Public Accounts committee  Just to clarify, as I said, we did a consultation with members of Parliament some years ago to find out, because at the end of the day, the information that is being supplied and that we're being asked to supply is meant for MPs' use. Ultimately, it would be MPs who would be the judge of what the problem is today.

Public Accounts committee  It's just a very quick comment, Chair.

Public Accounts committee  First of all, I welcome the question, and I would love to see the analysis. I think this sounds very appealing at a conceptual level. If it's done at the government level, why can't it be done at the departmental level? But I think operationalizing that is quite another matter, and I think it's been left to us to define how that would be done.

Public Accounts committee  First of all, just to clarify, as I've said already, we endorse accrual accounting and accrual budgeting at the federal level, and we're making best efforts at the departmental level. We chose the particular strategy of future-oriented financial statements after consultating with members of Parliament at the time to try to get some precision with regard to what they thought would be useful.

Public Accounts committee  As I've indicated, we're pursuing the timeline we had set out. We had indicated we would do an evaluation in 2012-13, and we intend to do so. In terms of the merits of whether or not the recommendation is a good idea, there are many aspects. This has been a long journey. We adopted accrual-based accounting; we have adopted accrual-based budgeting at the government level as a whole.

Public Accounts committee  I think it would be fair to say there's not a generally accepted understanding of what that would mean. We've defined it in a way that we thought was meaningful for us, which is to say future-oriented financial statements. That will restate appropriations in a manner that would facilitate easier comparison later on, with actual results once the financial statements are completed.

Public Accounts committee  Thank you for the question. Mr. Chair, the essence of our strategy was to ask departments to do a risk-based evaluation of internal controls. Departments are huge organizations, and controls are many and varied. There are many financial activities and many systems and processes involved.

Public Accounts committee  As I said, we had a three-year implementation plan. We wanted the largest departments to go first, and then the second tier and a third tier. In fact, built into the timeline was a sense of getting the biggest bang for the early efforts. Again, as I repeat, I don't believe the strategy is inappropriate under the circumstances.

Public Accounts committee  The first point to make is that we are on the timeline that we indicated. When we undertook to study the matter we set out a goal for the phases we would go through. There was a first phase that involved the production of future-oriented financial statements in departments, and we determined that we were going to do an evaluation thereafter.

Public Accounts committee  My role is first and foremost to help establish policy. As Ms. Cheng has mentioned, we also do some monitoring of the status of things through the management accountability framework and others. We also support the community through training, networking, and that sort of thing. We are particularly interested in succession planning for the leaders in the financial community.

Public Accounts committee  Mr. Chair and members of the committee, thank you for the opportunity to speak to you with respect to chapter 1 of the Auditor General's 2011 Status Report, tabled in June of this year. That chapter is titled Financial Management and Control and Risk Management. As you know, the Federal Accountability Act and the corresponding action plan were designed to strengthen accountability and transparency in government.

Public Accounts committee  I'm Jim Ralston, Comptroller General of Canada. With me is Gonzague Guéranger, who is executive director of financial management policy; and Paule Labbé, who is executive director, management accountability framework and risk management.

Public Accounts committee  Internal audit is fundamentally about asking whether a department is aware of its risks, whether it's aware of the extent to which its risks are controlled, and whether the verification of those controls is working. Audits can be oriented towards cost savings, but more often they're oriented towards whether risks are being mitigated.

Public Accounts committee  The increase in resources was certainly very helpful. It amounted to something like a 20% to 25% increase. It increased our manpower, if you will. For many of the structural elements, the focus on the use of standards and certification, and basically the idea that we were now going to fill internal audit positions with people who were professional auditors, as opposed to folks who had never been formally or extensively trained to audit, I think was an even bigger factor.

Public Accounts committee  We know that the entire government is focused on efficiency, and internal audit is no different. We believe there are ways in which we can become more efficient, and we will be working hard to do so. Our goal will be to maintain our effectiveness with the help of that kind of re-engineering.