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Institute of Public Administration of Canada
National Capital Region Chapter 2003 Speech - Address given by Sheila Fraser, FCA, Auditor General of Canada - Institute of Public Administration of Canada National Capital Region Chapter
Institute of Public Administration of Canada
National Capital Region Chapter
Notes for an address by Sheila Fraser, FCA, Auditor General of Canada, 18 March 2003, Ottawa, Ontario
Good afternoon, everyone.
Thank you for that kind introduction.
I'm really pleased to have the opportunity to talk to an audience that shares my keen interest in public sector management and what we can all do to improve it.
I was invited to speak to your colleagues in the Calgary chapter of IPAC last fall and I very much enjoyed the lively exchange we had about current issues in public administration. I look forward to hearing your views.
As you all know, I'm a relatively new Auditor General. In my former life I was a private sector auditor for 27 years.
Before I assumed this job I don't think I fully appreciated the challenges involved in managing a mammoth and complex operation such as the federal government.
Neither was I fully aware of the long and distinguished history of the Office of the Auditor General, which goes back for more than a century.
Nor could I have predicted that I would end up holding this post—and that I would follow in the footsteps of my grandfather's cousin, John Fraser, who served as Auditor General between 1905 and 1919.
I feel very honoured and privileged to have been asked to serve as Canada's 10th Auditor General. To me, this is not so much a job as a public trust.
It so happens that this year the Office is celebrating the 125th anniversary of the appointment of the first independent Auditor General in Canada.
I thought if you were all in the mood for some time travel, it might be fitting—and hopefully enlightening—to take a quick trip back through the years to see how the role of the Auditor General has changed and evolved.
Then I'll talk about today and share what kind of difference I want the Office to make during my term.
So let's begin by travelling back to 1867. That's when Canada became a nation and Canada's first Auditor General, John Langton, was appointed.
But John Langton wasn't truly independent of government. He actually wore three hats at the same time—Secretary of the Treasury Board, Deputy Minister of Finance and Auditor General. He was nothing if not industrious!
In his spare time he also served as Vice-chancellor of the University of Toronto. Mind you, those were the days when the entire Department of Finance was run by a staff of 28!
His role was a relatively limited one—mainly to make sure that the government's books balanced, and that every transaction was recorded, from buying bootlaces to contracting for new bridges.
But it is a basic principle of auditing that the person who prepares the books—the Deputy Minister of Finance, in this case—should not be the person who audits them-the Auditor General.
The problem was resolved in 1878 with a new Act of Parliament—a solution that Canadians should still be grateful for, on this our 125th anniversary.
Both sides of the House of Commons cheered when the government of Alexander Mackenzie introduced the bill that would, as he said, "free the auditing of Public Accounts from any interference on the part of the administration."
In her history of the Office, Cordial but Not Cosy, Sonja Sinclair wrote, and I quote:
"In a rare show of unanimity, Conservative and Liberal members almost competed with each other in praising the part of the bill which called for the appointment of an independent auditor general."
This is probably one of the few times in history that the government and opposition agreed on something!
And so, with that, in 1878, John Lorn McDougall became the first Auditor General to be truly independent of the government of the day.
This independence is the foundation of the Office's credibility and the cornerstone of our Canadian system of checks and balances.
Ever since Confederation, the Auditor General has been asked to answer a simple question. Is the government keeping proper accounts and records, and is it presenting its financial information accurately? This is known as financial attest auditing.
In 1931, Parliament drew a clear line between the duties of government and the Auditor General—making the government responsible for collecting and distributing public funds, and the Auditor General responsible for examining and reporting on how those funds were handled.
At this point, another question was added that was a bit more complicated. Did the government collect or spend the authorized amount of money, and for the purposes intended by Parliament?
This signalled our move into compliance auditing. Here, the Auditor General determines whether the government has complied with Parliament's wishes.
The work of the Office began to move in a third direction in the 1950s, when the Auditor General started to report on so-called "non-productive payments." These were transactions that, while legal, provided no apparent benefits to Canadians.
Then in 1977 a new Auditor General Act expanded the Auditor General's responsibilities. The Office was given a mandate to examine how well the government managed its affairs.
The new Act maintained the important principle that the Auditor General does not comment on policy choices, but does examine how those policies are implemented.
In addition to looking at the accuracy of financial statements, we now had the authority to conduct audits that asked new questions: Were programs run economically and efficiently? Does the government have the means to measure their effectiveness? This is known as value-for-money auditing.
In 1995, yet another question was added: How do government activities impact on the environment?
Parliament created the position of the Commissioner of the Environment and Sustainable Development within the Office of the Auditor General.
Today that position is held by Johanne Gélinas, who investigates environmental and sustainable development issues of concern to Canadians by auditing the federal government's performance.
As you can see, the scope of our activities has broadened over time, at the request of Parliament. What we do, and the approaches we take, are not just an idle whim.
I'd like to spend the rest of my time today talking about the five areas that are my priorities for the Office during my term. These are the areas in which I want us to make a difference. And these are areas where we will focus our audits.
The first is accountability. This has been an area of focus for all Auditors General, and I'm no exception. I'll say more about this in a moment.
The second is the promotion of an effective public service. Our audits help answer the key question: Are the key resources of government—people, technology and financial resources—working together well to achieve results for Canadians and make the best use of public funds?
The third area I want to focus on is the well-being of Canadians—specifically issues that we all care about and that touch our day-to-day lives. Issues like health, safety, security and the environment.
Another of my focus areas is Aboriginal issues. The Office seeks to contribute to the well-being of Aboriginal people by focussing our work on the social, economic and environmental conditions they face.
Lastly, I am concerned about preserving our legacy and heritage as Canadians. The federal government's actions or lack of action today clearly affect the options for future generations.
What will Canada look like when we're ready to retire? What will we be leaving for our children and our children's children? Will we have preserved or squandered the cultural, historical and physical assets that we so value and that that help define who we are as Canadians?
Since my time today is limited, I'll concentrate on accountability.
This is a popular word these days in the private, the not-for-profit and the public sectors. And there is no question that shareholders, stakeholders and citizens are increasingly demanding it—and that they deserve it.
It is also an idea that permeates all our work—and in large part is the justification for it.
Here's how I see it.
The people's right to control how public funds are collected and spent is one of the cornerstones of democratic government.
In Canada, like other parliamentary democracies, this control is carried out on behalf of the people by their elected representatives, the Members of Parliament.
Members of Parliament need information with which to hold the government to account. And they need independent assessment of that information so that they can effectively judge the government's performance.
They also need assurance that the information accurately reflects the results of the activities authorized by Parliament.
Sound oversight by Parliament depends on sound information. Let me give you a recent example where that didn't happen.
I'm sure you all heard about our December report in which we talk about how the costs of the Canadian Firearms Program spiralled dramatically, and apparently out of control.
While that is bad enough, to me the really upsetting conclusion was the one we highlighted—that the Department of Justice did not provide Parliament with sufficient information to allow it effectively to scrutinize the program, to ensure accountability.
It provided little financial information and insufficient explanations for the dramatic increase in the cost of the program.
In other words, we got a few answers, but the right question to ask was whether the department was acting in the best interests of Parliamentary accountability. It was not.
I'd like to conclude my remarks with a brief look at what we accomplish.
Recently I was with my colleague, the Auditor-General of New Zealand, when he was musing about whether he was a watchdog or a bloodhound.
I think that in Canada I have to be a bit of both—warning about problems, while seeking out the elusive information that Parliament should have.
But I also recall the metaphor used by one of my predecessors, J.J. Macdonell. He once said that "watchdogs do a lot of barking, and there is another kind of dog called a guard dog. He doesn't do much barking, but he can be quite effective."
I believe that in my Office's concern for the rights and duties of Parliament, and for taxpayers, there is also an element of the guard dog about us.
In fulfilling our mandate, we can and must influence the attitude of the government and public servants toward effective management of—and accounting for—public funds.
But does our work make a difference?
Absolutely.
Last year, parliamentary committees held hearings on more than 70% of our value-for-money audits and the Standing Committee on Public Accounts endorsed over three-quarters of our recommendations in the chapters they reviewed.
In February alone, we testified at 14 hearings of the Public Accounts Committee and other parliamentary committees.
In some cases, we are called to discuss the recommendations of specific chapters in our reports—as with our audit of the Canadian Space Program.
And in others we are called to provide advice on proposed legislation—as with Bill C-17, the proposed national security legislation.
I attend these hearings with my audit team, and senior public officials from the audited department, so that the committees can review the audit findings and question senior officials.
After the hearings, the committees may report and make recommendations to the House of Commons.
In all cases, the committees are attentive and interested in what we have to say, a fact that is evident in the reports they issue.
The audited departments are generally expected to report back to the committee on what they have done in response to the committee's recommendations.
And government departments DO take action as a result of these reports, as well in response to our value-for-money audits, although not as quickly as we might like in some cases.
Among the recommendations we have made over the past five years, departments have already completed nearly a quarter of the total, and are making satisfactory progress on another half.
One innovation I introduced to increase government action is called the Status Report.
Its purpose is to draw even more attention to what government departments have done—or not done—about the recommendations of our previous reports. I will be tabling my second Status Report in May of this year. You may want to watch for it.
The reports concentrate on few complex and significant issues that are timely and relevant-these are the high-risk, high-cost issues that are likely to be of most interest to parliamentarians.
For example, our last status report noted that Human Resources Development Canada had been slow to address security issues around the issuing of Social Insurance Numbers—a problem that has taken on greater significance in recent times.
To wrap up today, I would like to stress that improving the performance of the public sector will go a long way toward restoring confidence in government.
And success means more than giving taxpayers value for money. It is about building stronger public institutions, a better country and a healthier democratic society.
And let's not forget that the source of much of the confidence that Canadians can have in our government is the transparency that supports criticism of its operations many times a year.
This is a hallmark of an open democracy—one that is envied by citizens of many countries throughout the world.
Yes, maybe change takes longer than we'd like. But change does happen. By asking the right questions, we at the Office of the Auditor General are proud to play a role in bringing it about.
We're proud to have been around for 125 years serving Parliament and making a difference in the lives of Canadians.
Thank you.