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The Senate chamber sits empty in Ottawa on Sept. 16, 2010.

Chris Wattie/Reuters/Chris Wattie/Reuters

Canadian senators are rejecting an independent auditor's call for a second set of eyes to scrutinize their expense claims.

A report by Ernst and Young, which recommends across-the-board reforms for managing Senate spending, also suggests senators put in place a "second level of approval" to oversee their claims.

Senators, who earn their posts by political appointment rather than by direct election, currently approve their office travel, hospitality and living expenses before submitting them to an internal finance department for reimbursement.

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"Normal practices within private sector and public sector organizations include second-level approvals of expense reports, including those of the CEO," auditors wrote following their scrutiny of senators' office spending, which is about a quarter of the Senate's $81-million operating budget.

Senator David Tkachuk, chair of the Senate's internal economy and budget committee, said there's no need for a second level of sign-off.

"Who's going to sign off for a senator secondly? The senator is responsible for his or her own office and budget … we all sign off a form saying we swear our expense report to be true," he said.

"We still have to submit to a whole bunch of rules we established for ourselves."

Mr. Tkachuk said the Senate itself ordered this audit. The body is preparing to post senators' quarterly expenses online.

The Ernst and Young audit, conducted between July and September 2009, warned existing rules fail to clearly spell out what duties and activities should be covered by taxpayers and which are partisan politicking and therefore ineligible.

"For example, there is no clear guidance made between partisan activities related to Senate business (allowable expenses) and partisan activities on behalf of political parties which may not be eligible," the auditors said.

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The report warned the lack of written policy spelling out when senators' spouses can travel on the public tab may lead to cases where taxpayers are being cheated. "There is a risk from a public perspective that travel of spouses may not be for a parliamentary function."

The audit found more than a few examples of senators misusing their travel charge cards. "We noted six instances out of a total of 25 tests where travel cards were incorrectly used to pay for hospitality-related expenses."

Tests carried out by auditors found many cases where senators were not properly justifying their expenses. For instance, senators are provided with $5,000 in hospitality spending for meals, drinks, gifts and promotional items.

"We observed that 13 of 25 hospitality expenses had minimal documented descriptions regarding the purpose of the hospitality expense and the number of guests attending the hospitality event," the audit report said.

"The absence of the list of guests on hospitality claims hampers [the Senate finance department]personnel when assessing the reasonableness of the expense against meal allowance limits," the report warned. "There is a risk that ineligible expenses may be reimbursed."

Senators aren't currently required to identify when they give gifts to people and who received the items. "There is a risk from a public perspective that gifts may not be for parliamentary functions," the audit warned.

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Mr. Tkachuk said the problems identified by the audit are not intentional. "Most of things the audit showed are not sins of commission. They were sins of omission … a lot of mistakes," he said.

"New senators get appointed all the time … they're going to make mistakes at the beginning. There is no one to babysit them along.

The base salary for each of Canada's 105 senators exceeds $130,000 and they are appointed to the Senate until age 75.

Auditors identified flaws in how senators manage their offices, noting that in a significant number of cases there were no résumés on file for staff. "There is a risk that an individual's competencies do not align with the requirements of the position," the report said.

The auditor raised concerns about the lack of secondary oversight of spending, noting that "when expenses are submitted for reimbursement, each senator certifies that the expense was incurred for the conduct of parliamentary business or is in accordance with the [Senate administrative rules]" It's the senators themselves who "review, approve and submit all expense claims for travel, hospitality and living expenditures," it said.

The Senate's internal economy and budget committee however rebuffed the call for more oversight.

It said in an accompanying note to the report that it feels the Senate's expense claim process is "rigorous" and "adequate" with sufficient internal checks to mitigate the risks of problems.

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