Mr. Speaker, I am pleased to provide further information on the point of order raised in the House on October 2 by the hon. member for St. Albert.
The member noted that the Auditor General's report on the Office of the Privacy Commissioner suggested that the office exceeded its authorized parliamentary expenditure for 2002-03 appropriations by a sum of $234,000 in unpaid liabilities and that the office had submitted inaccurate information in that respect, or so the allegation goes.
I would like to advise the House that the office in question had decided, so I am informed, not to accrue certain payables, including those for performance pay and salary, but to record the expenditures in fiscal year 2003-04 rather than record these expenditures in fiscal year 2002-03 as required by the Financial Administration Act and the Treasury Board policy on payables at year end.
Upon being alerted by the Office of the Auditor General that expenditures had not been recorded accurately, the Office of the Privacy Commissioner, with direction from the Treasury Board Secretariat, processed an accounting entry to record the expenditures properly in the year 2002-03.
This item is now being handled under a well-established process which I will now describe.
The Financial Administration Act and the Treasury Board policies set out a clear authorization process for dealing with such expenditures.
Members will no doubt know that section 37.1 of the Financial Administration Act require that:
--a debt incurred by Her Majesty...and any amount due or owing under a contract, contribution or other similar arrangement entered into before the end of the fiscal year that remains unpaid at the end of the fiscal year, shall be recorded as a charge against the appropriation to which it relates.
Furthermore, the Treasury Board policy on payables at the end of the year states:
It is the policy of the Government of Canada to record liabilities to outside organizations and individuals incurred up to and including March 31st...and to charge them to existing appropriations...even when the appropriation has been, or will be over-expended.
Therefore, the $234,000 will be recorded in the public accounts for 2002-03 since that is the year when the expenses were incurred.
This will result in reporting in the Public Accounts 2002-03 an overexpenditure on that vote, in this case Vote 45 of the Office of the Privacy Commissioner, by approximately $234,000, which is the amount that I was describing a moment ago.
Section 37.1 of the Financial Administration Act authorizes the payment of these overexpenditures through a well-established process for handling this kind of situation.
This section requires that when, and I quote:
--a payment is made that results in an expenditure that is in excess of an appropriation,
(a) the amount by which the expenditure exceeds the balance then remaining in the appropriation constitutes a first charge against the next appropriation of the immediately subsequent fiscal year;
Under the Treasury Board policy on payables at year end, it states:
Where the limit of an appropriation is overexpended...a reserved allotment for the amount of the excess must be established against the equivalent appropriation in the following fiscal year.
Otherwise there would be no mechanism for paying it.
Through the reserved allotment, Treasury Board controls the discharge of the overexpenditure.
In conclusion, Parliament, through the Financial Administration Act, anticipated payments in excess of appropriations, as they sometimes occur and in such special cases, and established in that act the means by which such special expenditures can be authorized and charged against the appropriation of the next year.
The expenditure in question is being dealt with in the proper way. If the Table or you, Mr. Speaker, need to have access to the documentation, the actual pages of the existing Treasury Board policy and the Financial Administration Act, I will gladly arrange for the officials to make those available to Mr. Speaker to render his decision should those be necessary. However I believe the explanation that I gave was quite clear and that most members will have understood it full well and will be more than satisfied.