My colleagues can believe that. It's not hard to believe that I would be like that.

Listen. What I want to do is read into the record a letter addressed to me, as the chair, from Mr. Wiersema, who at the time was the interim Auditor General. That was between the era of Sheila Fraser and Michael Ferguson. Mr. Wiersema was the interim Auditor General. He was a great auditor and a great guy too, just for the record. He was just a real prince of an individual.

It's from the Auditor General. It's on the office's letterhead. It's dated October 26, 2011, and addressed to me, as chair of the Standing Committee on Public Accounts. It reads:

Dear Mr. Christopherson,

In July 2011, Officers of Parliament received letters from their respective Ministers strongly encouraging them to adhere to the spirit and intent of the government's Strategic and Operating Review—one of the steps in the government's efforts to achieve fiscal savings of at least $4 billion by the 2014-15 fiscal year. My Office recognizes the seriousness of the current economic circumstances facing Canada and all Canadians. In my response to Minister Flaherty dated 2 August 2011, I committed to undertake a review of my Office and present my results to the Parliamentary Panel on the Funding and Oversight of Officers of Parliament and to the Standing Committee on Public Accounts.

I am writing to you in your capacity as the Chair of the Standing Committee on Public Accounts to advise you of our proposal that is the result of our Strategic and Operating Review, and to request a meeting with the Committee to discuss it at your earliest convenience. I am writing to the Chair of the Parliamentary Panel on the Funding and Oversight of Officers of Parliament with a similar request.

We have undertaken a thorough and comprehensive review of the Office of the Auditor General. The starting point of our review was strategic. We have analyzed all of our legislative audit practices with a view to concentrating our efforts where they will best serve Parliament and territorial legislatures. While we believe that all of our work is valuable, some is less critical than others. We have used this review as an opportunity to assess how our limited resources are best deployed, based on risk and value. We have also reviewed all of our internal processes and services to identify opportunities for operational efficiencies.

Our proposal, outlined below, would result in a reduction of approximately 10 percent from our current workforce. The impact will be felt across all levels of our organization. We expect to incur expenses for redeployments and retraining, which we have allowed for. We are committed to making these reductions in the most responsible and caring way we can.

In total, the reductions will approximate $6.7 million in 2014-15, or 8 percent of our 2011-12 Main Estimates of $84.4 million. We are able to implement about $5.3 million of these savings on our own, but will require legislative and executive action to realize about $1.4 million of the total. The proposed savings, including those arising from changes to our territorial work, are summarized in attachment 1 to this letter.

The proposed reductions in our audit work predominantly affect our financial audit practice. This practice has experienced a number of independent, ad-hoc and special mandate requests over the years. The legislative and other changes we are proposing will focus our financial audits on what we believe to be the most important accounting information and the areas of greatest risk.

Parenthetically, financial audits are the standard audits that most of us understand—where you go in and make sure that the bills are there and were paid on time, where the money is, just that basic auditing accounting function—versus performance audits, which used to be called “value for money” audits, which is the focus of our work.

We do not review financial audits. We accept them because we're part of the mandate, but the actual work that we do and the hearings that we have are on performance audits, which are different. For example, a financial audit says, you said you were going to spend $10 million on schools, so let's see the bills and see the cheques and see the bank balances and make sure everything is square. A performance audit says, you had $10 million to build schools, so did you do it efficiently or not?

The interim Auditor General is differentiating at this point in the letter between a financial audit and a performance audit.

I'll just continue:

The changes will also enable us to achieve greater consistency in our audit effort across federal organizations. For example, consistent with the government's decision not to proceed with audited departmental financial statements, we propose discontinuing our audits of the financial statements of department-like organizations. This will reduce the number of financial audits we conduct by 18. Those organizations with significant public funds would still be subject to examination as part of our annual audit of the Summary Financial Statements of the Government of Canada. In a few cases, the organizations may wish to continue receiving an audit. We would have no objection if they were to engage a private sector auditing firm to do so.

We propose to continue our work as the financial auditor of the majority of Crown corporations and of Agents of Parliament, recognizing their unique responsibilities and accountability relationships.

The one legislative change we propose outside our financial audit practice would discontinue our assessments of the performance reports of the Parks Canada Agency, Canadian Food Inspection Agency, and the Canadian Revenue Agency. When these agencies were created in the late 1990s-2003 as a new type of governmental organization, it was seen as valuable to have an independent review of the fairness and reliability of their performance information. Since then, however, we have not been asked to do similar work on performance reports of any other government organization, and we can see no reason to continue to single out the agencies for this type of assessment. We believe Parliament requires high-quality performance information from all federal organizations and therefore we will continue to include performance reporting as a topic for consideration in our performance audit practice.

A list of the audits and review engagements that we are proposing to be discontinued is provided in attachment 2 to this letter.

In our special examination of Crown corporations (a type of performance audit), the government implemented a significant change in 2009 when it extended the period between examinations from five to ten years. Following the governments change, our costs for this work decreased noticeably. We are now focused on distributing the workload more evenly and operating this practice as efficiently as possible. We see no further opportunity to change the nature or extent of our audit effort in this area.

The majority of our interaction with Parliament is through our performance audit practice. We conduct audits that examine the efficiency, economy, and environmental impact of all major federal government departments, agencies, and other organizations, and annual government revenues of $237 billion and expenses of some $270 billion. In fiscal year 2008-09, we presented 32 performance audit reports to the House of Commons and territorial legislatures. This compares with the 26 performance audit reports we issued in our most recent fiscal year, after reducing our performance audit practice in response to previous funding pressures and Parliament's capacity to consider our work.

Again, parenthetically, the Auditor General came forward on his own and asked if it could be reduced from three reports to two. The main argument was in part the pressure on the office to deliver it but quite frankly, back in those days, we were having a heck of a time on the committee keeping up with the reports. I won't get into the politics, but the dynamics of this committee at that time were not the healthiest in terms of good practice for a public accounts committee, so that led to some of it.

I think history has shown, Chair, it was probably a wise decision because during this era I think, and I stand to be corrected by you, Chair, we've been able to do just about every chapter, certainly the overwhelming majority. I think on a number of reports, we did them all. That's night and day compared with the era we're talking about here when there were dysfunctional ingredients, let's just say, in the work of PACP.

I'll leave it at that. I have enough political fights on my hands without opening up another one, especially on an old battle.

Anyway, I just wanted to point out that did happen.

Again, there have been contractions in the work of the Auditor General, but as you can see, often it's driven by their own review of their workload, what they need to do and what can be most effective. They're also looking at the ability of the committee.

Quite frankly in my opinion, if this committee had been around at that time, that recommendation might not have been made.

I have to tell you, and Tyler can tell you—he was with me the whole time—we had a heck of a time trying to play catch-up with two tracks going. We were trying to play catch-up on the one track, consistently falling behind, and on the other track, we were trying to do the new ones as they were coming out and we were falling behind. It gets bad because you're reviewing reports that reflect a hearing that you did 10 months ago, and that hearing was six months after the report was tabled. You're a veteran now of PACP, Chair. You can appreciate that a lot of the effectiveness of this committee is lost.

I think the Auditor General of the day looked at that and, in combination with their own workload, made that recommendation. I think history has proven that, so far, this was a good decision, because what we've been doing is just about the right amount of workload.

By the way, I remind this committee that this average amount of workload is anywhere between six and 14 chapters within one report, and right now the Auditor General, I think, has at most three or four audits planned. That's out of two reports. Where there should be upwards of 20, there are going to be four and one that's going to be cut is cybersecurity. This is what blows my mind.

David Christopherson

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