OGGO Committee Meeting

37th PARLIAMENT, 2nd SESSION

Standing Committee on Government Operations and Estimates

EVIDENCE

CONTENTS

Monday, May 5, 2003

Á

1110

The Vice-Chair (Mr. Tony Valeri (Stoney Creek, Lib.))

Mr. John Wiersema (Assistant Auditor General, Office of the Auditor General of Canada)

Á

1115

The Vice-Chair (Mr. Tony Valeri)

Mr. Paul Forseth (New Westminster—Coquitlam—Burnaby, Canadian Alliance)

Mr. John Wiersema

Mr. Douglas Timmins (Assistant Auditor General, Office of the Auditor General of Canada)

Mr. Paul Forseth

Á

1120

Mr. John Wiersema

Mr. Paul Forseth

The Vice-Chair (Mr. Tony Valeri)

Mr. John Wiersema

The Vice-Chair (Mr. Tony Valeri)

Mr. Benoît Sauvageau (Repentigny)

Mr. John Wiersema

Á

1125

Mr. Benoît Sauvageau

Mr. John Wiersema

Mr. Benoît Sauvageau

Mr. John Wiersema

Mr. Benoît Sauvageau

The Vice-Chair (Mr. Tony Valeri)

Mr. Roy Cullen (Etobicoke North, Lib.)

Á

1130

Mr. John Wiersema

Mr. Roy Cullen

Mr. Richard Smith (Principal, Office of the Auditor General of Canada)

Á

1135

Mr. Roy Cullen

Mr. John Wiersema

Mr. Douglas Timmins

Mr. Roy Cullen

The Vice-Chair (Mr. Tony Valeri)

Mr. Benoît Sauvageau

Mr. John Wiersema

Mr. Benoît Sauvageau

Á

1140

Mr. John Wiersema

Mr. Benoît Sauvageau

Mr. John Wiersema

The Vice-Chair (Mr. Tony Valeri)

Á

1145

Mr. Paul Szabo (Mississauga South, Lib.)

Mr. John Wiersema

Mr. Paul Szabo

Á

1150

Mr. John Wiersema

Á

1155

Mr. Paul Szabo

Mr. John Wiersema

Mr. Paul Szabo

The Vice-Chair (Mr. Tony Valeri)

Mr. Tony Tirabassi (Niagara Centre, Lib.)

Mr. John Wiersema

Mr. Tony Tirabassi

Mr. John Wiersema

Mr. Tony Tirabassi

Mr. John Wiersema

Mr. Tony Tirabassi

Mr. John Wiersema

Â

1200

Mr. Tony Tirabassi

Mr. John Wiersema

Mr. Douglas Timmins

Mr. John Wiersema

The Vice-Chair (Mr. Tony Valeri)

Mr. John Wiersema

The Vice-Chair (Mr. Tony Valeri)

Â

1205

Mr. John Wiersema

The Vice-Chair (Mr. Tony Valeri)

Mr. Douglas Timmins

The Vice-Chair (Mr. Tony Valeri)

Mr. Benoît Sauvageau

Mr. John Wiersema

Mr. Benoît Sauvageau

Mr. John Wiersema

Â

1210

The Vice-Chair (Mr. Tony Valeri)

Mr. Paul Forseth

Mr. John Wiersema

Mr. Paul Forseth

Â

1215

Mr. John Wiersema

The Vice-Chair (Mr. Tony Valeri)

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CANADA

Standing Committee on Government Operations and Estimates

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NUMBER 035

l

2nd SESSION

l

37th PARLIAMENT

---

EVIDENCE

Monday, May 5, 2003

[Recorded by Electronic Apparatus]

Á  (1110)  

[English]

    The Vice-Chair (Mr. Tony Valeri (Stoney Creek, Lib.)): I'll call the meeting to order. The order of the day is, pursuant to Standing Order 81(4), consideration of the main estimates 2003-04, votes 1, 2, 5, 10, and 20, and the “Report on Plans and Priorities” under Treasury Board.

    Thank you very much for coming before the committee this morning. I'd ask you to introduce yourselves.

    For the benefit of the committee members, we have scheduled this week, next week and into the following week a number of meetings with respect to the estimates process. This meeting today could, to my mind, be considered a bit of a pre-meeting on the part of our committee before we meet with Treasury Board officials. It's an opportunity to speak with the Office of the Auditor General and get some questions answered and perhaps some positioning on certain issues in advance of meeting with those officials.

    So I'll turn it over to you, the witnesses. I understand you do have an opening statement, so if you'd like to make that, I'm sure members have numerous questions.

    Mr. John Wiersema (Assistant Auditor General, Office of the Auditor General of Canada): Thank you, Mr. Chairman, for this opportunity to appear before the committee as it prepares to consider the Treasury Board Secretariat's “Report on Plans and Priorities”.

    My name is John Wiersema and I have overall responsibility for the office's audit work within the Treasury Board Secretariat. With me today is Douglas Timmins, an assistant auditor general, who also has numerous responsibilities related to the secretariat, including audits of financial management, comptrollership, and information technology. Also here are Rick Smith, a principal in the office, who assists me in our work on the secretariat, and Bruce Sloan, a principal who works with Doug Timmins.

[Translation]

    While we are not here to comment specifically on the Secretariat's Estimates documents, we can provide an overview of our recent observations that may be useful to the Committee in its review of those documents with Secretariat officials.

    Given our mandate as a legislative audit office, it is not surprising that a great deal of our work has covered issues that fall within the secretariat's areas of responsibility. An annex to this opening statement provides key findings of relevant reports tabled since 1997.

    As Committe members know, the Treasury Board is the Cabinet committee that is responsible for the overall management of the federal government's resources. The Secretariat supports the Board in fulfilling that role.

    Over the past several years, the government has launched a number of initiatives to strengthen management in the federal public sector, with Results for Canadians: A Management Framework for the Government of Canada in March 2002, and continuing through the February 2003 Budget Plan.

[English]

    These initiatives include citizen-centred service delivery; Government of Canada online; modern comptrollership; improved reporting to Parliament; program integrity; developing an exemplary workforce; human resource modernization; compensation and classification reform; adoption of accrual accounting and study of accrual-based budgeting and appropriations; and a systematic and ongoing examination of all non-statutory government programs to ensure that they continue to be relevant, effective, and affordable.

    The intent of these initiatives is to help departments do a better job of managing and accounting for their use of resources entrusted to them, that is, to increase the effectiveness of the public service by strengthening its management capabilities. These goals are commendable and we as an office strongly support them. The government has set an ambitious agenda for achieving them. Given the size of government, however, any initiative that seeks to change the way the government functions is a formidable challenge, no matter how desirable the change.

    As government's management board, the Treasury Board and its secretariat have been clearly designated to lead these change initiatives. Success depends on a strong commitment to change, commitment at the highest levels of government, that must be translated into concrete action.

    Our office has been fairly critical of the Treasury Board Secretariat's performance over the years. Our past audits have found that the government must go beyond stating principles and must put into effect clear, detailed plans of action. Strong leadership must be provided.

    It is also vital that clear direction be provided. Those responsible for implementing initiatives must be held accountable for achieving key milestones by specific dates, and initiatives need to be resourced adequately both in the secretariat and in departments.

    We believe that after many years of taking a hands-off approach to departmental decision making, the secretariat needs to be involved more actively in confirming that departments are delivering programs with economy, efficiency, and effectiveness. In our view, this is what “active monitoring” is all about, but it's not clear what the secretariat means when it uses this term.

[Translation]

    In conclusion, the federal government has taken a number of steps to strengthen management, and the treasury Board and its Secretariat have been designated to lead these change initiatives. It is a daunting task.

    Our Office will continue to examine the progress of specific government initiatives and to tell Parliament what we find. But we have encouraged the government to provide more information itself to Parliament about these change initiatives, the progress achieved, what remains to be done, and any difficulties encountered or anticipated.

[English]

    Indeed, your review with secretariat officials of their report on plans and priorities provides a good opportunity to take stock of these change initiatives with them.

    In March of this year we tabled in committee a report called “Parliamentary Committee Review of the Estimates Documents”, and we have sent copies to all parliamentarians. The intent was to assist committees in undertaking review of estimates documents by describing the estimates process and making a number of suggestions committees might find useful. The document includes a set of questions standing committees could ask officials when reviewing reports on plans and priorities and departmental performance reports. We have provided the clerk with additional copies in case you think they would be helpful in your review of the secretariat's report.

    Thank you, Mr. Chairman. I had a short opening statement, and we'd be pleased to respond to the committee's questions.

Á  (1115)  

    The Vice-Chair (Mr. Tony Valeri): Mr. Forseth, we have seven-minute rounds.

    Mr. Paul Forseth (New Westminster—Coquitlam—Burnaby, Canadian Alliance): Thank you very much, and thank you for coming.

    I'd like you to expand on the whole issue of comptrollership and how you see it being improved, both in a communication plan so people can understand what it's really all about and in demonstrating that it is in fact working.

    One of the comments I heard was, well, Treasury Board has stacks and stacks of manuals and rules. We always talk about Treasury Board guidelines, but do we have any real follow-up to show that on a day-to-day basis Treasury Board guidelines are being followed? And when they're not, what mechanisms are there for actual corrective action, to actually reach forward and do something about it rather than saying, oh, woe is me, Treasury Board guidelines have been violated, the comptroller says that this expenditure, this contracting, or whatever wasn't done properly?

    What about the consequence side and what about the authority, the power, and the courage to actually make all of these manuals of operation meaningful because there's a policeman on the beat who watches and there's a process in place to make it meaningful?

    I think the word-picture I've used communicates what I'm trying to get across.

    It's all in the area of comptrollership. Why have a comptroller or that whole initiative if it really doesn't make any difference? Perhaps you can expand on what the emerging reality is in that regard.

    Mr. John Wiersema: Thank you, Mr. Chairman.

    The member has picked up very directly on one of the issues I tried to highlight in my opening statement. As I indicated, the Treasury Board does have an ambitious management reform agenda. They have quite a number of initiatives underway, and as I indicated, our office supports each of those initiatives. However, we are concerned about the follow-through in the implementation and the monitoring of those initiatives.

    The member talked specifically about the modern comptrollership initiative. Douglas Timmins, sitting on my right, did a report to Parliament called “Strategies to Implement Modern Comptrollership” in April of 2002. So perhaps, Mr. Chairman, I can ask him to speak a little bit more about the findings in our April 2002 chapter on the subject of management comptrollership.

    Mr. Douglas Timmins (Assistant Auditor General, Office of the Auditor General of Canada): Thank you Mr. Chairman.

    In that report in April of 2002 we talked about action plans in the departments lacking timelines and targets, and we said that Treasury Board needed to provide clearer direction and guidance. The member's question relates to the fact that while there are guidelines, there may be no monitoring to ensure they're in effect. In fact, I think there was a tendency to require even more guidance coming from the centre than existed at the time.

    We concluded in that chapter as well that the reporting by Treasury Board in their own performance report didn't meet what we thought would have been the expectation for reporting on progress on this particular initiative. The majority of the reporting was on activities to date and not really on what had been achieved.

    We think that a lot of the requirement for Treasury Board--which cannot be involved in every aspect, as they have delegated and have to put the onus on the department--is that they have to play this role John Wiersema referred to as active monitoring, and that needs to be clarified. How do they know that these procedures and guidelines are being applied if they just establish them, set them out, and take what we have referred to as the hands-off approach, where they leave the responsibility for implementation to the departments?

    The last point I would raise is that there is a role for internal audit, and internal audit may be one of the factors the departments can use in terms of the response, and Treasury Board should be monitoring the activities of internal audit as well.

    Mr. Paul Forseth: Basically, what you've done is agree with me, but I'm just wondering if you could tell me if there has been any improvement or if there are any suggestions that can be made on the consequence side of things.

Á  (1120)  

    Mr. John Wiersema: Mr. Chairman, we haven't done any specific audit work in terms of what the consequences are to departments of not complying with Treasury Board guidelines or directives, so I'm not sure I'd be in a position to offer anything substantive based on actual audit work we've done.

    The points we've been raising in our reports to Parliament are that there need to be more leadership and direction provided by the Treasury Board Secretariat and that they need to monitor more actively what's actually happening out there in government departments and agencies. But where they determine that there has been non-compliance, we haven't specifically as an office addressed the question of what they should do about it in terms of the consequences. It's a question the member may wish to raise with the secretariat officials tomorrow.

    Mr. Paul Forseth: Thank you for my turn.

    The Vice-Chair (Mr. Tony Valeri): That'll be the first question tomorrow.

    I'll just pick up on what Mr. Forseth mentioned, that there are a bunch of initiatives there. Is Treasury Board trying to do too much? You keep saying you support them and you support all of these initiatives, but it's a big agenda, and are they trying to do too much?

    Mr. John Wiersema: As I said in my opening statement, Mr. Chairman, the Treasury Board does in fact have a very ambitious management reform agenda. It has quite a number of initiatives underway and needs to ensure that it, the secretariat itself, and the departments are adequately resourced if we're going to change an organization as large as the Government of Canada.

    Here again, unfortunately, we haven't actually audited whether or not Treasury Board has the resources to do all this good stuff. Our past audit findings would suggest that there are challenges there and that there is not the level of follow-through, monitoring, and corrective action we would like.

    Here again, Mr. Chair, it's an issue I would encourage the committee to pursue tomorrow with the secretariat officials. Does it have the resources to do all these good initiatives?

    The Vice-Chair (Mr. Tony Valeri): Monsieur Sauvageau.

[Translation]

    Mr. Benoît Sauvageau (Repentigny): Thank you, Mr. Chair.

    Gentlemen, welcome. I have a few questions I want to ask you. I am standing in for my colleagues from the Bloc québécois who are members of this committee and I may not have their expertise, but I would like to know... Treasury Board is like the last level before the general audit process, thus his role is to control the expenditures, mainly the expenditures of the government, according to certain criteria that my friend from the Alliance has outlined earlier.

    But if those criteria were fully applied—and I will deal with the action plan in a moment—do you think there could be a link between Treasury Board and, for example, the one billion dollars cost overrun of the Firearms Registration Program? Could or should Treasury Board have...? I know you will answer with your hat of spokeperson of the Auditor General and not as a parliamentarian or as a person who defends the department, but if we use the expression by the book, could Treasury Board have some responsibility in the one billion dollars cost overrun in the Firearms Registry Program, in the Federal Sponsorship Program, in the boondoggle at the Human Resources Development Department, which represents around one billion dollars, and in certain contracts handed out by CIDA? I know that two or three years ago, the Office of the Auditor General had made a comment about that, including about a contract given to a business in Shawinigan which did not comply with any of the basic criteria used for awarding contracts by CIDA, and which had nevertheless, somewhat surprisingly, obtained the contract.

    Are these examples where some preventive action by Treasury Board might have solved the problems?

[English]

    Mr. John Wiersema: Merci, monsieur le président.

    The member used a specific example, the firearms program. I think there are some really good questions that could be asked of the Treasury Board Secretariat there. The Treasury Board Secretariat had to approve all the increases in funding that were asked for by the department for the firearms programs, so on what basis did they approve those additional submissions to Treasury Board seeking additional funding?

    Members use a number of other examples, the sponsorship program, the Groupaction contract, and the HRDC problems with grants and contributions. In our view, had Treasury Board a stronger implementation of its policies for active monitoring and been closer to what was happening in the departments there, they might have been able to detect some of these issues much sooner than was in fact the case.

    It comes back to the point I was making on active monitoring, Mr. Chairman. It's not clear to us what the Treasury Board means, and as the former Auditor General said in one of his reports, we would encourage the Treasury Board to fully implement its policy on active monitoring with emphasis on the word “active”.

Á  (1125)  

[Translation]

    Mr. Benoît Sauvageau: Let's talk now about those action plans. My area is official languages. I will explain to you a bit how the action plans about respecting the official languages and the Official Languages Act work. I would like to know if there is the same logic or consistency with the follow-up of action plans in this case. There may be a link between the various departments about the follow-up of action plans.

    According to the Official Languages Act, 29 departments and institutions must file an action plan dealing with their implementation of the Official Languages Act. These action plans are presented to Heritage Canada; this department takes those plans, put them on a shelf and leaves them there. Those departments and institutions must file an action plan, not follow it, not implement it, they only have to file it. And they fully assume their responsibilities: they file them. Do we see a similar thing with the action plans that have to be filed with the Treasury Board's Secretariat?

[English]

    Mr. John Wiersema: The official languages program per se has not been the subject of recent audit work by the Office of the Auditor General, so I can't speak to that particular program. The general point the member was making was in terms of getting information from government departments and then actually monitoring it and verifying that the information is reliable and has been properly applied. I think the analogy works quite nicely with some of the initiatives we have in fact audited, the modern comptrollership initiative, the GOL, accrual accounting, and so on.

    In the case of the official languages program, the member referred to the fact that certain plans were submitted to Canadian Heritage. In many instances that's not even the case with respect to some of the programs that are of concern and that have been the subject of audit by our office. Departments sometimes aren't even required to submit their planning documentation to the Treasury Board Secretariat, so the Treasury Board Secretariat is in an even weaker position to assess the extent to which the particular initiative has been successfully implemented in that department.

    But the member makes a general point in terms of the analogy to the official languages program, where there is a good policy and there are statements of good intent, but the implementation, the follow-through, the corrective action, and the monitoring leave something to be desired. I believe this applies to the initiatives we spoke of today, Mr. Chairman.

[Translation]

    Mr. Benoît Sauvageau: For me, the concept of accountability does not only entail the proper filing of action plans or giving consideration to what has to be done or to comply with one's obligations. Accounting concerns the follow-up of the action plan. What I hear from you is that the follow-up on the action plans that are filed is the problematic part, as in the other case. Is it really how you see things? We should focus on that aspect, if I have understood correctly what you said,when we meet tomorrow with the officials from the Secretariat of Treasury Board. This is the real concept of accountability and not only a part of it that we should focus on. Is that right?

[English]

    Mr. John Wiersema: Yes indeed, we do think that would be fruitful for examination with the Treasury Board Secretariat. It's not just a question of receiving the action plans, it's also the Treasury Board Secretariat's responsibility. Is it providing sufficient leadership? Is it providing sufficient guidance and direction to departments? Is it receiving action plans from departments? Is it actively monitoring the department's implementation of those action plans? Based on all of this information, is it learning and continuously improving its initiatives?

    Yes, Mr. Chairman, we think that would be a subject of fruitful discussion with officials from the secretariat.

[Translation]

    Mr. Benoît Sauvageau: Thank you.

    Do I still have some time left?

[English]

    The Vice-Chair (Mr. Tony Valeri): We'll come back to you in the second round.

    Mr. Cullen.

    Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Mr. Chairman, and thank you to the witnesses.

    This question of the Treasury Board Secretariat's lack of follow-up and monitoring and its lack of compliance with its own stated policies is something I'd like to pursue. I've looked at a number of the policies and they are excellent policies, but if they're sitting in a binder somewhere and no one adheres to them, then what is the point of the exercise? You may not have said it as strongly as that, but I think that is the gist of what you're saying.

    We've talked about resources, but I think it goes beyond resources; the resources may well be there. You talked about leadership, and in the ebb and flow of time there are some ministers and deputies who, because of their personalities, push the envelope. In his day C.D. Howe almost ran the government, even though if you look at his mandate, strictly speaking it probably didn't go that far.

    Also, I think part of it is political correctness in the sense of the whole line and staff issue. Maybe you could tell me what happens when the Treasury Board Secretariat looks at a department or agency that hasn't complied with policy. Perhaps they give a report to the minister or the deputy minister, and then the deputy minister responds, saying that's fine, but in the real world I have to deal with all these crises. It gets up to the minister, who says, yes, it's tough out there, it's a jungle.

    I was involved in the public service as an ADM in a kind of redneck province, B.C., where I was involved with the treasury board secretariat. The treasury board secretariat there had a lot of teeth, and the teeth were in resource allocation. If a department was flouting compliance, this had consequences when they came in looking for funding, especially if it was related to the area in which there was non-compliance.

    Maybe you could, first of all, describe the process. Let's say there's significant non-compliance with a Treasury Board policy by a department or agency. A nice little letter is written, I suppose. What happens after that? Could the Treasury Board Secretariat be given more teeth to actually ensure compliance, and what might those teeth be?

Á  (1130)  

    Mr. John Wiersema: The member has summarized very accurately the concern I described in my opening statement, though, as he said, perhaps a little more strongly than I did.

    The process of what happens when there's non-compliance is not, again, something we've audited directly. Given the types of issues we have been talking about here today and the various levers that might be available to the Treasury Board Secretariat--the member referred to its powers with respect to approving funding submissions and so on--we have undertaken a plan to do some further work with the Treasury Board Secretariat. We're at the early stages of that plan, where we intend to look specifically at the role of the Treasury Board Secretariat and its effectiveness in carrying out some of these management agendas.

    We are also looking at the possibility of doing an audit of the expenditure management process, looking at the process for allocating resources, in which the Treasury Board Secretariat plays quite a key role.

    If the member would like, Mr. Chairman, I might ask Mr. Smith to briefly describe some of our audit plans on a go-forward basis with the Treasury Board Secretariat. Unfortunately, I'm not in a position to comment specifically on what happens in the event the Treasury Board Secretariat does determine there's non-compliance. As I said, it's not something we've audited.

    One of the concerns we've described, though, is that in many cases, given weaknesses in its implementation of active monitoring, it might never know it or would only know when it's too late in the process.

    Mr. Chairman, if you'd like, I can ask Mr. Smith to briefly describe some of our future audit plans for the secretariat. These, as I said, are still at a fairly early stage.

    Mr. Roy Cullen: Could you do that briefly, please.

    Mr. Richard Smith (Principal, Office of the Auditor General of Canada): Mr. Chairman, given the importance of the role the secretariat plays in terms of overall management in government, as an office we've decided to take a step back and almost go back to basics and ask, what is the government-wide management agenda? What's the role of the Treasury Board and its secretariat in developing and implementing that agenda? What are the challenges and risks they face in pursuing that role, and how did all these things evolve over time?

    Mr. Wiersema's opening remarks talked about this being a very ambitious agenda they have set for themselves. We want to start off with some fairly basic questions, and from that will flow what our long-term audit plan is going to be for the secretariat.

Á  (1135)  

    Mr. Roy Cullen: Good. Well, I look forward to that and I'm sure many others do.

    Let me cite an example for you. Departments and agencies charge user fees for proprietary goods or services--and I'm not here to promote my private member's bill, which you have probably not heard anything about. I notice in some of your reports you talk about the erosion of parliamentary control, about how the government raises money and spends it, and also about the placing of the public's money beyond Parliament's reach.

    You might have had other things in mind when you talked about the latter, but user fees bring in about $4 billion a year; parliamentarians are really not engaged, and in terms of non-compliance, this is a classic case where in many cases departments.... In fact, the new policy that is in draft right now through Treasury Board Secretariat will call for all departments to set up performance targets for all user fees. That's not exactly policy yet, but in many cases the departments or agencies don't comply; they don't meet the performance standard, and there don't seem to be any consequences for that.

    I'm wondering if you've looked at that aspect or have any comments.

    Mr. John Wiersema: First, in reference to the member's comment about placing moneys beyond Parliament's reach, that was primarily directed at a concern the office has with putting money in foundations. That's an area of continuing concern for us, one we continuously discuss with officials from the Department of Finance and the Treasury Board Secretariat.

    On the issue of user fees, Mr. Timmins led an audit that was reported to Parliament a couple of years ago, so we have in fact done some work in the area of user fees, and perhaps I can ask Mr. Timmins to speak to that chapter.

    Mr. Douglas Timmins: When the initial policy on user fees was introduced, we did a fair amount of work in a number of departments that were implementing them. Agriculture was one where we did extensive reviews, and we did look generally at the policy.

    We haven't done anything in recent times, but I think one of the main issues that was raised at the time was the ability to produce costing information that would be able to support the actual user fees that were going to be charged. Since that time, we've introduced new financial systems throughout government. There should be more ability now to produce that information, but I think there's still a concern that the information isn't being used adequately in those systems. That's part of the comptrollership initiative.

    We haven't done anything recently. They weren't listed there, but we could provide you with the actual reports we've done on user fees if that would be of interest to you.

    Mr. Roy Cullen: Thank you.

    The Vice-Chair (Mr. Tony Valeri): Monsieur Sauvageau.

[Translation]

    Mr. Benoît Sauvageau: I will start with a question I wanted to ask at the end of the first round.

    To do a proper follow-up on each action plan coming from the departments, what do you think is lacking at the Secretariat of Treasury Board? Is it the financial resources, the personnel or the will to do it?

[English]

    Mr. John Wiersema: As I indicated, Mr. Chairman, I'm not sure I can definitively conclude as to which it is. We will be able to definitively answer the member's question only when we have had an opportunity to do some of the audit work Mr. Smith has described. Then we will get more directly at the role of the Treasury Board, its success in implementing its policies, and the reasons it hasn't been able to stay closer to the implementation of those policies and follow through on their implementation.

    In all our work with senior officials in the secretariat we seldom see a lack of good intentions or a lack of will. We have seen more of an issue with whether or not those good intentions are translated into concrete actions, whether there's the strong leadership that's required, and whether there are detailed action plans or the follow-through on the implementation of those action plans.

    But at a general level, in our ongoing work with the officials of the secretariat I have not seen evidence there's a lack of will to follow through.

[Translation]

    Mr. Benoît Sauvageau: Thank you. I will give you two examples and I will ask you who should control the expenditures and who should be the first to blow the whistle.

    I will give you my first example. There is a language training program that is administered by Immigration Canada. The budget for this program is 94 millions dollars. It is an official languages program that offers linguistic training to francophones, anglophones, and recent immigrants who speak neither official languages. Out of that 94 millions dollars, 99.6 percent go to English language training and 0.4 percent to French training. This is a complete perversion of the rationale of that program.

    Does the responsibility for converting more than 20 percent of an amount of 94 millions dollars to English training belong only to the Immigration department? I know the department of Immigration has the lead role in this. But is it only the responsibility of the department of Immigration? Does the Secretariat of Treasury Board have a say in the management of this program? Eventually, if your Office receives a request, would you verify if those moneys are properly spent?

Á  (1140)  

[English]

    Mr. John Wiersema: As I indicated earlier, Mr. Chairman, we have not audited the government's official languages program, nor have we audited the specific program the member refers to, and I am very hesitant to offer any views that are not based on our audit work. The credibility of the office comes from the fact that we have done audit work and we have substantiation for our findings. We've not audited the particular program the member refers to, so I don't think I'd be in a position to offer anything of any real substance to the committee.

    The only thing I can say is that like other government programs, this program will have to approach the secretariat for funding, so the Treasury Board Secretariat will have some opportunity to contribute to the management of this program just as it would with any other submission to Treasury Board.

[Translation]

    Mr. Benoît Sauvageau: I was not asking questions about your analysis. I wanted to know if, in a program like this one, the responsibility is shared between the department of Immigration and the Secretariat of Treasury Board. Eventually, if you received such a request, what would you do? I was not asking you if that money was well spent. I will give you another example.

    For education, the federal government gives funds, under federal-provincial agreements, to all provinces for minority language education. These funds are often used for majority schools. Is it only the funding institution, Heritage Canada, that has a responsibility in that area? Is it Heritage Canada and the Secretariat of Treasury Board? If you received a request, could you examine a program like that one? I am not asking you if this education program is a good thing or not; that is not my question.

[English]

    Mr. John Wiersema: In terms of who's responsible for delivering government programs, as I indicated in my opening statement, Treasury Board Secretariat is the overall management board for the government, so they are responsible for the implementation of government-wide management initiatives. They are also the employer of the public servants, so they have a responsibility to work with departments on issues of shared interest. My understanding, Mr. Chairman, is that when it comes to the actual delivery of a particular program within the management framework established by the Treasury Board Secretariat, the lead responsibility rests with the particular department that's at issue.

    With respect to the member's question as to whether we would be in a position to audit a particular program that was suggested to us by a member of Parliament, we receive those requests fairly regularly, Mr. Chairman, and when we receive a request from a particular member of Parliament, we take that request very seriously and we consider it in our future audit plans. If the member would like us to consider a particular program for future audit, we can take his request today. Otherwise, he's encouraged to write to the Auditor General directly, and we try our best to incorporate members' requests into future audit plans.

    The Vice-Chair (Mr. Tony Valeri): Thank you, Mr. Sauvageau.

    Mr. Szabo.

Á  (1145)  

    Mr. Paul Szabo (Mississauga South, Lib.): Thank you.

    I'd like to pursue one general and one specific topic. First, the general one is with regard to the process relating to the estimates and the estimates documents. There was an article or an op-ed piece written by a former clerk of the House in which he indicted Parliament for ignoring 50% of its job in that the review of the estimates was not effectively being done. I haven't seen a response, I don't think, from the Auditor General on the allegation, and I'm sort of curious why.

    I certainly do know that history tells us about 80% of committees don't even do a review of the estimates, and by our rules they are deemed to have reported back.

    You've given some examples of areas that are notable, but we somehow haven't addressed what the responsibility area is for members of Parliament. I think it's really important. I think we need the Auditor General's help, not simply to encourage us to have one meeting to call in the department and say, let's go through the numbers or the plans and priorities.

    I'm a chartered accountant by profession and I'm familiar with auditing process, but because you're dealing with a mixture of backgrounds, it's not possible, I don't think, for parliamentarians to discharge the responsibility they've been given. I'm a little bit concerned about that.

    We're working on strategies for how we might do it, maybe more to emulate an audit process of sampling, etc. But in terms of our responsibilities, it either is or it is not, and if it is--and I think it is--we do not have either the tools, the structure, or the guidance to be able to do it properly. Before we lay all the focus on departments and outsiders, well, we are elected to do a particular job and it seems we're not doing it.

    I'd be interested in your comments.

    Mr. John Wiersema: I'm not aware that we as an office have responded publically to the particular op-ed article the member mentioned. However, as an office we have been encouraging Parliament to take a more active role in the review of the estimates documents, the RPPs--the reports on plans and priorities--and the departmental performance reports.

    Indeed, in my opening statement, Mr. Chairman, I referred to the document we provided to the clerk of the committee, which I understand has been discussed in committee, “Parliamentary Committee Review of the Estimates Documents”. Therein we describe the estimates process, and we make some suggestions for members of Parliament in terms of questioning of departments when they call them before the committee to discuss the estimates documents.

    We also, Mr. Chairman, have repeatedly in the past made and continue to make the offer to meet with parliamentary committees to talk about our recent audit work in those departments. We'll be more than pleased to appear before parliamentary committees to talk about this work if that is helpful for committees when they review those estimates documents with the departmental officials, particularly where recent audit work has actually included the departmental report on plans and priorities or the departmental performance report.

    Mr. Paul Szabo: If I can, I'll just follow up on that. Our subcommittee has received the report, we've looked at it, and I know that if I were to take any department.... I'll just pick out three questions the Auditor General suggested we might want to ask. Are the strategic outcomes and cost of the program clearly described and linked to other horizontal results? Is it clear what planned results are to be achieved in the short, medium, and long terms, by when, and at what cost? Is the program adequately linked to the related horizontal results of other programs? If we were to ask just those three questions of ourselves and the department, it would take us weeks to do it properly because no department is just a program. It's many programs, and even if we took out all the statutory requirements, we'd still have far more than we can do.

    Let me put it this way. I'm a little concerned that the Auditor General's office continues to ignore the problem with regard to the committee review of estimates. It is not possible to do this. We have to come up with a strategy to do it properly so we can be part of the solution or part of the tools to be used rather than contribute to a process that is simply going through the motions.

    We can't do this effectively. We don't have continuity of membership of committees, we don't have the necessary time, and we certainly don't have the staff, the resources, or the expertise to draw on. It is just not possible to do this.

    Just as a personal comment, I think the Auditor General's office should be looking seriously at the role of parliamentarians in terms of the estimates, what they can reasonably do and how they do that to be able to discharge what Mr. Marleau and his op-ed piece described as 50% of a member of Parliament's job. I'm just going to leave that for you.

    I have one last question to ask you. You mentioned HRDC as an example of an area where there were concerns. It was what you might call a classic billion-dollar boondoggle. It was a program where billions of dollars, quite frankly, were given to various groups and organizations all across Canada for various and sundry reasons. As a result of an internal audit and some other subsequent work--I think the Auditor General's office was also involved--there were a number of files on those various projects that were found to be missing either a document or an authorization, or the file itself was missing or couldn't be located at the time, and they were subsequently cleaned up.

    The question to you is--you've used it as an example--first of all, do you know today, as a result of all the work that was done on those particular files, what the current status of those files is in terms of the dollar exposure, loss, or whatever it is. I know it started at $1 billion; if with every file they touched the money was totally lost and unaccounted for, what is the actual number now?

Á  (1150)  

    Mr. John Wiersema: Mr. Chairman, if I may, I will go back to the member's earlier concerns about the practicality of parliamentary committee review of these documents. I think the member raises a very valid point. It is not physically possible for parliamentary committees to call every department every year and do a detailed, thorough review of the estimates documents, the report on plans and priorities, and the departmental performance report.

    However, we as an office have been encouraging more parliamentary committee involvement with those documents. The committees are going to have to do this on a sampling basis. The member referred in his comments to picking samples, and that, I believe, is a prudent way to proceed.

    In our view, increased parliamentary interest in those estimates documents will put more pressure on departments to improve those documents as well. It's a bit of a chicken and egg type of scenario. They're not getting a great deal of parliamentary attention at present. That may in fact be one of the causes for the fact that they're not nearly as good as they might be. It might put more discipline into the system if there were increased parliamentary interest and a risk of being called before committee to discuss your plans and priorities and your performance both in terms of what was reported as well as the substance of the results.

    The member's question referred, Mr. Chairman, to whether I am aware as of today of the current status of the grants and contributions problems that were experienced in HRDC a couple of years ago. The short answer to the question is no, I'm not aware of that status as of today. That work was first done, I believe, three or four years ago, and it was the subject of a follow-up audit by the Office of the Auditor General. I don't have that work with me today.

    I believe we reported that some progress had been made on dealing with some of the fundamental management concerns that underlay the problems with those programs, but there was still further work to be done.

    If the member would like, Mr. Chairman, I could provide a copy of the status report, the follow-up work we did on HRDC after the initial audit findings, to the committee in a separate communication.

Á  (1155)  

    Mr. Paul Szabo: I raised it simply from the standpoint that if there is a problem or a perceived problem and it goes through some rigorous public exposure and review, the file isn't really closed until we find out what the real story was. The public should also know that. I asked the minister herself about it very recently, within the last couple of weeks. I understand there are fewer than nine files, and most of those are before the courts because people defrauded the government. If that's the case with HRDC, that there were problems with general management practices but the loss to the taxpayers of Canada turned out not to be a material amount or certainly not anywhere in the ballpark of what was initially discussed, it's sort of like closing the file.

    Mr. John Wiersema: Mr. Chairman, as an office we try to do our part in terms of the follow-through of past audit findings. We do monitor departmental activities and the response to our reports. We report on that to Parliament, but it is done on a periodic basis. As I said, Mr. Chairman, we'd be more than pleased to provide the follow-up report.

    Mr. Paul Szabo: I'd like that. If you've finished the file, I'd like to find out where we ended up.

    The Vice-Chair (Mr. Tony Valeri): If you can submit that to the clerk, we'll make sure Mr. Szabo gets it.

    Mr. Tirabassi.

    Mr. Tony Tirabassi (Niagara Centre, Lib.): Mr. Chairman, I too would like to welcome our witnesses here.

    This is a question I'm sure comes to mind when we try to think of the scope of the federal government. As an auditing agency, do you have any idea how many agencies and departments there are in the federal government--do you have a number on that--and how many programs would flow from them at any given time, programs Treasury Board is responsible for versus their dealing with policy, framework, and all that? Do you have those numbers, any idea?

    Mr. John Wiersema: Mr. Chairman, yes, the short answer is that we do have numbers. We do know what's out there in terms of government departments, agencies, foundations, and crown corporations.

    Mr. Tony Tirabassi: How many?

    Mr. John Wiersema: I don't have the number with me today. I've been advised that there are some 82 or 83 reports on plans and priorities submitted to committees, so that will give you an indication of the number of departments and agencies. There are also some 40 crown corporations out there. In terms of how many programs these organizations administer, the short answer is no, I don't believe we track that within our office, Mr. Chairman.

    Mr. Tony Tirabassi: Would it be in the thousands?

    Mr. John Wiersema: I think it would probably be in at least the tens of thousands, but I'm just venturing a guess, Mr. Chairman. There are a lot of programs out there.

    Mr. Tony Tirabassi: In scrutinizing operations and reporting back to Parliament, what the Auditor General does is, they will go in and take a look at a particular program and they'll come back with a report and criticize it where it needs to be criticized. They'll often refer to what policies Treasury Board has had in place and to whether or not the department failed to adhere to those policies. If the policies were a little weak, the AG will make recommendations as to how Treasury Board may want to strengthen some of those policies. Then they'll come back and report further as to whether or not that's been happening.

    Is that not really the role of the Treasury Board ultimately, whether or not the improvements fall within a department? You stated there are some 83 RPPs you are aware of plus the crown corporations and tens of thousands of programs. Regardless of the resources, to say that the hands-off approach to departmental decision making.... Being that all this is what is entailed in the running of the federal government day to day, is it really practical to think that any one department could monitor all that effectively and efficiently, come in and not only do that but offer remedies and, if there is any action that needs to be taken, go in there and enforce it?

    I would like your thoughts on that.

    Mr. John Wiersema: Mr. Chairman, the point the member is making is that the government is extremely large and complex, and how does one monitor what's going on with the tens of thousands of programs in an organization that large and complex? It is a very valid question, and it's a question we would encourage the committee to ask the Treasury Board Secretariat. It has a policy on active monitoring. How does it implement that policy?

    The member talked about the fact that the Office of the Auditor General plays some role in what's going on out there, but we too are a small organization and we cannot audit all of government every year. In fact, it's all we can do to get coverage of the bigger government departments and programs over a six- or seven-year cycle.

    In our office, Mr. Chairman, we focus our audit efforts on risks, on the areas of risk to the achievement of a particular government department's program objectives. What are the most important risks or critical success factors for achieving that program's objectives? That's where we try to focus our audit effort.

    The Treasury Board Secretariat might as well, in terms of implementing its policy on active monitoring, adopt a similar sort of approach: where are the risks and where does Treasury Board Secretariat need to focus its efforts? The member raises a valid point, that you can't be in all places at all times.

  (1200)  

    Mr. Tony Tirabassi: You often hear about government contracting, what took place with Groupaction, for example, and we hear about the gun registry. But in a report to the public accounts committee, although she referred to where there were certain improprieties or things that had gone awry with regard to the awarding of contracts, the Auditor General said this was not how things were generally done across government. You won't see that statement published in too many places.

    Don't get me wrong; if the government is doing everything else right and there is just one Groupaction or one gun registry file, we have to identify that and we have to work to correct that as well.

    Do you have any idea of the percentage? How do you measure efficiencies in comparison to the total number of programs that are out there? We keep hearing these two coming up. In view of the Auditor General's comment, could you expand on that further.

    Mr. John Wiersema: If I have understood the member's question correctly, it deals with the government's contracting policy and how pervasive is non-compliance with the government's own policy on contracting. You talked about the Groupaction contracts the Auditor General reported on recently, where she was quoted as saying--and she in fact said--that they broke just about every rule in the book. When she said that, she was thinking of the Financial Administration Act and the government's contracting policy.

    How frequently does this happen? We report fairly regularly, Mr. Chairman, on the government's contracting policy, and it's not infrequently that we report on the fact that the government isn't complying with its own contracting policy. It is an area of audit risk for some programs and it's an area we focus on. We see non-compliance more frequently than we would like, and it's the subject of reporting fairly regularly.

    The government issues a report on its own contracting practices, including the number of contracts administered and how many are issued on a sole-source basis. Mr. Timmins audits that report periodically and has done recent work on that report. If you'd like, Mr. Chairman, I can ask Doug to speak about the government's report on its own contracting activities.

    Mr. Douglas Timmins: Actually, I'm sorry to correct my colleague, but I don't do that report.

    Mr. John Wiersema: Oops. I apologize, Mr. Chairman. I thought it was Mr. Timmins.

    Some hon. members: Oh, oh!

    The Vice-Chair (Mr. Tony Valeri): I just have a couple of questions before I go to Mr. Sauvageau.

    You mentioned active monitoring a number of times this morning. Could you define for us what you believe to be the principles of active monitoring. What's a minimum that would be in a system that would include active monitoring? What do you mean by “active monitoring”?

    Mr. John Wiersema: That's a very, very tough question. I'm not aware, Mr. Chairman, that we have come out publicly and specifically addressed the question as to what the Office of the Auditor General would consider to be active monitoring. We have come out and said we think it's more than what the Treasury Board has described in its policy. But have we specifically come out and said, well, here are all the things that need to be in place for an active monitoring policy to be successful? I don't believe we have come out that definitively.

    The Vice-Chair (Mr. Tony Valeri): You just finished saying earlier that you really don't make comments except in areas you do some audit work in. This is an area you're commenting on, but you're not really adding a lot more value to the discussion except to say that it has to be more than what it is. I'm wondering if you can perhaps do a bit of work in that area and give us a sense of how you define active monitoring. Then we could essentially look at what Treasury Board says and try to reconcile the two views.

  (1205)  

    Mr. John Wiersema: That's a reasonable request, Mr. Chairman. I will first verify what we have already done in this area to the extent we can contribute on a go-forward basis in terms of what we think would be reasonable and active monitoring. We can take that under advisement and get back to the clerk.

    The Vice-Chair (Mr. Tony Valeri): Mr. Timmins.

    Mr. Douglas Timmins: The Treasury Board does have a policy that describes active monitoring, and I think the committee members may wish to look at that before tomorrow. It might be grounds for asking the Treasury Board whether they're actually implementing that and how they might see where they are deficient or not deficient in doing that.

    There are two aspects to the act of monitoring. One is in terms of the hot files, if you might describe them as that. The active monitoring policy was in response to the HRDC situation the member referred to earlier. It was their intent to try to prevent those things from happening.

    In some of these other initiatives, I've alluded to things like having an action plan with timelines and deadlines and monitoring whether those things are in place; that could be part of active monitoring in a broader sense. There are things we have said they can do, and as Mr. Wiersema has said, maybe that would be something we could look at as part of the Treasury Board role.

    But I really do think the starting point is to ask Treasury Board how they see that role evolving, because it is a replacement, in effect, for what they used to have, where they would approve virtually all expenditures or at least all significant expenditures. It would be something we would have described as a command and control type of role as opposed to what I described earlier as a more hands-off one, where the responsibility is within departments. It's really looking at how they can get awareness of things that may be getting out of control in the departments.

    There are many aspects of the role they can play as a management board in active monitoring. They've set their own policy, but I would wonder whether they've actually accomplished what they set out to do. I think that would be the starting point for the committee at this point.

    The Vice-Chair (Mr. Tony Valeri): Mr. Sauvageau.

[Translation]

    Mr. Benoît Sauvageau: I want to make a comment about what Mr. Tirabassi said. I think this is funny because I feel that if I went before a judge and tried to use that argument, I would have a problem. In any case, I do not wish to be in that position because I don't think I would be acquitted.

    What he implies is that there are many programs and that sometimes a few get botched up. Does it mean that because I have many days left to live, I can rob a bank once, steal a small percentage of the money I will earn in my life and that looking at my life as a whole, this can be forgiven. For me, this argument, that it is acceptable to lose a billion dollars at HRDC or with the Firearms Program, does not hold water. It is no use saying that we are doing well with the other ones. At least, I would not try that.

    About the federal sponsorship program, if I understood correctly what Mr. Timmins said, you will soon table a report on what was done last year. I would like to know if that's right. The Office of the Auditor General will present a report on the federal sponsorship program. When should that happen?

[English]

    Mr. John Wiersema: In response to the area work on the sponsorship programs in PWGSC, the office has in fact launched a government-wide audit on sponsorship activities. That work is underway as we speak, and we expect them to report that work to Parliament in our November report of this year.

[Translation]

    Mr. Benoît Sauvageau: With the permission of the Chair I would like to ask another question.

    Before, you used to table your report once a year, and you would get good coverage from the press. For the last three or four years, the rule has changed: you table three or four reports each year. In theory, it was to get closer to the public.

    Can you tell me, from your experience, if this more regular reporting is a good or a bad thing? I will tell you what I think and it is biased. It seems to me that by multiplying your reports, they have lost some importance. Do you have the same perception?

    Mr. John Wiersema: Thank you, Mr. Chair.

[English]

    We were in fact, as the member has indicated, granted the authority through an amendment in our act a number of years ago to report periodically to Parliament. Our practice currently is to present four reports to Parliament each year. One of those four reports is the report of the Commissioner of the Environment and Sustainable Development.

    My understanding is that one of the key reasons our act was amended to allow for this type of reporting was to allow for more timely reporting. Now we are able to report to Parliament four times a year, so we can report audits more closely to when they are ready. In the past we might have finished an audit in June and had the report ready to go, but we would have had to sit on it in order to include it in our annual report to Parliament. We can now report when we in fact finish the work and are ready to report.

    In that respect we think the provisions, the amendments to our legislation to allow for periodic reporting, have been successful, and we're pleased with the powers we have to report to Parliament when we're ready to report in one of those four reports.

  (1210)  

    The Vice-Chair (Mr. Tony Valeri): Mr. Forseth.

    Mr. Paul Forseth: Thank you.

    Within your auditing process it may be helpful to take some specific case examples. You might find one where there appear to be some problems. You take one case to illustrate the larger principle and you follow it right through by documenting every individual the paper flow goes through, gathering the e-mails and the memos back and forth concerning the decision-making process, and identifying who actually writes the cheque. After following the whole process from idea right through to the back end, you then ask, was the product, service, or activity delivered and was there any evaluation built into the plan?

    We keep talking about generalities, but sometimes it's appropriate to follow one case and follow every stream to find out where it went. This is part of, I suppose, our subcommittee's work, trying to uncover the labyrinthine character of how you get from an idea that's floating around there somewhere to how it works through the various decision-making levels, especially, say, something that is small enough that it doesn't go to tender. We should be following that kind of case example, looking at every hand that has actually been involved right to the writing of the cheque and then following through to get that level of detail. We can't do that on everything, but the standard audit practice is to pick a file and then follow it through.

    It might be very instructive for us to understand why case after case, when you actually start pulling files, you see the guidelines aren't being followed, the file is empty, or all the stuff isn't here. Then you say, well, we'd better pull another one and another one, and that's what happened with the so-called HRDC boondoggle in some respects. It began with pulling a file, and then of course more files were pulled and so on.

    So it's a matter of taking that very detailed case example approach to really reveal to us the process; then we can look at it more. In Parliament MPs can get a handle on it and follow up where changes need to be made.

    Mr. John Wiersema: When we make our long-term audit plans, we attempt to do a combination of a number of different approaches to our work. Some of our audits will focus on individual case studies and will follow a file through, if you will, from cradle to grave, which I believe is basically the suggestion that's being made by the member. In other cases we will plan our work more to deal with horizontal issues that apply government-wide. Then we will also in our long-term audit planning look at control frameworks and management frameworks that are in place to manage the delivery of government programs.

    So we approach our work in a multi-faceted sort of way, looking at individual case files in some cases, looking at horizontal issues, or looking at management frameworks and control structures that are in place. Our audit plans attempt to address all three of those approaches to our work.

    Mr. Paul Forseth: We continue to come back to the same issues with government bureaucracy. I'm sure that in the forties or in the twenties it was the same kind of stuff.

    First of all, it's the number of people in a department to do certain things, the human resource planning, how you get those people, whether they're qualified, how they got there, and so on. Then those people have to have tools to do the job, so it's always office space and office furniture, and historically there have been big boondoggles around that issue.

    Now of course we know we're always going to be facing computer and IT technology and the purchasing of that, and whether it's program design, hardware, or whatever, we're always going to be faced with that. You know the cases last year, where we had very expensive servers that had never even been taken out of the box going out the back door while new equipment was being brought in the front door. Then there was that whole lateral issue between departments about the hardware and software around IT.

    We can predict where we're going to be in the future, so we need to zero in on some of these case studies so we're not making the same mistakes and having the same wastage over and over again.

  (1215)  

    Mr. John Wiersema: As I said, Mr. Chairman, we plan our work on a multi-faceted sort of basis. We will look at individual case studies. We've looked in the past at management of major IT projects. We've looked at other major capital projects, major procurement projects that are underway in the government, and then we also look at these issues on a more horizontal basis.

    Mr. Timmins, as I indicated before, is doing work on the government online initiative on a government-wide horizontal sort of basis. We look at various other management initiatives, frequently under the jurisdiction of the Treasury Board Secretariat, such as modern comptrollership or improving reporting to Parliament. We look at those on a horizontal basis in addition to looking at individual cases, programs, or departments, and we try to balance off both approaches in our work.

    The Vice-Chair (Mr. Tony Valeri): Seeing no further questions, I want to thank you for coming before the committee this morning and helping us prepare for our meeting with the Treasury Board in reviewing their estimates. We look forward to the information you will provide in terms of your assistance in defining active monitoring and also the information you will be providing with respect to the request made by Mr. Szabo about HRDC. Thank you very much.

    Meeting adjourned.