Report of the Auditor General of Canada to the Senate of Canada—Senators’ Expenses

Report of the Auditor General of Canada to the Senate of Canada—Senators’ Expenses


Just over two years ago, the Office of the
Auditor General of Canada accepted the Senate’s invitation to undertake a comprehensive audit of Senate expenses, including the expenses of individual Senators. We have completed this work and delivered our findings and recommendations to the Speaker of the Senate. The Speaker tabled our entire report in the Senate earlier today. As requested by the Senate of Canada, our audit has been comprehensive. In fact, this was not just a single audit. We completed 116 individual baseline audits, examining every expense incurred by 116 individual Senators and former Senators over a two year period. This involved examining more than 80,000 expense items, including travel, living, and other office expenses. As a group, Senators are responsible for governing themselves and how the Senate functions. They design their own rules, and choose whether to enforce those rules. They also determine what information, if any, will be publicly disclosed. The Internal Economy Committee, which is made up of Senators, has the exclusive authority to act on all of the Senate’s financial and administrative matters, including those of individual Senators. Senators who sit on this Committee also make expense claims as individual Senators. This means that there is a lack of independent
oversight in the way Senators’ expenses are governed that may give rise to a perceived
lack of objectivity. We found that the oversight, accountability,
and transparency around the expenses of Senators were quite simply not adequate. Senators did not always consider the requirement to ensure that expenses funded with taxpayer
dollars were justifiable, reasonable, and appropriate. Our work was anchored in the overarching principles that are embedded in the Senate’s own Administrative Rules. These principles state that Senate resources shall be used for the parliamentary functions of Senators, and that every person who uses
Senate resources is responsible to account for that use. In conducting this audit, we considered the varied nature of the work and activities performed by Senators. We spent considerable time gaining an understanding of this work, and of the
approaches taken by individual Senators to perform their various parliamentary duties
and functions. We reviewed every transaction to determine
whether expenses were incurred primarily for parliamentary business, and whether Senators had considered the cost to taxpayers in their spending of public funds. We looked for all available information, including documentation held by the Senate Administration and by Senators themselves. Where documentation practices were poor,
we sought additional evidence from Senators, including explanations as to why a particular
expense was for parliamentary business. We also sought independent evidence of Senators’
attendance at certain events. We took our obligation to apply the principles
of natural justice seriously, and considered the views and perspectives expressed
by Senators and former Senators in light of the Senate’s rules, policies, and guidelines. In the end, we had to exercise our professional judgment in determining whether expenses were
incurred for parliamentary business. The fundamental principle guiding our work was that public funds should not be used to pay for personal or private activities. We were satisfied with the way that 86 Senators and former Senators managed their expenses. We found that some Senators clearly separated their personal and private activities from their parliamentary business and ensured that the Senate was not charged for expenses related
to these activities. A number of Senators chose not to charge some expenses that would have been eligible under the Senate’s rules, policies, and guidelines even though they personally incurred the costs. As for the remaining 30 Senators and former Senators, these are the cases in which we found spending practices that we simply could not accept
as having been for parliamentary business. Given that Senators are responsible to account for their use of funds, it is our view that
they have an obligation to demonstrate that they incurred expenses for parliamentary business, and to provide documentation to support that assertion. For example, there were cases where we determined that Senators arranged travel using public funds for the primary purpose of attending a personal event, such as an anniversary celebration
or a board meeting, or primarily to facilitate a personal trip. We also noted cases where the Senator’s designated traveller, such as his or her spouse, travelled for purposes not related to reunification with the Senator or any other parliamentary
business. Within those 30 cases, we found 9 cases
that in our view the Senate’s Internal Economy Committee should immediately refer to other authorities, such as the RCMP, who have the power to conduct further investigations or inquiries. In five of these nine cases, we determined
that the Senator or former Senator was primarily residing in the National Capital Region, but considered themselves to be on travel status and claimed accommodation and other travel expenses. Our assessment is consistent with the statement
made by the Internal Economy Committee in its 23rd Report released in 2013, which says that “if a senator resides primarily in the National Capital Region, he or she should not be claiming living expenses for the National Capital Region”. In the four other cases we are recommending for referral to other authorities, there was such a pervasive lack of evidence or significant contradictory evidence that we were unable
to determine whether the expenses claimed had been incurred for parliamentary business. I am struck by the overall lack of transparency and accountability around Senators’ expenses, both at the level of the oversight exercised by the institution as a whole and at the level of some individuals. This is an institution whose members have
not been required to be fully transparent about their spending or accountable to Canadians
for that spending. Our audit has demonstrated that the status
quo, when it comes to Senators’ spending and the way those expenses are managed, is
simply not acceptable. Just changing existing rules or adding to
them is not the answer as it is virtually impossible to create rules to address every situation. In this context, overarching principles embedded within the rules must be respected
by Senators when they incur expenses. The weaknesses and problems
uncovered in the course of this comprehensive audit of Senators’ expenses call for a transformative change
in the way Senators’ expenses are claimed, managed, controlled, and reviewed. There must be significant improvements in the oversight, accountability, and transparency
surrounding Senators’ expenses, and also in the way individual Senators consider
the cost to taxpayers when deciding how to spend public money. The recommendations we have made in this report mark the way forward for the Senate. We urge the Senate to act on these recommendations and effect transformative change to the management
and oversight of Senators’ expenses.

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