The Select Standing Committee on
Public Accounts is formed each session with relatively the same terms of
reference: to examine into issues raised by the Auditor General for the
Province of British Columbia; to review the Public Accounts for the Province as
prepared by the Comptroller General; and to review the records retention and
disposal schedules of the provincial government approved by the Public
Documents Committee. In this interview the Chairman of the Public Accounts
Committee, Darlene Marzari, MLA; Robert Hayward, formerly Acting Auditor
General; and Brian Marson, Comptroller General, discuss their respective roles
with the Executive Secretary of the Canadian Committee on Public Accounts,
Craig James.
Could each of you explain who
you are and what you do in your respective capacities and what provincial
statutes guide you in your work?
Robert Hayward: I am the Acting Auditor General of the
Province of British Columbia. My role as Auditor General is determined by the
Auditor General Act which was originally passed in 1976. That Act established
the Auditor General as a Officer of the Legislative Assembly and provides that
he undertake certain duties. One of the principal duties is to examine the
financial statements of the government each year and express an opinion on
them. In addition, the Auditor General Act calls for the Auditor General to issue
an annual report to the Legislative Assembly which contains anything that would
be of interest to the Assembly including matters to do with systems of internal
control and compliance with legislation.
The Auditor General examines the
economy and efficiency of the management of government. This particular aspect
of the statute was rather unique at the time, only five jurisdictions in Canada
are able to conduct this type of work. The Auditor General is also eligible to
be appointed auditor of any public body in the Province of British Columbia. I
am the auditor of some thirty public bodies. Other provincial statutes
influence our work, particularly the Financial Administration Act. It is one of
the principal Acts we use as guidance throughout our work in examining whether
the government has complied with the provisions of that Act. We also refer to a
variety of provincial statutes that deal with subjects that we may be examining
at any particular time.
Brian Marson: I am the Comptroller General for the Province,
a position I have held since 1982. The Comptroller General is the chief
accounting officer for the government. The position is established in statute
under section 6 and 7 of the Financial Administration Act. This Act was brought
into force in 1981 by the legislature and it replaced two very old Acts -- the
Financial Control Act and the Audit Act which went back to the late 1800's. We
have had a Comptroller General in British Columbia since 1917. The Comptroller
General is an officer of the Government with authority to maintain proper
financial controls within the ministries. He has certain operational
responsibilities which are important in this jurisdiction such as administering
a payroll of 1.32 billion dollars per year and the payment of thirty-five
thousand people every two weeks. He is also the paymaster for government in the
sense that all government payments are issued under his authority. All the
payments authorized by the legislature are paid by the Comptroller General to
schools, hospitals, universities, all income support payments, and all payments
to government suppliers.
There is a substantial operational
role as well as an accounting and control role. The Comptroller General,
through the Financial Administration Act is given the responsibility to ensure
that proper controls exist throughout the ministries or government over not
only expenditures but also the revenues of government as well as the assets and
liabilities. This is a functional role. He keeps the financial records of
government and those records eventually become the financial statements of the
government at the end of the year, something that is of particular interest to
the Public Accounts Committee. He also establishes policies and procedures on
how civil servants ought to conduct themselves within the financial affairs of
government. There is an internal audit capacity which allows him to assess how
well those policies are being adhered to. The Comptroller General can examine
the accounts of a crown corporation and report back to Treasury Board.
Darlene Marzari: I am an Opposition member in the
Legislative Assembly and Chairman of the Select Standing Committee on Public
Accounts. The committee is comprised of twelve individuals. This particular
committee has eight government members and four opposition members. The Public
Accounts Committee receives its authority from the House.
What role does the
Auditor-General play in the process.
Robert Hayward: The Auditor General is traditionally
invited to appear before the Public Accounts Committee after his Report is
received by the Committee and to assist it in its deliberations. The objective
of his appearance is to explain matters that are in the Report. The Auditor
General looks to the Committee for support in his efforts.
Brian Marson: The Auditor General is an Officer of the
Legislature. The Comptroller General is an Officer of the Government. I prepare
the financial statements which the Auditor General examines and gives an
opinion upon as to whether they fairly represent the financial affairs of the
government for that fiscal period. The Comptroller General is responsible for
ensuring good financial controls throughout government, although that
responsibility is shared with ministries now under the Financial Administration
Act.
The Auditor General is basically
providing a report card back to the Legislature on how well we managed the
funds that have been provided to the government. The role of the Comptroller
General in the Public Accounts Committee is primarily two-fold: first of all,
to explain to the Committee the financial statements that have been prepared
and referred to the Committee, that is, the Public Accounts. And secondly, to
respond to the recommendations of the Auditor General in the Auditor General's
Report. The Comptroller General also acts as a coordinator for the Committee to
bring those witnesses from ministries who are the appropriate people to answer
questions in areas of the Auditor General's Report that touch specifically on
ministry responsibility rather than the Comptroller General's specific
responsibility.
We have a tradition in this
Province of the Public Accounts Committee asking for and examining original
documents. If a Member of the Committee wishes to examine an original document
he will ask through the Chairman for a printout of the document -- a printout
of a series of transactions. The Committee may ask for that document to be
brought to the Committee or otherwise examined by Members of the Committee.
Darlene Marzari: The Public Accounts Committee is basically
responsible for receiving the Auditor General's Report and reviewing it,
questioning it and presenting a Report to the Legislature. The Public Accounts
Committee by tradition and by its Terms of Reference established by the House
reviews the Public Accounts, calls witnesses, initiates investigations,
produces a report for the House and makes recommendations about the Public
Accounts and the Auditor General's review of the Public Accounts. The Public
Accounts Committee, in my mind, is a partner in the system of checks and
balances which is provided by internal audit, by external audit and by the
functioning of the Auditor General and the Comptroller General.
What similarities do you see
between chairing this Committee and being chairman on any other board or
commission or agency that you may have chaired in the past?
Darlene Marzari: Most committees are task oriented in
nature and are there to solve a particular problem and to fill a particular
need. This Committee I view as a partner in the checks and balances of the
Legislature itself so it is particularly encumbent upon this Committee to act
responsibly and to produce a responsible, legible, coherent picture of the
status of both the Comptroller General's Public Accounts Documents and the Auditor
General's Report. There are restrictions upon the Committee's ability to
function in British Columbia such as not having a non-partisan research base
and not having a capacity to meet when the House itself is not sitting.
Consequently, the Committee's ability to conduct effective investigations and
to question witnesses in an effective manner is somewhat compromised, I
believe.
What purpose is served, do you
think, by having Ministers on a Public Accounts Committee?
Darlene Marzari: It might have been appropriate at one time
for Ministers to sit on the Public Accounts Committee when it did not regard
itself necessarily as a partner in the checks and balances or when Ministers
might have had more information than other people in the Legislature Assembly
and might have been better able to answer to an auditing function or to a
Public Accounts inquiry.
At this point, in Canada, the
Canadian Council of Public Accounts Committees is querying the presence of
Ministers on public accounts committees for reasons which become obvious if you
look at a more sophisticated functioning of the Committees. That has to do with
the rather compromised position a Minister can be placed in if the committee is
questioning the Minister's department. From a practical point of view it is
very difficult to get a quorum if Ministers sit on the Committee.
How has the role of the Auditor
General and the Comptroller changed over the years?
Robert Hayward: The role of the Auditor General in British
Columbia has only ten years behind it. I think the legacy left by Mrs. Morison
was a reputation for professionalism, fairness, and credibility. We are
building on that and aiming in the future to try to learn more about what would
be of interest to the Members of the Legislative Assembly and how we could
better serve them and the Public Accounts Committee in the direction of our
audit work. Right now we are putting our efforts where we think it is desirable
and wanted but I think we need feedback from the Committee as to what direction
they would like us to go.
When the Audit Office was first set
up it concentrated on the financial statements of the government, examining
those in detail and recommending changes and improvements in the financial
statements. I think much has been accomplished in this area thanks to the
direction and cooperation of the government. We are looking into economy and
efficiency issues which is the thrust coming out of examining recent reports
from the Auditor General. The change is an evolving process and fairly dynamic
because it is a subject that is under constant study and change.
Brian Marson: I think there have been seven Comptrollers
General in the Province. The first one was Alexander Mowat who was appointed
Comptroller General in 1917. He was a Hudson Bay Factor and was a Manager for
the City of Edmonton. He built the office on the basis of commitment, high
ethical values, and professionalism. He introduced innovations that were seen
at that time as being the best in the British Empire in terms of our estimates
and our public accounts. The Comptroller's role has changed dramatically in the
past years from a strictly financial control role to a financial management
role, but those are the traditions that I also like to build upon.
The Comptroller General has become
more of a partner with his colleagues in the ministries. He plays a leadership
role in the financial community of government -- more of a collegial role with
colleagues throughout government. This arises because the Financial Administration
Act and policies which have been issued under it allow ministries to take a lot
of responsibility now for management of the financial function within their
ministries and within a policy framework. It means less of a personal hands-on
detailed role -- more of a policy and monitoring role. As the ministries
develop a better capability to manage their financial affairs those elements of
the Comptroller General's role will continue to grow and the hands-on elements
will continue to diminish in importance.
What expectations do you have of
the Public Accounts Committee in British Columbia and are they being realized?
Darlene Marzari: After many years of functioning as a
political vehicle for both sides of a very fractious House and of the Committee
not producing a report, the Committee is being used as an effective legislative
tool for both sides of the House. Having said that, my expectations for the
Public Accounts Committee are low at this point. My expectations are that the
Committee will meet and it will continue to review the Auditor General's
Report. Any further expectations can only be realized if, as I have said
before, we have the capacity to meet outside the House.
The Committee's function could be
further enhanced if the other Committees of the House met on a more regular
basis. I think that if we had a more responsible House that dealt with its
priorities in Committee fashion that this Committee could assume a role of
being a natural part of the ongoing structure of a civilized, sophisticated House.
I would like to see that happen. My expectations of this Committee are in the
context of what I would like to see in the House and then we would be a part of
it instead of an isolated thumb standing out there like a lightning rod
attracting attention that turns into polarized political attention.
Brian Marson: First of all, I would say that the
Committee potentially is a very key link in the accountability chain in our
parliamentary system of government. Each year the Legislature of this province
authorizes something like ten billion dollars in expenditures and through tax
legislation authorizes the collection of similar amounts in revenues. It has
responsibility for something in the order of fifteen billion dollars in
financial assets and when those funds, revenues and assets are approved the
Government's responsibility is to manage them in an efficient and effective and
well-controlled way.
The Legislature must have
mechanisms for determining how well the government is doing. We know that our
legislative process is built on many centuries of history and that the
structures we have in place are there to prevent some of the major difficulties
that have occurred, particularly in British parliamentary history with the
Crown spending money for purposes which have not been authorized by the
legislature and in periods that have not been authorized by the legislature.
How well does the Committee meet those expectations? I would say -- not very
well -- but improving. And as Darlene Marzari has said it really is a function
in my view of how polarized the Committee is, how political it is in a partisan
sense.
To the extent that the work of the
Committee becomes partisan I think the accountability mechanism is lost. When
the Committee is bi-partisan and business-like and has proper support to carry
out its role and meets as often as necessary to conduct its business then the
Committee is effective in achieving its role. So I have to say I am encouraged
by the progress we have made in the last year and a half. I think we have the
basis for an effective Committee and the final outcome will largely depend upon
whether the Committee can function in a bi-partisan way.
What are the basic documents
involved in the Public Accounts process.?
Brian Marson: The Public Accounts for the Province of
British Columbia are described in section 7 of the Financial Administration
Act. They encompass not only the financial statements of the government but
also a number of ancillary statements to provide the Legislature with a
complete view of the financial condition of the government.
The accounts are produced in three
volumes. Volume one is the financial statements of the government:
expenditures, revenues, -- the balance sheet of the Province. It shows what was
expended against the amount authorized, what was revenue against the budgeted
amounts. It shows the detailed breakdown by ministry and standard object
showing great detail how the government spent the money in that fiscal year.
Volume three of the public accounts outlines the financial statements of crown
corporations and other substantive public bodies. It shows the legislature not
just what the government spent through the estimates process and through
certain other statutes but it shows what crown corporations took in and spent and
it displays the properly audited financial statements.
The second volume of the public
accounts is a volume of supplementary information that is really there for
public scrutiny. It shows how much each public servant was paid, how much each
public servant and, indeed, Member of the Legislature incurred in travelling
expenses, how much each supplier to the government was paid during the fiscal
period and how much was paid out to each institution in grants and
contributions. So its a very detailed volume that gives the Legislature and the
public a lot of detailed information as to who got what in the expenditures of
Government.
Whose idea was it to have the
second volume published?
Brian Marson: My understanding is that it was the idea
of W.A.C. Bennett who was the Premier in this Province from 1952-1972. He was a
person who had a very strong belief in an open window on financial transactions
and so he was the instigator of that detailed level of information. He felt the
public had a right to know how much public servants were being paid, and who
was getting government business so that everything was above board and that
there was no possibility of hidden expenditures to people who appeared to be
friends of the government. He also introduced legislation which requires other
public bodies to provide similar sorts of financial disclosure. This includes
hospitals, school boards, municipalities and universities. We have the most
extensive disclosure requirements in legislation of any province in the
country.
Robert Hayward: Another important document is the Auditor
General's annual report. It fulfills a requirement of the Auditor General Act
which states that the Auditor General shall report annually to the Legislative
Assembly on the work of his Office and call attention to anything as a result
of his examination that he considers should be brought to the attention of the
Assembly. It is significant that is there is no limitation in the Auditor
General Act on which subject, topic or incident he may report upon. The entire
guidance in the Act is permissive in that it suggests areas that he might be
interested in. He need not report any immaterial or insignificant facts. The
tabling of the Report is also rather an interesting thing in that it must be
tabled by a Minister of the Crown and is presented to the Minister of Finance
and Corporate Relations. He is required to table the Report if the House is
sitting within one day. If that does not happen the Auditor General can pass
the report to the Speaker who must table the Report forthwith. There can be no
intentional or accidental effort to prevent the Auditor General's Report from
reaching the House.
Another interesting feature is that
the Report is required by the Auditor General Act to be referred to the Public
Accounts Committee so that the Committee always has the Auditor's Report to
refer to in its work.
Darlene Marzari: The Public Accounts Committee Report to the
Legislature is the final piece on what happened in the fiscal year that is
being reported on. It is the Legislative Committee's Report to the House on its
consideration of the Comptroller General's Report, the Public Accounts, and the
Auditor General's Report. It is also a vehicle by which the Public Accounts
Committee and the Legislature can talk back to the Auditor General and
Comptroller General. It is the Legislature's vehicle to express the direction
it would like to go in and to suggest ways which should be given more
consideration. It is a vehicle for the Legislature to ask the Comptroller
General to change his focus if that be the desire of the Legislature. It is a
vehicle to ask the Auditor General where attention might better be paid.
Has the Public Accounts
Committee in British Columbia been an effective forum for each of you?
Darlene Marzari: For the Legislature, the Public Accounts
Committee in the last hundred years has not been a terribly effective forum as
a partner in this accountability process. For the Government side, the Public
Accounts Committee, I think, has often been regarded as a nuisance. For the
Opposition side the Public Accounts Committee has been regarded as something of
an opportunity to tear strips off Government. So I would think over the last
number of years the full capacity of the Public Accounts Committee has not been
tapped. In the past year, I think we have all put new expectations on the
Committee, albeit they have been low expectations but I would say the format is
slowly being structured in such a way that the Committee will be a more
effective forum and accountability will be better served in this enterprise.
Robert Hayward: I would say yes, it has. I feel that the
Committee has heard me out on any issue that I wanted to bring before it and I
have been extended a fair hearing in consideration from the Committee and I
think I could not ask for more. What does concern me is that if the loop is not
closed the Committee is not able to present a report on a timely basis to the
Legislative Assembly, the effectiveness of the whole procedure suffers.
Brian Marson: I would say partially. I certainly have
always had the opportunity to respond to the Auditor General's recommendations
or observations and be given proper time and consideration by the Committee to
provide whatever information I can. I think the weakness in the Committee as it
operates now from my perspective is that it does not really offer an
opportunity to look at the good things that are being done. The way the Auditor
General Act is structured and the way our process works is that we tend to
focus on those things that are not working well, which might be one percent of
the total. By focussing only on the things that are not going well does it give
the public the perception and perhaps the perception of the Legislature, too,
that the government is not operating well? The taxpayer comes to believe that
public servants are not serving them well and that there are serious problems
in the management of the financial matters in government. That is a public
policy problem in all jurisdictions that I know of in this country - how we
address that, I am not sure, except that I think we do need in the Public
Accounts Committee to provide a forum for public sector managers to give the
good news as well to identify those areas where improvement is needed.
Do you think the Public Accounts
Committee is the appropriate vehicle to review and approve the Auditor
General's estimates?
Robert Hayward: The Public Accounts committee has been
effective in supporting the Auditor General. Two or three years ago the then
Auditor General did take up an issue with the Committee about her resources
and, in fact, the Committee did make quite a strong recommendation which the
Government heeded and the staffing of the Auditor General's office was
increased by ten persons.
Darlene Marzari: In Ottawa, where the Public Accounts
committee has the ability to look at and deal with the estimates of the Auditor
General, the Public Accounts Committee cut back the Auditor General quite
substantially.
The Auditor General should have
access to another vehicle in the House to handle estimates. I do not think that
the Public Accounts Committee should have an estimates function. It would be
almost ideal if we had a process that took us from estimates through to
accounts from beginning to end -- two Committees working side by side and
producing a report that would follow programs and develop new programs from
beginning to end.
Are there any specific changes
you would like to see in the operation of the Public Accounts Committee?
Darlene Marzari: The strengths of the committee are that it
has got good people working for it and if there is any strength from the
Committee it has to come from the respect that the House now has for it and the
material the Committee is given to work with. If I had recommendations to build
the Committee's respectability and respect I would say we need a continued
strong presence of the Clerk of Committees; research, perhaps provided again
through the Office of the Clerk would be useful so that the Committee can, on
request, not only access the vouchers but also access solid information about
what is going on elsewhere in given areas, or information about policy
development, for example, across Canada. I think a solid research capacity is
something we could and should look forward to.
I also think we should have the
ability to meet when the House is not in session, the ability to call upon
financial resources to access witnesses who are outside government, the ability
to travel which has been found by other committees in Canada to be very useful
and to take a look at onsite workings of particular departments. The Chairman
should be on the Auditor General's Selection Committee. I think that these are
all recommendations that I would like and will be bringing forward in a more
formal way to the House over the next few months.