Opening Statement to the Standing Committee on Government Operations and Estimates

Reporting and Review of Estimates Documents

19 November 2002

Maria Barrados, Ph.D
Assistant Auditor General

Mr. Chairman, we would like to thank you for inviting us to discuss reporting and review of Estimates documents. I have with me today John Mayne, the audit principal leading the Accountability Team.

Committee members will know that the reports on plans and priorities and departmental performance reports were introduced as part of a reform of the Estimates documents that began in 1995. The report on plans and priorities, tabled in the spring soon after the Main Estimates, establishes performance targets and outlines the general direction the department plans to take during the upcoming year and the next two fiscal years. The performance report, tabled in the fall, indicates the extent to which results achieved reflect those that were planned. We think that this has been a positive change.

My Office has examined information for Parliament a number of times in the past. We have also commented on the overall accountability process, which the Estimates support. In Chapter 19 of the December 2000 Report, we followed up on progress in reporting performance to Parliament since our last audit of this area in 1997.

To summarize our findings: departments have made some progress but we were disappointed at the slow pace. Most departments reported only the "good news" and made little mention of performance that did not meet expectations. As a result, accountability to Parliament is weakened. Departments need to make improvements in a number of areas, including the following:

• Departments need clearer and more concrete statements of the results departments are to achieve, so that members can better judge how well programs are doing and not just what they are doing. Too often, we find quite loosely worded statements of what is intended, statements that do not indicate clearly what result is to be achieved, by when and how.
  
  
• Better explanations are needed of how activities undertaken are contributing to the reported results, supported by appropriate evidence. This is a challenge, but it must be addressed if reporting on the performance of federal activities is to be meaningful.
  
  
• More balanced reporting that discusses problem areas and what is being done to improve them. This, too, is a challenge, but without more balanced reporting the credibility of the reports is considerably reduced. Our recent assessment of the Canadian Customs and Revenue Agency's 2001-02 Performance report shows that balanced reporting is feasible. The report highlights both good and bad news and indicates where the quality of the information is weak.
  
  
• Improved information is needed on the costs associated with the results that the government is achieving. Members and the public need to know how much it has cost to achieve the reported results.
  

In our view the government needs to pay more attention to ensuring that the information it provides Parliament on results is both reliable and meaningful - that it provides more than just data.

On the other side of the equation, the demand for performance information is also weak. Our audits and others have noted that the review and use of the Estimates documents by House of Commons standing committees has been limited. Some committees have examined Estimates documents, but most have not.

Parliamentarians have called for a stronger role for standing committees. Individual Members of Parliament told us that changes are needed in the process for parliamentary review of the Estimates if it is to become more meaningful. Numerous suggestions have been made. We welcome the creation of your committee as a catalyst for improving review of Estimates documents by the House.

There could be a review by a parliamentary committee of departmental performance after the reports on plans and priorities are tabled in the spring or as part of a review of performance reports in the fall. By examining information in the Estimates documents, especially the future spending and priorities set out in reports on plans and priorities, committees could seek to influence future government budgets. Review of the results achieved in the performance reports would strengthen the scrutiny role of Parliament and could also influence future budgets.

My Office has made a number of suggestions about how standing committees can improve their review of Estimates documents, contained in a 1998 publication, Parliamentary Committee Review of the Revised Estimates Documents. We are revising this document and plan to send it to all members of Parliament in a few months time. These suggestions relate to more effective meetings with departmental officials and questions that committees can productively ask officials.

We have also examined practices in other jurisdictions, and are continuing to watch interesting developments. In 1997, we noted that legislators in other jurisdictions in Canada and abroad were using performance information, and had recognized the need to find ways to make the review of this information more meaningful.

Standing committee procedures and practices in other jurisdictions may demonstrate ways to strengthen our own committees. Examples of the kinds of things being done elsewhere include

• having an Estimates committee such as yours coordinate review of Estimates by other committees,
• requiring committees to report on their review of Estimates, and
• committees sending questionnaires to departments before hearings to obtain more specific information.

Departments would listen if committees effectively engaged departments in reviewing statements of expected results and discussed how departments will demonstrate their achievements against those expectations. I believe that they would be more diligent in reporting in their performance reports what they have accomplished and how it relates to their statements of expected results in their reports on plans and priorities.

We see significant opportunities for improvement through electronic reporting and we encourage the government to continue moving in this direction. We suspect that e-reports will inevitably become a formal part of the Estimates.

E-reporting allows for convenient and accessible linking of all results-based departmental and government reports. Cascading reporting should allow members easy access to both high-level information on programs and detailed information on specific operations of interest to members. The move toward e-reporting should be made in consultation with Parliament to ensure that members are equipped to take advantage of these opportunities.

In conclusion, Mr. Chairman, your committee may wish to consider the following:

• an examination of a department, perhaps focussing in depth on a specific program area, making full use of the relevant reports on plans and priorities and departmental performance reports;
• an examination of ways that parliamentary committees could enhance their review of Estimates documents; and
• how Parliament and its committees, in light of the trend toward e-reporting of the Estimates, can best deal with this development.

Mr. Chairman, this concludes my remarks on the current Estimates process, and we welcome questions from Committee members. We would also welcome the opportunity to return to discuss other matters the committee may be examining, such as accountability in Crown corporations and the new delegated arrangements- foundations-the government has created, and issues in managing horizontally across government departments.