Proceedings of the Standing Senate Committee on
National Finance
Issue 16 - Evidence - Meeting of May 30, 2007
OTTAWA, Wednesday, May 30, 2007
The Standing Senate Committee on National Finance met this day at 6:15 p.m. to examine the Estimates laid before Parliament for the fiscal year ending March 31, 2008.
Senator Joseph A. Day (Chairman) in the chair.
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The Chairman: As part of our committee's examination of the Estimates laid before Parliament for the fiscal year ending March 31, 2008, it is my pleasure to welcome this evening our Auditor General of Canada, Sheila Fraser. We are pleased to have you with us this evening. I see that you have brought along your team from the Office of the Auditor General of Canada, which we very much appreciate: Hugh McRoberts, Assistant Auditor General; John Wiersema, Deputy Auditor General; Nancy Cheng, Assistant Auditor General; and Richard Flageole, Assistant Auditor General.
We understand that you may have a few introductory remarks. After that, maybe we can have a discussion. Thank you very much for being here.
Sheila Fraser, Auditor General of Canada, Office of the Auditor General of Canada: We are pleased to be here. I am accompanied by Mr. Wiersema, Mr. Flageole, Mr. McRoberts and Ms. Cheng.
When we appeared before this committee about a year ago, we discussed our May 2006 status report. Much has gone on since then, and I would like to take this opportunity to brief the committee on what we have produced in that time. First, I would like to outline our mandate and operations.
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As a legislative auditor, we provide objective information, advice, and assurance that can be used by parliamentarians to scrutinize government spending and performance.
Our legislative audits include both financial audits and performance audits. A financial audit examines whether the government is presenting its financial information fairly in accordance with accounting policies. Our financial audits are similar to the type of audits you see in the private sector.
Through our performance audits, we examine whether government programs are managed with due regard to economy, efficiency, and environmental impacts; and whether measures are in place to determine program effectiveness.
For 2007-08, we have $80.6 million in appropriations that are available to us through the Main Estimates, and the equivalent of 625 full-time employees. With these resources, we will have produced close to 30 performance audits of federal departments and agencies, including reports by the Commissioner of the Environment and Sustainable Development and three performance audits of territorial governments; some 130 financial audits and other assurance engagements; 11 special examinations of Crown corporations; and our assessments of the performance reports of three federal government agencies.
Committee members may recall that we had an issue with our funding in the recent past. In earlier Estimates documents, and in discussions with several parliamentary committees, we had presented the need for a new funding mechanism for officers of Parliament. I am pleased that the Advisory Panel on the Funding of Officers of Parliament was reconstituted last fall, and that I had the opportunity to appear before it on November 23. Our funding was subsequently approved by the Treasury Board.
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We are often asked how we select the subject of our performance audits. There is a rigorous process in place for this. We start by conducting risk assessments of federal departments and a number of management areas such as human resources and information technology. Our selection is based on the risks that departments and agencies face in fulfilling their mandates and conducting their operations. The 2004 international peer review of our performance audit practice lauded this as a good practice.
In Appendix A, you will find a list of the chapters that we provided to parliamentarians in the last year. You will note a wide range of topics. Some are specific to one department while others cut across numerous departments. Some are the results of requests from parliamentary standing committees. The appendix also includes our special examination reports on various Crown corporations. It is our practice to dedicate one of our reports to following up on audits we have previously conducted. We believe it is important to inform parliamentarians of the degree of progress achieved in the areas that are most at risk. This status report is usually tabled in February.
Looking toward the future, you will find a list of topics that we plan to report on in 2007-08, in Appendix B. I would like to point out that next year's status report will consist of follow-up audits of previous work conducted by the Commissioner of the Environment and Sustainable Development.
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And now Mr. Chairman, I would like to briefly touch on two of the chapters in our May 2007 Report. I gather that these may be of particular interest to the committee. Staring with financial assistance programs for post-secondary students, we found that Human Resources and Social Development Canada and the Canada Millennium Scholarship Foundation have good controls to ensure that loans, grants, and bursaries are delivered in the right amounts to eligible students.
Both the department and the foundation have taken appropriate steps to make students and their families more aware of the financial assistance available to them. The department has improved the information that it provides to students on resources offered to help them manage their debt.
However, although the department committed to completing an evaluation of the Canada Student Loans Program in 2006, it has not yet done so. We think the department should evaluate this program to see if it has indeed improved access to higher education, as Parliament intended.
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The second chapter concerns the management of human resources at the Department of Foreign Affairs and International Trade. The department operates 170 missions in 111 countries around the world. Its people conduct diplomatic relations, provide assistance to Canadian individuals and businesses, and advise the government on international issues.
In the next few years, more than half of the department's employees in the management category will be eligible to retire. The department has not been planning adequately to meet these challenges. It does not have a complete picture of the people, competencies and experience it will need in the future and it lacks basic information needed to manage its human resources. In addition, it does not pay enough attention to the management of locally engaged staff in missions abroad, who make up half of its workforce.
Finally, the department lacks the flexibility it needs to provide Canadian staff with cost-of-living compensation and incentives for hardship conditions at missions abroad. This makes it difficult to find people willing to accept some postings in certain foreign countries. Barriers to spousal employment are another deterrent. This lack of flexibility is an important, long-standing problem and it is time for the department and the Treasury Board Secretariat to work together and resolve it.
In concluding, I would like to say that your views on our work are very important to us. As a way to assess our overall performance, we have decided to conduct a survey of the members of this committee and certain other committees of the House and Senate. It is a short questionnaire concerning the value of our work. Some of you may have already filled in the questionnaire. We thank you in advance for taking the time to provide us with your feedback so that we may provide you with the maximum possible value. I thank you, and I would be pleased to answer your questions.
The Chairman: Thank you, Ms. Fraser. I am sure there will be a number of questions that will flow from your remarks and your report, and the two follow-up reports that you have produced in the last while, all of which are read with a great deal of interest by us, I can assure you. We appreciate the work that you and your office are doing.
I will start with Senator Murray, a senator from Ontario and a former chair of this committee for a number of years.
Senator Murray: I will touch on two or three matters and will then invite you to comment or not, as you see fit. I am happy that you have taken on this issue of the Canada Student Loans Program and asked for an evaluation of the program to see that it has improved access to higher education as Parliament intended. It is important that that evaluation be done so that we can have an opportunity to look at it and have an opportunity to debate in Parliament.
Second, I have a view about the Department of Foreign Affairs and International Trade that is not widely shared, to put it mildly, by the senior people there. It has to do with the training of people. It is good training, in my observation, creating specialists on various subjects and various parts of the world. I have come to the conclusion that, in their desire to develop well-rounded people, who are able to operate in any part of the world or on any subject, we are wasting talent that we have developed at great effort and expense.
Many years ago, I remember being very impressed with a younger officer whom I met in Moscow and who was a Russian speaker. He seemed to me and to others to have a real command of the convoluted politics of the Soviet Union as it was at the time. When I ran into him here on Sparks Street some time later, I asked him what he was doing. He told me he was in the Commonwealth section. How many Russian speakers and how many people did they have who knew as much as he did on those subjects? Likewise, I have run into people with training and experience in China, who are fluent in Mandarin or Cantonese, who were posted to Western Europe. How many Arabic speakers do we have and where are they, given the problems we face now? I wonder whether you would make it part of your job to look into the deployment of the talent that we have in that department. I will leave that where it is.
There is another matter on which you may or may not want to comment. The evidence is largely anecdotal, but it is widespread, of what is sometimes called a post-Gomery paralysis in the federal public administration. I do not believe I need to describe it to you. One hears wherever one goes, not only in town but also out of town, about people dealing with the federal government and the serious problems they have, given the proliferation of rules and procedures, and various departments and agencies they must go through for what seemed to me to be very simple transactions. I suspect — and this is an editorial comment with which colleagues may not agree — we made it worse with the Federal Accountability Act in some ways. You do not have to comment on that.
There was no one in the prevailing political climate and in the media climate in this country, nor was there anyone in Parliament — even many people with much experience in government — who would stand up and say: "We are going too far. This is foolish. Let us get things in perspective.'' The sponsorship scandal was perhaps as bad as the Pacific Scandal back in the days of Sir John A. Macdonald, but they did not turn the system upside down when it was over. They punished those responsible and moved on.
Monday afternoon, there was a meeting of the Official Languages Committee. We had some witnesses from the community radio stations, the francophone community radio stations, weekly newspapers and so on. They depend, of course, on government advertising. More importantly, the government depends on them, or should, to get the message out about its programs and services. Let me give you something of the flavour of what we heard at that meeting the other day. Serge Paquin, Secretary General, Alliance des radios communautaires du Canada said:
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We are talking about half a million dollars a year to inform our communities about those services. However, we still have to obtain the consent of the Privy Council, the Treasury Board and Public Works and Government Services Canada.
And Mr. Ouellette adds:
With the tightening of the regulations and procedures, as a result of the sponsorship scandal, it takes nearly 18 months before a department can announce a new project.
So there is an unease and a problem in that area. Amounts are approved but not spent. After going around in circles for 18 months, the departments ultimately give up.
Audit is necessary, of course, but how much does it cost to audit everyone a number of times? I can tell you that, in certain departments, people are fed up with audits. Audits are conducted once, twice, three and four times and even more. While officials have to produce all the documentation necessary for the audits, they cannot focus on the programs and, consequently, are not doing their job. In my opinion, things have gone too far. Balance has to be restored.
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Various witnesses from the weekly newspapers, community radio and others were talking about half a million dollars in some cases and the virtual paralysis of programs. I have heard it elsewhere. I have heard academics outside of town saying it is not worth the trouble to accept an invitation from the federal government to get involved in something for a few thousand dollars with what we have to go through. I will leave it at that. You know what I am talking about.
I have one final point. Politicians, for the most part, are so guilt-ridden and intimidated by all of this that they would be terrified to suggest that perhaps a new look should be taken at some of these issues. It will take someone of your standing and reputation to point the finger at this and recommend, where necessary, that action be taken to render the situation less complex, difficult and unproductive.
Ms. Fraser: I will address each of your elements. With respect to the Canada Student Loans Program, there had been a commitment to do an evaluation by 2006. That has changed. They are now talking about doing an evaluation in phases, which will not be completed until 2011. We feel that is too long and should be done much earlier to ensure the program is providing the results that are expected.
In the Department of Foreign Affairs and International Trade, we did not specifically look at deployment as related to the qualifications of the people. That would be more into a staffing action, which the Public Service Commission of Canada might want to get into. We looked at how well the department identified the competencies it needed, and we raised a number of issues. For example, with respect to language requirements of the positions, we know only 16 per cent of the people occupying those positions met the language requirements.
Senator Murray: Are we talking about official languages?
Ms. Fraser: For example, with respect to a posting in China, there would be certain positions required to have knowledge of the Chinese language. These are for the missions abroad.
There were 180 positions that required a general working proficiency in a foreign language. We were able to ascertain that only 16 per cent of people had actually met those requirements. Perhaps there were more, but they had not been tested, and it is not up to date. However, it is an indication that the department is not managing that and, therefore, does not know.
We also found problems in that 30 per cent of the positions abroad were acting positions, which indicates an issue there. They were acting positions for very long periods of time, years. We noted in the report as well that there would be promotion processes and the people who were in acting positions would go through the promotion processes and would not be promoted.
Either the process is too onerous or the people do not have the competencies to do the job, but they are doing the job. There are many issues around human resource management, such as the planning and the definition of the competencies needed, particularly going forward with a large number of people retiring.
Senator Murray: It is not easy for spouses to get jobs overseas, et cetera.
Ms. Fraser: With respect to the process, there are Foreign Service Directives, which are essentially negotiated with the unions.
For example, it took them over a year to get insurance in place for people going to Afghanistan. Is it really reasonable to take that long to provide people basic coverage that one would expect them to have? The process around how they determine these conditions must be changed, because it will be difficult to get people to go to these places.
With respect to your last element, I agree with you. There is always a balance between flexibility and control. My impression is that the pendulum has gone way too far toward control. We feel a certain responsibility perhaps in having people interpreting audits and having perhaps pushed the pendulum there. Our office has identified the challenge of seeing how we can contribute to bringing it back.
In a number of our audits, we have raised issues around unnecessary rules and too much burden. One of the first audits we did was on reporting requirements of First Nations bands, where we found that a typical First Nation that has less than 500 people has to produce somewhere around 200 reports a year.
The Treasury Board Secretariat did its own analysis and found that just Indian and Northern Affairs Canada alone received 60,000 reports per year from 600 plus First Nations. This was four or five years ago, and we thought that was ridiculous. They should be able to streamline that. When we did a follow-up about a year ago, it had not changed, and I suspect it had become maybe even worse.
We did another audit on grants and contributions and heard much from the recipients of them, who are important to delivering the programs of government, that the requirements were becoming so onerous that it was becoming costly to them and they were thinking of opting out.
We brought in a number of examples about the length of funding over programs. The funding was not aligned with the program. For example, I remember one in Aboriginal education where the school year goes from September to June, and yet the funding was on the government's calendar year, so the students had to reapply at the end of March for funding. There were situations like that which made no sense.
The government responded and set up the Blue Ribbon Panel to conduct a review and came out with some interesting recommendations. If the committee was interested in this issue, you may want to have the panel appear. They talked about the fact that the relationship between government and the recipients of grants and contributions must fundamentally be changed.
The Chairman: We appreciate you letting us know when you think we might want to look into some group that has been created that not many people know about. We can follow up on those points.
With respect to a point of clarification dealing with the Department of Foreign Affairs and International Trade, would it be within your mandate to look at all those foreign service officers — people qualified to work either here in Canada or represent us abroad — and do a comparison of how many are working abroad versus those working at home in Canada?
Ms. Fraser: I believe the only issue where we did a bit of a comparison with other countries is on the locally-engaged staff. About half the employees with the missions abroad are locally engaged, and that was a higher ratio than several other countries. Beyond that, we did not make a comparison.
Richard Flageole, Assistant Auditor General, Office of the Auditor General of Canada: We mainly compared the ratio between what we call locally-engaged staff and Canadians. It is about 50/50, and is one of the highest among all the Western countries.
The Chairman: I believe you indicated that the human resources management of the information about the locally- engaged personnel is not at a level you would expect.
Ms. Fraser: That is correct. I will ask Mr. Flageole to elaborate.
Mr. Flageole: They must improve the quality of information they have on these people.
The other key message is the support that the headquarters in Ottawa are providing to the people in the mission to manage those people. Canadians are on a rotational assignment, so they come and go on this. It is important to ensure there is continuity in the management of those people. The capacity of the group in Ottawa charged to do that was not sufficient to carry out their mandate.
The Chairman: Do you get any sense that the reason for having such a high percentage of locally-engaged personnel has anything to do with the funding that we are making available to Foreign Affairs and International Trade?
Mr. Flageole: It is a trend that started in the mid-1990s with the budget reductions. We saw how it evolved. In the mid-1990s, we started to replace Canadians with local people. I believe there was a major budget aspect to that. The situation today is that 50 per cent of personnel are Canadians and 50 per cent are local people. I guess there is certainly a link between the two.
Senator Mitchell: Thank you very much for being here; it is always a pleasure. I share Senator Murray's concerns with paralysis. I could not hope to express the frustration as well as he did, so I would just second it.
My first question concerns the government's decision to hire Mr. Paillé to investigate the polling contracts between 1990 and 2004. There are a number of aspects about their decision that I find unusual, if not odd, if not capable of making one wonder. Could you confirm that you did study that process and what your findings were?
Ms. Fraser: We looked at public opinion research and polling. I must admit I do not remember the exact time period that we covered. However, it would have been probably from about 2000 to 2003; the report was issued in November 2003, so we would have covered probably three or four years. This was one of the audits that came out in conjunction with the sponsorship and the advertising, so we did all three areas.
We found that, generally, the public opinion research was not too badly managed. There were some concerns about advertising that could have been of a political or partisan nature. There were some issues about verbal reports, that not all reports were being made public, and we had some concerns as well that they were not necessarily always following the process and explaining why the research was necessary.
We did a follow-up to that audit and tabled that this past February. We found that actually the situation had improved quite significantly. We found no deviations from policy. The reports were there. There was still a question that they were not always necessarily documenting why they needed the research, but we did not have any major concerns about public opinion research.
Senator Mitchell: You might be interested to know that I was actually a great defender of yours in the Senate. The argument was made for further in-depth study — that you had just sampled, so it was not detailed enough — but my argument would be that clearly you would be in a position to go from just sampling to a more detailed study. You have the expertise and the background, or the people who did it had the background. Would you be prepared and believe you would be capable of doing a more in-depth study, had the government asked you to do it?
Ms. Fraser: We had met with Mr. Paillé to ensure he is aware of the work that we have done, and he has indicated and even his mandate indicates that he is not to redo the work that we have done. My understanding is the work that he is doing is probably more on the policy side and policy advice, and that is not the kind of work that we would be able to do. This is very preliminary and just based on what I read from a mandate. I believe he was still in the process of scoping out how he would conduct his work and on what areas he would focus. It was clear that it was not to repeat the work that we had done. The time frame he had was a little further back than the one we had, and he was also looking at some of the policy issues, which we would not do.
Senator Mitchell: It is interesting that he would be hired to do a job for which the specifications had not been done. If he is still fleshing out what he is doing, what is his contract?
Ms. Fraser: When one gets these sorts of contracts, one has to flesh them out and understand what information is available and what areas one will focus on.
Senator Mitchell: In meeting with him, would you have assessed his qualifications for doing that, given that he was serving from a distinct political perspective and does not have an expertise in this area — and certainly not an expertise anything like yours?
Ms. Fraser: No, we were simply there to explain to him what we had done in the past.
Senator Mitchell: Therefore, you do not evaluate policy. You would not evaluate whether or not it is correct to do a poll for one reason or another.
Ms. Fraser: No. We would expect to see documentation in the file to explain why that poll had been done, and that is one of the requirements, but we would not then judge whether it was appropriate.
Senator Mitchell: You do make judgments about whether it was too political or not.
Ms. Fraser: If there was a specific exclusion in certain time periods and we were able to see that a poll was conducted in a certain time asking certain questions that were clearly political, we could say, "This is contrary to the policy.''
Senator Mitchell: Would it be a role of yours to evaluate the study?
Ms. Fraser: No, we do not do evaluations either.
Senator Mitchell: If you were asked to audit Mr. Paillé's work, what would you audit?
Ms. Fraser: We could audit, I guess, with respect to the contract. Was the work done in accordance with the contract? Did the billings respect the contract? That would be there. We do not get into an actual evaluation. We would expect the client departments to do that sort of evaluation. It is clear in our act that we look to see if there are measures in place to evaluate — do the departments have measures in place — but we do not, ourselves, conduct evaluations.
Senator Mitchell: Would you not find it odd that he is fleshing out how he is doing this project and has not been given a defined mandate of any kind?
Ms. Fraser: In most cases such as this, in just about any consulting engagement, there is a broad parameter. However, the consultants have to decide how to go about it, what areas they will focus on and what is already available within government that they can use. We even do that kind of work ourselves when we begin an audit. That would seem to be normal practice.
Senator Mitchell: The mandate has been cut off at 2004, and yet it would be interesting to know if whatever we might determine as being a practice that is not appropriate or was not adequately efficient or did not derive adequate value for money was being continued by the people that did these things into 2005, 2006 and now 2007. It seems arbitrary to cut it off at 2004, especially when one concern you found was that some of the polls that are supposed to be reported in a certain way were not reported. Just recently, we saw a report where the government itself, this government, had forgotten or neglected to report a poll. Would it be something that you would maybe investigate now knowing that Mr. Paillé has only gone so far?
Ms. Fraser: As I mentioned, we did a follow-up on the public opinion research, which we tabled in February, so we would have looked at public opinion research up until probably the fall of 2006, and we found no problems.
Senator Mitchell: You are saying that from 2004 to 2006, you found no problems, and you did not feel it necessary to reinvestigate it. You just said that. Why, if you found no problems prior to that, is it necessary for them to investigate that?
Ms. Fraser: You will have to ask government.
Senator Mitchell: We will. Thank you.
The Chairman: When you are reviewing contracts, if you see a contract that appears to cover the same subject matter as something that has already been done, and you know it has been done, surely on a value-for-money audit you would be able to say that this appears to be a duplication of something that has happened already.
Ms. Fraser: Yes.
Senator Stratton: I would like to go back to paragraph 18 of your statement indicating that, in the next few years, more than half the department employees in the management category will be eligible to retire.
About 10 years ago, this committee did a study on the early retirement phase that would hit us when the baby boomers started to retire. I am rather surprised that the department does not appear to be addressing these issues when, really, government has been aware of this for quite some time.
Do you make recommendations or do you leave it entirely up to them? You do the assessment; you do not see any real planning for the retirement. Is it up to them then to move on, or do you make suggestions or proposals?
Ms. Fraser: No. Most definitely, in all of our audits we do make recommendations. Specifically in this one, we have indicated, for example, that as part of its human resources plan the department should outline its strategies to fill current and projected gaps in its workforce, including how recruitment promotion assignment and language training activities can best contribute to ensuring it has qualified people in the right place at the right time.
The department responds indicating if they agree or not and often what actions are taken. They actually have quite a lengthy response to say that they agree with the recommendation, that they are working on data integrity, that they have created a unit headed by an executive to focus on human resources data integrity. The department anticipates it will take up to two years to update all the systems to ensure quality data. They are working with Statistics Canada as well to improve its ability to address workforce gaps. They talk as well about using non-traditional means to staff positions. That is an issue as well in that department. We noted in the report that they had started some preliminary steps to doing the management planning that they are required to do.
Senator Stratton: As part of the experience, we are fortunate in the fact that we can do international travel, and we meet with the missions abroad. Senator Day is aware of this as well. We see what takes place within these missions. They are always polite, but there is usually a shot — it does not matter what country we are in — that perhaps we could lobby for a little higher pay than they currently get.
In your opinion, how do we assess that when we are visiting a country? Do you do that kind of assessment where you would say they are underpaid? Do you do a comparison with other countries or is that up to the government itself or the departments?
Ms. Fraser: That is up to the government itself.
Senator Stratton: Is that a policy matter?
Ms. Fraser: For example, in this report we brought up issues around the benefits in the Foreign Service Directives, that it has been a long-standing problem of more than 20 years. We had an audit in 1987 when we talked about the complexity of the directives and the process, and 20 years later we are saying the same thing, especially when we have more and more missions. The number of missions classified as "highest risk'' in the last four years have doubled compared to the previous four years. It takes a year to provide insurance. The system is not responsive and does not give the department the flexibility that it needs.
Senator Stratton: I would like to go into one other issue. I was staggered when you told us the number of reports that the Department of Indian and Northern Affairs had had.
Ms. Fraser: It was 60,000 reports in one year.
Senator Stratton: How could that be possible?
Ms. Fraser: In that audit, we took four departments and looked at how many reports a typical First Nation had to produce. We looked to see what happened to the reports, and there was really not much use made of them. There were examples where departments were asking for five different audited financial statements. They are not using information; each program is stove-piped. When we look at the program in isolation, we see it makes sense. However, when we add it up, it no longer makes sense, especially in a department such as that when there is a limited number. When we talk about 630 First Nations, there has to be a way to collect the information in a much more streamlined fashion. The different programs can use that information rather than everyone collecting it and not assessing it or using it.
Senator Stratton: Is government doing anything about it or are they just accepting the fact that 60,000 reports come in, and they get put on the file?
Ms. Fraser: As I said, we made this recommendation about five years ago and when we did a follow-up a year ago the situation had not changed. It seems to me that that would be easy to do too. It would not be that complex to think about how to get a better reporting structure in place. We all have to recognize that the resources that are used in filling out the report are not resources used for housing or health or education.
Senator Stratton: That is really the fundamental question. We put all that money in there, and when we hear about the preparation of 60,000 reports, there is no wonder in part they are not getting appropriate housing or health care or education. That is an issue we should look into.
The Chairman: On that issue, do you have the authority to go in and do any audits on any of the First Nations reservations or groups?
Ms. Fraser: We do not, but I would say in all the work that we do concerning First Nations, we ask them to cooperate with us, and we have received excellent cooperation from First Nations all across the country. We will go in, and they will provide us with information on various programs, be it housing or economic development or reporting or whatever, so they are willing to cooperate with us in doing these audits.
Senator Nancy Ruth: I will return to the Department of Foreign Affairs and International Trade and personnel problems. In the report, you said that this was not atypical for the federal government. Is there a government-wide workforce strategy to deal with this significant shift of baby boomers? How do the department's plans mesh between ministries?
Ms. Fraser: In the audits that we have done on human resources management across government, we have yet to find a really good human resource plan. I know there is now the Canada Public Service Agency — I believe that is the new name. They are charged with doing some of this, but to my knowledge there is no plan across government. I suspect there is not even very good information across government. We find that in many departments. Even in this audit, there was a disagreement about the number of positions that were actually vacant. The systems gave one number and the department said it was something else. The systems showed 35 per cent vacant, and they said that it was only 20 per cent. It is a very big issue across government.
Senator Nancy Ruth: Do you have any suggestions for what a humble group of senators might do about that?
Ms. Fraser: It might be interesting to have a discussion with the people responsible for human resource management across government, to ask them what plans they have in place and how they intend to fix some of these issues.
Senator Nancy Ruth: With respect to the Department of Justice Canada, your report notes that there has been growth in the demand for legal services since the introduction of the Charter of Rights and Freedoms in 1982. Are you able to estimate what portion of the $625 million spent by the Department of Justice on legal services is attributable to Charter cases?
Ms. Fraser: No. They do not keep the information in that form. That is one of the criticisms we have of them, that the whole information system and the costs of providing legal services is not adequate, and they need to do much more work on that.
We talked as well about how there is really no incentive in the system to manage the costs. The arrangements between justice and client departments vary. There are a number of different arrangements. They are not necessarily charged for the full costs of the services provided to them. Estimates are not provided to them in advance. They do not receive the costs of specific services at the end. That is a standard practice that any of us would expect in dealing with that kind of professional service.
Senator Nancy Ruth: I have one more question about justice, and I am not sure it belongs with the Auditor General's department. However, I was shocked to learn about a month ago that if a private member's bill came up, which it had as an amendment to the Divorce Act, the Department of Justice, in my opinion, feels no obligation to do any kind of due diligence with the Canadian Bar Association or the family bar associations in the provinces. Any private member could come up with a proposal for legislation, and if it got through his caucus, it might end up in the law and affect millions of Canadians. For example, in the Senate we are dealing now with amendments to the Divorce Act. I was shocked when the lawyer from Justice Canada — whom I knew when she was an articling student for a good feminist lawyer, so I knew she had good training — was about to let this fathers' rights bill — at least, that is how I saw it — sail through, but she was absolutely professional. Afterwards, she said, "We do not have to do due diligence, we are not asked to and we do not do it.'' I could not believe it. Someone could change the entire Divorce Act or something that affects every Canadian and Justice Canada has no obligation.
Senator Murray: Their job is to advise the government. The problem is the government is not obliged to tell you what advice they get from them on an issue such as that — It is not a problem; one understands.
Senator Nancy Ruth: Government is not opposed to this amendment and all parties in the House of Commons passed it, but I did not feel that was due diligence. Do you have any comments at all, sir?
Hugh McRoberts, Assistant Auditor General, Office of the Auditor General of Canada: We cannot answer that one, I am sorry.
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Senator Biron: In October 2007, you planned to conduct a study on border security. Will that study also look at security and the means at Border Services' disposal concerning terrorist activities?
Ms. Fraser: Yes, essentially. We are going to see how risks can be identified, verify whether measures are in place to identify risks, staff, and capability. The study will concern those activities in general. Obviously, terrorism is a risk at the border.
The Chairman: Senator Biron is senator for the riding of Mille Îles in Quebec.
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Senator Mitchell: I know that Senator Nancy Ruth will be very interested in this as well, so I may be asking questions she has in mind.
Could you comment on the progress of women in senior management positions in the government? Is progress being made? What do we need to do to make more progress?
Ms. Fraser: That is not something at which we have specifically looked. The government does have a policy, though, on employment equity, and all government departments and agencies have to provide reports on that. There are audits conducted. I know, for example, we had one conducted in our place about a year or two ago. There are various reports provided.
We have looked at it in certain areas. For example, when we did an audit on recruitment in National Defence, we looked at what objectives they had set and how well they were meeting their objectives vis-à-vis hiring of women. We also looked at visible minorities and what programs they had in place and how they were doing. It tends to be quite specific to audits such as that. We do not look at it generally. That would be more in the area of perhaps the Public Service Commission. I believe the Human Rights Commission is the one that did the audit on us, so I imagine they do audits on this.
When agencies do not meet the targets, we have to have action plans in place. They assess if those action plans are adequate or not, give a pass or fail rating and determine whether they have to come back and reassess. That would be more of a discussion with, perhaps, the Human Rights Commission.
Senator Mitchell: You did say that there are programs in place in government to advance women in management, et cetera. It seems to me that those programs would be susceptible, if I can use that word, to a value-for-money audit. It seems so much more work needs to be done in this area. Is it something you could consider?
Ms. Fraser: It is something we could do. There are government policies about gender equity. We could look at what programs are in place, how good the strategies in government are, whether they have the information to know if they are meeting their objectives and so forth. It would be the typical kind of audit we could do.
Senator Mitchell: Could I encourage you to do that?
Ms. Fraser: You most certainly could.
Senator Mitchell: Another issue that Senator Nancy Ruth has raised at times here, and others of us are very interested in, is gender-based analysis. I believe it is this committee that has been told there are policies and procedures in place to provide gender-based analysis for budgeted items, legislated items, new legislation and so on. Are you aware of those, and are they worthy of value-for-money audits?
Ms. Fraser: We are not aware of that. We were discussing it, because I met Senator Nancy Ruth and suspected this question might come up, so we did a little research today. We know, for example, that in some of the assessments of the Canadian International Development Agency, CIDA, projects they will consider that aspect. We have seen some evidence of it, but we have not done any work in that area. We really do not have much information on it, to be honest with you.
Senator Mitchell: Would you need to change your mandate to do that?
Ms. Fraser: No, if there is a government policy and commitment, it would be within our mandate to ask how they are implementing that and if they know if they are being successful or not.
Senator Nancy Ruth: One of my frustrations is that Canada is a signatory to conventions, and we do not do too much. One is the Convention on the Elimination of All Forms of Discrimination Against Women, CEDAW. When we try to see its flow-through in various departments, it is like a sponge. There is nothing to push or find; or it disperses or we get some rattle tale that the only response to is, "Give me a break; do you think I fell off the truck yesterday? No, I did not.'' I do not know how to go at it. We have a convention, Canada is a signatory, they went to Beijing and they signed up on all this sugar stuff. It is now 12 years later, so where is it? If it is not there, how can we use an office such as yours to go hammer?
Ms. Fraser: We have done that kind of work, for example, international environmental agreements, where we have had audits. It is something that we can do. We will consider it.
Senator Nancy Ruth: Do you need a formal letter?
Ms. Fraser: If there is a request from a committee, we would perhaps take that more seriously.
Senator Nancy Ruth: You would take that more seriously than from an individual.
Ms. Fraser: Yes.
Senator Nancy Ruth: We could have several committees.
Senator Mitchell: With respect to another topic, passports, issuing, many people who have waited in line for hours would say that they are not getting value for money. Are you looking at that?
Ms. Fraser: We did a follow-up on a passport audit. We had done an audit of passports in November of 2005, and we were asked by the Public Accounts Committee to do a follow-up, which we released in February 2006. Our audit was completed before the lineups started. Knowing that this Western Hemisphere Travel Initiative was coming, we looked at the risk assessment in the planning done at headquarters, and we found that the planning was not bad there. However, when we went out into the passport offices and asked them what contingency plans were in place, none were in place. It was obvious there would be a peak in demand and that they had to have better contingency planning in place to respond to that. However, we did not go any further after that, and we have not done any work since then either.
Senator Mitchell: The government has been arming border guards. We have heard the figure of $750 million for 5,000 border guards, which works out to about $150,000 a pistol. Is that something you will look into, as to whether there is any value in that whatsoever?
Ms. Fraser: The decision to arm them is a policy decision, which we would not comment on. When we are looking at border security, in October, we would probably just make mention of it, but I do not know that we have actually looked at the expenses around that. We can see what we are doing for that.
Senator Mitchell: Could I get an answer in that regard if you have looked at those expenses?
Ms. Fraser: I will ask Mr. McRoberts.
Mr. McRoberts: Right now, that is still a program that is in, if you like, the future state. The decision to arm border guards is clearly a policy decision per se. We would not look at that. It is not impossible that at some future date we will look at how well that policy has been executed and whether it has been done in a cost-effective manner.
Senator Stratton: I want to go on to an entirely different topic. Recently, I have been dealing with the closed army base in Winnipeg called Kapyong Barracks. The Armed Forces moved out of there a while ago. The land has been in the process of being transferred from the Department of National Defence, DND, to the Canada Lands Company. It has taken about the second longest time of any property to be transferred.
When we talk to the people at Canada Lands Company, they go into a convoluted explanation. I cannot understand it at all. There are opportunities for residential development in the city, which is very short of land. I believe there is also an outstanding issue with respect to a base here in Ottawa, as well in other parts of the country.
I see that you have done a special examination report on Canada Lands Company. Would that include the transfers of land and the length of time it takes? This has been around for five or six years.
Ms. Fraser: Yes, most definitely it would. In our last special examination, we raised the issue about the future viability of the Crown corporation with the transfer of lands. We have also raised a similar issue with Downsview Park in Toronto, which is probably the longest to be transferred. It was a major concern, because this Crown corporation had been set up to develop this park and the land was never transferred, so there was a whole structure happening with no land to develop.
I believe that has been resolved. We would look at that in Canada Lands Company. The next special examination is in 2008, so we would be starting later this year.
Senator Stratton: My concern is that progress is glacial. DND offers the property and then to go through the step- by-step process is unbelievably complicated. We look at the opportunities for the existing housing, for example. On that army base, there are 367 housing units, 200 of which are still occupied by DND officials in one form or another until they transfer the land and find other accommodation for them. There are 167 units that are empty that could be used on a temporary basis for refugees, for transitional housing that we are so desperately short of and need. There is a process being put in place, but it will take about another year to even get access to those 167 units. That is tragic when we look at the shortage of temporary housing that the city desperately needs.
There is a story behind that. However, when you go in next year, I would ask that you look at not just this issue of Kapyong Barracks but also the process of transfer of land from whatever Public Works department there is; or if Public Works is responsible, should they be? It goes from DND, to Public Works, to Canada Lands, I believe. I beg you to look at that, because it is taking an inordinate length of time.
Ms. Fraser: We will certainly look at that in the Canada Lands Company special examination. We will give some consideration to expand it further to go beyond the Canada Lands Company issues.
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Senator Ringuette: I apologize for being late, but I was attending another committee meeting where they were hearing from your former colleague Ms. Barrados. That leads me to point 17 that you raised in your presentation. I am surprised because, in Bill C-25, which concerned the modernization of the public service, the power to audit financial resources was delegated to the Public Service Commission.
[Français]
They had the audit power in regard to human resources. I see that you have touched on the human resources issue at the Department of Foreign Affairs and International Trade.
[Traduction]
Ms. Fraser: The Public Service Commission has audit powers regarding staffing. We instead conducted an overall performance and planning audit, as, for example, for employees hired from the outside who did not come under the Public Service Commission. We had good cooperation from the Public Service Commission, which was informed of the audit. We would have liked to collaborate with them in conducting the audit, but, for reasons of internal resources, they chose not to proceed with that audit together with us.
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Senator Ringuette: I am happy that both of you are looking into this human resources issue, because the last knowledge that we have is that only 23 per cent of government departments and agencies have an HR plan in place. Am I to assume that Foreign Affairs and International Trade is one of the 77 per cent that do not have an HR plan?
Ms. Fraser: That is correct.
Senator Ringuette: You have identified that almost 50 per cent of government staff will be retiring, and there has been no planning done to replace them.
Ms. Fraser: That is correct.
Senator Ringuette: I will say this here again, as I have said many times in many committees. In terms of the business community, as providers of services, the number-one factor in providing services is human resources. That is the number-one priority. If we do not have human resources, we cannot provide services. We are not in the product business; we are in the service business. I have been hammering at the importance of this for so many years — baby boomers retiring, lack of planning and restrictions on the current hiring process. From your perspective and your audit of this department, what can we, as parliamentarians, do? I have been arguing this for four years in the Senate and have been doing more than those in the House of Commons. What can we do?
Ms. Fraser: You are absolutely correct. This is a major problem. It is particularly acute in departments such as Foreign Affairs and International Trade, where traditionally people come in at entry level and move up through the system. Only recently the department has tried to bring in people laterally, which was challenged. They have to develop new strategies, because there will not be enough people to move up. They do not have the basic information to know today what the current vacancies are to be able to do the planning going forward. How will they have the people to do these important jobs?
They have agreed with this and, hopefully, they will take action. We have seen some indication that they seem to be serious about moving on this issue, but this is just one department. As you said, the majority of the departments do not have good plans in place.
The only thing I could encourage parliamentary committees to do is bring in the agencies and government who are responsible — Canada's Public Service Agency or something similar — to ask them to account to Parliament about their plans to address this and what progress they are making.
The difficulty is finding how to get people to take action.
Senator Ringuette: Is it in your future work plan because of the severity of this human resources situation that you have identified in this department to place a priority on HR audits in other departments?
Ms. Fraser: We have plans to do HR audits in other departments. We want to do Canada Revenue Agency next because they received additional flexibility when they became an agency. It would be interesting to see if they are using that flexibility and whether there are lessons to be learned from that.
As well, we are planning to do either an audit or series of audits on the entire HR modernization that came through to determine how successful that is. It is key in helping resolve some of these issues to give more flexibility to editors, knowing whether they are actually using that and that it is working in the system.
Senator Ringuette: It is important to know whether they are using that flexibility properly or to bypass the proper human resource hiring process to give us permanent employees that will have benefits and will provide full-time dedication to the task at hand.
Ms. Fraser: Absolutely.
Senator Ringuette: Thank you. I find sometimes that I am the lonely voice in the wilderness crying out that we are a service industry. Five years from now, if this is not addressed and corrected, the taxpayers of Canada will not be able to receive the services that they have been paying for adequately, never mind the new technology.
In paragraph 11, you indicate that you follow up on previously conducted audits. I recall your report on an audit of heritage buildings and Canadian archives. Have you done a follow-up on that audit?
Ms. Fraser: We did a follow-up and tabled the report in February 2007 on built heritage, but we did not look at archives because that is to be done at another time. When we did the original audit, we looked mainly at Parks Canada because they have many of the national historic sites. We found that Parks Canada has made satisfactory progress. They have received extra funding and have begun to address many of their issues, which does not mean it is all perfect, but they had been making satisfactory progress. In the audit tabled in February, we went into other departments that have national historic sites, principally, National Defence, Public Works and Government Services, and Fisheries and Oceans. We found that in the regime across government, those sites are not protected in the same way that sites in Parks Canada are protected. There is a gap in the policy over the protection of these sites, and the fact that they are in operating departments poses a real challenge. At National Defence, for example, we found armouries, classified as national historic sites, that require significant sums of money to maintain them. Will National Defence, in its current situation, take away money to put into the conservation of an armoury? It is the same at Fisheries and Oceans and the Canadian Coast Guard. Will those departments take money away to protect lighthouses? That is the dilemma, so we said that the government needs to strengthen the protection regime and prioritize much better. I cannot remember the numbers of sites, but there were thousands that have been classified or designated heritage. There needs to be a priority-setting exercise to determine which ones truly need to be protected.
Senator Ringuette: I will come back to my main issue. I thank you for highlighting the situation of Foreign Affairs and International Trade. I know it is not the only department lacking in a major way. I hope that you have the opportunity to audit the HR situation in other departments and report before the situation is beyond correction.
The Chairman: On Senator Ringuette's question with respect to follow-up reports, it is important to highlight the good follow-up work that you do. We hear so often about Senate committee reports being put on a shelf somewhere, and I am sure you hear the same. This follow-up to determine progress is so important. We are trying to follow the same example in a number of different committees in the Senate.
I had a chance to look at your February 2007 report with respect to the Coast Guard. This is a follow-up on two of your reports, one in 2000 and one in 2002. The table of contents gives one the sense that it is not a rosy report. This is not the first time we have read this. There are a number of Senate committees, particularly the Standing Senate Committee on National Security and Defence, that have pointed out similar problems. The report makes a number of points: the observations and recommendations indicate that progress has been unsatisfactory; progress in developing a national approach has been limited; Coast Guard has difficulty meeting clients' needs; and Coast Guard's track record for completing initiatives is poor. I am sure you will head back to see what progress they are making as a result of this.
During your look at the Coast Guard, having in mind its clients, did you determine where it could best be located within government? Would you look at such an aspect?
Ms. Fraser: No. That is policy and machinery of government, and we do not comment on that. We do note in the report, though, that there have been a number of changes, which of course have affected their ability to move on some of the issues that have been raised over many years.
The Chairman: As you point out, since they created a special operating agency, they have had difficulty adjusting to that and an overambitious management, which probably indicates that there is some lack of experience.
Ms. Fraser: We indicate that the Coast Guard has this "can do'' attitude, and they take on much and then fade off. We are telling them not to try to do everything, that many of these issues will take a long time to resolve, so pick a few priorities and do them instead of trying to move everything forward at once.
They are developing action plans and agree with the issues we have raised, so we are cautiously optimistic.
The Chairman: We have the luxury of looking into and at least making recommendations with respect to policy issues, and this committee may wish to follow up on some of the points that you raise here. They are quite serious. I feel the Coast Guard has an important role to play and may not be fulfilling its role the way some people feel it might be. That will be for another day.
During your study of the Coast Guard, would you have looked into any operational research that would deal with deployment or redeployment; or reassignment of vessels, vessel replacements or need for new vessels?
Ms. Fraser: Yes, we did look at the fleet. We said that it was a very old fleet with many maintenance problems. However, we also note in the report that there was a real problem with the training and expertise of some of the people: What should have been fairly minor repairs ended up being costly because people were doing it the wrong way or things were happening while they were doing it. Repairs that were supposed to cost about $60,000 ended up costing over $1 million.
There was an issue around the training and the competencies of some of the people. They were not getting the training and the manuals were not available to them. There is now a plan in place to start with replacement of the vessels; they have gone beyond what was considered their estimated useful life, and that is a problem they are facing.
The Chairman: Having reviewed what was intended for these ships and the functions they have to perform, would you determine the best location for those ships?
Ms. Fraser: No. That is not something we would have looked at. We looked at what they were planning to do. We noted that because of the age of the vessels, they were not always able to complete their entire program.
In the report, we noted that certain surveys of fish stocks, for example, were not conducted because the vessels were not available to do them, and that is an important function that they carry out. That is why we say they were not necessarily meeting the needs of clients. We had some examples such as that.
The Chairman: During your review, did you see any operational research on the functions to be performed by these vessels?
Ms. Fraser: I am not sure that we did. We would have gone through the amount of time that they were spending on repairs and maintenance and the consequence of that, but I am not sure we would have asked for that kind of information.
The Chairman: I have seen no recommendations in your reports. Are you aware of any recommendations concerning two vessels that were in Halifax being moved to other locations in the Atlantic?
Ms. Fraser: No. I am quite sure we would not have commented on that.
The Chairman: That is helpful. I appreciate your information in that regard.
[Traduction]
Senator Biron: It seems to me that the next report of the Commissioner of the Environment and Sustainable Development in February 2008 will be very interesting, depending on all the points it concerns. Will it examine the impact that non-compliance with the Kyoto Protocol can have, where it refers to international environmental accords?
The current President of France, Mr. Sarkozy, stated in the pre-election debate with Ségolène Royal that he would block imports from countries not complying with the Kyoto Protocol. Will that point be examined in the report?
Ms. Fraser: No, the Kyoto Protocol will not be the subject of a study because, as you may know, that audit was previously conducted by the Commissioner of the Environment in his September 2006 report.
We have conducted a series of audits on climate change, and these are follow-ups that we will be doing in February 2008. It is too early to go back to the Kyoto Protocol issue, since we do not yet know the government's plans.
The report will not include an impact analysis either, but rather an evaluation done by the government. We could ask the question as to whether they have done it, but we will not be doing that kind of work.
Senator Biron: I am not talking about the impact of compliance with the Kyoto Protocol; I am talking about the economic impact that could result from it.
Ms. Fraser: I do not remember exactly what agreements are concerned, but they will be agreements that we have previously audited. We will re-audit in order to determine whether the government has taken our recommendations into account and whether progress has been observed in relation to the said recommendations.
I could give you the details on the specific agreements that we are going to audit, if you wish.
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Senator Mitchell: There has been some controversy over the application of funds for humanitarian aid and development projects in Afghanistan, questions of getting information on how much has been spent where and how effectively. I know it would not be easy to audit that, but is it something you have considered auditing?
Ms. Fraser: We have not considered auditing that for the moment. We may eventually, but it is not currently in our plans.
Senator Mitchell: This question is nowhere near as cynical as it will sound. I look at the $100 a month child benefit for children under 6, and I wonder how you would evaluate that. Against what kind of objective would that be evaluated? What are its parameters? How would you evaluate that as being effective or value for money?
Ms. Fraser: There are three things we do not do. We do not question policy, we do not question machinery-of- government issues and we do not do evaluations. We would ask government if they have done an evaluation. For example, if Canada Student Loans committed to doing one, we would ask if it had been done and what it showed. In that case, it has not been completed.
For these programs, we could ask if the evaluation has been done in order to see if the results expected were being obtained. We do not carry out the evaluation. It is clear in our act that we can only see if government has the mechanisms in place to evaluate.
Senator Mitchell: Therefore, the government essentially giving money away would be very difficult for you to evaluate.
Ms. Fraser: We would ask the following: What measures do you have in place, what kind of results measurement system is there, and how do you know if you are achieving your objectives by that system? We ask that consistently in almost every audit we do.
Senator Mitchell: They might say they were trying to buy X number of votes and they bought them. That is as cynical as I wanted to be.
Senator Nancy Ruth: Following on the same line, North American Aerospace Defence Command, NORAD, was not designated a major Crown project. Your report states that the Department of National Defence, DND, asked Treasury Board Secretariat if it should be, and there is no record of what the Treasury Board Secretariat said. Could DND have pursued this? Is there any evidence that they did not pursue it and why they did not? Do you have any best guesses as to whether they just wanted to avoid the scrutiny of being designated a major Crown project? Then, of course, why do we have these procedures if no one will use them?
Ms. Fraser: I will let Mr. McRoberts answer that.
Mr. McRoberts: The issue came up in the context of 1998-99; it appears to have been raised internally in DND, and the record, which has been made available to us, indicates that there were some discussions between DND and officials at the Treasury Board, and a decision was made not to proceed.
We have only the sketchiest records of those discussions, and we concluded that we cannot see that the Treasury Board did its job in that case. I simply note that it was clearly acknowledged, at that point, that the project would cost in excess of $100 million — that being the first of the two criteria for being designated as a major Crown project. The second was that the delivery risk had become high as a result of the problems that Litton was having with its contract. Those are the two conditions normally used to define a major Crown project: costs over $100 million and high risk. That is why we raised the question.
The Chairman: My question is in relation to the funding mechanism for your department. Three or four years ago when you were before this committee we agreed with you that parliamentary officers should maintain independence. There seemed to be a bit of a conflict when your department's budget came through the Treasury Board, which is government. We had recommended at that time, in a report from this committee, that some mechanism be put in place to ensure that that conflict was not there. In fact, an advisory panel was created. Regretfully, the Senate was not included as a part of that, and my understanding is as well that the advisory panel was only for a two-year period, at least when it started.
Can you tell us, first, what has your experience been in working with the advisory panel, and do you find it satisfactory? Do you have any comments? Presumably, this will be up for review again fairly soon.
Ms. Fraser: Let me start by thanking the Senate committee and other committees as well that took an interest in the issue of funding for officers of Parliament and were instrumental in encouraging government to address the issue.
You are correct, there was an advisory panel to the Speaker of the House that was established in the last Parliament and then reconstituted this year in this Parliament. It is a pilot project for two years. An assessment is to be done at the end of the two years. All the officers of Parliament have now appeared before the panel at least once, some maybe even twice. We view it as a very important body for us obviously on the funding decisions, but we also see it as a way to resolve perhaps other differences with government over the administration of our offices, for example, on human resource practices, et cetera. If we are in a conflict with government we can bring that forward to the panel.
I believe everyone is generally satisfied with the way the funding has worked. It is interesting that we will appear with the Treasury Board Secretariat and present our funding requests, if there are any. The Treasury Board Secretariat has to then present their analysis, which is something we never received before. We would simply get a "yes'' or a "no,'' and we would never understand on what basis that decision was made; whereas now they actually have to present to the panel if they agree with the funding request or if they have concerns. It encourages all of us to try to resolve the issues before we appear before the panel. None of us wants to be in a fight; it would be better if we can resolve it, but just the fact that those analyses by the Treasury Board Secretariat are now more transparent is an interesting process.
The process has worked very well. We are generally satisfied with it. There are some improvements perhaps with how the information is provided, and there will be aspects that can be improved over time, but to the officers of Parliament it is an important mechanism.
The Chairman: Can you think of a reason why the Senate was not included in that advisory panel?
Ms. Fraser: My recollection from the time was that it was initially to be a joint body. I believe that the Senate may have been approached, but I do not know what happened. That would be something you might want to take up.
The Chairman: We can go at that question from different angles and different places.
My final question about that advisory panel relates to the Main Estimates for this year. Your office has an increase from $73.7 million in the past fiscal year to $80.6 million this year. Was that as a result of your request before the advisory panel?
Ms. Fraser: Yes, we requested about $6 million in new, additional funding in our Main Estimates. The rest of the increase is probably salary increases through collective bargaining. Of that, $2 million is for new financial systems within the office and a records management system, which is required. That is a one-time capital funding.
The other $4 million is to respond to increases in our mandate. When the budget implementation bill went through in the summer of 2005, we were named as auditors or co-auditors of all Crown corporations and, as well, all Crown corporations became subject to special examinations, which they were not before. As a result, we became co-auditors of Canada Post and of the Public Sector Pension Investment Board, and we had seven or eight additional special examinations that we had to do. There was some additional work in the Territories. We were named auditors of the Yukon Hospital. We have a special opinion we have to give on the Canada Revenue Agency on controls, which was part of the tax collection agreements with the provinces.
There is quite a long list of new work. We said we would try to get through much of it in the first year. We had a carry forward, which we ate up so that we could better assess what these audits will cost. Then we came forward with the request for $4 million, and that was a large part of it going forward. We also have a significant portion related to human resources, recruitment-retention plan, training and methodology. There are many new standards coming out constantly from the professional organizations, so we have to do more training for our people. There was a large portion — at least two or three full-time equivalents, FTEs — just related to retention and recruitment.
The Chairman: You have a new mandate under Bill C-2, the Federal Accountability Act. Is any of that increased there, or are you saying you will try to live with what you have until you see how much more you need?
Ms. Fraser: We have indicated all along, even during Bill C-2 discussions, that we expected to use those additional powers in rare circumstances and did not see any need for additional funding, so we did not ask for additional funds related to that.
The Chairman: In that figure we have, does that include the environmental audit aspect of the Auditor General's office?
Ms. Fraser: Yes.
The Chairman: Can you break that out and tell us how much of your $80.6 million relates to that activity?
Ms. Fraser: It would be about $4.5 million, probably, and about 45 FTE auditors, which are related specifically to environmental, but then of course there are all the support services that are common within the office.
The Chairman: Just refresh us all for the record with respect to these increases. What is the total number of employees of the Office of the Auditor General?
Ms. Fraser: We have 625 FTEs.
Senator Ringuette: When this committee was looking at Bill C-2 last year, both you and the Comptroller General indicated to us the increased need for human resources to do the additional tasks that would be required of your departments — the co-audits you have to do and all the controlling positions in the different departments of the Comptroller General — and how difficult it was to recruit competent people. The Comptroller General even indicated that he was looking outside of the country to recruit.
What is the situation today?
Ms. Fraser: We have been fortunate. The market is tight. It is difficult to recruit particularly financial auditors. There is obviously much competition even within government. Government tends to come knocking on our door and enticing some of our people away.
We noted last year that our turnover rates went up; it was about 14 per cent, which was too high. Early indications are that it has come down considerably this year. We have to do more analysis to understand why. We have been fairly successful in bringing people in.
Once a year, we bring all our staff together and I ask all the people that were not there the year before to stand up, and there were over 100 new people in the office. It is a continuing challenge for us to bring people in because we have many retirements, similar to any department, and people leaving.
We are able to attract young professionals with young families, because we can offer them perhaps a little more balance between work and family than the private sector. We seem to be able to attract people in for that reason.
The Chairman: Honourable senators, it only remains for me to thank our special guests here this evening; Auditor General Sheila Fraser and her team. Thank you very much for being here. We appreciate your openness, candidness and helpful comments.
Ms. Fraser: It is always a pleasure to appear before the committee. Thank you.
The committee adjourned.