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Opening Statement to the Standing Committee on Public Accounts

Protection of Public Assets—Office of the Correctional Investigator

(Chapter 11 - November 2006 Report of the Auditor General)

26 March 2007

Sheila Fraser, FCA
Auditor General of Canada

Mr. Chairman, thank you for this opportunity to present the results of Chapter 11 of my November 2006 Report—Protection of Public Assets—Office of the Correctional Investigator. I am accompanied by Jean Ste-Marie, Assistant Auditor General, and Neil Papineau, Principal, who were responsible for this audit.

The Office of the Correctional Investigator (OCI) acts as an ombudsman for federal offenders. It is a small, independent agency that investigates complaints of individual offenders and tries to resolve them by making recommendations to Correctional Service Canada.

Our audit identified a series of abuses and wrongdoings at the Office of the Correctional Investigator. These related to personal leave, absences, cash-out of annual leave, and travel and hospitality claims.

Before continuing, I would first like to address statements made that may cause Committee members to question our conduct of this audit. I want to assure the Committee that we rigorously followed our audit methodology, including allowing the entity and individuals concerned the opportunity to review and comment on our findings.

While our audit dealt with only the Office of the Correctional Investigator, it serves to highlight some broader, more fundamental problems. I would like to focus today on the underlying issues and on how such abuses could be prevented in the future. To this end, my remarks will centre on three concerns highlighted in our chapter.

First, to maintain the public's trust and confidence in government, agency heads and senior management are required to discharge their responsibilities according to the highest ethical standards of integrity, objectivity, and impartiality. Their conduct and their actions are expected to exemplify the values of the public service.

In order to do this, Governor-in-Council appointees, such as the Correctional Investigator, and other senior officials, need to be advised and informed about their expected standards of conduct as holders of public office. Responsibility for this orientation and training rests with the central agencies—the Privy Council Office and the Treasury Board Secretariat. We raised this issue in our audit of the Office of the Privacy Commissioner in 2003. To our knowledge, it still has not been resolved, even though the Public Accounts Committee made a recommendation about the training of Governor-in-Council appointees in its 2004 report on the audit of the Office of the Privacy Commissioner.

Second, our audit found that poor human resource management and financial management practices contributed to the improprieties at the Office of the Correctional Investigator. Appropriate comptrollership and management are essential in any federal organization to manage financial risks and protect against fraud, financial negligence, violations of financial rules or principles, and losses of assets or public money.

In our audit, we found that there was some confusion about who was assuming the position and functions of the senior financial officer of the OCI. We recommended that the Treasury Board Secretariat ensure that every small independent organization have a formally designated senior financial officer who is appropriately trained to carry out his or her responsibilities and duties.

We also found that Public Safety Canada did not properly fulfill its responsibilities as a provider of financial and human resource management services to the OCI. Public Safety Canada officials failed to report concerns or suspicions to appropriate government officials. Instead of challenging questionable and inappropriate transactions of the OCI, they processed them.

The third concern arising from our audit was that these abuses continued over such a long period of time and that while senior officials were aware of some of the improper activities, they took no action to stop them. It is important to reinforce the responsibility of all public servants to take action in such cases.

The audit once again points to the issue of accountability in independent or quasi-judicial bodies. An independent agency such as the Office of the Correctional Investigator must maintain its independence while discharging its mandate; at the same time, it must act in accordance with government policies and the public interest. The challenge for central agencies is to provide adequate oversight while respecting this independence.

I would like to take this opportunity to inform Committee members that we are planning to undertake audit work, in the near future, looking at the governance of small entities in general.

The Privy Council Office, the Treasury Board Secretariat, and Public Safety Canada have agreed with all of the recommendations in our audit. The Office of the Correctional Investigator has also agreed with those recommendations directed to it and has indicated that it is taking action to address deficiencies.

Mr. Chairman, that concludes my opening statement. We would be pleased to answer the Committee's questions.