OPENING STATEMENT OF KAREN HOGAN, CPA, CA

AUDITOR GENERAL OF CANADA

BEFORE THE STANDING COMMITTEE ON PUBLIC ACCOUNTS

2018–19 DEPARTMENTAL RESULTS REPORT AND

2020–21 DEPARTMENTAL PLAN

OF THE OFFICE OF THE AUDITOR GENERAL OF CANADA

29 October 2020

1. Madam Chair, we are pleased to have this opportunity to discuss the work of our office, including our most recent departmental reports. With me today are Andrew Hayes, Deputy Auditor General and Interim Commissioner of the Environment and Sustainable Development, and Kim Leblanc, Principal of Human Resources.

2. The mission of the Office of the Auditor General of Canada is to contribute to well-managed and accountable government for Canadians. We do this by providing Parliament and territorial legislatures with independent and objective information, advice, and assurance about government financial statements and the management of government programs. The Commissioner of the Environment and Sustainable Development assists the Auditor General by conducting reviews and audits that relate to the environment and sustainable development.

3. We also support the development of legislative audit methodology and accounting and auditing standards, and we work internationally to build audit capacity and promote better-managed and accountable international institutions.

2018–19 Departmental Results Report

4. Let me turn first to our 2018–19 Departmental Results Report. We provided this report to Parliament in December 2019. As shown in our financial statements, our net operating cost was $98.6 million, and we employed the equivalent of 552 full-time employees.

5. With these resources, we completed a total of 21 performance audits, including 6 led by the Commissioner of the Environment and Sustainable Development and 1 reported to a northern legislature. In addition, the Commissioner presented the annual report on environmental petitions and we conducted 9 special examinations of Crown corporations.

6. In terms of our financial audit work, we issued clean opinions on 85 of the 89 financial statements of federal and territorial governments and of Crown corporations we audited. We also presented commentaries derived from our special examination and financial audit work.

7. In the 2018–19 fiscal year, we appeared before 11 different parliamentary committees, for a total of 46 hearings on our audit work. Parliamentary committees can use our reports to improve government management and accountability, namely by inviting departmental officials to explain how and when they will address our audit recommendations and by following up on progress at a later date.

8. Our Departmental Results Report includes several indicators of the impact of our work, along with measures of our operational performance. They are provided in an appendix to this statement.

9. In 2018, an international team led by the audit office of South Africa conducted a peer review of our office. In its 2019 report, the review team concluded that our office had adhered to relevant professional standards, and that our system of quality control was suitably designed and effectively implemented. The peer review team also suggested improvements. Our action plan is available through our website.

2020–21 Departmental Plan

10. Let me turn now to our 2020–21 Departmental Plan. The Office of the Auditor General of Canada is funded through various appropriations and transfers. Under vote 1 of the Main Estimates, our program expenditures for the 2020–21 fiscal year are set at $78 million, and we plan to employ the equivalent of 585 full-time employees.

11. I would like to present 3 of the strategic objectives set out in our Departmental Plan: first, to ensure that we are financially well managed; second, to continue to develop and maintain a skilled and engaged workforce; and third, to ensure effective, efficient, and accountable office governance and management. We are now more than halfway through the year. These objectives have driven our work, including the way that we have responded to the COVID-19 pandemic and our funding pressures.

12. Our office has had to adapt to COVID-19. For the most part, our employees have been working remotely since March. For our performance audit work, we have prioritized the motions passed by the House of Commons earlier this year. In particular, we have undertaken audits of the government’s Investing in Canada plan and COVID-19 response. However, because of our funding pressures, focusing on this work has meant that we have had to defer other planned audits.

13. Since my appointment in June, we have been working productively with the government to address our funding needs. In July, I submitted an updated funding request, and I have strong indications that our needs will be fully addressed. We are now working with officials at the Treasury Board Secretariat so that our additional permanent funding can be included in the next Estimates for parliamentary approval.

14. To be as well prepared as possible to serve Parliament in the future, we have taken a calculated risk to start hiring in anticipation of receiving additional funding. We are monitoring our spending, and we are ready to react if needed to ensure that we will not exceed our budget.

15. We have also been focusing on the state of our IT environment. Like all organizations, we must invest on an ongoing basis to maintain and upgrade our systems. Our funding pressures have affected our ability to do some of this work. In the past, we have had to make difficult decisions to postpone some upgrades for our IT systems and processes that support our audits. Once we receive additional permanent funding, we will be able to act on our modernization plans.

16. Madam Chair, we thank the committee for its ongoing support and use of our work. We look forward to continuing to serve you in the coming year. We would be pleased to answer your questions.