, page 35. What are the revenue streams for the OAG?

[Karen Hogan]

I believe your references are in the public accounts of Canada. I'm not sure I know them by heart, but our revenue streams are really parliamentary appropriations. We do have the authority to do some international audit work on a cost-recovery basis, so we do have some revenue there that is meant to recover costs for two international jobs that we do.

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

Are there any plans to increase your sources of revenue, especially since there was a decrease of 44% from the previous year?