Canadian Government Executive - Volume 23 - Issue 03

March/April 2017 // Canadian Government Executive / 21 Accountability convey whether the expenses were appro- priate; and was also insufficient to identify potential conflicts of interest. Recommen- dations addressed each of these areas. However, the Senate has not acted on the recommendations. Moreover, some of the questionable expenses identified in the audit have been reduced through a dispute resolution process. What happened to the accountability for public funds? The Auditor General has the power to audit federal entities, and publicly report to the House of Commons (the AG’s man- date is posted: http://www.oag-bvg.gc.ca/ internet/English/). The reports are gen- erally considered by the Public Accounts Committee and other committees. The audited entities respond to recommenda- tions, and senior departmental officials appear as witnesses before committees. While the Auditor General cannot compel remedial action, the levers of media ex- posure, the public and parliamentarians help call the government to account. However, the Auditor General does not have the right to audit inside Parliament; he must be invited to do so. In the case of the 2012 audit, the Senate Internal Econ- omy Committee invited the Auditor Gen- eral to carry out the audit and the report was addressed to the Committee, with recommendations made to the Senate Ad- ministration. The Committee met once in camera when the audit began, but not on the report itself. However, the Committee issued its own report to the Senate, which brought the audit to the attention of the Senate. In addition, the Senate Adminis- tration agreed with all the Auditor Gen- eral’s recommendations, and provided responses in the text of the report. The Senate’s Response: Dispute Resolution In contrast, the Senate itself has been silent on the expenses audit. To date, there has been no response to the rec- ommendations, either in the report itself or in a meeting of the Internal Economy Committee, although comments from in- dividual senators were included in the sections of the report addressed to them. The only Committee meeting occurred in June 2013, when the Auditor General first agreed to undertake the audit. In addition to the recommendations dealing with the whole process, the Audi- tor General recommended that the Inter- nal Economy Committee act immediately on the nine cases for further investiga- tion; consider the findings on the other 21 senators; and determine whether further action was required in those cases. Instead, the Committee decided to set up a dispute resolution process. The Committee Chair wrote to the 30 named senators, informing them that the Steer- ing Committee had reviewed the audit report, and offering them the option of paying what the Auditor General said they owed, or going through arbitration, heard by former Justice of the Supreme Court Ian Binnie. Fourteen of the Sena- tors opted for arbitration. The Committee itself did not meet to consider the find- ings on individual senators or make any determination of further action. In ten of the cases, the Binnie report reduced the amount owed. The Committee had the legal right to establish the dispute resolu- tion process. The problem lay in the fact that the senators themselves control their own expenses, so that their objectivity could be questioned. This conflict of inter- est was recognized by the Auditor Gener- al who recommended the creation of an independent body to oversee expenses. The dispute resolution process con- sidered evidence not always available to the Office of the Auditor General. The Auditor General was also unable to share audit files with the arbitration, to protect the confidentiality of individual senators. When the Binnie report was made public in March 2016, the Auditor General issued a statement standing by his Office’s find- ings and noting that his audit applied the same measures and judgments multiple times to all files examined, to ensure fair and consistent findings. The Resources and the Impact It should also be noted that the Office of the Auditor General took longer and used more resources than planned to complete the audit. The decision to examine the 80,000 transactions of all senators and for- mer senators over a two-year period cre- ated a heavy work-load. In terms of audit practices, this was an unusual step, since auditors generally take a statistical sample rather than audit all transactions. In testi- mony before the Internal Economy Com- mittee, the Auditor General stated that the audit would likely include samples of transactions, but this was before the audit scope had been determined; the Senate’s request for a “comprehensive” audit led to the examination of all of the transactions. The media and public pressure, essential for accountability, has dropped off since the audit was completed. Senator Duffy was ac- quitted on all counts in April 2016 and then returned to the Senate in full standing. The RCMP and prosecutors dropped the charg- es against the other senators a month later. However, in January 2017 the media reported an exchange between Senator Peter Harder, the Government repre- sentative in the Senate, and Senator Leo Housakos, Chair of the Internal Economy Committee, that suggested possible ac- tion on some of the Auditor General’s rec- ommendations. Senator Harder wanted the Senate to run regular internal au- dits, and create an outside body to over- see spending instead of having senators police themselves. Senator Housakos replied that work was underway and indicated that a proposed new spending oversight body would be announced af- ter the Senate returned from the Winter break. It remains to be seen if this will amount to the transformational change that the Auditor General called for. T om W ileman , Principal (Retired), Office of the Auditor General of Canada, and Treasurer of the Performance and Planning Exchange. The Senate has not acted on the recommendations of the Auditor General. Moreover, some of the questionable expenses identified in the audit have been reduced through a dispute resolution process. What happened to the accountability for public funds?