[Recorded by Electronic Apparatus]
Tuesday, November 28, 1995
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[Translation]
The Chairman: Welcome all. Pursuant to Standing Order 108(3)d) we will be considering Chapter 12 of the October 1995 Auditor General's Report (Systems and their Development: Managing the Risks).
I will give the floor to Mr. Desautels followed by Mr. Little from the Treasury Board Secretariat. Mr. Desautels, please proceed with your opening statement.
Mr. Denis Desautels (Auditor General of Canada): Thank you, Mr. Chairman. I would first like to point out that I have with me Mr. David Roth, the Deputy Auditor General, and he was in charge of the chapter we're examining today.
I am very pleased to have the opportunity to present the results of our audit "Systems and their Development: Managing the Risks" as reported in Chapter 12 of the October 1995 Report. This chapter sets out very fundamental issues which are of critical importance to the government initiatives to reduce the administrative costs of government and improve the services provided to Canadian taxpayers.
Mr. Chairman, the successful application of information technology in government is, I believe, absolutely essential.
The effective use of information technology to deliver services that are tailored to the public's changing needs is, and must continue to be, a priority for government. Information technology offers the opportunity to deliver more services faster, at the same or lower costs. Technology also offers significant potential for delivering new services or delivering existing services in ways that provide added value to the public.
The Canadian federal government, like many organizations, is making significant investments in using technology to reduce and to manage the cost of government and deliver programs more efficiently and effectively. Through its blueprint for renewing government services using information technology, the government has made the successful introduction of information technology one of its key priorities.
Within the federal government, your committee, my own office and indeed a number of deputy ministers, through the Treasury Board Secretariat Committee on Information Management Systems, have expressed concern over the difficulties experienced by the government in implementing large systems.
[English]
A recent research study completed by the Standish Group, which included both private and public sector organizations in the United States, reported that ``a staggering 31.1% of projects will be cancelled before they ever get completed'', and that ``52.7% of projects will cost 189% of their original estimates''.
This study noted that on the success side, the average is only 16.2% for software projects that are completed on time and on budget. In larger companies, it noted that the situation is worse and that only 9% of their projects come in on time and on budget.
What does all this mean? It means that if that experience applies to the federal government, seven or eight out of approximately twenty-five large federal government systems projects could be cancelled prior to completion. It also means that on planned expenditures of $2.1 billion, cost overruns could amount to unplanned expenditures of a further $1.5 billion. Finally, it means that a significant amount of taxpayer dollars are at risk.
However, we do not know if this is the actual story. To date, the government has not maintained historical data on its success rates in implementing systems. Basic data, such as total government spending on information technology projects and the frequency and extent of cost overruns and/or project cancellations, were not available at the time of our audit. As a consequence the government does not know if the extent of the problem is similar to, worse than, or better than the experience of the private sector.
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Surveys also indicate that over 90% of organizations state that they have become either largely or totally dependent on their computer systems to meet their business objectives. Most organizations today, therefore, view the successful introduction of systems as critical to their efforts to further reduce operating costs, improve service, and gain a competitive advantage in the global economy.
For the remainder of this decade, as we prepare for the turn of the century, emerging technologies will place even greater demands on all organizations, including the federal government, to introduce technology in a careful, well-managed way.
[Translation]
Over the past few years, our office has committed considerable time and effort to determining what is needed for the successful introduction of systems. As you may know, in September 1993 we published a study of best practices for systems and their development in which we reported the approaches used by leading private and public sector organizations to improve the likelihood of successfully introducing systems.
As well, we have worked with the private sector to implement new audit methodologies within our office. This provides us with a proactive approach to monitoring the implementation of these projects as they are built.
As I said earlier, the implementation of large systems projects, in both the private and public sectors, is characterized by risks and uncertainty. Accordingly, it is critical that these risks be identified, evaluated and effectively managed. This requires a committed and sustained effort on the part of decision-makers and effective project management.
We are concerned because, in many respects, the findings that have emerged from this audit are not new. We have made similar observations in the past. Mr. Chairman, your committee will, I am sure, recall the concerns we have expressed in the past.
For example, in Chapter 25 of my 1994 Report concerning information technology within the Department of National Defence we noted that the processes used by the department to manage information technology were not adequate; that time frames were too long and that adequate cost estimates had not been prepared.
[English]
Mr. Chairman, your committee may recall our various reports on the COSICS project of Foreign Affairs and International Trade. In 1987 we reported that the department risked exceeding cost estimates and that predicted savings would not be realized. In 1989 we further reported cost increases and again expressed concern that some of the expected savings would not be fully realized.
This project also experienced delays in implementation. The public accounts committee held two hearings on COSICS in the spring of 1992 and received assurances that the project's successor, SIGNET, will meet the requirements of the department on time and on budget.
Yet the issues that have led to these observations persist and continue to impair the ability of management to successfully introduce these systems. By successful, I mean the project is delivered reasonably on time, close to budget, and meets the needs of the organization. We've compared the results of our audits with the results of private sector research studies and our own study of best practices. We note that many of the factors that influence the risks associated with systems development initiatives in the Canadian federal government are quite similar to those reported in the private sector.
We have also seen, however, that the private sector has been able to respond more quickly to the challenges. For instance, the private sector has shifted its focus to developing smaller, more manageable projects and realizing the benefits sooner.
[Translation]
It is important to emphasize that while the problems are not unique to government, this does not mean that we can excuse them or become complacent about this issue.
If the government is to reap the benefits available from the successful introduction of information technology, it is imperative that current approaches to developing and managing systems development projects be changed. Continued high levels of costs overruns and project failures will result if there is no change in the way things are currently done.
The impact of project cost overruns and or project failures can be significant. Millions of taxpayer dollars can be spent with little or no return on the investment.
[English]
Mr. Chairman, I will ask Mr. Roth to quickly comment on the details of the audit that we carried out and reported on in October 1995.
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The Chairman: Mr. Roth.
Mr. David Roth (Assistant Auditor General, Office of the Auditor General of Canada): Thank you, Mr. Chairman.
In Chapter 12, Systems Under Development: Managing the Risks, we've concluded that the government can no longer afford to continue managing investments and information technology systems as it has done in the past. As the Auditor General stated earlier, developing and implementing these systems is characterized by risk and uncertainty. However, there is no magic solution to managing these risks and reducing the uncertainty.
The purpose of our audit was not to stop the government's strategic investment systems. Rather, it was to point out the need to dramatically change the way the projects are approved, funded, and managed. Our audit examined four major systems under development, assessed the risk government currently has in developing these systems, and looked at how the government is managing these risks.
As the basis of our audit, we conducted a risk assessment, a process through which professional judgment is applied in considering certain basic questions about virtually any project, including systems under development. These questions include what can go wrong, what the probability is of its going wrong, what the likely consequences are if it does go wrong, who will be affected if it goes wrong, and what procedures management has implemented to control the risks and to mitigate the potential consequences.
Our audit focused on these questions by assessing the risks associated with implementing system development projects through a framework that considered the processes and practices that management had put in place to identify the potential risks that could hinder or prevent the successful implementation of a system and manage those risks, the complexity of the technical and business solutions being implemented, and the linkage between the project's objectives and the departmental business lines and priorities.
To provide a basis for comparing the results of this audit with the experience of the private sector, we also reviewed a number of research studies that examined the reasons system development projects fail.
The systems we selected for audit were: the public service compensation system, PSCS, which is a payroll system, and a departmental accounting system, the common departmental financial system, CDFS, both being developed by Public Works and Government Services Canada; an accounting system integrated with materiel and personnel systems, Transport Canada's integrated departmental financial and materiel management system, IDFS; and a pension system, Human Resources Canada's income security program redesign, ISPR. These four systems together presently represent approximately 25% of the government's planned $2.1 billion spending on system development projects.
Incidentally, I should add that we are currently looking at more large system projects and will comment on these in future reports.
In this audit, we did not include a review of the procurement of information technology, as this will be a separate audit. In addition, we did not audit the role of the contractors.
We conducted this audit for several reasons. Information technology is critical for the government to manage its costs and deliver its programs. The amount of money spent on technology in the public sector and the private sector has risen dramatically, yet systems have typically failed to meet users' needs, have been over budget, and have been late.
We found that only one of these four systems, Transport Canada's integrated departmental financial system, is being managed effectively to deal with the risks. The compensation system, PSCS, has been terminated, CDFS has failed to meet its original objectives, and income security program redesign needs continued corrective action by departmental management.
One of the lessons learned from this audit is that projects need to be structured into smaller, more manageable components. We use the term ``chewable chunks'' to describe delivering usable components that produce benefits immediately in some six to nine months.
Invariably, projects that are planned to take several years to complete have a very high risk of failure because of the rapid changes in technology and organizations.
For example, PSCS was started in 1987 to reduce the administrative costs of the compensation system. After eight years of effort and the expenditure of some $61 million, the government will receive little benefit from that investment.
The common departmental financial system was started in 1988 as a replacement for an existing accounting system for small to medium-sized departments. After seven years of development and testing effort by PWGSC at an approximate cost of $25 million, only one department, PWGSC, and three small agencies are committed to using the system. In its response, PWGSC has suspended its marketing effort and will concentrate on implementing the system in its own department.
We understand the government has started to review the risks associated with the other large system development projects currently in progress. In addition, the government is developing a new framework related to the review of the management of large information technology projects in the federal government. However, it is our view that there are still a number of real challenges in actually improving the rate of success of these projects.
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As I stated earlier, there is no magic solution to the complex equation of managing information technology projects. However, we have set out factors that we believe will help improve the probability of success, and whose absence will almost always guarantee failure. These are: more clearly defined project sponsorship; clearly stated and defined systems requirements; effective user involvement; requisite dedicated experience and expertise; and implementing systems through smaller chewable chunks that provide discreet benefits sooner.
Finally, we have recommended that to increase the likelihood of success of developing and implementing systems, both departments and the Treasury Board Secretariat give immediate attention to improving the current practices for approving, funding, and managing such projects. Your committee may wish to ask the Treasury Board Secretariat what it plans to do to address our recommendations.
Thank you, Mr. Chairman.
[Translation]
The Chairman: Is that the end of your presentation, Mr. Desautels?
Mr. Desautels: Yes.
The Chairman: Fine. I will now give the floor to Mr. Little from the Treasury Board Secretariat.
[English]
Mr. W.E.R. Little (Deputy Secretary and Deputy Comptroller General, Treasury Board Secretariat): Thank you very much, Mr. President, for the opportunity to provide you and this committee with the status report on the actions under way in government to improve the management of large information technology projects that amplify the Treasury Board Secretariat response to the Attorney General's report of October 1995, chapter 12, Systems Under Development: Managing the Risks.
I'm accompanied by Mr. Bernie Gorman, the assistant secretary in my branch, responsible for information management and system technology.
If I may, Mr. President, I have a short deck that I'd like to go through in ten minutes or so, which simply provides the members with some background. Of course, I'd be delighted to respond to questions now and in the future.
As stated by the Auditor General and as we agree - I'm on page two of the deck - worldwide there are poor large IT track records, which have not been significantly improved within the federal government, although I do want to point out at the beginning that we have had some successes.
We started work on this particular area as a result of concerns by a group of deputy ministers. We were well under way in examining the problem area when the Auditor General's report of October on four of the large IT projects was published. There are currently twenty-five projects that we've identified as being largely IT related, in progress, in the government today, which results in a total investment of something in the order of $2 billion.
In addition to these twenty-five projects now under way, we also need to respond with alacrity to the need of managing future IT projects to meet the risks that have been identified by our own work and amplified by the AG report.
The next two pages, pages 3 and 4, contain a listing of the twenty-five projects referred to by the Auditor General in his report and that have been the basis for our work in undertaking an examination of what is going wrong, why is it going wrong, and what it is that we need to do to improve the situation currently and in the future.
You will find, for example, under the Department of Human Resources on the first page, the income security program, which is one of the four that was examined in detail by the Auditor General. You will find on page 4, under Public Works and Government Services, two of the remaining projects: the common departmental financial system; and the public service compensation system. Finally, you will find the fourth of the detailed projects that he examined under integrated departmental financial and material management system under the Department of Transport.
You should be aware that we have undertaken with departments to examine all twenty-five of these particular projects and that we are in the position of providing some assurance that the work we have under way will assist these twenty-five, as well as help develop the framework for future projects to be guided by.
Having conducted an analysis to identify the issues, we're now proposing improvements to the management framework, work we've had under way for the last eight months. The process included interviews with a whole series of players and review of our current policies and procedures. From that we have developed a series of findings and recommendations and an action plan, which I'm pleased to report to you on today.
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I want to outline some of the problems, and I wish to refer to this only as an outline. There are others, but rather than take the time.... We divided our review into a series of detailed functions or activities. Under the planning stage we concluded that much of the initial project definition had some difficulties, and that we're not satisfied the senior management support needed to overcome some of the difficulties is always there.
We are particularly concerned that the client, who in terms of program delivery is normally at the operational arm of the department, has not been adequately involved in the project definition, not to mention the absolute client, which of course is the taxpayer. We understand that our current process or review and evaluation and approval need considerably more work in order to respond to the kinds of concerns that have developed as a result of our review.
In terms of the execution, the project management discipline is not consistently applied. Although we have some very dedicated and capable people, we don't have enough to manage the great range of work that's under way in all cases, and we are particularly concerned about the manner in which the change proposals are put in place and handled over the course of a project. When there's a multiyear project and the requirement changes, if you don't deal with it appropriately you will automatically go off-time, off-budget, and significantly increase the risk in terms of what the original intent was. Although there are very good reasons why people want to do that, we want the process managed more rigorously.
We're not satisfied that we do appropriate sanity checks. Are we examining the original intent, are we still achieving it and is this program meeting the needs of Canadians as time progresses? We're not clear at the Treasury Board level on how we should measure and report on situations given that the accountability for the actual development of the project is in the hands of individual departments, but we have work under way to try to develop a means of ensuring that this reporting is going on. We also have concerns over accountability, authority, and responsibility, and how they're defined.
We are concerned about the procurement methods that we use, and we're also concerned about industry capacity and capability. Even if you've contracted we find that in some cases the same company succeeds on the one hand and fails on the other, so there are a whole series of reasons that we need to further develop in how we procure both the actual hardware or software and system, as well as the project management and other support.
One of the difficulties in the past and always is that in an incentive system that doesn't respond to problems, it's difficult to get people to come forward at a sufficiently early stage to discuss the problem so that action can be taken. I can amplify on that in questions. We're also concerned that the consultant expertise we need to help us shadow or reinforce our project management capability is not always present in the private sector either.
The key principles under our proposed management framework in terms of responding to this need that we've identified is to focus on stages such as problem definition, preparation of the environment, execution, etc. We want to turn to a world of delivering smaller projects within defined visions. In other words, we want to have a series of off-ramps that enable us to move to a specific objective, and if not met, allow us to turn to another alternative. We want to utilize a process that involves a continuous improvement and a roll-out of solutions, as opposed to trying to leap to a future well down the path, way out in the state of the art.
I would like to point out, however, that this in itself is not the solution. When you move to bite-sized, chewable chunks and you have a program that's going to evolve and continuously improve, you have what's called an integration problem. You cannot now rely on some prime system integrator to bring everything together, but you must have that expertise inside so that as you manage this evolution, you're constantly able to keep your process and your system together.
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We talk about ``shoot, don't save'' as shorthand for existing programs where we simply cannot continue to go into a world where we know that the objective cannot be met within the time, cost, and risk assessment that was originally there. There are some activities that need to be descoped and dealt with in a more evolutionary manner. We want to be sure we take the opportunity of leveraging from the successes that we've had, and from more community involvement in terms of finding expertise and working out a series of approaches that will be easier in terms of managing this immense problem that we have.
Mr. Chairman, it's important to recognize that we simply cannot stop taking these actions in terms of bringing enabling information technology to bear and providing quality service to Canadians in the face of the opportunities and the continuous resource squeeze the government is facing.
The components of the management framework that we are putting in place, both for existing and future projects, constitute a series of phases that I've described in a chart. The left side shows governance, review and facilitation, and I'll describe that in a little more detail. The point of the slide is to indicate that we're happy to have a policy in place. We need to do a little more work on it, but we think the policy framework is there. We have to figure out how to significantly improve our review, facilitation, professional development, etc., and I'll go through that area very quickly.
In terms of governance, the purpose is to provide an appropriate management framework that balances the government - that's the corporate requirements - with departments' empowering needs. We need a clearer accountability framework and we need funding approvals, no longer in mass but tied to deliverables that if not met, will not allow you to go forward to the next stage of funding. We need to negotiate project-specific authorities rather than provide general ones. We need to be specific about what has to happen within individual projects, and we must do significant work in revising the procurement and contracting processes to at least align them with approval stages, if not with other problems to be addressed.
In terms of reviewing, the purpose of this particular phase is to establish effective mechanisms for monitoring the status and assessing the performance of projects. Here we're going to return to a world of rigorous gating, which means that you have to achieve certain standards and objectives within certain cost and time parameters in order to be allowed to proceed to the next gate.
We need to do complete sanity checks, no longer depending solely on the individual who's accountable for the production of the project, but also use independent reviews, audits, evaluations and, where necessary, contracting for third-party reviews. Another thing we want to make more use of is peer review, which we find to be impressive in terms of getting at the peer level problems identified and brought forward, as opposed to using a hierarchical approach, which makes it more difficult.
We also intend to increase the Treasury Board Secretariat's assessment of specific projects, not by us doing the work, but by insisting that people provide us with the results of their assessment in a way in which we can see that it's working and that they are following the appropriate procedures to bring these projects on-line within the parameters of the project approval.
In terms of facilitation, we believe we need to do more work in creating and maintaining a set of best practices and support capability to assist departments. We need to produce additional guides on business case, risk management, and IT procurement. We have to provide more templates for people to use so that they don't reinvent the wheel. There's a series of tools, techniques, and methodologies that have become current in the world of procurement of IT, and we want to make it mandatory for departments to use those. Which ones they select is up to them, but they must use them and must report to us on how they are using them in order to ensure that we are getting this review work under way.
Some of that work I can describe in more detail. It's not technical. I think functional point analysis is very important, but it's been suggested that I move on, so I will.
We have a whole series of projects that we want to undertake in terms of professional development and building a cadre of experienced project managers. On page 14 we have a series of pathfinder projects that are under way now, including work on an immigration modernization program within Citizenship and Immigration, the veterans benefit redesign program within Veterans Affairs, and the manner in which we procured ``the'' human resource management system that we will now use within government by all departments and agencies.
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On page 15 we're dealing with a communications problem in terms of getting the word out on how we'd like to see this happen, and getting word back on how things should be adjusted to meet the actual requirements of the day. We also want to take continual advantage of the fact that other people are experiencing similar situations, and we want to see how they're in fact handling them.
On page 16, regarding the terms of introducing change in attitudes and culture, we want to involve the community more in developing and implementing solutions in order to manage the expectations and to communicate the successes, which we have not been necessarily doing throughout government in a meaningful way.
In this program we have now developed detailed findings, recommendations, and the framework, which have now been approved. I've restructured my organization to provide a project management office beginning in September, and the work in the community to develop the framework and to provide these guidelines and other things that I've said we want to do has been under way since September.
We've had a series of meetings. We're using the twenty-five projects as an example of testing our particular approaches to see how they would work and learning from these departmental situations about what needs to be adjusted. On page 19 I've listed the key tasks we've undertaken for the first phase, which is October to December, and I'm prepared to come back to them in detail if you wish. On page 20 the key tasks that we're undertaking from January to September in terms of our action plan are listed, which I'm prepared to come back to and provide you more detail on. And finally, in our third phase of the work plan, beginning in October of next year...we believe we'll then have sufficient framework details in place that we'll be more confidently managing the IT projects of the future, as well as finishing the work that we have under way now in the government as a whole.
In summary, if I may, Mr. Chairman, there are no silver bullets, there's no instant solution. We're taking a holistic approach to the problem definition and to the resolution, involving, in all cases, as many people as we can in both defining and eventually implementing the outcomes. We have specific flexible solutions that we believe are appropriate for each type of organization, but I want to assure you that the accountability regime must stay in place because I cannot personally manage all of this - and no human can. We are dealing with this as a two-part problem. We're managing the current IT projects, as well as looking into the future about how to better manage projects coming along the track. Finally, I want to assure you that we believe the components of solutions are available. It's a question of packaging them and using them appropriately within departments within their particular business lines and their strategic needs.
Thank you, Mr. Chairman.
The Chairman: Thank you, Mr. Little.
[Translation]
We will now entertain questions. Mr. Laurin will lead off.
Mr. Laurin (Joliette): I don't really know where to start, because I have so many questions in my mind.
According to the Auditor General, information technologies should be parcelled out in smaller and easier-to-manage components. I'd like to know if Treasury Board Secretariat representatives share this philosophy, which should be used as a guideline in implementing new information technology.
The Chairman: Is the question for Mr. Little?
Mr. Laurin: Yes, the representative from the Treasury Board Secretariat.
[English]
Mr. Little: Thank you, Mr. Chairman.
We are in agreement that there are more successes likely to be available by taking more specific and short-term improvements, as opposed to trying to develop a complete solution, which takes many years to unfold. We also believe that it's important that we provide, in the context of individual projects, what are called off-ramps, so that as you proceed, even in short-term projects, you have to meet objectives that have been set, or you have to have a way out so that you don't continue to reinforce a problem that you cannot solve.
We also believe it's important that a strategy be related to the departmental business line, that it's not just a question of individual solutions, as much as it is fitting within an overall strategy. We're also working on the issue of making sure that government as a whole is developing an infrastructure that allows us to minimize the amount of the duplication and overlap that could take place if you're just dealing with little projects one by one.
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So we have an overall strategy within the government and a certain series of infrastructure activities. We have departmental strategies that are being developed or should be developed, and we have within that individual, more specific project work that can be undertaken to achieve what you're suggesting.
[Translation]
Mr. Laurin: It also says somewhere that competent professionals were not called upon enough to implement these systems. Why were those professionals not called upon? Are there none within government? If not, why didn't they ask for outside professionals who could have helped implement these systems?
[English]
Mr. Little: We have a particular series of successes that have done just that. We've had a series of problems that have not effectively done what you're suggesting. If I may, sir, it's a question not of professionals from a technical sense; it's the alignment of the senior management of the department with the program deliverers, as well as the technical capability and the project management, that produces success.
In many instances, we've noticed a separation between senior management's attention to the problem and the technical project management activity that's under way, and unless that's aligned with the business needs, you produce a solution in some instances for a departmental business line that's now evolved. So it's the integration of senior management, program deliverers, technical capacity, and project management, both private as well as public, that produces the climate for successful project delivery.
In some instances, we've done that very successfully. We know that, and now we're trying to emulate it elsewhere.
[Translation]
Mr. Laurin: What do you do when you are in a situation where senior officials have problems adapting to new technology you are trying to set up lower down in the scale?
In organizations, you often see people of a certain age who refuse to accept change and refuse to adapt because they're close enough to retirement. So they ask their juniors to tame the new technology and they just stay out of the whole thing. I get the impression that's probably what happened here. When you don't get the voluntary consent of the senior civil servants who don't believe in the systems being set up or may find them too hard to learn, what happens? Do you delay introducing the change and avoid involving those people, or is this sort of thing tolerated? What is the attitude?
[English]
Mr. Little: It's a very astute question, as always. What we've listed in here is a series of things that we think need to be done. First of all, the senior management attention is heightening now. Perhaps a few years ago the situation described was more prominent, but now senior management is relying on enabling IT, information technology, to improve the service delivery to Canadians and to respond to the constant downsizing pressure that now says, unless you do a re-engineering of your process and use, where appropriate, technology, you will not succeed. So there's a heightened awareness at senior management level that this is something that has to be brought to bear.
Second, by turning to a reporting and a more frequent review process and demanding from senior management the results of their reviews, we will focus their engagement more in ensuring that the projects are unfolding appropriately. If we don't give them the total amount of money and say they have to come back to get to the next stage, attention is paid much more specifically to success and how things are developing.
Third, the cultural and attitudinal areas that we've talked about are ones of reinforcing people's knowledge and understanding through training and ensuring that we bring a community involvement to the particular issues. Now this is hard to do and it's not going to overcome the situation you're describing, but I believe we have already become much more aware of this problem in trying to find solutions to it as I described.
[Translation]
Mr. Laurin: Mr. Little, you're not being very reassuring when you say that in that kind of situation the senior civil servants ask for reports. That's the big problem. You have a nice report for us here today. That shows a lot of good will but it doesn't explain what is going to be done, practically speaking.
When you're in a situation where your senior officials refuse new technology or don't have the necessary competence to implement it, what do you do with them? You ask them for a report. You'll get a beautiful report that won't be prepared using computers. The report will be drawn up with the old technology and turn into a lullaby just like the one that is so easily putting us to sleep here today. But the problem isn't solved for all that. Two years later, and that's what happened in the army, your computer systems are obsolete and you haven't even started using them yet.
In my opinion, people should probably be moved around. Is that also one of your practices?
[English]
Mr. Little: I'm sure you would want me to suggest that the premise of your discussion is one that I can't agree to...that we are deliberately going about promoting and providing reward to people who aren't performing well. I simply can't support that, sir, for obvious reasons.
Could I ask you to turn to page 12 of my deck. There are tools available now that senior managers can readily use that no longer enable them to escape the inevitable situation.
If you provide a cost schedule performance management system, nowadays you divide your project up into a series of earned values.
By day six you're supposed to have so much completed and so much spent, and the standard or quality, what have you, can actually be measured at that particular point. So you're not dependent on lower echelons telling you something that is not true, because you have to demonstrate in this methodology, which is much more current now, how it is that you've achieved it, what you've spent on it, and why it is that you have or have not reached a particular level of standard.
You can measure very accurately very early on and throughout the project whether you're achieving the objective. It's a management technique that has not been used in the past, and we believe by turning to such things we'll get better performance out of the management hierarchy and the teamwork that we need to develop these projects.
[Translation]
The Chairman: Mr. Laurin, I'll give the floor to Mr. Williams. You can continue on the next round.
[English]
Mr. Williams (St. Albert): Mr. Little, I read the Auditor General's chapter 12, and I looked at your presentation today and I think you have only picked up on one of the two major issues that the Auditor General pointed out.
Number one, you mention on page 8 of your presentation the need to utilize continuous improvement and roll-out of solutions. I think you're referring there to the ``chewable chunks'' concept of breaking major projects down to small items. I agree with that.
The point you have missed and the Auditor General referred to is sponsorship. You talked about a trail boss, and we from the west perhaps can identify with that name, but I don't think this is what the Auditor General is talking about.
I think the Auditor General is talking about a complete and total buy-in to the system by people who recognize that this is going to be good for them if they take the project up and carry it through to successful completion. There's going to be some kind of adverse effect if it doesn't get there...where there is a total and complete buy-in not just by the project manager but by the departments, assistant deputy ministers, deputy ministers and even the minister. I don't find that in your presentation at all.
Mr. Little: First, I have been referring repeatedly to the teamwork that's necessary in a department in order to bring to success these projects involving the senior management, the program deliverer, the technical capability, and the actual project management group itself. I hope this is an illustration that I understand your point and I agree entirely that this is a major effort that needs to be reinforced throughout.
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Secondly, I would like to refer to the specific use of the term ``sponsorship'' in the AG report, because I'm sure Mr. Desautels or his colleagues will amplify this. They're referring to a situation in which there is no single department that has the responsibility for delivering the system. They're now talking about corporate-wide solutions. I'll pick one where I am actually now designated as the project leader, which is in my term the project sponsor, who is developing a financial management system for the Government of Canada.
It isn't the responsibility of the Receiver General exclusively, it isn't the responsibility of individual departments, it isn't the responsibility of the central agency, it's the responsibility of all. In order to make that work...and he's used the public service compensation system as an example where it didn't, because there wasn't one person who was prepared to say, I am accountable for bringing all these pieces together and making it work. What you had was this hand saying this hand's doing the work and that hand saying, no, it's this person who's responsible, and then you had a series of confusions that resulted in this problem.
Mr. Williams: Let's ask the Auditor General as to whose perception of his concept of sponsorship is correct. My opinion is that he's talking about a real hands-on commitment by the senior people who are committing the taxpayers' dollars to the development of this particular program, so that there is a real commitment by somebody, knowing that it has good effects or bad effects on their career if they can bring this thing to fruition or otherwise. This is compared to your definition of it's just another job by a particular department. What does the Auditor General have to say?
Mr. Roth: I did not interpret Mr. Little's comments quite in that way. I think the Treasury Board Secretariat and our office are on roughly the same wavelength. The project sponsor is the individual who is responsible for making sure the project gets delivered. We look at that person at a very senior level. He or she is the individual who understands the value of the project to the organization, to the government as a whole, who relates the importance of that to the business objectives, and who continually supports and pushes the project.
At the end of the day, that person is looked at as the one who drove it to success or who did not succeed. What the rewards are at the end of the day is a different issue altogether, but I don't think Mr. Little and our office are that far off...at least I didn't interpret that as being that far off from what we had written.
Mr. Williams: But I recall at an earlier meeting, when the chapter was tabled that morning, and I'm talking about the $61 million write-off on the payroll program. I asked what happened to the project manager. I think he was promoted to another project. We walked away from a $61 million write-off in a project half complete and the recognition that it would never be complete.
I also take a look at the Canada Pension Plan upgrade of several hundred million dollars, and I go back to the hearings we had a year or so ago when that program was supposed to be delivered in 1997. I recall at that time I was very concerned about the fact that we were to lose $1 billion through wrongful payments and payments that couldn't be traced to various other things over the five-year period, pending this new program coming on board. I see, Mr. Little, that you were the assistant deputy minister of human resources and development that day.
Now I see by the Auditor General's report that it looks as if it's the year 2000 before that program comes on at a cost of around $283 million, but, again, if I recall correctly, we were losing about $100 or $200 million a year in lack of controls, pending the implementation of this new system. So the costs are going to be even more horrendous, because now, if I'm correct, we're looking at a three-year cost override.
.1625
I want some commitment from Treasury Board or the government that we're going to get into the merit-based principle of management of these major programs, that people's careers are going to be rewarded or otherwise depending on their success or failure. We need some real buy-in. Sponsorship is fine, but to have no effect on one's promotions or otherwise isn't going to resolve the problem when people can walk away from a $60 million investment and say, I guess it didn't work. How are we going to address this human problem, Mr. Little? And I'm talking about the human problem here of having the real motivation to take it to success.
Mr. Little: If I may, I'll comment on the very clear situation described, Mr. President. First of all, I'll deal with the reference to the $1 billion that was being examined as a need to review the collections and the various actions taken to prevent overpayments. Although I've left that department, I'm pleased to report to you that the action plan continues. I might point out to you if I may, Mr. President, that if you look at that chapter of the AG's annual report, you'll find he comments favourably on the action plan that was undertaken and continues to be undertaken to correct that situation.
Secondly, I should point out to you that I wasn't moved and promoted. I was only moved; therefore, I'm of course still accountable for that. I would like to continue to be seen as interested in how that's unfolding.
In terms of the program that you've referred to in Human Resources Development, the income security program upgrade, it continues to be effectively managed. I'm receiving an update on that from the project sponsor, if you like, tomorrow. I'd be pleased to come back with the department to explain how that particular project is unfolding. It is not three years late. It is referred to in terms of complete implementation, and even in the project itself it was referred to as beginning in 1997, with completion intended by the year 2000. So that's still in train. I'll give you a better update, sir, after I've received this discussion tomorrow. I simply want to point out that we're watching it closely.
Finally, if I may, in terms of the incentives - both favourable and negative in terms of success - I'd be pleased to take back your comments to my president. I'm sure he will examine this carefully.
Mr. Williams: I have one final -
The Chairman: We can come back to you after Mr. Telegdi, Mr. Williams.
Mr. Telegdi (Waterloo): Following up on some of that, Mr. Little, when I look at the presentation that you made to us, you have twenty-five projects that cost slightly more than $2.1 billion. You then list the projects. How many of those projects have been terminated?
Mr. Little: The situation, of course, is in the hands of the individual departments that I've listed there. That is the accountability for the particular project success or failure at this point. I am aware of the fact that the Department of National Defence is examining its continuation of certain projects, but they have not reported to us that any have in fact been stopped.
On page 4, I'm aware of the fact that the Department of Public Works and Government Services has terminated work on the public service compensation system. We are in receipt of information that indicates they wish to examine the continuation of the scope of the common departmental financial system. I also have early information on the fact that there are other programs they want to examine, but I don't have details at this particular time for that particular department.
I would also say that the Department of Transport has been working assiduously at improving the situation with the Canadian automated air traffic system, which has been fairly public in terms of the new approach that's being undertaken by that department.
Mr. Telegdi: Would it be possible for you to provide us with information on these various projects - maybe a couple of lines just to say whether they're on target, off target, or fini.
Mr. Little: I'll undertake to produce for you as best a report as I can, but I ask you to remember that the details are in fact those that are provided to us by the individual accountable departments. I will, however, try to summarize it and send it to you.
Mr. Telegdi: You also mentioned that successes aren't given enough attention or aren't celebrated. I understand that with the new system you're talking about, each project will have somebody who is the head. Could we possibly get a list of those folks as well? And as the projects are completed, maybe the successes can be filed with the committee as well as the failures.
.1630
Mr. Little: I'll undertake to provide you with that information.
Mr. Telegdi: Thank you very much.
This is my last question: what, if anything, did the government receive for the $61 million spent by Public Works on PSCS?
Mr. Little: Sir, if I may I will ask for a detailed answer to be provided to you by the Department of Public Works and Government Services. However, I can report to you that the savings intended to be received through work in modernizing that particular system are still being achieved, despite the fact that the system itself has not reached our intended targets. So the department will pay the savings that were associated with putting this project in place and on target by other particular activity that's taken in shorter, chewable chunks in developing this work. In terms of details, this is a question for the responsible department.
Mr. Telegdi: To what extent are private consultants utilized?
Mr. Little: They are utilized extensively now, and in some instances they are perhaps depended on too much. We've had examples of successes and examples of failures, but I think the approach being more widely adopted now is what is called ``shadowing'' or even ``trail boss'', if I can go back to that. You're trying to get not only the expertise that you have currently, but you're trying to get outside expertise for reviewing, for doing systems under audit development, and for providing you with advice, counsel, and review as you're proceeding down this road. There are some skilful people, but like everything else there is never enough to cover everything you want to do.
Mr. Telegdi: What kind of tracking do we do on the successes of these consultants?
Mr. Little: It's a question of when and how they're used, which results in one factor that produces success, but I don't have information that would enable me to say ``if you do this it'll guarantee success'' because the circumstances are quite varied. They differ from project to project. We are certainly encouraging departments to undertake this shadowing or this review and third-party assessment frequently to ensure things are on track and moving according to plan.
Mr. Telegdi: I look at the twenty-five projects that you have listed that are over $2 billion, where we're talking $80 million per project on average. Do you have any idea as to what percentage of that would be for consultants?
Mr. Little: I'm sorry, sir, I don't have that kind of detail available and I'm not sure I could get it from our accounting systems. I could probably sample some for you and provide you with information about where we've seen some successes and where we've seen some continuing activity, but I couldn't give you a global figure.
Mr. Telegdi: What might be useful when you're dealing with moneys of this magnitude or projects of this magnitude is to certainly do some kind of correlation as to what kind of money you spend on consultants and outside expertise and what kind of pay-off they have in terms of the success of the project. It might be very useful now.
To me, $80 million projects are pretty major. I can't recall dealing with projects of that magnitude too often in my municipal days, but whenever we came close to dealing with anything of that magnitude we usually had fairly good political accountability on it.
.1635
I understand they intend to strengthen the accountability factor. It would seem to me that the more it's strengthened, probably the better the results we end up getting will be, as long as we have people who are still impressed with $50 million and $80 million, as you will find with smaller governances, if you will.
Anyway, I look forward to the information coming forth about it.
[Translation]
Mr. Laurin: Mr. Little, on page 8 of your document, you say that you intend to cancel "don't save projects". Have these projects been identified, and if so, which ones are they and how much have they cost until now?
[English]
Mr. Little: The only project we know of that has been reported officially as being shot as opposed to saved is the public service compensation system, which is the one referred to in the Auditor General's report and which has been mentioned a number of times around the table.
Rather than continuing to spend money on that project, it was stopped, as we could not achieve the objectives we wanted and the department decided not to continue.
[Translation]
Mr. Laurin: But how do you currently identify the other projects? According to American studies, insofar as they can be applied to Canada, a third of the 25 projects will not reach their objectives and will have to be cancelled before being completed. That's 8 projects worth 80 million dollars each, a total of 640 million dollars. Half of those projects represent about 189 per cent of the original budget. It's almost a billion dollars.
How do you identify projects which should be written off? Write-offs occur as a matter of course in the private sector, and there is no reason why this should not happen in the public sector. You should therefore be alarmed at this situation and you should have measures in place to identify non viable projects. What is currently being done?
[English]
Mr. Little: I'm pleased to advise you, Mr. President, that we've undertaken the exact action you have described. We have asked each department to provide itself with a risk assessment in terms of the twenty-five projects. Where are they now, how's it going, are they meeting their objectives, what are their problems, what are their concerns, and what are they going to do about it? Each of those particular projects has undergone that assessment within the department, and they are very alert to the fact that we want to know how they're going to deal with the individual situations that are currently in front of us.
[Translation]
Mr. Laurin: I woudn't really rely on the persons involved to tell you they are incapable of implementing a system.
I would like to know whether it was the Auditor General who discovered that one of the four audited projects was a write-off and had been cancelled, as stated in his report, or whether it was the department which informed the authorities that the project should be cancelled because it was not possible to implement it.
I would then like to go back to Mr. Little.
Mr. Desautels: We determined that the project was definitely in danger before the department decided to cancel it. Hence, our audit preceded decisions taken by the department.
Mr. Laurin: Given that you had basically determined that the project was a write-off before the Treasury Board Secretariat realized it, it's quite possible that other projects are in the same situation and that if you don't audit them, very few people will come forward and admit that they are incapable of completing information technology projects which they are charged with implementing.
That's why I put this question to Mr. Little. It's quite natural that people do not want to admit that they are incapable of doing something right away. People will do their best for a while, and they can muddle a long for three, six or twelve months or maybe even two years.
.1640
This happened in the army. At a certain point, someone else realized that it was impossible to implement the system. In the meantime, 80 million dollars were spent. If the figures are correct, half the projects overrun their initial budgets. This ultimately leads to huge amounts of money being wasted.
However, Mr. Little is telling us that there are no other bad projects right now.
Mr. Desautels: Mr. Laurin, each department and the Treasury Board Secretariat can use techniques to measure relatively objectively whether a project will succeed or what level of risk is involved. We have ourselves used some of these techniques to assess these four projects. I would like to point out that in his presentation Mr. Little said that the Secretariat intends to use some of the techniques to judge whether the reports he receives are reliable enough to let him judge whether a project is healthy or whether it is too risky.
There are techniques which allow you to judge relatively objectively whether a project exceeds a certain risk level. Our audit showed that this could be done.
Mr. Laurin: Mr. Little, since these techniques exist, do you use them to assess projects? Is there a completion schedule for each stage of a project? If that is the case, could the committee get a copy of these schedules? These three issues are part of the same question.
[English]
Mr. Little: The answer is that the correct kinds of tools are not being used in all instances, and we are doing so now.
Let me state this slightly differently: from here on in there will be mandatory uses. Departments must demonstrate that they've put the appropriate tools in place. That's the first point. That's for the future.
For these, where they're not in place, we're encouraging departments to put in place the necessary tools to finish the projects they have under way. We are asking them now to report to us in a way that enables us to determine whether those tools are being used.
The third point is that there is a control mechanism I haven't described to you. That is the fact that the particular project approval has a series of time lines and budgets.
In the past these were global. In other words, a total amount was provided for the total project. Those still exist and we're still getting reports, particularly if they are over $180 million and a major crown....
We're encouraging departments to take advantage of this framework we're developing to apply it to the current projects. Where they are now reaching the point at which they have to make a decision, they're making those decisions on a more accurate and timely basis than they were before.
But for me to be able to describe to you each and every one of those circumstances, sir.... I'm afraid I don't have that information, and all I can ask is that you look at each of these departments in turn, and ask them to provide you with the detail you're searching, project by project.
Mr. Silye (Calgary Centre): First I'd like to thank the Auditor General for pointing out in his report some of the inefficiencies and ineffectiveness of developing information technology.
This is a tough area, and one of the toughest areas in this, whether it's private or public, has to do with the basis on which you determine whether to go ahead and what determines success.
In the private sector the incentive to succeed is always measured against profitability, if the product, software or hardware, is developed. On a public basis, it gives you more time to get the information or gets you information a lot quicker.
So my line of questioning is going to be more about some of the objectives here that you,Mr. Little, have pointed out. One of them is clearly unattainable: having a clear accountability framework.
I thought the questioning by the member of the Bloc was very good in that...what's been happening here? How come all of a sudden, just because of an auditor's report, from here on in we're going to do this, plus we're now going to toughen up the twenty-five projects that are in place?
Did you just get this job now, Mr. Little?
.1645
Mr. Little: No, sir.
Mr. Silye: So your predecessor, who was then the overall sponsor, was a person who, as a Bloc member said, didn't really care about new technologies, new developments, new programs? Do we have a situation here in which that person was moved to another position?
In other words, you denied earlier that people are promoted. I suggest that's exactly what happens. When somebody doesn't do a very good job, or doesn't do the job that's expected, because of the right to work in government you can't dismiss anybody. There's no fear here. Once you get to work here for the government, you stay. Maybe that's good or bad; that's another issue.
How do you measure success or failure? How are you going to hold me accountable if I'm the deputy minister, the assistant deputy minister, or in whatever position I hold at whatever level on the ladder?
Who developed this program? Who wants to do these twenty-five projects? Who bought into it?
Who in the first place is going to ask the question? The Auditor General hasn't got that here; neither do you.
Maybe we're all saying the same thing in fancy economic and management terms. Where is the cost-benefit analysis? We have a $2 billion number. Where is the number that's attached to any one of these single programs, if this will cost us $10 million or $100 million?
Where along the way...? If everybody - from the minister, to the deputy minister, to all the way down the line - buys into...we either spend $250 million on human resources to develop a program to do this.... Buy into it. You're going to spend that money along the way.
Now, you have a sponsor. He's responsible overall, but, as you said, you have gateways to check them along the way: hey, how are we doing? We're proceeding or not proceeding. Is it moving? Oh, it's not going to work.
Then you can abort, and you won't get out at $60 million; you might have aborted at $20 million. Who knows at what stage you would have aborted?
The type of accountability that holds it to one person, because you have a sponsor, is not going to work. I know. I was involved in the private sector on something that was supposed to cost us $300,000, developing some hardware with a little bit of software. We spent $1.2 million before we aborted.
A voice: Did it work?
Mr. Silye: It didn't work. It still is not working, and people are still spending money on it. Now the thing is going to cost $10 million. Where were we the day we thought $300,000?
I know you're in a tough area. But you give us a report that says you are doing fifty-five things here, but not one of them starts off with a cost-benefit analysis prior to commencement, that that department.... And then you can peck away, all the way.
It's a collective decision. You can't pinpoint one person. You can't achieve your clear accountability framework. You're not going to be successful at it.
If things were that bad, your predecessor should be in here answering these questions, not you, if in fact he's responsible. If he's not, then.... Why doesn't anybody ever ask the question: what's this going to cost us, and what's the benefit we're going to get out of this?
Mr. Little: We do, sir. I'm sorry, I don't wish to take your time in terms of trying to present an opening statement to take you through all the practices and procedures we use.
We demand and we've always insisted that the departments provide a cost-benefit analysis before they undertake a particular project. If the particular project is of a certain value, this is reviewed by the Treasury Board itself to determine whether the substantiation is there to undertake the expenditure. If it's below that, we depend on internal departmental reviews to ensure that the cost-benefit is undertaken.
Like your project, sir, when you're going to take these particular things, you're involved in a a high-risk area. In some cases it's been successful; in other cases it hasn't. We're trying to produce an improved framework that will improve the chances of bringing these high-risk projects to success in the face of these difficulties that have been well described by -
Mr. Silye: But the solution in terms of standing up to be measured is in the area of responsibility. If you give me a project and something to be responsible for, I'll stand up. I'll follow my rules, and I'll do it the way I'm supposed to.
Look at the Auditor General's criticism. The project's not predefined. There's no effective user involvement. Requisite dedicated experience and expertise... Who's even doing it? It's like we're just spending money, and just throwing it out the window. How can it be that bad?
I'm shocked at how bad this could be. Unless you enforce your recommendations here, of which there are many.... It's a very good report, by the way, Mr. Little. If you do these things that are in here, I think the Auditor General will not find as much waste the next time he does an audit.
How do you introduce clear accountability? That's my last question.
.1650
Mr. Little: Well, sir, I wish I had an easy answer. I don't. You're right: accountability is exceptionally difficult to pin down in the government that has a particular approach to its activities, that tends to diffuse the accountabilities across a variety of activities and functions. In many respects it's a collectivity that causes the diffusion of accountability, and yet the collectivity is important to be able to manage the complex delivery of programs and services.
If I may, sir, I think I would start by saying we work on the premise that everybody wants to do a good job, and that the public servants are no different from anybody else. They take pride in their ability to deliver the work that's expected and in which they are involved. If that is not true, then we're in a very serious problem, and I maintain it is true.
Second, it's so true that unfortunately you get yourself into a situation in which somebody should be saying, I'm sorry, I'm in trouble, I need help. They don't want to, because they want to do a good job and they want to deliver, so they really strive to get there even though they've now faced the situation that has caused some of these overruns that have happened in the past.
Third, it's important to recognize that we do have an accountability regime. There are particular outcomes that aren't always visible in the sense that we have terminated people's employment, or that we have gone to a regime of particularly public discipline.
I agree that I can't sit here and tell you that with my colleagues I have designed a way to guarantee the accountability. We'd like to make it more visible; we'd also like to make it more rewarding.
We have the other problem that if you succeed in developing a project and you bring it on-line, the first thing you want to do is get the hell out and not have to do it again, because it's enough once in your life. So we don't even encourage it in the sense of saying, that's really good stuff, now do another one or anything. We let them off.
So, there are a number of problems there. You've identified them, and we'll certainly take your comments into our deliberations to try to improve the situation.
I'm quite prepared to be brought back, as I'm sure I will be, so I might as well volunteer, to explain how far we've managed to move this the next time you have -
Mr. Silye: What about role and accountability?
The Chairman: You can come back with another question after.
Mr. Assad.
Mr. Silye: Yes, I apologize.
[Translation]
M. Assad (Gatineau - La Lièvre): On page 7 of Mr. Little's report, under the heading "Procurement", it says that there were certain problems. I find this particularly interesting because I have received complaints from certain people who did not understand why they did not get Public Works and Government Services contracts despite the fact that they had submitted bids.
I would therefore like to ask Mr. Desautels whether the Office of the Auditor General found problems with the procurement process in terms of lack of flexibility and co-operation.
Mr. Desautels: Mr. Chairman, our audit did not really focus on the way contracts were awarded by the departments in question. However, we did not discover anything which shed doubt on the integrity of the process.
The point raised by Mr. Little in his presentation is interesting because it highlights the fact that the government has to strike a balance between awarding a reasonably clear contract which protects the interests of the Crown, and awarding a contract which fosters a partnership between the entrepreneur and the government. Sometimes people find that the contracts are not clear enough. However, entrepreneurs sometimes complain about the fact that the contracts are too rigid and that it's impossible to develop a true flexible partnership with the government.
It's a source of frustration but there is no magic bullet to solve this problem.
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But I can tell you that we did not find any irregularities in the procurement process.
Mr. Assad: I wasn't really referring to irregularities. Perhaps I should ask Mr. Little what kinds of changes he would suggest to make sure that entrepreneurs and other people who submit bids to the government... I know there have been many problems in the past, and it's true that this is all very frustrating, especially when an entrepreneur doesn't know why his bid was rejected. Do you intend to do something about this?
[English]
Mr. Little: I have a general comment, Mr. President, and then I would ask if the member would be kind enough to provide me with specific details, which I'd be happy to follow up in more detail with you.
I think what we need to do is to be much clearer in terms of the establishment of the front end of a contract proposal...the criteria we're going to use to obtain best value from the contract.
We're moving away from a world where lowest price is always the major determinant to a world where price continues to be a determinant but we're trying to establish up front, for the benefit of the supplier, what we believe is the best value for the taxpayer through a series of criteria. They are published for everybody and make it easier to describe, in terms of a technical assessment or evaluation that we've completed, why the contract was awarded to a particular person and not to another.
I know my colleagues in Public Works and Government Services are prepared to meet with individuals or respond to individual concerns, but I think it's a question of being very clear up front what it is that we're using to measure best value for the taxpayer in awarding a particular contract.
[Translation]
Mr. Laurin: I would like to come back to the problem I raised earlier. Unless I'm mistaken,Mr. Little said that there were no copies of the schedules for the different stages of each project.
Some Honourable Members: Oui.
Mr. Laurin: If that's the case, I wonder how he can follow the progress of each project and how he can possibly report to Cabinet when he doesn't even know whether a project is on track or off track. How can he monitor a project without a schedule?
[English]
Mr. Little: Two answers, sir. First of all, the individual projects if they have been reviewed by the Treasury Board - in other words, they've reached that dollar value where they require authority of the Treasury Board - contain cost and time schedules as part of the cost-benefit analysis that's been undertaken. I just don't happen to have them with me. There are twenty-five projects here. Some of them are huge projects that would take a pile of paper to provide you with an answer.
Secondly, I would like to be able to monitor more effectively how these projects are moving. I've asked my group to restructure around a means of intelligence gathering and undertaking monitoring specifically around individual projects. This is not so that we can be accountable for the project's success, that's the problem of the project sponsor and the department that's doing it, but to ensure that the framework we developed is adequate to the need and that the policies, procedures, and tools we are providing to departments are adequate.
I don't think there's been enough of that in the past, and we're trying to develop it as part of this action plan of the future.
If there's a specific project you want to examine in detail, I would ask, sir, that you consider bringing a department before you with the request for that information. I'm sure they can provide it to you.
[Translation]
Mr. Laurin: But, Mr. Little, isn't the Treasury Board secretariat responsible for monitoring the implementation of these projects?
[English]
Mr. Little: It's a very good question, sir, which we are not certain of in terms of the answer. It's a question of time and capacity. I have a very small staff, I try to do what I can. If you want it to be more detailed, I need to expand my resources to be able to do the work you're asking for.
.1700
So we monitor those areas that we believe are in trouble to the effect of trying to help. But I do not monitor every IT procurement that's going on in the Government of Canada, and it's not my role, sir. If it were my role, I would need much more in resources to undertake it.
[Translation]
Mr. Laurin: Mr. Chairman, I don't see how Mr. Little can do his job, since he is responsible for monitoring projects. He said he did not have enough people on staff to ensure monitoring. Therefore, since he does not have the necessary information, he will never know specifically whether a project is working or not and he will never report to Cabinet. He must therefore have to rely on people implementing a program. If they have problems, they will have to ask Mr. Little to speak to Cabinet.
I don't know how we're going to fix the situation, because if this is the way it really works, we have a real problem.
[English]
Mr. Little: No, sir, I'm accepting far more of a responsibility than I should in responding to you in the way I have been. The way this works is that there are individual accountabilities in each department to bring these particular projects forward for approval and to actually implement the projects. The accountability for making that happen is in the hands of the departments themselves.
The responsibility I have to cabinet is to ensure that the policy framework is in place, that the adequate tools are there and the analysis is done, and, where appropriate, the monitoring is done, which at this stage of the game is only for those projects over $100 million in size. The rest of that particular monitoring responsibility is in the hands of the department. What I'm trying to do here is to build a capacity to understand what's happening in a clearer way so that I can ensure that the policy framework is appropriate and that the tools, techniques, advice, and assistance we're providing to departments is adequate to the need.
But that should not be translated, sir, into the fact that I'm personally responsible for the outcome of these twenty-five projects.
[Translation]
Mr. Laurin: I'd like to summarize the situation, Mr. Little. If I come to you with a nice 100-million dollar project, as well as with a nice schedule and reasons to go ahead, you'll simply make sure that the authorization to spend 90 million dollars is justified. Once I get the go ahead, I won't see you any more. I'll have a nice fat cheque in my pocket to go ahead with my project and no one will monitor my work. No one will ask me to justify how I spend the money or whether I'm spending it according to schedule, or whether I'm meeting my objectives. Is this the way it works? It seems that if a project is worth less than 100 million dollars, it's not worth the trouble of monitoring it.
[English]
Mr. Little: Not any more, sir.
[Translation]
Mr. Laurin: That is no longer the case.
[English]
Mr. Little: That was the way it may have been, but it's not the way it is now.
[Translation]
Mr. Laurin: But you just admitted a few minutes ago that in the case of projects involving less than 100 million dollars, you don't have the necessary staff for monitoring.
[English]
Mr. Little: I said, sir, that there were twenty-five projects now on our plate that came through under a regime that did not have this gating or this chewable chunk. You have to show me that you've achieved the objectives before I'll give you an x amount of money. It is a different regime, compared to the one we had before, that we're trying to put in place to handle the problems that have been described.
The Chairman: Any questions on that side?
[Translation]
Mr. Desautels, I believe you wanted to make a statement at the end of the meeting.
Mr. Desautels: If I may, Mr. Chairman.
[English]
I would just like to take one minute to recap what I think is happening. First of all, I'd like to let the committee know that I'm quite pleased to see the degree of consensus on the issues raised in our chapter. When I speak about consensus, it's not just with the Treasury Board Secretariat, but it's also with other major government departments that have been the subject of our audits.
I would also like to stress that it's important to improve the rate of success of these large IT projects, and at the same time we should not discourage the move towards the utilization of information technology in government.
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I'm pleased with the Treasury Board response to our chapter. I think it's very comprehensive. At the same time, the committee should recognize that achieving all this will not be easy. There are certain constraints that will make it difficult and, in part, we are starting with an inventory of projects that were brought to a certain stage under the existing regime. Bringing those projects to a successful conclusion will present a difficult challenge.
As far as other projects down the road are concerned, we have to recognize that the government will have to make sure it develops and maintains an adequate pool of talent. I think it's very important to have the human resources and the human talent needed to be able to achieve some of the things being talked about today.
In particular, I think the government will have to further develop its ability to conceptualize its information technology strategy within individual departments. In order to move to smaller, more chewable chunks, we think it becomes even more important to have a clear idea of where you're going over time and to have a rigorous enough plan so that you know your chewable chunks fit within a longer term project or longer term strategy.
Mr. Chairman, I think the response from the Treasury Board Secretariat is very encouraging and very comprehensive, but they'll need a lot of support and cooperation to make sure all of this unfolds the way we hope it will.
Thank you.
[Translation]
The Chairman: Thank you, Mr. Desautels.
[English]
Mr. Little, thank you to you and your colleague for being here today.
[Translation]
The witnesses may now leave but I would request the committee members to stay a few more minutes to discuss the subcommittee's program.
Thank you.
[English]
We'll proceed with the report from the subcommittee. You received that report during the meeting.
[Translation]
There are four paragraphs.
The first concerns chapter 12 which we have seen today and which deals with developing systems.
The committee also unanimously recommends an examination of the property removal services with representatives of a number of firms. The representatives of the three parties are in agreement. This is scheduled for tomorrow.
We are also in agreement on item 3, the draft report relating to chapter 6 on transport subsidies in the Atlantic region.
I would invite your support for these three points on which all your representatives were in agreement.
The last item is the one that was not unanimously accepted, namely that the committee organize a meeting with the Governor of the Bank of Canada and a meeting with the Minister of Finance before Christmas relating to chapter 9 on the debt and the deficit.
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Mr. Laurin: Didn't he ask you for the date?
The Chairman: We were not in agreement with respect to these two invitations. Everyone agreed to invite the Governor of the Bank of Canada but some reservations were expressed about the Minister of Finance. The matter is open to discussion and I am ready to hear your comments.
Mr. Laurin: Mr. Chairman, I think it's the best item on the agenda.
The Chairman: First, I think we all agree on the adoption of the first three items.
[English]
Does everybody agree with the first three items?
Mr. Williams: What happens if I disagree with number one, Mr. Chairman?
The Chairman: It's difficult because it's too late now. It's all done.
An hon. member: Oh, oh.
Mr. Williams: I think we all agree.
The Chairman: Okay, we agree. On the last item, I'm open to your comments.
[Translation]
Mr. Laurin: Mr. Chairman, we could ask the member to remain so that we do not lose our quorum.
The Chairman: Yes, I think that's what will happen.
Mr. Assad also left and he had some reservations about the last point. We no longer have quorum and we are unable to vote but we can continue our discussions. If you have any comments, you can make them now and we can adopt this item tomorrow.
Mr. Laurin: I think we should first of all find out the reasons for the reluctance of some members and determine whether they are valid or not. I presume that the colleagues opposite who have remained do not have any objection to our meeting the Governor of the Bank of Canada and the Minister of Finance.
[English]
Mr. Telegdi: I have no problem with the Governor of the Bank of Canada. Perhaps in the future we should be voting on agenda items at the beginning, when we have quorum.
As for the Minister of Finance, everybody has the chance to stand up in the House and ask him questions. I invite you all to do that. You can't get a more public forum than the House during Question Period. You could pick up this item again next week when we have quorum and we can proceed to a vote on it. I have to run off too because I have a -
[Translation]
The Chairman: It's always possible for us to discuss the subcommittee reports during a meeting when we have a quorum. This has been done in the past and there has been no problem when everyone is in agreement and we can adopt the report quickly. But other times, it may be more difficult because witnesses have to wait for 10 or 15 minutes. That's why we prefer to wait until the end of the meeting to deal with the subcommittee reports.
Mr. Laurin: Mr. Chairman, I think that's an excellent idea. As far as we're concerned, since it is hard for us to reach a consensus, we could start with the Governor of the Bank of Canada and I'm sure we have enough questions to last a whole meeting and then we could invite the Minister of Finance to another meeting.
I also think that during this meeting, the Governor may be able to give us sufficient arguments to convince our colleagues to invite the Minister of Finance afterwards. The appearance of the Governor of the Bank of Canada is an important event. We don't often have this opportunity and I'm sure we'll have lots of questions to put to him.
[English]
Mr. Williams: Mr. Chairman, the Auditor General pointed out in his chapter that the debts and deficits are a major problem. I'm not in full agreement with Mr. Telegdi when he says our opportunity to question the minister is in the House of Commons. I think the Auditor General has some positions here. We could ask for the opinion of the Minister of Finance. It wouldn't be the first time we've had a minister in front of this committee. But I'd like to get some indication from the Liberals as to whether they have any objections to the Governor of the Bank of Canada coming.
Mr. Telegdi: Oh no, that's fine. We don't have any other opportunities to question him.
Mr. Williams: Mr. Chairman, I would therefore suggest that we introduce this item as the first order of business when we have a quorum at the next meeting of the public accounts committee.
[Translation]
The Chairman: The first three items have been adopted, but as for the last, we will not have quorum until tomorrow. So we will deal with this as the first item on our agenda so it can be adopted. Thank you.
The meeting is adjourned.