Public Accounts committee  If I could ask the committee to indulge me for just a minute, I think that something that is very important is to understand what it is that an audit does, particularly an audit of financial statements. I'm being very particular here, because the issue is an audit of departmental financial statements, so there are a few points I'd like to make about what an audit of departmental financial statements would accomplish.

Public Accounts committee  I think the first point to make is that we were always talking in terms of being ready to do a controls-based audit. That's actually a significant qualifier, the controls-based part. One can do audits that are not controls-based: the term used is a more substantive approach to auditing.

Public Accounts committee  Thank you, Mr. Chairman. It's a pleasure for me and my colleague, Mr. Matthews, assistant comptroller general, to appear before you today and talk about some important policy changes affecting financial management. Earlier this year, the Treasury Board approved the policy on financial reporting, information, and resource management.

Public Accounts committee  I'm here to discuss a policy of the Treasury Board that was approved earlier this year. In the reference that John Wiersema made, he spoke of a time when a policy position had not yet been promulgated. We were anticipating some policy by the Treasury Board, but it had not been promulgated at that time.

Public Accounts committee  You weren't too easy on me, either.

Public Accounts committee  I would like to reiterate the comments that you made at the beginning. This is the end of a cycle that starts with budgets and goes through main estimates, with hearings on main estimates and supplementary estimates before we see the final results. It is the whole process that is important, and the scrutiny that parliamentarians provide is fundamental to the success of the whole enterprise.

Public Accounts committee  I've had an intimate relationship with those numbers for the past decade. Let me just say that on the estimate of the revenues themselves, what we're experiencing is a growth in understanding that comes with experience. When we first embarked on the estimation process with accrual accounting for tax revenues about six years ago, we actually placed a high value on being able to tie the estimates to actual transactions.

Public Accounts committee  What I'd like to point out is that the purpose of this meeting, of course, has been to review the government's financial statements. It kind of points us to the pinnacle, the end of the road, one of the most visible outputs perhaps of the government's financial management system.

Public Accounts committee  Mr. Rochon spoke to this a little earlier. Obviously, against a trend of growing GDP and in the long term a growing economy, we have been successful in keeping a tight grip on government spending, and the manner in which it has been financed has been prudent.

Public Accounts committee  I think this is a situation in which the question would best be posed to the organization.

Public Accounts committee  I think these questions are going to have to be posed to the organizations.

Public Accounts committee  What I would say is that hiring consultants can provide value for money. There are many cases where you need a specialized expertise for a short period of time, and it simply makes more sense to acquire as much of it as you need rather than to try to put someone on staff permanently who may be underutilized.

Public Accounts committee  A number of countries have had experience with it. We've read with interest a report put out by the OECD, and it indicated there were mixed reviews, you might say, specifically with the use of accrual appropriations. I recently received a report from the CICA in Canada, and it cited that same OECD report.

Public Accounts committee  Although the amount appears as a single line item in the consolidated financial statements, the expenditures are in fact made across the government in many departments and in respect of many different programs. In each case, it would be the managers of those programs who would need to decide what was an appropriate—

Public Accounts committee  They're large numbers, but there's not any particular reason to be concerned with that business input as opposed to any other. You would have to look at the results obtained from those expenditures. They may very well have been the best way to get value for money. It would have been a programming decision.