Message from the Auditor General

Opening Statement to the Standing Committee on Public Accounts

Message from the Auditor General

(Message from the Auditor General of Canada—2018 Spring Reports of the Auditor General of Canada)

19 June 2018

Michael Ferguson, Chartered Professional AccountantCPA, Chartered AccountantCA
Fellow Chartered Professional AccountantFCPA, Fellow Chartered AccountantFCA (New Brunswick)
Auditor General of Canada

Mr. Chair, thank you for this opportunity to discuss the Message from the Auditor General of Canada that I included as part of our Spring 2018 Reports of the Auditor General of Canada.

I am familiar with the testimony of the Clerk of the Privy Council when he appeared before this Committee last week.

I first want to say that I agree with the Clerk that he and I have had many fruitful direct, honest and respectful conversations about our work. The frankness of this public conversation won’t change that.

Also, as he said, we were able to work together to achieve a mutually acceptable Order-in-Council that clarifies our right to access information. And I would sincerely like to thank him for that. I would also like to acknowledge the efforts of the Public Accounts Committee that facilitated our ability to arrive at a mutually acceptable solution.

Mr. Chair, as I understand it, the Clerk referred to my message as an opinion piece. He is correct.

The message does express my opinion that we need to find the root cause of the Phoenix project failure and other incomprehensible failures.

It is an opinion piece based on my almost 7 years as Auditor General of Canada; 40 years of performance audits done by our office; and the fact that all of the government’s controls did not prevent the Phoenix failure from happening.

The message was motivated by my profound belief that the federal government has important services that people in Canada need and rely on, and that the federal government has hard working civil servants who are dedicated to the work they do. In that message, I pointed to the fact that the Canadian civil service is ready and willing to do the heavy lifting to improve the culture.

In my opinion, Phoenix has tarnished the reputation of the federal government both at the political level and at the civil servant level.

Therefore, we all need to look deeper to understand how Phoenix and other incomprehensible failures happened—what were the root causes—and we need to prevent any more from happening in the future.

In my message, I said that the bottom line is that a change in the culture of the federal government will be the best hope to prevent incomprehensible failures in the future.

I described aspects of the culture that—in my opinion—may have contributed to Phoenix. I admit in the message that I may not have captured everything in my description of the culture. People will disagree with some, or maybe even all of my description.

But there has to be a conversation about the culture of government.

As I said in my message, Phoenix failed thoroughly in an environment that has a management accountability framework; risk management policies; program evaluations; internal audit groups; departmental audit committees; accounting officers; departmental plans; departmental performance reports; pay-for-performance compensation; and audits by the Office of the Auditor General.

I believe it would be too simplistic to think that just adding a few more rules or another policy will—this time—prevent any future incomprehensible failures.

I originally decided to write the message because I expected that people would feel that the performance audit we did on Building and Implementing the Phoenix Pay System did not adequately answer the question of who was to blame for Phoenix, and how it could have been possible.

And that took me to the need to explore the question of how the government’s culture enabled Phoenix. So, I described some aspects of the culture that in my opinion contribute to problems.

For example, policies are sometimes applied as cover to avoid blame; there is a reverence for checking boxes; there has been an erosion of Deputy Minister influence partly because of the short tenure of deputy ministers; ministers tend not to get excited by back-office administration projects and so they expect the budgets and timelines of those projects to be strictly managed; governments have tried to stay in the safe space of administering payments instead of being an active partner with Indigenous people to improve outcomes; the measure of success on Indigenous programs has become the amount of money spent, rather than improved outcomes; and, compliance with all government rules has become impossible because of their sheer volume.

Mr. Chair, my message was not intended to say that I had the answer to the culture issues, in fact I said that I don’t have a set of instructions to deal with the issue.

It was intended to start a conversation about how government culture contributed to the Phoenix failure.

The message does reflect my opinion, and as such, I am prepared that some people will say—that’s just his opinion. But I stand by it, and I believe that I said what needed to be said—whether people agree with it or not.

So, to close, Mr. Chair, I want to sincerely thank the Public Accounts Committee for being an early participant in this culture conversation.

I am now ready to answer your questions.