PACP Committee Report

Additional analysis and recommendations offered by the Parliamentary Caucus of Liberal Party of Canada to that of the majority of Members on the Standing Committee on Public Accounts concerning:

“Internal Audit”, Chapter 3 of the 2011 Status Report of the Auditor General of Canada

While the majority report produced by the Standing Committee on Public Accounts reflects much of the same findings of fact and contains many of the same recommendations for remedial action concerning the government’s performance on internal audit held by members of our Parliamentary Caucus, the Liberal Party of Canada is disappointed that the majority of the Committee Member’s neglected to include a more substantive analysis of one issue that had been repeatedly flagged by the Interim Auditor General of Canada and by several other witnesses during the course of the Committee’s study of this Status Report. That issue - the imminent reduction in financial and human resources to various Internal Audit offices within Budget 2012 and the negative consequence this will have on the overall performance, efficiency and effectiveness of the internal audit function in the future - deserves much stronger attention than has been offered by the majority of the Committee.

During the course of the 10^th meeting of the House of Commons Standing Committee on Public Accounts held on October 26, 2011, the Interim Auditor General of Canada, Mr. John Wiersema, told the Committee:

“We would encourage government not to repeat past decisions to reduce funding for internal audit in an attempt to save money. Internal audit is an important management tool particularly in times of financial restraint.”

Later in the meeting, Mr. Wiersema took a second occasion during this meeting to tell the Committee:

“The message I’m trying to convey is that it’s important to protect internal audit as an essential management function.”

Mr. Don Love, the Director General for the Audit and Evaluation Division of the Department of Veterans Affairs echoed many of the same sentiments as Mr. Wiersema but went further by reflecting on how important internal audit is to ensuring program efficiency and effectiveness of taxpayer’s money during times of fiscal restraint.

“During this time of fiscal restraint, we are contributing a critical service, providing deputy ministers with strategic advice, assurance that the appropriate controls are in place, and opportunities for improved efficiency. Now more than ever, the government of Canada requires a strong function of internal audit, and we need to continue to build on the progress that has been made since 2004.”

During the course of the Committee’s dialogue with the Interim Auditor General and with the other witnesses who appeared before us, only the Committee member representing the Liberal Party of Canada made the observation that the maintenance of a robust internal audit function better serves the objective of achieving efficiency and effectiveness of taxpayer’s money than the hiring of an efficiency consultant from outside of government at a cost of $90,000 a day as the Harper government has chosen to do.

With such compelling testimony and wisdom obtained from such credible, professional witnesses as those who appeared before the Committee during the course of this study, the Parliamentary Caucus of the Liberal Party of Canada offers the following additional recommendations to the government and to the House of Commons for its consideration:

Recommendation 1

That the Controller General of Canada provide an annual report to Canadians on the financial and human resources associated with the internal audit function of government.

Recommendation 2

That, in order to maintain the high level of professionalism and achievement achieved within the internal audit function as noted by the Office of the Auditor General of Canada since 2004, the government of Canada exclude internal audit function from any financial and human resource reductions.

Recommendation 3

That the Controller General of Canada be asked to appear before the Committee after Budget 2012 is tabled to outline the impact and consequence of any changes to resourcing of the internal audit function across government.

Like the Auditor General of Canada, the Parliamentary Caucus of the Liberal Party of Canada, as member of this important Committee, felt strongly enough about these points and about these recommendations that they should not go unsaid. We are pleased to provide this service to Canadians.

Respectfully submitted,

Hon. Gerry Byrne, PC, MP
Humber-St. Barbe-Baie Verte
Liberal Party of Canada