Mr. Speaker, I will be sharing my time with the hon. member for Hillsborough.
I am very pleased to participate in this debate on the Auditor General's 2002 reports. However, I should mention that I question the usefulness of this motion, since we all know that this House considers these important reports on a regular—and I could even say mandatory—basis. They are subject to special consideration by the Standing Committee on Public Accounts.
That said, I am very pleased to be here, because I believe this matter to be of fundamental importance to our democratic government, which is morally and legally responsible to Parliament and Canadians.
Canadians expect the taxes they pay to be put to the best possible use. Confidence in our democratic system depends on the certainty that public moneys will be spent wisely and effectively. To that end, the government must be transparent and provide regular reports.
We have good mechanisms for ensuring proper accountability. The government must report on its performance, through the public accounts, the estimates, and various annual reports. These documents, and many others, provide the hon. members and the Canadian public with a large quantity of information, which ensures that the government is held accountable. One of the essential elements of this accountability is the independent auditing of this information.
Under the Auditor General Act, the Auditor General is responsible for determining the accuracy of financial statements and if the government is properly administering its affairs.
The government so fundamentally believes in the concept of independent verification that in 1994 upon taking office the act was amended to allow the auditor general to report four times a year in addition to special studies. This independent reporting is essential to helping us to improve the functioning of government.
In her assessments the Auditor General addresses three main questions. The first is: Is the government keeping proper accounts and records in presenting its financial information accurately? This is called financial attest auditing. Auditors general attest to or verify the accuracy of financial statements.
The second question is: Did the government collect or spend the authorized amount of money and for the purposes intended by Parliament? This is called compliance auditing. The Auditor General determines whether the government has complied with Parliament's wishes.
The third question is: Were programs run economically and efficiently? Does the government have the means to measure their effectiveness? This is called value for money in which the Auditor General asks whether taxpayers got value for their tax dollars.
A value for money audit judges how well a policy or a program was implemented. This is the same objective Treasury Board has as the management board of the Government of Canada.
The Auditor General is an important partner in our efforts to improve the government's management practices. When she speaks, we listen and when it is appropriate to do so, we take action.
Allow me to provide a few recent examples of accountability to Parliament.
For many years, the Auditor General and her predecessors pointed out the necessity of reforming human resources management in the public service. The Auditor General recommended both legislative and non-legislative changes so as to clarify the role of the key stakeholders, improve human resource planning and manage those resources within a more strategic perspective.
This required a major reworking of the complex rules-based staffing system, which hindered the recruiting of qualified candidates to the public service.
The government has responded and proposed the most extensive legislative reform in more than 35 years. At the present time, this House is engaged in examining the public service modernization bill, which will allow more leeway to managers for hiring staff on the one hand, and create a framework of accountability and protective mechanisms on the other, with a view to striking a proper balance of powers within the system. The bill also clarifies the roles of the key stakeholders in human resource management.
Another point on which we agree with the Auditor General is the necessity to bolster the very foundations of modern administration, namely performance information, risk management, good stewardship of public resources, values and ethics. These are what we consider the function of a modern comptroller.
The Treasury Board requires all departments and agencies to create this modern comptrollership function and I am pleased to be able to say that this new practice has been inaugurated in 89 departments or agencies, and the results are beginning to show. In her 2002 report, the Auditor General again confirmed the importance of this initiative to enhance the government's administrative capacities.
We also agree with the Auditor General on the need to improve department reporting to Parliament. Over the last few years we have renewed our guidance to departments on performance reporting and increased our investment in evaluation and performance measurements. We have sponsored learning events and continue to review departmental performance reports on an annual basis.
We have renewed this commitment to improved performance reporting in this year's budget. Our focus remains on improving the relevance, clarity and timeliness of performance information. We will be investigating ways to use electronic reporting as well as other means to maximize transparency and accountability to parliamentarians and Canadians.
For many years auditors general have also recommended that the government implement full accrual accounting. In her observations on the government's financial statements included in the Public Accounts 2002, the Auditor General urged the government to implement this important initiative fully.
We have listened. After many years of hard work, we announced the implementation of full accrual accounting in budget 2003. The recent budget was prepared on a full accrual basis, and the financial statements for Public Accounts 2003 will be prepared on a full accrual basis of accounting. In addition, the financial results of previous years have been restated on a full accrual basis. The implementation of full accrual accounting will help to ensure that Canada remains a world leader in open and transparent financial reporting.
For a number of years the Auditor General has also recommended that the government strengthen the accountability to Parliament of arm's length foundations that receive federal funding.
The government took action. Funding agreements for foundations arising out of budget 2001 were strengthened to address many of the Auditor General's concerns. Furthermore, budget 2003 outlined a number of measures that would ensure effective accountability for the use of federal funds. These would include annual reports to Parliament, compliance audits, evaluations and dispute resolution mechanisms. Provision will also be made for the possible recovery of the unspent funds in the event of winding up.
Like the Auditor General, the government is constantly seeking to improve its management practices, controls and reporting mechanisms. This was, moreover, part of our commitment to good stewardship made in the year 2000 in the document “Results for Canadians: A Management Framework for the Government of Canada”.
No organization is perfect, especially one of the size and complexity of the Government of Canada. A responsible government knows enough to acknowledge that errors and problems may occur, and when they do, takes corrective action.
Being such a responsible government, we have put in place a system that makes that corrective action possible, and the Auditor General is an essential partner in that system. Our shared objective is to maintain public confidence in Canada's public institutions.