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Opening Statement to the Standing Committee on Public Accounts

Report on the Office of the Privacy Commissioner of Canada

2 October, 2003

Sheila Fraser, FCA
Auditor General of Canada

Thank you, Mr. Chair. I am pleased to have the opportunity to brief members of the Committee on the results of our audit of the Office of the Privacy Commissioner of Canada. I am accompanied today by Hugh McRoberts, Assistant Auditor General, as well as Kathryn Elliott, Principal responsible for the audit work on human resources management issues. Others who contributed to this report are also available should the Committee need to go into greater detail.

As I mentioned on Tuesday, I am both outraged and saddened by what we found. Outraged because of the environment of fear and arbitrariness that lead to the major failure of the controls over human resources management, financial management, contracting, and travel and hospitality expenditures—and saddened by the treatment of employees.

The human cost has been significant. I am also concerned that an even greater harm may be done if this case is generalized to all the employees of the Office of the Privacy Commissioner and the entire public service. This would be wrong—and a great disservice to the thousands of honest and dedicated men and women across this country who faithfully serve Canadians.

The former Privacy Commissioner abdicated his responsibilities as a deputy head for ensuring the proper administration of the Office. He and some of his executives turned a blind eye to breaches of law, policy, guidelines, and basic management principles.

We found that the former Commissioner repeatedly abused his discretion, in that he often failed to exercise sound and reasonable judgment. For example, he spent public money on travel and hospitality unreasonably and extravagantly, without regard to prudence and probity. We found little value to the Office of the Privacy Commissioner and to taxpayers for expenditures on hospitality and international travel. We also found that the former Commissioner abused his discretion in the areas of job classification and compensation.

Significant financial and human costs were incurred as a result of a poisoned work environment. The internal governance mechanisms in the Office of the Privacy Commissioner and oversight mechanisms of central agencies—the Treasury Board Secretariat and the Public Service Commission—were insufficient or, in the case of central agencies, not used to either prevent abuse and wrongdoing or deal with them when they occurred. Few employees reported the abuse and wrongdoing because they believed that they had no way to express their concerns without fear of reprisal.

In our view, these conditions have seriously impaired the ability of the Office of the Privacy Commissioner to function. A great deal of rebuilding is needed to restore its management capabilities. The present situation is cause for concern, given that parliamentarians provided the Office of the Privacy Commissioner with powers in an area of critical importance—assisting Parliament in protecting and preserving the privacy rights of Canadians.

This situation is particularly serious because, as an Officer of Parliament, the former Privacy Commissioner—and his executives—owed a special degree of care in the management of the Office.

Our report contains a number of recommendations, several of them related to recovering money that was improperly spent. I have referred certain matters identified during the audit to the Royal Canadian Mounted Police.

It is now important that the Office of the Privacy Commissioner and central agencies of government take corrective action. Sanctions should be applied and restitution made, where appropriate.

Looking ahead, the Committee may wish to discuss with the Interim Commissioner his plans to improve the management capability in his office and the timeframe he proposes to do so.

The Committee may wish to ask the Treasury Board Secretariat what it is doing to help the Office of the Privacy Commissioner and how the Secretariat will monitor progress. Also, for the broader public service, how does the Secretariat plan to implement active monitoring to ensure that problems are detected and resolved expeditiously? I am referring to problems in financial management, in contracting, in classification, in the application of policy like the one for performance awards, and in other areas.

The Office of the Privacy Commissioner is not a separate employer like my Office and therefore it has been delegated authority for staffing from the Public Service Commission and certain other personnel management powers from the Treasury Board. Thus, both the Secretariat and the Public Service Commission have responsibilities for oversight and monitoring human resources management in the Office of the Privacy Commissioner.

The Committee could ask the Public Service Commission how it intends to help the Office of the Privacy Commissioner improve its practices in human resource management. Also, for the whole of the public service, the Committee may wish to ask the Public Service Commission about how it intends to monitor the use of discretion in staffing to ensure that abuses can be detected and acted on decisively and how it might adjust its own role in executive staffing.

Finally, the Committee may wish to ask the Privy Council Office how it intends to ensure that governor-in-council appointments have a thorough understanding of all that is involved in the exercise of their responsibilities as deputy heads.

It is important that we all learn from these failures and ensure that they never reoccur.

In closing, I would like to thank the Interim Privacy Commissioner and his staff for their full co-operation during our audit. I also want to extend a sincere note of appreciation to my staff for their dedication in completing this difficult audit in such a short period of time.

Mr. Chair, we would be pleased to answer members' questions.