Alberta’s auditor general issued his annual report to the Legislature two weeks ago. Like any audit report, it identified errors in the government’s financial management: not applying due diligence in financial transactions and management, and program management, and not adhering to policies that enable management oversight in delivering programs and services efficiently and effectively.
The current government earned its share of rebuke from the AG, like governments in past, but it still boggles the mind that governments regularly ignore their fiduciary responsibilities and continue to commit financial misdemeanors. Before we go on, let’s be clear that the AG is not a government office but a legislative one, reporting to the Legislative Assembly, an important point despite the dominance of a majority governing party.
The current audit report is about new but mostly ongoing problems in financial management. Three big financial investments and two major programs of the Alberta government were highlighted at the outset: crude-by-rail contracts, Keystone XL pipeline agreements, Sturgeon Refinery processing agreement and Assured Income for the Severely Handicapped/Income Support programs. The AG made financial adjustments for the five, increasing the cost of these initiatives alone by over $1.8 billion. For sure, most of the initiatives started before the current government, however, the AG still holds each government accountable for current and ongoing problems.
Another highlighted new initiative was the Canadian Energy Centre (CEC, “energy war room”) where the AG found egregious contract management. CEC is a board-governed provincial corporation, not a department of government, but it must still abide by government policies. The AG found most contracts were sole-sourced, not awarded to best bid from a public tender. This is simple financial management. Department and agency heads, senior officials, particularly the senior financial officers, know this. Sole-sourced contracts can only be let when contract value is below a commonly set cost or clear, particular circumstances allow the sole-source. Departments and agencies can even issue tenders to create a stable of contractors pre-qualified to undertake work for a period to time. Every contractor would love to be sole-sourced to a government contract but also know that their best chance for government work is through an open tender, where the best bids are chosen competitively and fairly. It also means better assurance of best bang for public buck.
A big part of department head and senior official jobs is financial management, adhering to financial policies and practices to enable most effective and efficient program and service delivery. Senior financial officers and even AG staff are there to advise and assist. Department/program heads ignore them at risk.
The auditor general made 187 recommendations for change in government financial and program management to 19 offices, departments and their agencies (three departments/offices did not receive recommendations). Only four of the recommendations were new; 183 were outstanding recommendations, 84 over three years old. The AG allows departments time and opportunity to challenge recommendations or correct the problem. He expects results by the next annual report. Obviously, it’s a job for a patient person.
The auditor general cannot enforce the recommendations – that’s for premiers, ministers and department/agency heads. However, the AG can encourage the government’s boss to react, when governments don’t, through public reporting. But we, the public, seem to be too removed and complacent.
Roger Jackson is a former deputy minister and a St. Albert resident.