The B.C. Legislature’s finances have been treated as high risk by the province’s auditors for the past dozen years because of weak oversight, but there was no political will to change the system, B.C.'s Auditor-General says.
Now, with the bombshell allegations of financial improprieties against the top two officers of the legislature, Auditor-General Carol Bellringer is welcoming an all-party agreement by B.C.'s legislators to pursue reforms.
This week, Speaker of the House Darryl Plecas delivered a report alleging lavish spending and personal enrichment by Craig James, Clerk of the House, and Gary Lenz, the Sergeant-at-Arms. The sums involved total hundreds of thousands of dollars. The two men, now under criminal investigation, have denied wrongdoing.
But a lack of strict financial management should not have come as a surprise to the MLAs who are ultimately responsible for legislature spending, Ms. Bellringer said in an interview on Wednesday. “We have been reporting on this since 2007, we have been telling them they have a huge problem ... Nobody wanted to clean it up."
And while she welcomed the commitment to change this week, she said she is troubled that none of the issues were brought to her attention. Despite a decision on Monday by MLAs to commission a forensic probe by an out-of-province auditor to look into the allegations, Ms. Bellringer is conducting her own special audit.
“There are serious examples of misspending and poor oversight," she said.
While she said her office has long treated the financial statements of the legislature as high risk because of poor management oversight, she stressed that her annual audits do not examine every expense, nor do they imply approval of the legislature’s internal spending controls.
Mr. Plecas began a private investigation into the perks and pay for Mr. James and Mr. Lenz soon after he took up the Speaker’s post in September, 2017. In his report tabled on Monday, he chronicled “flagrant” overspending on overseas junkets, including fine suits and cuff links purchased at taxpayer expense; questionable claims for electronics and subscriptions; and inappropriate cash payouts for vacation time.
But as his report reveals, the lines of authority for the $80-million annual budget for the operations of the B.C. Legislature are blurry. Although there are policies in place that govern who provides signing authority for different types of expenses, Ms. Bellringer said there is a degree of “management override” that makes it difficult to maintain accountability.
In many cases, Mr. Plecas was the signing authority for the Clerk of the House, and in his report he noted that when he became Speaker, he relied heavily on Mr. James for guidance.
Only capital expenses of more than $75,000 require the approval of a committee of MLAs. In some instances, Mr. James is the signing authority for expenses filed by Mr. Lenz. In other circumstances, the legislature’s executive financial officer, Hilary Woodward, must authorize payments.
In his report, Mr. Plecas said he authorized some travel expenses without realizing the extent of the claim, and he described Mr. James putting documents in front of him to sign that boosted the Clerk’s life insurance policy.
The report indicates that Ms. Woodward’s office did sometimes question expense claims, including an $1,100 luggage set purchased by Mr. James in Hong Kong, but the Clerk defended his spending. "His response stated that luggage had allegedly been requested by, and was purchased for, use by MLAs,” the report notes.
Mr. Plecas also raised concerns that both men routinely were paid out vacation benefits, against policy. “In Mr. Lenz’s case, although his practices in relation to rolling over and requesting payouts for vacation days are contrary to established policy, it is Mr. James who has been responsible for approving them," the report says, “and perhaps unsurprisingly, they have been consistently approved.”
Both Mr. James and Mr. Lenz have been suspended with pay since November, and through their law firm have promised to address the allegations in full.
But speaking to reporters on Wednesday, Premier John Horgan expressed a lack of support for Mr. James to be reinstated, saying he thought his appointment to the powerful position of Clerk of the House was wrong from the start. The Premier said the province needs an “impartial” clerk to ensure "excessive expenditures on what seem to be some pretty bizarre items just doesn’t happen again.”