Auditor general wants to audit MPs
Auditor general Michael Ferguson is urging MPs to let him look at their books.

thestar.com
June 11, 2015
By Tonda MacCharles

Auditor General Michael Ferguson is openly urging MPs to invite him to look at their books.

“I think what is necessary is that the House of Commons make sure that they have the appropriate levels of transparency and objectivity, the same types of things that we are recommending to the Senate,” Ferguson said in an interview with the Star.

“We’re willing to play a role in that.”

A Commons audit would be a “huge undertaking,” he conceded, but could be confined to a shorter period of spending, random samples of claims, or narrowed in other ways. He said an independent audit function is a vital aspect of accountability to the public.

“Anytime you have a situation of a group of people making decisions about that same group of people it’s open to accusations of not being objective, not being independent, whether it’s actually functioning that way or not.”

But many senators are furious with Ferguson’s opinion on how they should be held to account, saying he invented new rules or tests to judge them by.

Several complained they never had to prove how much time they spent at a “primary residence” outside Ottawa in order to be able to claim up to $22,000 a year for “secondary residence” living costs and per diems while in Ottawa. The Mike Duffy fraud trial has heard there was no time requirement under Senate rules.

But Ferguson rejected those complaints. He said his analysis was based on existing principles in the Senate’s administrative rules and on the 2013 reports of the Senate’s powerful internal economy committee on the cases of Mac Harb, Patrick Brazeau, Pamela Wallin and Mike Duffy.

He said the committee was clear: “There’s no ambiguity about it, if a senator is residing in the national capital region they should not be claiming those expenses while they’re in the national capital region.”

Same with travel claims, said Ferguson - the onus is on the senator to show the main reason for the travel is Senate business, not personal or private interests.

Senators like Manitoba’s Sen. Janis Johnson, ordered to repay $22,706 for frequent trips to Vancouver, said Senate rules allow trips where personal business is combined with parliamentary business, and “never included a subjective determination as to which was predominant.”

Ferguson said his auditors believed that if “there was a substantive business reason for going there, then we would have accepted the travel there as being for parliamentary business. It wouldn’t have mattered if they then tacked on a personal vacation or a personal trip as long as there was nothing charged to the Senate for that personal component.

“But if we felt that the evidence was really convincing us that this was a personal trip but they tried to add on something to make it look like there was a business component to it which really was not substantive, then we said no, that was a personal trip, it shouldn’t have been charged.”

Travel to attend board meetings was a no-go, says Ferguson.

Ontario Sen. Nicole Eaton eventually repaid $3,489, but defended four trips to Toronto to sit on boards of a foundation and not-for-profit organizations including St. Michael’s Hospital Foundation, the Pontifical Institute of Mediaeval Studies, the National Ballet of Canada and the Gardiner Museum.

“I receive no compensation or personal gain of any kind for so doing. Participation in these organizations should not be characterized as ‘personal interests,’ she wrote in response to Ferguson. “Rather, it is voluntary community service. It is part of public business, as defined in the Senate rules. My efforts in support of the charities to which I dedicate my extra time are constructive, productive and in no way conflict with my work in the Senate of Canada.

“Is a parliamentarian expected to stay in Ottawa all week, or is travel between the residence/constituency and Ottawa in the middle of a sitting week allowed? And is participation by a senator in pro-bono activities part of parliamentary functions?”

Ferguson says the Senate should not be expected to cover travel to attend board meetings, saying that a board member has a “fiduciary duty” to be work on the “operation and good running of that organization,” and therefore is “not on Senate business.”

“We’re not passing any judgment - that’s good work, that’s important work, but it’s not Senate business, that’s board business...It’s not personal, but I would refer to it as their private interest.”

He drew a distinction between attending board meetings and simply raising awareness for good causes, which he said may qualify as Senate business.

“Senators do have a role to play in bringing attention to, human rights, autism, some of those different things, but once a senator is serving on a board and is a board member then that’s all of a sudden a different relationship, that’s a responsibility now to the good running of that organization as opposed to the Senate.”

The audit found some Senate contracting irregularities: one senator who split over two fiscal years the payments for contract work that was completed in one fiscal year, and two senators who filed identical claims for the same days’ work by the same contractor.

But Ferguson did not turn up more examples of the kind of contracting arrangements that suspended senator Mike Duffy had with a friend, Gerry Donohue - which the RCMP alleges was a vehicle by which Duffy could direct other payments, such as for makeup, fitness training, speech writing or consulting advice - that didn’t comply with Senate policies.

The scope of an audit of the Commons, a chamber three times the size of the Senate, doesn’t have to be as broad as the probe Ferguson’s team conducted into two years’ of Senate expense claims, he said. That audit, which saw about 40 auditors a month working on it fulltime, is earmarked to cost $23.6 million - from Ferguson’s operating budget.

It looked at the expense claims filed by 116 senators over two years – 80,000 items totaling $45 million in Senate money going out the door. It uncovered examples of wasteful spending, trips that were for personal reasons or to further a senator’s “private interests” such as work on non-profit boards or at law firms.

He concluded $1 million should be paid back to the taxpayers by 30 senators. Nine of them have now had their files sent to the RCMP. Many of the other 21 delinquents are set to challenge his findings before an independent arbitrator Ian Binnie.

Even among the 86 who were not named for misspending, Ferguson said there were many examples of a lack of regard for the public purse, such as taking business class flights for short hauls between Ottawa and Toronto.

Ferguson last urged MPs to be more transparent and accountable at a Commons committee in November 2013, but with the release of his team’s explosive audit of the Senate this week, the pressure is mounting on parties in the Commons to open their ledgers to him as well.