Disposing of Government Surplus Goods and Equipment

Opening Statement to the Standing Committee on Public Accounts

Disposing of Government Surplus Goods and Equipment

(Report 2—2018 Spring Reports of the Auditor General of Canada)

5 November 2018

Jerome Berthelette
Assistant Auditor General

Mr. Chair, thank you for this opportunity to discuss our spring 2018 report on the disposal of government surplus goods and equipment. Joining me at the table is Martin Dompierre, the Principal who was responsible for the audit.

We completed our work on this audit in March 2018, and we have not audited actions taken by federal organizations since then.

All Government of Canada departments and agencies have movable assets, including vehicles, furniture, machinery, and other goods and equipment.

When a federal organization no longer requires assets, it can dispose of these surplus assets by either transferring them to other departments or agencies, or by selling, donating, recycling, or scrapping them.

Under the Surplus Crown Assets Act, Public Services and Procurement Canada is responsible for the disposal of all surplus assets unless this authority has been given to another department or agency.

This audit focused on whether selected federal organizations disposed of surplus goods and equipment at the appropriate time and in a manner that maximized benefits.

These benefits included selling assets for the best possible return, reusing or refurbishing assets that were still in good condition, donating assets to organizations that could benefit from them, and disposing of assets in an environmentally sustainable way.

Overall, we found that the Government of Canada’s accounting suggested that federal departments and agencies sold their surplus assets for less than two-thirds of the value estimated as the assets’ remaining future benefit to the government.

On the basis of our analysis, we found that all federal organizations chose to sell surplus assets rather than to extend their use by transferring them to other federal organizations. Efforts to transfer assets through GCTransfer accounted for just over 4% of total requests to sell or transfer assets during our audit period.

In addition, 3 of the 4 organizations we audited did not always do costing analyses to justify their decisions to sell assets instead of choosing another disposal method. At these organizations, 65% of the files we tested did not have costing analyses to justify the disposal methods selected.

We also found that the Canada Revenue Agency had adopted practices to reuse its own assets. These practices resulted in savings of more than $4.5 million over 3 years.

Finally, we found that Public Services and Procurement Canada was effective at selling the goods that it received through GCSurplus. However, we found that the Department had little incentive to pursue other disposal methods because the Department depended entirely on commissions from the sale of government assets to operate GCSurplus.

We are pleased to report that all four federal organizations agreed with our recommendations.

Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the Committee may have. Thank you.