Auditor General goes out with a bang ... taxpayers left to whimper

By Walter Robinson
web posted February 12, 2001

After staying up half the night reading the December 2000 version of the Auditor General's (AG) report (tabled last week in Parliament), one quickly sees why the Prime Minister called the election last fall.

Jean Chretien wasn't afraid of Stockwell Day, a looming recession, several RCMP investigations in his own riding or the all too familiar hospital emergency room horror stories that surface each winter, he was afraid of AG Denis Desautels' latest report. And rightfully so!

Denis Desautels

After ten years on the job, Mr. Desautels' term as AG expires on March 31st. As the cliché goes, he went out with a bang, not a whimper. Politicians and taxpayers alike have become immune to his repeated findings of mismanagement and waste, but this report (all 19 chapters) would make Hannibal "the cannibal" Lecter sick to his stomach.

Before offering up the low-lights from selected chapters in this special two-part Let's Talk Taxes commentary, consider the following words from his Matters of Special Importance chapter. In fact, if you read nothing else, read the following observations from Mr. Desautels.

"Each year in this chapter, I highlight issues I consider especially significant. In this my tenth and last such chapter, I concentrate on the question of how we might improve the management of government spending. I discuss four basic principles that should be informing spending decisions and practices in a system of government like ours.

  • All government spending should have Parliament's sanction.
  • Government spending should be managed with priority and efficiency.
  • The value of government spending should be measured by what it achieves.
  • Government spending programs should remain current."

"While these principles may appear self-evident, they are nevertheless too frequently breached."

Mr. Desautels goes on … "despite the retrenchment and cutbacks of the past decade, spending by the federal government remains at historically high levels – roughly $175 billion a year. How well this money is spent is clearly of great interest to the taxpayers, who bear the cost, and to the public at large, on whose behalf the spending takes place."

But here is the legacy paragraph which history will return to time and time again when assessing his work and the Government's collective and decade-long contemptuous indifference to his work.

"In my 10 years as Auditor General, I have seen significant improvements in the management of government spending, often made under the pressure of fiscal constraints. But progress has been slow, and there have been relapses as well. Year-end surges in spending, expenditure commitments without adequate planning or control, insufficient effort to recover moneys owed to the Crown – these and other indications of a failure to make the best use of resources are still encountered with disquieting frequency in the federal public sector."

Mr. Desautels goes further by noting that the "shortcomings of the sort revealed at HRDC – vague and inconsistently applied eligibility criteria, breaches of authority, absence of an appropriate control and accountability framework – are by no means exclusive to one program or one department."

"I can cite other examples over the years, but these will suffice to make my point … spending in government is not always conducted with care and prudence that taxpayers expect … they get upset and angry when they see their tax dollars squandered … Frankly, I share their frustration."

With these words of caution, let's look at some of the AG's findings …

Ch. 18 – Governance of Crown Corporations. The AG noted that there are currently 41 Crown Corporations employing some 70,000 people managing $68 billion in assets and $61 billion in liabilities.The AG criticized the current patronage driven process that determines the leadership of these organizations.

"Boards of directors need to be strengthened … Boards of directors also need to be engaged in the selection of their chair as well as the corporation's CEO. Without meaningful board involvement in the selection of the CEO, his or her accountability to the board is weakened and corporate governance as a whole suffers."

Ch. 19 – Reporting Performance to Parliament: Progress Too Slow. "Federal departments and agencies have made some progress in reporting on their performance to Parliament, but we are disappointed at its present pace. Continue at this rate, it would take too long for good reporting to become routine.

Ch. 21 – Post-Secondary Recruitment Program of the Federal Public Service. "Our review of the Post-Secondary Recruitment program in the federal public service found that the Public Service Commission of Canada is recruiting qualified candidates. But there are too few of them given the significant number of public service executives, professionals and managers who will be eligible to retire in the near future."

Ch. 30 – Fisheries and Oceans: The Effects of Salmon Fishing in British Columbia on the Management of Wild Salmon Stocks. "Fisheries and Oceans is managing the salmon farming industry on the basis that it poses an overall low risk to wild salmon and habitat. However, the Department is not full meeting its legislative obligations under the Fisheries Act to protect wild Pacific salmon stocks and habitat from the effects of salmon farming."

Ch. 31 – Fisheries and Oceans: Fleet Management. "In our opinion, Fisheries and Oceans is not managing its fleet in a cost-effective manner. There is wide variation in practices and procedures employed by the regions where fleet operations are controlled. With each region having its own operating practices, procedures and support, the Department is missing opportunities for greater flexibility in sharing resources and for better productivity in providing fleet services.

Ch. 32 – National Defence: Defence Support Productivity: A Progress Report. "National Defence's efforts since 1994 to transform itself to a more entrepreneurial organization and to maintain military capabilities in the face of declining financial and human resources have yet to be completed. Efforts to reform the services we examined in 1996 that provide support to the ships, land force brigades and air squadrons of the Canadian Forces remain a work-in-progress."

"In 1996 we reported that the productivity of the base/wing support functions of vehicle maintenance, supply and transportation had either fallen or was less than that of similar service providers. This year we found that, because of massive organizational and process changes, we could no longer measure productivity; nor could the base/wing managers tell us if they were more or less productive than they were in 1996."

Ch. 33 – Follow-up of Recommendations in Previous Reports. "We noted some satisfactory progress in some areas by several entities, but we also noted numerous areas where progress is disappointing … Few entities get a "well done" for speedy implementation."

As the AG himself noted, these findings continue to occur with disquieting frequency.

Walter Robinson is the Federal Director of the Canadian Taxpayers Federation.

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