:
At this point in time, I'd like to call the meeting to order.
Bienvenue à tous. This meeting is called pursuant to the Standing Orders, and the committee today is dealing with chapter 8, “Strengthening Aid Effectiveness—Canadian International Development Agency”, of the fall 2009 report of the Auditor General of Canada.
We are very pleased to have with us today, first of all, from the Office of the Auditor General, Richard Flageole, the Assistant Auditor General, accompanied by John Reed, Principal, and Dusan Duvnjak, Director. From the Canadian International Development Agency, we have the President and Accounting Officer, Margaret Biggs, accompanied by David Moloney, Executive Vice-President.
On behalf of the committee, I want to again welcome each of you to the meeting.
There is a possibility, members and witnesses, that the committee hearing may be suspended for a vote, but that would only take about 10 or 15 minutes. That's just a possibility. I don't know if it will happen or not. In any event, we have no control over that, so I'm going to call for opening statements.
I understand, Mr. Flageole, you'll be delivering the opening statement for the Office of the Auditor General. I turn the matter over to you right now.
:
Thank you very much, Mr. Chair.
[English]
Thank you for this opportunity to discuss chapter 8 of our 2009 fall report, “Strengthening Aid Effectiveness”, concerning the Canadian International Development Agency.
As you mentioned, I'm joined at the table by Mr. John Reed, principal, and Mr. Dusan Duvnjak, director. They were responsible for the audit.
CIDA is the agency that administers the bulk of Canada's official development assistance. In the past fiscal year, it spent around $3.5 billion, almost half of which was for its geographic, or country-to-country, programming. CIDA's geographic programming takes place in over 60 countries, 20 of which are considered countries of concentration.
Our audit examined the extent to which the agency is meeting commitments it made in 2002 to improve the effectiveness of delivering aid in its geographic programming. Specifically, we looked at CIDA's management processes to sustain the implementation of its commitments related to aligning with the needs and priorities of recipient countries; harmonizing with other donors; using program-based approaches; and achieving greater sectoral focus. CIDA views these commitments as important for delivering aid effectively.
[Translation]
As noted in the chapter, CIDA has made progress in aligning its projects with the needs of recipient countries and harmonizing its efforts with other donors.
Many stakeholders in the development aid community—both here in Canada and abroad—describe CIDA and its field staff as a valued and active partner. Yet, overall, we found that CIDA had not put in place the basic management processes required to direct and sustain implementation of its commitments. Frequent changes in priorities and policy direction, and weak management practices have hampered CIDA's ability to deliver foreign aid more effectively.
With respect to achieving greater sectoral focus, the agency recognized that its aid is widely dispersed across many sectors. It therefore committed to focus on fewer priorities to make a more meaningful Canadian contribution. However, we found no evidence that it was concentrating its aid on fewer sectors. This is due to CIDA sectoral priorities being too broadly defined and changing too often, and to the agency never developing a robust plan to achieve greater focus.
[English]
This situation has also had a negative impact on the agency's ability to determine and build upon its strengths relative to other donors. CIDA's relative strengths in the development of its country programs and individual projects were not evident in our audit. The agency has also made limited progress in deciding what types of skills and expertise it needs to support its priorities and how to provide them. CIDA needs to clearly identify which sectoral priorities and programming areas it will and will not fund, and acquire the appropriate skills and expertise.
Over the past decade, new forms of projects known as “program-based approaches” have been put in place. These approaches entail new forms of funding, such as direct transfers to the budgets of recipient countries, and involve several donors working together. They typically rely on recipient government systems for delivery.
Our audit found that the support for using these approaches has been neither uniform nor timely throughout the agency. CIDA management has provided little specific direction and no targets to country desks on how and when to use program-based approaches. Further, it has not clearly defined the specific conditions under which the agency would or would not participate in a program-based approach, and it has not standardized the types of risk assessments that must be done before accepting such approaches.
Given that CIDA has gained considerable experience with such approaches over the past decade, it would be important that the agency evaluate its use of them to determine whether the approaches are in fact achieving the agency's goals.
[Translation]
With respect to CIDA's process for planning its country programming, we found that programming frameworks for the countries that we examined had all expired by the end of our audit and a rigorous country planning process was missing. The Agency was embarking on a new planning process whose requirements were constantly changing, causing frustration among staff, and taking time away from analytical work. As a result, donor partners, recipient governments, and program staff were unclear about the agency's direction and long-term commitment.
With respect to funding projects, we found that CIDA adequately identified project risks up front and managed those risks through implementation. However, we also found that burdensome administrative processes within the agency hamper effective decision-making. For example, an internal study conducted by the agency in 2007 found it took an average 43 months to get project approval. The agency acknowledged such problems in 2002 and yet this long-standing issue remains unresolved.
In our view, many of the weaknesses discussed above and in the chapter can be traced to the absence of a master plan to implement the commitments made in the 2002 policy statement. Early intentions were simply not matched with specific action plans and followed through. Indeed, even when action plans were developed, they were not completed.
[English]
Finally, as we note in the chapter, the long-term nature of international development requires stability and predictability of programming. In our view, frequent changes in policy direction and substantial turnover of senior management have posed significant challenges to CIDA in achieving its aid effectiveness agenda.
CIDA has agreed with our recommendations and we understand it has prepared a detailed action plan. While we're encouraged by the current management commitment, we are mindful of past initiatives that fell short of timely and full completion. Your committee may wish to have the agency report on its progress to ensure that the current momentum is sustained.
This concludes my opening remarks. We would be pleased to answer any questions the committee may have.
Thank you.
:
Thank you very much, Mr. Chair.
Thank you for the opportunity to discuss Chapter 8 of the 2009 Fall Report of the Auditor General of Canada as it relates to the Canadian International Development Agency, CIDA.
Aid effectiveness is a priority of the Government of Canada, and CIDA has an agenda that delivers on the government's commitment to ensure that Canada's development assistance yields concrete results.
[English]
The Auditor General's recommendations are very much in line with our ongoing efforts to improve how we do our work. I would point out that the audit was completed six months ago, in the middle of May, and many steps have been taken since that time.
I would like to take a few minutes to outline for you the important progress that CIDA has made to implement its aid effectiveness agenda. I would like to highlight three areas in particular. These are bringing greater focus to CIDA programming, stronger management and sustained implementation, and streamlined business processes.
First, in terms of bringing greater focus to CIDA's work, the agency has made significant progress in defining and refining its priorities, and in fact has already moved on many of the steps laid out in the Auditor General's report. We have narrowed our focus both geographically and thematically so that our resources can have the greatest impact where they are needed the most.
Regarding geographic focus, Minister Oda announced in February that 80% of CIDA's bilateral assistance will be concentrated in 20 countries. The remaining 20% of our bilateral aid will be invested in a smaller number of countries as required, and as of this year CIDA has met this commitment.
As for thematic focus, last May the minister outlined CIDA's thematic priorities for international development: increasing food security, securing the future of children and youth, and stimulating sustainable economic growth. She followed up by unveiling CIDA's food security strategy in October, the children and youth strategy in November, and the third, on sustainable economic growth, will be released in the new year.
[Translation]
For each of these strategies, we consulted extensively with experts and partners to put together what we believe are solid plans for our priority areas.
[English]
Within these thematics, the agency has narrowed the focus, further targeting elements we believe will make the greatest difference and where Canada can make a significant contribution. For example, for children and youth, CIDA will zero in on three elements: child health and survival, including maternal health; access to quality education, particularly for girls and young women; and safety and security. Using these thematics, the agency has also narrowed the focus of our individual country programs and new country strategies have been approved.
[Translation]
I believe that concentration of CIDA’s efforts will strengthen our results. I believe it will strengthen the expertise and effectiveness of the agency. And I believe it will provide the clarity and direction that CIDA partners and staff have been seeking.
[English]
The second area I would like to highlight, Mr. Chair, is that solid management tools are being put in place to ensure follow-through and sustained implementation of the government's development priorities. The Auditor General's report correctly notes that previous intentions were not always matched with specific action plans. We agree this was a concern for the period under review. I am pleased, however, to report that significant work has been completed since that time.
CIDA has put in place an aid effectiveness action plan. This plan now provides the entire agency with clear actions and concrete direction, including indicators and time-bound targets for implementing all key elements of the government's aid effectiveness agenda. The agency will monitor performance and report progress annually.
[Translation]
CIDA has also instituted a policy to guide the use of program-based approaches throughout the agency. It sets out very clearly whether and when to use PBAs to maximize results and how to put them in place.
[English]
This policy was not yet finalized at the time of the audit. Program-based approaches are still a relatively new approach. CIDA, like other donors, has had to learn by doing. We have now consolidated the lessons learned into our program-based approach policy and have communicated this directly to staff.
[Translation]
Third, CIDA has been rightly criticized for its complex and lengthy administrative processes.
[English]
The length and unpredictability of CIDA's decision-making has made it an unreliable partner. It has also made the agency inefficient and it has compromised its effectiveness. The agency has taken action. It has successfully piloted a new business process that cuts processing times for its major bilateral programs from 43 months to 15 months at a maximum. This is a 66% reduction, and these processes will be mainstreamed in January 2010.
[Translation]
The agency has also reduced processing times for its partnership programs from 50 weeks to 20, a 60% reduction.
[English]
In conclusion, I draw your attention to the detailed action plan the agency has prepared in response to this audit. Most of the actions we have identified are already completed and the remainder are well on track. I'm also tabling with you today the OECD's mid-term review of Canada's development assistance. Following up on its 2007 peer review, the OECD also highlighted and encouraged CIDA on the need to focus its efforts. It states that Canada is progressing well and on a good trajectory.
I believe the steps CIDA is taking will meet the concerns outlined by the Auditor General.
[Translation]
CIDA is becoming more focused, effective and accountable. It now has clear priorities and a management plan to guide and sustain implementation of the government's aid effectiveness agenda.
[English]
It also has the talent and the expertise. As the Auditor General highlighted when she was here with you on November 4, CIDA staff in the field are highly regarded by donor partners and recipient countries, and their efforts are appreciated.
I believe we now have the priorities and the plan needed to deliver Canadian aid more effectively.
Merci beaucoup.
:
Thank you very much, Ms. Biggs.
Just a couple of issues I want to address before we go to the first round.
First, I plan to stop at 5:15 and deal with the minutes from the steering committee on an issue arising from the steering committee during the last 15 minutes of our two hours allocated.
Secondly, you can take this in the nature of a pre-ruling, but it's a job of the chair to predict issues that may or may not come up during the questioning.
One issue that I predict might come up is KAIROS, which is a public debate. There are a number of findings and recommendations made regarding the performance targets, evaluations, focus, expectations, progress, and the expertise needed. If the decision not to fund relates specifically to a finding, I will allow the question. But I will not allow any discussion or questions dealing with the merits of the decision. That is a policy decision made by the government. This is not a continuation of question period; it's the public accounts committee, and any question of that nature will be ruled out of order by the chair.
You have seven minutes, Mrs. Crombie.
Ms. Biggs and Mr. Moloney, you were criticized at the time, and I don't know how new you are to CIDA. Perhaps you can let us know. Certainly someone has to be accountable and explain what was--and not just that you have good intentions and wishes going forward, and a plan, but let's talk about what was. There was no master plan or comprehensive strategy. There was a lack of direction, shifting priorities, and a lack of corporate management process.
From what I can count, there were about 24 different priorities since 2000, five different ministers, four different agency heads, and a partridge in a pear tree. How did such shifting priorities and priority sectors impact your effectiveness? How did this lack of focus or absence of a plan help you achieve your effectiveness commitment? How did the agency achieve its goals? Which goals could you achieve? How did that impact recipients, other governments, other donors, etc.?
:
The government has just announced 20 countries of focus, and there were three criteria used to select them. The first one, as you would expect, is need and whether or not there was significant need in a country, from a poverty reduction point of view, in terms of both absolute poverty and relative poverty, and whether or not the country was particularly vulnerable, for example, due to natural disasters.
The second criterion was really Canada's ability to make a difference, and that was assessed in a number of ways. Really, can that country use our assistance effectively? Do they themselves have the kind of governance and management tools that we would expect to ensure we would actually have pretty good results with them? We would also look to see whether or not we had presence and capacity to monitor our work in those countries. We also looked at whether or not Canada had a potential to really have some influence. Could we actually have a significant influence? Because we would be one of the major donors.
The third criterion was the extent to which the countries selected were aligned with our foreign policy priorities. As you would expect, that had to do, for example, with our democratic values.
If we felt that in one of the 20 countries selected the conditions were deteriorating--either they were inconsistent with our foreign policy priorities or we felt they were not able to make effective and efficient use of our resources--then we would take corrective actions and we would bring advice to the minister if we were going to stop. We chose the countries to prevent that from happening, but if it did, we would certainly monitor and we would take action.
:
Thank you very much, Mr. Chair.
I now have an opportunity to discuss matters with you. We saw each other quickly when the Auditor General tabled her report. I would like to take this opportunity today to seek some clarification.
Mr. Flageole, I'm going to summarize what you said, probably a bit too quickly. You said, in a nutshell, that the report on international cooperation and CIDA can be traced to the absence of a master plan to implement the commitments made in the 2002 policy statement. Finally, you mentioned that CIDA had agreed with your recommendations and that you believed and understood that, based on these recommendations, it had established a detailed action plan.
Does CIDA subsequently have to present you with a plan, by a certain date, explaining how it will remedy the operational shortcomings you uncovered? In all of this, we have noted that the agency had been really in a shambles over the past four years and that project management has been plagued by a certain degree of administrative slowness.
I would imagine that this cannot be done in two shakes of a lamb's tail, but did the agency make a commitment that it would submit an action plan to you? Will this plan be submitted by a certain deadline, or is it depending on the goodwill of the minister?
:
Was this action plan distributed to the committee? Thank you.
I have a question for you, Ms. Biggs. I'm going to make some very broad statements. you stated that you had achieved significant progress on the plan which defines and solidifies CIDA's priorities. You also mentioned that you held very extensive consultations.
NGOs or experts often tell us about their concerns regarding the lack of consultation or the way that consultations are held, particularly since some of the organizations have had or are expecting cutbacks in the assistance they have been receiving for, in some instances, 35 years.
How can priorities change? After 35 years, how can an organization that has always been supported and subsidized by CIDA respond when it receives a simple phone call from an official informing it that it is no longer eligible?
Have these organizations been consulted or advised? We try to provide them with answers, but we have very little to say because we do not know what CIDA bases itself on in deciding who will be receiving aid from now on.
:
Maybe I'll answer it in a couple of ways, Chair.
In terms of setting our priorities, in terms of setting what we are going to do in a country, we would have consultations. For example, we had extensive consultations last summer before we developed our thematic priorities. We consulted in Canada with a great number, a cross-section of Canadians, we consulted in our countries, and we consulted with other partners, other donor agencies. So we did a consultation, and CIDA consults on a continuous basis.
So we did consultations for that. As we develop our country strategies, we will consult both in Canada and in the countries themselves, and of course with the partner countries, etc. CIDA has a very strong tradition of consultations. It is also one of the requirements under the overseas development assistance act for us to consult, and we do that.
In terms of our operational issues, we don't consult on operational decisions. Those are the decisions of the government, the department, and the minister, and we don't consult on those. Canadians can apply and those decisions are the decisions taken internally.
Thank you all for your presence.
I want to follow up on the foundation that Madame Deschamps has laid. We're both active on the executive of the Canada-Africa Parliamentary Association. However, I want to take a higher macro-overview. Chair, I'm respecting what you said earlier, and I agree entirely. If you think I've crossed the line, I know that you'll bring me back, but I'll do my best not to do that at all.
I want to raise the issue of the procedure that was applied, given your response about consultation. With the KAIROS funding, there doesn't seem to have been a lot of consultation, given the outrage that I'm hearing from across the country. These are social justice groups, they're faith organizations, they do good work, and they've lost $7 million that they were expecting from October 2009 to December 2013.
I cannot ask you about the decision to cut, but I think it's fair for me to ask you about the procedure this went through. I'd like to suss out how much of this procedure was problematic, given the audit that we have in front of us. And I would ask the same question regarding the funding to countries in Africa. I raised this earlier when the auditor first tabled this report. We had an extraordinary meeting with 10 to 12 ambassadors from Africa—you don't normally get that many at one time—who came to talk about the funding they were losing through CIDA. There couldn't have been a lot of consultation or they wouldn't have been as shocked as they were.
They couldn't understand why Canada, which had been a long-time friend of Africa, was throwing old friends overboard to make new friends. That was their phraseology. They couldn't understand why we were doing this to them. That's the way they saw it. They pointed out that they're a good friend to us on the international stage, where African countries try to vote as a bloc. They've always seen us as a tight ally. On issues we care about at the UN, we have almost 55 votes there that we might lose.
I can't ask you about the dollar decision, but I want to ask you about the procedures. What procedures did this go through? Help me understand how we went from funding to generating outrage. I want to know what procedure it went through—not the political decision but that process that you undertook at the bureaucratic level.
:
Maybe I can distinguish a couple of different issues.
As the Auditor General has said, and as the audit says, a policy decision on what priorities a government wants to bring to its development assistance is a decision of the government. This government chose to focus its assistance so as to increase its impact. That's a decision of the government. But this course was also recommended by the Auditor General and the OECD. The government adopted this policy on the basis of three criteria: need, effectiveness, and foreign policy priorities.
Choosing which projects get funded is an operational issue. The one that you're raising has nothing to do with the programs that were referenced in the Auditor General's report. They're in a different part of the agency. They have nothing to do with the setting of priorities. They have everything to do with exercising due diligence in deciding whether or not an initiative is going to make the best possible use of taxpayers' dollars.
Our mandate is to give advice on that basis, and we make decisions like that every day. It's a different issue. It's not something we would ever consult on. It's something that is done on the basis of good management practice—whether or not we think the criteria are clear, and whether the expected results are sound, achievable, and positive.
That's the due diligence that Canadians expect from their public servants, and that's the work we do. That's an operational decision, and it's not at all relevant to the issue in front of us in the Auditor General's report.
:
Yes, I had a sneaking hunch that I wasn't going to get too far.
These issues are so important that I want to ask them and to put them in front of you. I appreciate the answer you gave and I won't go any further on it. It gets into the political realm after that, and I respect that. Thank you for answering as fulsomely as you could.
My experience with CIDA, especially in Africa, is that they're either beloved or loathed. Sometimes it's just like, “Thank God that CIDA's there, and here's what they're doing for us”, and other times it's just a rolling of the eyes and no sense of the focus. It has been raised in the report, and we've had this before on numerous occasions, and our chair always makes sure we raise this when it's pertinent. Since 2000 we've had five different ministers and four different agency presidents, you being the fourth.
Again, I know you can't speak to the appointments process—we've had that bite elsewhere—but I do want to ask you this. How much of an impact has it on CIDA when the top of the house, both at the president's office level, yourself, and at the minister's office, keeps changing all the time, and new people bring new priorities? So for those areas of the world that roll their eyes when they hear “CIDA”, just how much of the lack of consistent leadership at the ministerial and at the president's level has affected all of this, in your opinion?
:
Maybe I can just put a little context around the issue you're asking, sir. The Auditor General's report and the audit period that was undertaken was during a period when all donor agencies were undergoing quite a shift in terms of how they were going to do their work. That really is under the rubric of aid effectiveness. There was a meeting in Rome in 2002 that got the ball rolling. There was the Paris Declaration in 2005. There was a meeting in Accra, the Accra agenda, in 2008. All donor countries have been struggling to try to figure out how best to put their dollars to use.
That has meant that all agencies have been trying to figure out the best way to have effective assistance, and I think that's consistent with what you would expect here. That in itself has generated a degree of change, and CIDA—and I think it shows in the Auditor General's report—was looking at how to do that better and was learning as it was going. I think a lot of the change and the turn that you're seeing, that we are now able, I believe, to resolve and give much stronger direction on, is because we know more now about how to go about effective assistance.
That's one piece of context. As you would expect, in any organization when there is change, governments change. There were three ministers in one government, and maybe two ministers in another government. That does create some change in transaction costs as people have to get up to speed. I believe for the current government, starting in 2007, the budget right off the bat said that CIDA was going to focus its international assessments, it was going to focus on results, it was going to untie its aid, and it was also going to decentralize its operations. That was also followed up in the 2008 budget. Since then you have seen a consistent rollout of untying, countries of focus, thematic priorities, and now we're implementing it in the agency.
I think we have the direction we need now to actually do everything that you would want us to do in terms of making our aid more effective.
:
There have been a number of steps, starting with geographic focus, as we just discussed. There has also been a thematic focus, which are the three thematic priorities Minister Oda has laid out. Beyond those thematics, which are understandably fairly broad, we have zeroed in on some core elements that we think will have the greatest impact in terms of need. They are also where Canada can bring a special degree of attention.
So we are focusing within the focus in our thematics, and we are focusing within our countries on sub-elements of our thematics.
Another particularly important area that has now been addressed is that Canada has moved to untie all its food assistance. This allows the World Food Program, for example, to source food assistance in the most responsive and cost-effective way. That can increase the value of every Canadian dollar by 20% to 30%, which is very efficient. And sometimes the food aid can be sourced in the country.
We are also moving to untie all of our assistance by 2012-13, and that will have a huge impact in terms of the effectiveness of our assistance. So I think a number of these major steps...
The final step that I'll mention is that the government started with budget 2007, but we are also moving to put more of our resources and our people and our functions in the field so we can be more responsive. Again, this is something Canada has been criticized for by the OECD. We're taking a number of concrete steps, which we can go into if you want, but I think that will make us more effective on the ground.
Ms. Biggs, I have an issue I want to bring up before we go to the second round.
I've gone over the audit, and, as has been pointed out, there are a number of issues. Of course that was during the period of the audit, and a lot of the testimony you have given is post-audit. You're taking action and you've agreed with all the recommendations set out in the performance report.
I've also read the departmental performance report for the period 2008-09. A lot of the issues that were identified in the report from the Auditor General were not contained in your audit report: the challenges the agency was facing, some of the difficulties that are clearly identified. You, as the accounting officer, signed a certificate saying that the performance report was to be balanced and reflected that... This is what Parliament is looking for. It is looking for a document that clearly states what the department has done but also the challenges and risks that the agency faces.
Do you have any comment on the contents of this performance report and any explanation why, in my view, it doesn't address the issues set out in the report of the Auditor General?
:
Thank you. Those are good questions.
On the 43 months, I should say that's not from just the approval, it's from the actual RFP, so it encompasses more than just approvals within the department.
Actually, I might ask David to speak on this issue as well.
We feel that the 15 months is pretty competitive with anybody else. It's very strong. In my view, as I say to people in the organization, that's the maximum. We can always do better than that, but we also have to be realistic about the time it takes to do the proper due diligence.
I am going to ask David if he would like to comment further.
Earlier, you talked about the OECD. I read the OECD report on CIDA. It contains many positive comments regarding the fact that much of the aid is untied. The report refers to the decentralized way of structuring aid in various countries. However, your action plan is criticized. The report states that it took you 18 months to prepare your report, but that it did not contain any results pertaining to development and mutual accountability. In addition, the report indicated that you had tied the performance contracts of employees in India to effectiveness objectives.
Criticism was also levied against your choice of 20 countries of focus for Canadian aid and the fact that you emphasized three of the five major Canada-wide priorities for international aid, namely: enhancing food security, stimulating sustainable economic growth and providing for the future of children and youth. The objective to promote democracy and the objective to guarantee security and stability were not given priority by CIDA. You were also criticized for the fact that you have not integrated issues such as the environment in your action plan. Finally, the lack of enlightened public debate in Canada on the issue of international aid was noted.
I would like to hear your comments.
In my reading of the OECD's report on CIDA, the comment about 18 months was not a criticism. It was actually a positive comment that this was done with deep understanding within the agency, that the whole agency was engaged on this. It was actually viewed as being a positive comment.
In terms of the priorities, from an international point of view there are five priorities that the government is focusing on. CIDA is focusing on three, as you would expect, because they're most pertinent to our poverty reduction mandate. Again, I do not believe... In fact, quite the opposite: I think the OECD is praising CIDA, not criticizing it.
In terms of the cross-cutting issues, CIDA already has very strong gender equality provisions that are integrated into what we do, and we're actually seen as being a leader across the world on that. We are going to renew those, but these comments by the OECD are the next pieces for CIDA to undertake. I would not view them as criticisms in any way.