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|How we can Strengthen Accountability in Government|
|Monday, 28 April 2008 20:00|
Shawn Murphy is the Liberal Member of Parliament for Charlottetown and Chair of the House of Commons Public Accounts Committee. He was first elected to the House of Commons in 2000, and was re-elected in 2004 and 2006. He has served on the Standing Committee on Finance, the Standing Committee on Fisheries and Oceans, and as Parliamentary Secretary to the Minister of Fisheries and Oceans.
Deputies, Treasury Board and Parliament all have roles
The opinions and views I express here are mine alone and are not to be attributed to any other committee or party, organization or anyone else. All errors of fact and otherwise are likewise mine alone.
I have been a member of the House of Commons Standing Committee on Public Accounts for the last six years, and I've been the chair since May 2006. The goal of the committee is to improve the efficiency and transparency and effectiveness of government operations.
Parliamentarians and Accountability
Under our system of accountability, Cabinet collectively administers the government and is accountable to Parliament; Ministers are accountable to Parliament for the administration of their individual departments; and Parliament is responsible to the people.
Now, I want to point out that Parliament generally, and members of Parliament individually, do an extremely poor job in the accountability role.
Members of Parliament have four areas of primary focus:
The whole issue of accountability is generally on the back burner and just doesn't align with an MP's motivations or our resources. I personally have developed an interest in it, but I can count on my two hands and perhaps one foot the members of Parliament in Ottawa who have an interest and knowledge and pursue these issues with any type of vigour.
Again that is unfortunate, and there is a whole host of reasons for that - such as the relatively small size of Parliament, and the average tenure of Parliament (considered very short by comparison to the British example).
Deputy ministers Play a Key Role
Let me turn now to the public service, an area where the public accounts committee involves itself significantly. Deputy ministers are accountable to their ministers for the administration of their departments. They are also accountable to the Prime Minister, who is their boss, as well as the Privy Council Office. They have certain authorities delegated by the Treasury Board Secretariat and the Public Service Commission of Canada.
One of the fundamental provisions of the new Federal Accountability Act with which I agree 100 percent makes deputy ministers accounting officers to Parliament for the administration of their departments. They are accountable for all actions taken in concert with government policies and procedures, they are accountable for all internal control measures, and they are accountable for the final sign-off of accounts necessary for the preparation of the public accounts of Canada.
This is somewhat analogous to the U.S. Sarbanes-Oxley Act. Deputy ministers are responsible for the financial administration of their department, all transactions are reflected in their financial statements and those statements accurately reflect what has transpired in their department.
The role of deputy head is an extremely difficult job in the federal system. Deputies have to answer to NGOs and to oversight bodies such as the Office of the Auditor General; there are extensive consultations with stakeholders, the media, Parliament, outside consultants. And there are a lot of issues that aren't departmentalized; many issues that deputies deal with are horizontal issues, directed by the Prime Minister's Office or the Privy Council Office. For example, the Gomery Commission involved up to 20 departments here in Ottawa.
As Donald Savoie has said, the old departmentalized system that this city operated under for 50 years has basically broken down and we are left with a big conceptual mess. I believe that the pendulum has to swing back to deputies who are a little more grounded in the management of their respective departments.
Justice Gomery made three recommendations to deal with this particular issue. First, he recommended that deputy ministers become accounting officers. Second, he recommended that the tenure of deputy ministers in Ottawa be increased substantially. Lastly, he recommended that deputies be chosen by an independent body.
Because the Prime Minister is responsible for the administration of the government, we could not accept this last recommendation. The PM must be responsible for the ultimate choice of where the deputy is assigned. However, I don't see that as a major problem in Ottawa and it has not been an issue in the last 10 years. I agree with Judge Gomery wholeheartedly on the first two recommendations, however, although I would like to point out that those recommendations were made before by the federal public accounts committee, but were never followed.
Regarding the accounting officer role, I hope and I believe that there will be a cultural shift here in Ottawa, a shift towards a focus on management and accountability within departments. However, I don't think it will work unless the government accepts the second recommendation of the Gomery commission, a recommendation that we have made three if not four times - that the tenure of deputy ministers be increased.
Take, for example, the Department of Indian Affairs and Northern Development. I think everyone in Ottawa would consider this department a difficult one to administer. There are inter-governmental issues, stakeholder issues, rights issues, you have tremendous demands, and it is a large department with a budget of seven billion dollars. If you look at the changes in deputy ministers going back to 1979, there is a crowd. However, it has become even worse in the last 6 years - multiple deputy ministers with increasingly short tenures. It would take a long time to get up to scratch on what is going on, how you can effect the changes that are necessary, how you can effect changes in the management of the department.
The government cannot effectively run that department with this kind of turnover. Imperial Oil, CIBC, BNS do not do it so I cannot conceptualize how the department of Indian Affairs, which is a large and complicated department, can do it with constant changes in the executive office.
Those are some of the issues I see emerging. We have made those recommendations in the public accounts committee, but the previous government and the current government have said they need the flexibility, that basically it's none of the public's business. I am disappointed with this, but I hope that common sense will prevail.
Treasury Board Secretariat's Oversight Responsibilities
The public accounts committee is conducting study on the role and responsibilities of the Treasury Board Secretariat, and we have engaged Queen's University professor Ned Franks to assist us in this. It is our view that the Secretariat is at the top, and that it has to set the tone and culture and has the responsibility to ensure that all departments have the right people and the necessary resources so all the proper procedures are followed. It has to ensure that every department has the necessary organizational values and that every employee acts with a personal code of ethics. Probably most important, the Treasury Board Secretariat has to provide the oversight necessary to ensure the system works, from a management point of view.
I don't see that happening right now, especially regarding oversight. Treasury Board Secretariat has to strengthen its oversight role, although I am quite aware that in the Government of Canada we are dealing with an operation with a budget of 210 billion dollars, and TBS cannot scrutinize every transaction. From a macro point of view, they do have to provide oversight, a culture of internal audit and proper reporting. One thing we don't need is any new rules and we certainly don't need any new oversight bodies.
Strengthening Parliament's Accountability Role
As I indicated previously, Parliament does an extremely bad job of accountability. The accountability process is a number of events, called the business of supply. It begins with the budget, then goes into the estimates, then we have the annual departmental plans and priorities, the annual departmental performance reports, supplemental estimates, and then we go into the public accounts and the various reports of the Auditor General of Canada.
Most members of Parliament pay cursory attention to these events. Anyone who has been before a Parliamentary Committee when the estimates are being discussed knows that generally the discussion breaks down into political issues, like why a wharf wasn't constructed in somebody's district. The process is generally very weak and I would again say the problem is that this process does not align itself with the motivations or resources of the average member of Parliament.
One thing that is clear is that Parliament needs more resources, especially if it is to be enabled to deal with these particular issues. I believe the Privy Council Office and the Prime Minister's Office have about 1,300 people dealing with policy and issues such as this. Parliament and the Library of Parliament have 82 people, so you can see the general imbalance in the system.
Additional resources are not the entire answer, because if you do not get members of Parliament motivated, you can have all the resources in the world, and the process still will not work.
Improving Public Performance Reports
Concerning performance reports, I believe they have to be simplified, and the assumptions used have to be supported with data. Report users would get a better understanding of government operations if the statements were prepared on an accrual basis. I believe departmental reports should identify risks better. We do not live in a risk-free environment; risks should be identified and the department should be analyzing how the risks and challenges are underpinned.
Consistency is an issue. In 2002, the Office of the Auditor General set out what that office was looking for in a good performance report. Recently, a chapter of the Auditor General's report stated that most departments were not following the Auditor General's recommendations.
Again talking about risk, let me reiterate that a deputy minister cannot be held responsible for every error that occurs in his or her department. Accountability should be two-fold, in that:
Management should be held responsible for recognizing the risk that is out there and developing the proper risk management strategies. There must also be more focus on this in performance reports.
Dealing with Non-Compliance
One issue that consistently comes before the public accounts committee is sanctions. I must say that we are dealing with a public service where 99.9999 percent of public servants do their job with honesty, competence, diligence and extreme integrity. However, when situations occur, and they do, the lack of and the inconsistency of sanctions is a problem. In my six years on the public accounts committee, through all the issues we have dealt with, I have never seen or heard of a situation in which sanctions were imposed.
I believe the Treasury Board owes it to the public service to set out what happens when the Financial Administration Act is not complied with, and by that I mean deliberate non-compliance. In those cases there have to be consistent sanctions and those sanctions have to be publicized. I believe the public expects nothing less.
When you read about the public accounts committee, you are reading about the problems and not the tremendous job that most people do, but problems do occur. The system works, it is known worldwide for its transparency and ability to fulfill programs.
When problems do occur, they are usually based upon one of five events:
I lived through the sponsorship scandal and that is a textbook example of what happens when these events occur. This was a perfect storm that shouldn't have happened and basically was caused by five events.
First of all, we had a situation where there was political influence over the creation of a program. The offices of the Prime Minister and the minister of public works established a program to serve their own needs. It was established outside the traditional accountability channels; the normal line of accountability was not followed.
The person in charge of that program answered directly to the minister. That itself set out a whole host of problems.
The third issue is that top departmental officials failed to do their assigned role. I am speaking about the deputy minister, who said he “wasn't in the room,” but it was his job to be inside the room, not outside of it. All this gentleman had to do was to write a little memo to the department of accounts and his boss, saying he was concerned that this program was not being scrutinized.
The bureaucratic interests aligned with the political interests. Again we had a very small number of people involved, and they aligned themselves with the political interests of the day, and they felt they did not have to follow normal rules, guidelines and procedures.
We had a situation where the internal auditors within the department, on two occasions, failed to detect this problem. Even when they did, they failed to follow up on their recommendations. As a result, people were able to bilk the public for quite some time.
Checks and Balances
A recent report of the Auditor General spoke about problems in the Office of the Correctional Investigator. This situation was caused by the fact that the top person obviously didn't understand his role. He worked for 14 years and apparently cashed his vacation every year, although he spent summers at his cottage. There was certainly a breakdown in ethics.
I don't want to examine that particular individual. I want to ask: where were the system's checks and balances? Where was Treasury Board? Where was the internal audit function? In 14 years was there no internal audit of this particular agency?
The deputy minister should have been able to set the proper procedures and goals so that this situation did not occur.
Where was the executive director / chief financial officer? One person signed all these cheques, so I suggest there was a breakdown in organizational values. If the department had an organizational surplus at the end of each year, they would divide this surplus among all the employees of this very small department and call it overtime. So the accountant would have to go back and fix the numbers - clearly a breakdown in organizational values.
Now again, these are my views and opinions alone, and are not to be affiliated with any party, body or organization. I reiterate that 99.9999% of things are done right. Parliamentarians and those within the public service have one goal and that goal is to serve Canadians the best we can. We all have to work together to improve the efficiency and effectiveness of government operations in Canada.