British Columbia’s Auditor-General says the financial management of the provincial legislature is riddled with “significant deficiencies” – ranging from the sloppy handling of travel expenses to poor inventory management of the dining room and gift shop.
John Doyle, who released a 17-page report on the situation on Thursday, said it’s the first time in five years as auditor that financial records were found to be in such poor shape that he was unable to even form an opinion.
“I suspect most British Columbians would have expected that the financial controls and processes within the legislative assembly would have been appropriate for the organization,” he said in an interview after the report’s release.
Mr. Doyle said he expected B.C. residents would be as “disappointed” as he was to find out that that was not the case for the legislature, which has a $63-million operational budget and is managed by a bipartisan committee of MLAs called the legislative-assembly management committee.
“Even fundamental controls were woefully inadequate,” he said, referring to an overview of records from 2009 to 2011. “Almost from Day 1, we found multiple and large problems.”
The report’s findings, he said, do not suggest intentional malfeasance but rather sloppy management. It’s the second time this week Mr. Doyle has been at odds with politicians in Victoria. Earlier this week, he questioned the accounting principles that led Finance Minister Kevin Falcon to declare last year’s deficit at $1.8-billion, saying the figure was too low by about $520-million.
As for finances at the legislature, Mr. Doyle said it has been years since the body reconciled its bank accounts and that the practice only began after he began his audit. In addition, there was no segregation of duties around transactions such as purchasing and receiving goods to prevent fraud.
The Auditor-General also raised questions about the management of MLAs’ travel expenses. He noted the assembly has been unable to provide any documentation to support the travel expenses of members. Travel credit-card expenses are paid by the legislature. Even the legislature dining room and gift shop are questionably managed, with no inventory accounts for either, he said.
Mr. Doyle’s audit examined the overall operation of the legislature rather than the individual spending habits of MLAs. He is promising a review of constituency allowances for MLAs later this year. Searching for a reason for the mess, Mr. Doyle suggested that the legislative-assembly management committee may not be meeting often enough to get a grip on the operation of the legislature. Speaker Bill Barisoff said in an interview that the committee was working diligently on the issues raised by the auditor general, and that Mr. Doyle will find substantial improvements in future audits.
“He would see different accounting principles, more in a direction he thinks we should be taking,” he said.
But an NDP member of the management committee said there’s no escaping the criticism, and that all members of the committee, be they Liberal or New Democrat, need to address the concerns.
“We can’t run away from this stuff,” said John Horgan, house leader for the B.C. NDP. “It’s a damning report on our management practices. All of us have responsibility for it. We have to do a better job.”
He said the committee reviewed the report this week. “There are systemic problems with how we manage our affairs and we need to resolve them quickly,” Mr. Horgan said. “Not being able to manage your bank statement? That’s pretty basic stuff.”
Mr. Doyle said he will follow up on the concerns raised in the audit within six months.