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MOTION INVITING AUDITOR GENERAL TO CONDUCT A PERFORMANCE AUDIT OF THE SENATE ADMINISTRATION

 

Hon. David Tkachuk: Honourable senators, the sixth report of the Standing Committee on Internal Economy, Budgets and Administration, tabled on Thursday, October 21, has but a single sentence:

Your committee recommends that the Senate agree with the request from the Auditor General to conduct a performance audit of the Senate Administration.

The recommendation itself is self-explanatory. However, by way of background, I would like to outline the process that led to this recommendation and to what we expect from the audit.

I assure honourable senators that the historical rights of the Senate have been respected and will continue to be respected. As senators are well aware, the Senate and the other place are each responsible for their own administration and management. We operate independently of each other. We are also independent of the Crown and, thus, of her advisers. We are responsible for ensuring that our affairs are managed efficiently and responsibly.

We have already acted on our own initiative to have outside auditors look at various aspects of our operations and have put in place a multi-year internal audit plan. Until recently, there has never been a financial audit of the Senate's books. In the spirit of the 2006 Federal Accountability Act, that has now changed.

In June, the Senate released the first ever opening balance audit of its books, which was conducted by PricewaterhouseCoopers. The full statements for the 2009-2010 fiscal year have been audited by another firm, KPMG.

We have received and intend to soon release an audit of senators' office expenditures prepared by Ernst & Young. The scope of this audit included risks regarding senators' travel expenses, living expenses, and research and office budgets.

Beginning in December, the travel and hospitality spending of individual senators will be made public. This will continue to be made public on a quarterly basis.

As honourable senators are aware, while the Auditor General reports to the House of Commons, she is not the auditor of either house of Parliament. She can only look at our operations if she is invited to do so. In 2009, Auditor General Sheila Fraser made requests to conduct performance audits of both the Senate and the House of Commons administrations. At the time, it was deemed appropriate to await a decision of the other place, as the Auditor General is an officer of that house.

The House of Commons agreed to the Auditor General's request last June. Your committee then invited her to appear before it at the earliest opportunity to formally consider her request. At a meeting of your Internal Economy Committee on October 7, Ms. Fraser appeared before us together with two of her officials, Assistant Auditor General Clyde MacLellan and Audit Principal Gordon Stock.

The meeting was informative. Ms. Fraser clearly explained the scope and process by which the performance audit would be conducted and told us that the audit would be carried out at the same time as the audit of the other place, which is already in the planning stage, under the direction of the same Assistant Auditor General and Audit Principal, Mssrs. Clyde MacLellan and Gordon Stock, whom we met.

However, the Senate would be assigned its own audit team and all audit work would be carried out independently of the audit of the House of Commons. The Auditor General suggested in her opening remarks to the Internal Economy Committee that the audit could look at security, human resources, IT, and financial management and control. She further stated that an audit of the financial management and control would include an examination of practices established for the expenses and administrative costs of senators and their offices, and that the audit will cover two fiscal years — this year and last year.

The Auditor General has committed to keeping all confidential information secure on Senate premises. The audit would be conducted in three stages — planning, examination and reporting — with the first two stages taking two to three months each and the reporting stage taking six months. Ms. Fraser suggested that the audit report would be ready in the fall of 2011.

The questions asked by your committee at its meeting on October 7 and the resulting answers were likewise very informative. While the proposed audit is of the Senate Administration, this would, of course, include the policies and processes in place, with adequate testing to ensure that the prescribed practices are followed. Such testing of these practices could include transactions from senators. While she is prepared to keep the committee abreast of how the audit is progressing, audit findings and recommendations will be communicated initially with the Clerk of the Senate and, once validated, with the committee.

Following the Auditor General's appearance before the committee three weeks ago, the committee deliberated and unanimously decided last Thursday to recommend to the Senate that it agree to her request to conduct a performance audit. Should the Senate adopt this report, I will send a formal letter of invitation on behalf of your committee and the Senate to proceed with the proposed audit.

All honourable senators are aware of the potential sensitivities of carrying out an audit in a political institution such as ours, which is subject to intense public scrutiny and often undue criticism. To illustrate, after the committee's meeting on October 7, Senator Furey, Deputy Chair of the Internal Economy Committee, and I sent the same message to reporters informing them that there was agreement to recommend to the Senate that the AG be invited to conduct the proposed audit.

On the following Monday, The Hill Times reported:

Auditor General Sheila Fraser will finally be allowed to conduct performance audits of the Senate and House, after nearly 20 years of being shut out.

Now it was The Hill Times so I did not send the letter. We cannot speak for the other place, but the Senate had not been approached by the Auditor General to conduct a performance audit since 1991. We cannot shut out someone who has not even requested to enter.

Honourable senators, in the interests of transparency and accountability, and with the promise of constructive advice coming out of this audit, your committee has determined that this process is a desirable one that is well worth embarking on. In this light, I call upon honourable senators to adopt the draft report before you.