Evidence of meeting #28 for Public Accounts in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was audits.
A recording is available from Parliament.
11:45 a.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Just for the record, it's not that I did not want to ask questions; I just ran out of time with my own clock. It was not a lack of willingness to ask a question.
Thank you.
11:45 a.m.
Liberal
The Chair Liberal Joe Volpe
You're always a fine gentleman, Mr. Kramp, and even though it's not a point of order, I feel as though my wrists have been slapped.
Mr. Ralston.
11:45 a.m.
Comptroller General of Canada, Treasury Board Secretariat
We're very much concerned in promoting an effective internal audit practice within the federal government. Internal audit reports are made public. The follow-up of the recommendations is done. We have departmental audit committees with external members that are meant to follow up on those sorts of things.
Those same audit committees will work with the work of the Auditor General. Also, as I've said, the Auditor General is in departments, doing work in the context of the consolidated financial statements. They do look at controls. They do issue recommendations of things that come to their notice. They disclose these in management letters or whatever. The audit committees do follow up to ensure that those actions are taken.
So there are a number of controls and procedures in place to ensure that the sorts of concerns you raise are addressed. But of course, as the auditor will state, there are limitations. An auditor won't see everything. There will always be some subjection to resource limitations. But to the extent that items are noted, they are attended to.
11:50 a.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
Thank you very much.
In lieu of time, on the mandates for the Office of the Comptroller General of Canada and the Office of the Comptroller General, are those mandates being met, in your opinion? I'll ask Mr. Wiersema first.
11:50 a.m.
Deputy Auditor General, Office of the Auditor General of Canada
That's a very good question, Mr. Chairman.
11:50 a.m.
Deputy Auditor General, Office of the Auditor General of Canada
Well, as an auditor, I only express auditor opinions after I've done audit work. We have not audited the Office of the Comptroller General and how it carries out its functions, so I'm not in a position to give the committee any assurance on whether or not that mandate is done because I haven't audited it.
11:50 a.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
Mr. Ralston, do you feel that your mandate has been fully exercised and that you completely respect that mandate and are filling it?
11:50 a.m.
Comptroller General of Canada, Treasury Board Secretariat
Yes. We direct efforts toward all aspects of our mandate. It's a bit like gardening, though, we have to do it constantly.
11:50 a.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
Okay. I agree.
My concern, then, was brought up earlier. When we're looking at costs, we tend to sometimes strike a cost on dollars, which will sometimes bring in other costs around what resources are available in terms of the $300 million-plus to actually implement these particular external audits, I believe. As well, this would not deal with National Defence, which, I understand, is one of the largest and most complex costs that would be there. I want to move that as a comment.
What are some of the benefits, then, that you would see from the update of the policy on internal audits? I guess that will go to you, Mr. Ralston.
11:50 a.m.
Comptroller General of Canada, Treasury Board Secretariat
We're in the process of evaluating that policy, which was first set out in 2006. We want an internal audit to improve even further, but we believe there's a demonstrable improvement that has been noted.
In particular, I want to acknowledge the excellent work done by audit committees and the external members on those audit committees. I think they've really succeeded in providing focus to the work of departments around improving internal control.
11:50 a.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
It's okay. I'll let somebody else go in my time.
11:50 a.m.
Liberal
The Chair Liberal Joe Volpe
I'll take your time.
We had a couple of questions raised the other day by committee members. In the private world, if you have benchmarks, if you have markers, then you can measure how fast one gets to a particular spot, or if indeed you actually get there.
Today, I'm hearing that you're giving us assurances that everything is great, but that you don't have actual benchmarks. You make allusions to internal audit committees, to internal improvements, but everything you've said so far strikes the objective observer as...perhaps we don't need the Auditor General. If everything is working fine, according to the Comptroller General's assessment of how the departments are producing--i.e., performing, giving us a performance--and how they're following process and how they are giving us appropriate controls, am I wrong in thinking that perhaps you don't need the Auditor General to tell us whether you're doing a good job or not?
11:55 a.m.
Comptroller General of Canada, Treasury Board Secretariat
I worked for many years as an external auditor. External auditors provide great value. My only point is that—
11:55 a.m.
Comptroller General of Canada, Treasury Board Secretariat
Not at all: my only point is that it's important to understand what their opinions mean and what they don't mean. My concern is that it may be misunderstood as to what is covered by an opinion and what is not covered by an opinion. They are vital, needed, and of great value for the things that their opinions cover, but for the things that their opinions don't cover, it's fair game to look for other alternatives to provide those assurances.
11:55 a.m.
Liberal
The Chair Liberal Joe Volpe
Mr. Ralston, in your presentation and the auditor's presentation, you both relied on an interpretation of implied government policy, starting from 2004, and then your interpretation of an implied government policy subsequent to it. You can appreciate that members of Parliament want to be able to reflect on how government is working irrespective of who's in power and who's not in power. You're giving us, I think, kind of conflicting messages about where things are going to go. But perhaps.... You know, I'm new to the job, so—
11:55 a.m.
Liberal
The Chair Liberal Joe Volpe
No. It's okay.
We'll let Mr. Allen ask a question. I'd like everybody to have an opportunity.
Mr. Kramp.
11:55 a.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Mr. Chair, I certainly respect your opinion on that, but three minutes there is no problem at all now and then for an interjection. But taking the full time of perhaps one of the other things.... I just offer that thought.
11:55 a.m.
NDP
Malcolm Allen NDP Welland, ON
Thank you, Mr. Chair.
I appreciate the complexity of audits, because I've actually worked not as an auditor, but with audits, in the sense that I have had audits done for me. I appreciate what Mr. Ralston is trying to suggest.
Clearly, those of us who are here are trying to assure the folks we've come here to represent--that is, the Canadian public--that when we collect their dollars, when we tell them those have been spent wisely on their priorities, we indeed can somehow point to something that actually says this is true. Otherwise, it just becomes another politician telling the general public that they've collected their money and saying, “Trust me, it's okay”. You can rank us on a scale of trustworthy people and you'll find me somewhere not close to a firefighter.
The difficulty becomes that internal audits are somewhat magical for departments to look at, but not necessarily for us, in the sense of how we are going to then try to get through them. Because occasionally what we need to have is what the Auditor General does, which is to give us a larger picture. She does that now. But ultimately, it's too big, to be honest, in the sense that it's a macro piece when we don't necessarily want to talk to you line by line. I've done that as a municipal councillor. We're not interested in that in the sense of wanting to do that every time, but indeed we need to start looking at a more specific piece.
We've talked about departmental pieces, which aren't necessarily so small, especially when we're talking about $22 billion in the Department of National Defence and some other areas that are large, such as the human resource development and skills training department. They're big departments with large amounts of money. They affect literally hundreds of thousands of people across this country. It seems to me that in our way of having to report, we need some assistance.
I hear your position. I guess my question to you is how you intend to make sure that I as a parliamentarian--not an auditor, not an accountant--can understand what you're trying to tell me with that audit, so that I can communicate that to the folks I represent who are asking me those questions.
11:55 a.m.
Comptroller General of Canada, Treasury Board Secretariat
Mr. Chair, I would argue that the audit done of the consolidated financial statements of the Government of Canada and the opinion thereon are significant pieces of assurance for taxpayers. I would hope that the Auditor General would agree.
I think we're understating and giving short change to the value of that document. We're really talking about replicating those efforts at a departmental level, not necessarily with the objective of assurances about the financial statements, but as a way to motivate attention to internal control. That's really the link that's important to me.
I think the financial statements, the numbers, are very well validated at the consolidated level. I'm just trying to address how we motivate internal control improvements. We're saying that we just think there's a way to do it that is different from what had been envisioned in the past.