Expand auditor’s mandate

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This article was published 30/04/2014 (4204 days ago), so information in it may no longer be current.

The next auditor general should have broader mandate that includes the ability to review and comment on government policy decisions.

The provincial government has taken a much too leisurely approach to appointing a new auditor general. Carol Bellringer has retired after having given a year’s notice. With such a slow replacement process, one might think the position isn’t very important, but it is.

Of the various oversight bodies monitoring government, only the auditor general has the necessary independence, staff, scope and authority to undertake reviews and publicly comment on the results.

However, the next auditor general, who reports to the legislature not cabinet, should be allowed to review and comment on government policy. To allow for this, the Auditor General Act needs to be amended.

The purview of the auditor general extends beyond the departments, agencies and Crown corporations directly controlled by government and includes other bodies and operations financed in part or in whole by government.

Recently, Premier Greg Selinger reminded the legislature it was a NDP government that allowed the auditor general to undertake value for money audits. That may be so, but that scope has to be extended to allow for the reviewing of government policy decisions. That is where the big money is.

Government policy decisions drive its borrowing and taxing. Leaving aside the risk-laden, $34-billion expansion and refurbishment of Hydro’s infrastructure, there are numerous other policy-driven actions of government that could use a good ‘going over.’

Engaging a new auditor general offers an opportunity to the Selinger government to expand the auditor’s mandate and allow the next one to conduct value-for-money audits of government’s major policy decisions.

Taxpayers and utility ratepayers should not be expected to be left with an audit overseer that has ‘one arm in a sling.’ Other auditors general are not so restrained, including the federal auditor.

Areas deserving review include government’s use of Crown corporations to meet its responsibilities at ratepayers’ expense; the efficacy of rent control; decisions and expenditures related to recent floods and the approach to cost-sharing with the federal government; timing differences between the accounting for revenues and related expenses involving transactions between the government and its agencies; identifying potential improvements in the reporting of government’s accounts; examining in-depth government’s contingent liabilities; benchmarking government’s operations, inclusive of directly and indirectly controlled agencies, with other provinces; and, its actions potentially affecting the financial responsibilities of the federal government with respect to First Nations and their members.

That said, given the sheer scale of expenditures, commitments and risks involved, the new auditor should be first tasked by the legislature to focus on the various dimensions of the Manitoba Hydro affair — from the processes applied to reach the conclusions now being acted on, the potential effects on ratepayers, the risks that have been assumed and governance and regulatory issues.

If the next auditor general is given a wider mandate, the office will need more money and people for the job. It will need the special expertise of outside consultants from time to time.

Once that review is done, the countless other areas of government that cry out for value for money audits should be systematically tackled. To do any of this, not only does the auditor general’s scope need to be widened, but the next one should not count on a second term.

 

Graham Lane is a retired chartered accountant. He was chairman of the Public Utilities Board from 2004 to 2012.