Committee of the Whole: Ms. Karen Hogan respecting her appointment as Auditor General of Canada

By: The Hon. Peter Harder

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Alexandra Bridge across the Ottawa River, Ottawa

Senator Harder: Ms. Hogan, welcome to the Senate. I congratulate you on your nomination.

I wanted to take a moment to reflect that the Auditor General appointment is for a good period of time — it’s 10 years — and in the periods of which we have had various auditors general, we’ve had various priorities adjust and change as they reflect the changing circumstances and personalities of the auditors general. I’m thinking back to J. J. Macdonell, who is the first Auditor General I knew, which goes back a long way. J. J. Macdonell convinced the government of the day to move beyond simply financial compliance to introduce what he called value-for-money audits. At the time, the mandate was changed and value-for-money audits were incorporated in the mandate. He said, “I don’t think this value-for-money audit should take more than 10% of our budget.”

Forty-plus years later, of course, one audit told me it was 78% of the budget. I don’t know what it is today. My point is that value-for-money audits have significantly changed the agenda of the Auditor General and the resource constraints or resource pressures.

There have been some outstanding observers of this. I’m thinking in particular of Donald Savoie, who is probably the leading Canadian expert on public administration and management. In one of his books, he comments on his growth of value for money and says:

. . . the media and opposition political parties are not about to challenge the work of the OAG, because it is not in their interest to do so. Best to keep spending public money on measures that contribute precious little, other than providing fuel for the blame game by challenging the work of the OAG.

In another book he says, “Officers of Parliament are different from parliamentary committees.” And the Auditor General is, in many respects, amongst the primary officers of Parliament.

Savoie notes:

They work out of Ottawa and can focus exclusively on their mandates free of political considerations. They need not worry about oversight bodies challenging the quality of their work. Sharon Sutherland argues, for example, that the role of the Auditor General has been “flipped on its head” where parliamentary committees have become “stakeholders” and “clients” instead of “the source of [the office’s] role and authority.”

She asks the question: Who regulates the regulator?

I’m not expecting you to embrace the critiques of your office, but I would like you to comment on the exponential growth over this period of time in value-for-money audit processes. Would you at least commit to an independent review of value-for-money audit processes in your organizations to establish what the appropriate balance between financial compliance auditing and value-for-money auditing? It’s an easy question.

Ms. Hogan: I’ve got an answer. Right now, in our current context, our value-for-money auditing, as you call it, or performance auditing, does not occupy a great deal of our budget in that it is discretionary. A lot of our efforts, resources and our auditors are focused on the work that we must do in accordance with legislation, which is financial auditing and special examinations of Crown corporations.

You asked me about someone watching us and whether I would commit to that — absolutely. Our office is already audited by an external audit firm, so our financial statements are audited. Usually, once during every Auditor General’s mandate, the office commits to a peer review by other supreme audit institutes across the world to come in and look at all of our processes, which would include value for money.

I was there when the peer review occurred for Sheila Fraser, I was there with the peer review for Michael Ferguson, and if I was appointed Auditor General, we will have a peer review before the end of my mandate.

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