23 November 1999
L. Denis Desautels, FCA
Auditor General of Canada
Thank you, Mr. Chairman, for the opportunity to discuss with you the information in our 1999 Performance Report. The support and interest of parliamentary standing committees, especially your own, is vital in reviewing and recognizing performance information from government organizations. We welcome this initiative from your committee.
Our Performance Report essentially explains what we did in the past year, what we were trying to achieve, and what we actually achieved with the $51 million entrusted to us by Parliament.
Our Office strongly supports the measurement and reporting of the results produced with public money--this is the focus of the Performance Report. We are still "early in the game" and we recognize the challenges and efforts departments and agencies face in moving from simply reporting on inputs and outputs to reporting on outcomes and achievements. These efforts are paying off and reports such as the Report on Plans and Priorities and the Performance Report provide parliamentarians with better tools to review government operations. In fact, in February 1998, our Office published a paper entitled Parliamentary Committee Review of the Revised Estimates Documents. The purpose of that paper is to assist parliamentarians in getting the most out of the review process. Parliamentarians and their staff have indicated to us that they find the document useful in achieving this.
Establishing performance expectations and reporting on key achievements is quite challenging for legislative audit offices due to the unique nature of our work. Other legislative audit offices in Canada and around the world are also dealing with this challenge. Because we work together with Parliament and the entities we audit, the credit for the achievements that we may claim is shared with many players in and around government. Simply stated: "Our work influences change that others are responsible for implementing."
In April 1998, we met with your committee to review our 1998-99 Report on Plans and Priorities. That report established our performance expectations and outlined the Office's general direction for the next three years. The 1999 Performance Report that we are reviewing today discusses how we met those performance expectations.
Exhibit 2 (on page 7) provides an overview of our key results commitments. Exhibit 3 (on page 8) is an expanded chart of our key results commitments and shows what we expected to achieve with the money we received from Parliament. It provides the main objectives, the indicators of achievement and refers you to the pages where we describe our accomplishments.
We have provided examples of the results that our audit recommendations and our work in general have produced in government operations. We have presented other indicators of achievement, including efficiency and output measures. Exhibits 10 and 11 (on page 17) report on the progress made in response to our recommendations and observations in our value-for-money audit chapters. In summary, over the five-year period from 1993 to 1997, 57 percent of our recommendations and observations have been either fully implemented or there has been satisfactory progress. We would like to see a higher implementation rate and would welcome further discussion with you on this subject.
I would like to take a few minutes to point out some examples in our Performance Report that show where we have made a difference and delivered our commitments successfully.
When we conduct value-for-money audits, we want our audits to identify opportunities to reduce costs or to maximize resources. The case study on page 23 demonstrates our achievement in meeting this objective. Following our 1996 audit on materiel management, four departments have reduced their inventory levels by more than $480 million, resulting in potential savings of $100 million a year in the cost of maintaining their inventories.
One of the most important aspects of our work is our audit opinion on the Financial Statements of the Government of Canada. The fundamental purpose of these financial statements is to inform Parliament on the full nature and extent of the financial affairs and resources for which the government is responsible. Our opinion lends credibility to these statements and that is very important. In the 1999 Budget, the government responded favourably to some issues that we raised in our observations on the financial statements of 1997-98. It has agreed with and is addressing various reporting issues.
In our environment and sustainable development work, one of our indicators of achievement is the extent to which departments improve their management practices for protecting the environment and promoting sustainable development. As a result of our work in this area, parliamentary committees have focussed on ozone protection, climate change, biological diversity, and clean-up of federal contaminated sites. Subsequent to these hearings, departments and agencies have indicated a willingness to address these issues in a more co-ordinated and determined manner.
Since our primary client is Parliament, we can measure the effects of our work to some extent by the level of parliamentary interest it generates. For example, 63 percent of our reports were subject to hearings by this and other parliamentary committees this year. We believe that reviews by a parliamentary committee add to the transparency of government operations and we will continue to support these endeavours.
The Performance Report contains many additional examples of where the Office has made a difference. We hope to improve our Performance Report as we refine our indicators, targets, and measures of the impact of our work. We would welcome your suggestions on what you might consider useful information in establishing results commitments and reporting achievements in a legislative audit office.
I am very proud of our Office and what we have accomplished. I am convinced that we are indeed making a difference. I believe that our audit reports are providing Parliament with useful information on government operations, which is of course our main purpose. Committee hearings and reports, in turn, generate many important changes and improvements in departmental operations. The competence, excellent reputation and continuous efforts of our employees are recognized in Canada and around the world. Incidentally, our Office was recently re-elected as the External Auditor of UNESCO by the 175 Member States. During the first six-year mandate our work was evidently well received by them.
Thank you, Mr. Chairman. We would be pleased to answer your questions now.