Office of the Auditor General of CanadaOAG reports published in the past are available through Publications.gc.ca.

Canadian Club of Ottawa 2003 Speech - Address given by Sheila Fraser, FCA, Auditor General of Canada - Canadian Club of Ottawa

Canadian Club of Ottawa

Notes for an address by Sheila Fraser, FCA, Auditor General of Canada, 9 December 2003, Ottawa, Ontario

Introduction

Good afternoon. And thank you for inviting me to join you for lunch.

It is indeed a pleasure to address the members of an organization that is dedicated to strengthening Canada.

And of course it's an honour to be asked to speak to you during the Canadian Club of Ottawa's centennial.

It is a real pleasure to address the members of an organization that is dedicated to strengthening Canada during its centenary year.

By coincidence, my office is also celebrating an important anniversary. One hundred and twenty-five years ago, Canada appointed its first independent Auditor General.

Now, to give you an idea of what kind of change this appointment represented, previously, the roles of Auditor General, Deputy Minister of Finance and Secretary of Treasury Board had been carried out by one person. A very industrious person, I would say.

But of course, keep in mind that at the time the Department of Finance had only 28 employees!

How some things have changed…

History records that Parliamentarians on both sides of the House of Commons cheered when the bill to establish our Office was introduced by the government of Alexander Mackenzie.

So, the appointment is also noteworthy as one of the few times in history when the government and opposition agreed on something!

Well, putting aside the historical record, we come to the present.

2003 was a busy and challenging year for the Office. I want to share with you some of what stands out in my mind.

Although the vast scope of our work gives me extensive material to draw on, I'll limit myself to commenting on only a few of our most memorable audits.

But first, just a bit of background. With a staff of almost 600 people and an annual operating budget of some $70 million, my Office audits most areas of the Canadian government.

In addition to the federal government, which includes about 70 federal government departments and agencies, we also audit about 40 Crown corporations (such as CBC, VIA Rail and Farm Credit Canada), about 10 departmental corporations and about 60 other entities and special audits.

We also audit the governments of the three territories and two United Nations agencies.

In 2003, for example, we did a financial audit of the summary financial statements of the federal government as a whole, and financial audits of over 100 departments and agencies.

We did eight or so special examinations of Crown corporations and assessed the performance reports of three federal service agencies, including Canada Customs and Revenue Agency.

On top of all that, we conducted some 30 value-for-money audits of departments and agencies, examining issues as diverse as border security, First Nations' housing, and pesticide safety.

Our value-for-money audits look at whether programs are delivered economically and efficiently, and whether measures are in place to determine their effectiveness.

Essentially, we ask whether or not taxpayers are getting value for their tax dollars.

When I accepted your invitation to speak, my plan was to talk about my November report, which covers the findings of some new value-for-money audits.

As many of you know, this report was supposed to be tabled in Parliament on November 25. But, since Parliament was prorogued before that could happen, I can't talk publicly about my observations.

As an Officer of Parliament, the purpose of my reports is to help Parliamentarians do their jobs. So it makes sense that Members of Parliament have the right to see the information before anybody else.

That won't happen until the House is called back in 2004. Until then, the Report is in safekeeping with the Speaker. So, stay tuned!

Current context

Before I go on, let me just say a few words about the current context.

One of my most important roles of my office is to ensure that Parliament's role is respected. And so an area of great interest for me is accountability.

Another longstanding focus of my Office is the promotion of an effective public service. Through our audits we help answer key questions such as:

So it concerns me greatly when I hear talk of a decline in the public's trust for society's public institutions and the people who run them.

Recently, I was at a meeting where Darrel Bricker of Ipsos Reid talked about the "new Canadian mindset." He called it a "search for certainty."

His research shows that Canadians are more educated than ever before. They have more access to information. And they have great interest in political issues.

Canadians also place high value on credibility. They expect more of both public and private sector leaders and institutions than ever before.

In short, they want credible people to run credible organizations.

Yet, Canadians are also less inclined to trust public institutions and are less engaged in the traditional political system.

Trust is no longer given; it must be earned.

So, how do you build trust?

Well, by telling the truth, delivering on commitments and by being open and transparent.

To paraphrase Stephen Owen, the former Ombudsman for B.C. and now a Member of Parliament and Cabinet Minister, there is nothing more disarming than openness and nothing that raises more suspicion than secrecy.

To continue in Mr. Owen's words: "Just by providing independent and public oversight you disarm criticism. You also expose problems and then they can be fixed, and that gives the public confidence."

I couldn't agree more.

Accountability and transparency matter as never before in both the private and public sectors.

Whether people are shareholders or taxpayers, they want systems in place to protect their interests. They want to believe they can trust people with their hard-earned dollars.

They want good governance.

Our value-for-money audits look at whether programs are delivered economically and efficiently, and whether measures are in place to determine their effectiveness.

And, if the message is heard, the government takes action in response. That certainly happened on a couple of notable occasions in 2003.

Gun registry

Let me take you back to this past January. At that time, we were still feeling the impact of a report we had issued in December 2002. I'm sure you remember the media coverage surrounding the costs of implementing the Canadian Firearms Program, also known as the gun registry.

What really caught public attention was the way in which the program's costs had spiraled dramatically, apparently out of control. While that was bad enough, our report highlighted something even more unsettling.

As the facts showed, the Department of Justice had not provided Parliament with sufficient information to effectively scrutinize the program. Consequently, Parliament was not in a position to hold the government to account for a costly program.

Basically, our audit shone a spotlight on Parliament's right to sound information to discharge its responsibilities. And I'm happy to say that a positive development has come from that work.

This year, Parliament and its committees have paid increased attention to the process of reviewing the Estimates.

Privacy Commissioner

The reaction to the gun registry audit was beginning to settle down when my office received a letter from the Committee on Government Operations and Estimates—a new Committee of the House—asking us to conduct an audit of the Office of the Privacy Commissioner.

Now, I should tell you that we are free to choose our audit topics, and we do so based on our assessment of risk within public administration. We felt the issues the Committee brought to our attention merited an audit.

As many of you know, the Privacy Commissioner is one of five Officers of Parliament. I am another, and my colleagues—the Commissioner of Official Languages, the Information Commissioner and the Chief Electoral Officer—comprise the other three.

I am so pleased that some of them could be here today. We share a unique position in the Canadian political system and a strong commitment to serving Parliament.

We also share a profound respect for each other and the important mandates that each of us has been entrusted to carry out.

And of course, all five of us enjoy a great deal of independence from government. However, as our audit of the Office of the Privacy Commissioner would soon make clear, we are all still very much accountable for the way we conduct our affairs.

I'm sure I don't have to describe the outcome of that particular audit in great detail.

Frankly, our findings saddened us all.

To be blunt, 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. As a result, some people benefited personally.

Equally disturbing were the reports from employees of mistreatment. In addition to staffing irregularities, our audit revealed a poisoned work environment. Few people reported the abuse or wrongdoing because they feared reprisal.

Now, I ask, is this the route to instilling confidence among Canadians in our public institutions?

I'm sure your answer to that question is a resounding no.

It's clear then, that there must be more vigilant oversight and monitoring of government departments and agencies—big and small.

Officers of Parliament and other public servants in positions of leadership must be held to account for the prudent management of both their employees and the funds entrusted to them.

I am pleased to report that the interim Privacy Commissioner, Bob Marleau, has worked very hard over these last months to take corrective action and to rebuild the Office and restore its credibility.

The Office of the Privacy Commissioner has an important role to play, assisting Parliament in protecting and preserving the privacy rights of Canadians.

Who audits the auditors?

When it comes to my Office, I believe we should try to lead by example in the areas of accountability and transparency.

We routinely submit our reports on plans and priorities as well as our performance reports to the Standing Committee on Public Accounts for review. And we appear before the Committee to answer any questions they may have about our spending or management practices.

In addition, our financial statements are audited every year by an outside firm, and that information is included in our performance report.

All of this is available on my web site. I post the details of my travel and hospitality expenses there as well.

But beyond that, you may wonder if anyone outside our Office actually reviews our work in depth?

The short answer to that question is yes.

To understand the longer answer, you have to know that our office does two basic types of auditing, which I mentioned earlier: the first is the more well-known financial type, also known as "attest" auditing, and the second is value-for-money auditing, also called performance auditing.

A few years ago, we underwent an external audit of the quality management system of our attest practice, and we published the results on our web site.

And we are adding yet another dimension to the external assessment of our audit practices, which I feel is quite ground-breaking.

We will soon become the first national audit office to undergo a review of our value-for-money practice by an international team of our peers.

These peers are from the national audit offices of France, Norway and the Netherlands, led by the United Kingdom.

The review is just about complete. We expect a report early in 2004. The report and management letter of recommendations will be made public.

We don't have to undergo this kind of rigorous review—but we choose to do so—because this approach to testing our own professional standards helps improve our practice and enables Canadians to maintain their confidence in our work.

Conclusion

In closing, as I look back on 2003, despite the problems I've seen, I continue to have confidence in the public service of Canada.

In fact, I think Canada is very fortunate in the calibre of men and women who make up its public service—the vast majority of whom uphold high ethical standards and take very seriously the need to carefully manage public money to meet the needs of Canadians.

And as I travel from coast to coast, I am gratified when Canadians tell me that they appreciate the work of my Office, as well as its very existence, which both embodies and promotes the values of accountability, transparency and protection of the public interest.

While it is our job to be critical, ultimately I believe we have a constructive role to play in maintaining the confidence of Canadians in government, thus helping to build stronger public institutions, a better country and a healthier democratic society.

My staff and I are extremely proud to be part of a long history of dedicated service to Parliament and to Canadians. We're proud to play such a unique and important role in making Canada a better place for all of us.

Thank you.