Public Accounts Committee on May 8th, 2023

[The Chair, Conservative, John Williamson]

Thank you.

Mr. Fragiskatos, you have the floor for six minutes as well, please.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you, Chair.

Thank you to all of you for being here again today.

Auditor General, last year you spoke about the international work of your office. I wonder if you could expand on that in terms of relationships your office has with similar offices, particularly in emerging democracies, but add anything you want as well.

[Karen Hogan]

I'll let my colleagues think about whether they want to jump in.

We are the independent external auditor for two international organizations. It was UNESCO and Interpol in the year in question.

We do that work, but we do a lot of engagement on the INTOSAI front on sustainable development goals. We also welcome international fellows into our office in order to encourage and develop performance audit capacities in international organizations.

Then we do spend a lot of time actually collaborating with the auditors general across the country at the provincial level—and I've started to engage with some at the municipal level—so we can share best practices and support each other across the country.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you very much.

Staying with the international focus, how do you measure outcomes in terms of the engagement and whether or not it is producing the expected results you're hoping for?

[Karen Hogan]

I might turn to Paule-Anny to add how we intend to do that more consistently in the future.

Admittedly, we probably didn't measure outcomes as well as we should have in the past few years. We would measure it on exactly what I accuse some departments of using, which are the outputs we do, such as speaking engagements or fellows we might welcome, or committees we might participate in on INTOSAI. Our intention is to be a little more focused and actually measure our outcomes in a better way.

Paule-Anny, did you want to add anything?

[Paule-Anny Pierre, Assistant Auditor General, Office of the Auditor General]

Yes, sure.

As part of the new suite of indicators that we are introducing at the program level, we will have indicators that will seek to get feedback from those different partners—even entities and members of this committee—to assess to what extent we bring value, to what extent our work is useful and to what extent it supports reporting or accountability responsibilities.

You will see those in the new departmental results framework, which is to be reported in two years.

[Peter Fragiskatos, Liberal, London North Centre, ON]

I wanted to shift focus to hiring and maybe to the challenges that exist in hiring, although I do see that about 150 employees have been added during the pandemic, which is significant, I think.

I often hear this from different departments, for example, where there's competition with the private sector. The Deloittes of the world, to use just one example, have the ability to pay quite well, and so does the Canadian public service, obviously, but there is that competition factor there.

Do you have any comments, Auditor General, on the nature of that challenge and whether it is a real challenge? If it is, does it stand in the way of your ability as an office to continue to maintain a sizable workforce so that you can continue to do the work that you do?

[Karen Hogan]

There are a lot of elements that play into our ability to attract and retain the skilled professional resources that we need. I think in any given year, normal attrition sees us needing to hire about 100 individuals across the organization. That ebbs and flows. Sometimes it's a little higher than that.

While we hired many during the pandemic, we also received additional funding. The intention was to ramp up and increase our workforce.

I could talk a bit about the profession, and then I would like to talk about the impact the strike had on our organization.

I would say the accounting profession in general—given that a significant amount of our workforce is made up of CPAs and financial auditors—is seeing a decline in people going into accounting and then, more importantly, going into the auditing field of accounting. You can get your CPA now in so many varied ways. That is just a reality that AG offices across the country and accounting firms are facing.

That being said, we also hire so many other, diverse professions. We have lawyers, engineers and economists. There's always an issue on that front.

We struggled a lot in the area of professionals in communications and professionals linked to public service matters, including HR professionals and procurement professionals.

All of our support services were on strike, really, so if we go back to the impact of the strike, we had about 170 people who were out on the picket line. By the time everyone returned, after we had a deal and about a month later, we saw that of those 170, about 35 or so had left the organization for various reasons.

We then saw a sharp increase in sick leave. We were hard hit in our procurement office, HR and communications, for sure. For example, we wanted to have 14 procurement officers in order to support our modernization efforts, but a month after the strike, we were down to three. We have to re-staff all of that. It causes so many delays in our ability to advance projects, and then there is the need to hire. We saw a sharp decline of about two-thirds in our HR capacity, which really ground hiring to a halt.

I think there are many factors that play into the difficulty in properly resourcing an organization.

[The Chair, Conservative, John Williamson]

Thank you. That is all the time.

Ms. Sinclair-Desgagné, you have the floor for six minutes.

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

Thank you, Mr. Chair.

I'd like to thank the witnesses for having come here in person. I'm pleased to see the many faces here for a meeting that we might describe as more normal.

My first question is about the fact that you said you had produced fewer reports this year, owing to the strike. In a normal year, what percentage is allocated, let's say, to public account audits, departmental performance audits and Crown corporation performance audits? We know that the latter, in most instances, are already audited by external auditors.

If you could briefly provide an estimate of all that, it would help me understand.

[Karen Hogan]

It's funny that you should think it was more like a normal meeting. For me, it certainly isn't because I seem to be answering all the questions rather than the ministers, but I'm okay with that.

In a typical year, I'd say that about two-thirds of our auditors are financial auditors. That's a lot of work. It represents approximately 260 employees on the financial side. That covers federal and territorial financial audits. For the performance audits, we average about 170 auditors, and for the rest—

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

You're saying that two-thirds are financial auditors. What's the other third?

[Karen Hogan]

Can someone tell me what 170 out of 800 amounts to? I'm not a calculator. Is that about 20%?

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

Yes, that's it, one-fifth.

[Karen Hogan]

So 20% of the employees do performance audits.

You mentioned Crown corporation audits. We are the external auditor for most of the parent Crown corporations, except for a few. We sometimes do a joint audit with an external accounting firm, and sometimes we are the only auditor. We audit most of the parent Crown corporations, but not necessarily their subsidiaries.

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

In a normal year, how many performance audits are you capable of doing, prior to the funding increase that will enable you to hire more employees and potentially do more audits?

[Karen Hogan]

Before our funding increase, we had done about 14 performance audits, three of which were for territorial governments. We try to do one performance audit per territory each year. So there were 11 for the federal government and three for territorial governments. Our usual objective is to do 25, three of which are for territorial governments. That means 22 for the federal government. That's in addition to all the other annual reports that the Commissioner of the Environment and Sustainable Development has to produce under the act.

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

This year, of course, on top of everything else, there was a strike. How many performance audits did you do in all?

[Karen Hogan]

I don't think you're talking about the fiscal year covered by the current study, which is 2021‑2022, but rather the one that just ended.

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

That's right.

[Karen Hogan]

I think we've done 23 audits, but we need to factor in the audit for Bill C‑2.

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

Right, for support related to the pandemic.

[Karen Hogan]

The audit of support programs for COVID‑19 was huge. It covered around six programs, so that could make the number a bit higher.

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

My next question is about the Crown corporations.

During the 2020‑2021 fiscal year, there were relatively few performance audits of Crown corporations. We know that they weren't included in the Public Accounts of Canada. As you mentioned, your office is the external auditor for most parent corporations, with the exception of a few, and it sometimes does these audits jointly. So you can do performance audits for them, but that's all, if I've understood correctly.

[Karen Hogan]

Our mandate for the Crown corporations is rather complicated. We do an annual audit of the financial statements for almost all the parent corporations.