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as far as a requirement to, under the standards of conduct, if there is wrongdoing and the individual is aware of it, there is a responsibility — if it's crim- inal to involve the police and to involve the auditor general's oce. ere are a number of requirements in there.

Yes, it's there. i don't think it's part of a "here are your procedures on what to do." i think that's part of what we need to deal with in our roles and responsibilities in our fraud management strategy going forward.

b. Ralston (Chair): certainly, my experience in an- other life was that sometimes organizations, businesses, where fraud is detected, for a wish to keep that quiet so that people don't know, so that there's no reputational loss, are anxious just to have the person dismissed, maybe even with severance. ey're out the door, and there's no publicity given to that.

[1415] are you telling me that…? is sort of refers back to the issue of deterrence that was referred to a little bit earlier in the previous recommendation. are you saying, then, that the decision that's made in government is not inuenced by those considerations?

S. Newton: my experience in my internal audit role is that culturally, i think we've got issues in relation to wanting to put our hand up and say: "We have a prob- lem." most ministries work with the Public Service agency in coming to a determination. i would say that there are a number of cases where we don't have some- thing that's criminal but is still a problem.

i would have a personal view as to whether and what type of disciplinary action needs to take place. that would be outside of my purview to have hap- pen. labour relations would come to some sort of a determination on what the appropriate action is. i think it depends on the nature of the issue, and i think it depends on the nature of the history with the individual.

i think it's a natural human tendency to not want to stand up and say, "We have a huge problem here," and call attention to it. to me that is a bit of a cultural issue we have to work through. at's where roles and respon- sibilities and clear sorts of information and guidelines would help us solve that problem. i don't think we're im- mune to that at all.

K. Corrigan: on page 58 there is a noted gap and weakness in…. one of the gaps in current government reporting practices is…. it says that section 35 of the financial administration act requires the comptrol- ler general to deliver a statement to the treasury Board and auditor general each year outlining, among other things, signicant irregular government expenditures and payments and that the auditor general's oce has


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not received a report for the 2008-2009 scal year or re- cent prior years.

i notice that in the response from government on re- porting there's reference to meeting the loss-reporting requirements in the policy, but that is a dierent item. i'm just wondering what the status of this particular sec- tion is. has the auditor general since received those reports? if not, what is government planning on doing about it, i guess, for both?

S. Newton: We submit a fraud questionnaire every year out of the comptroller general's oce, combined with internal audit. in that, we are listing out known sorts of fraud or investigative issues that we are deal- ing with. at's what i am aware that we have provided in the last couple of years. Prior to that, i'm not sure. i wasn't involved in that process.

i don't believe we provided detailed lists of potential transactions, because i don't believe that we keep that list. i think it's embedded in our fraud response, from my understanding. So i don't have an answer for the '08-09. i would have assumed that it had gone, given that we prepared it. i'll have to follow up.

J. Doyle: We haven't received that response from the oce of the comptroller general for a number of years. We have been concerned about it. Where it be- comes more important this year than it ever has become important in previous years is that the international auditing standards, which we are now required to follow, put a greater emphasis on fraud, fraud detection and other aspects in regard to how fraud could impact the

  • nancial statements not only of entities but also of the

summary nancial statements.

in the absence of that information, that would mean that in our planning we would have to carry out addi- tional work, at additional cost. We would need additional funds from government or from the budgetary process to carry it out when there's no need to give us those additional funds if we were just given the report.

now, it seems to me that there's an issue not from the comptroller general's oce, about wanting to tell us what they know. it's a question of coordinating the in- formation from right across the entity, putting it into one document and then passing it through to us.

[1420] We would be happy if that was done on an annual basis. even if the report was dated, you know, the end of december and we got it in time for our planning for our audit, it would be better than not getting anything at all.

as it is, and as you have correctly pointed out, it's a legislative requirement, not only for matters of fraud, but also suspicious transactions. it just beggars belief at the moment that there aren't suspicious transactions somewhere in government. But again, the issue is that all

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