Behind the Numbers: Why won't they open their books?

Against the backdrop of the unfolding drama over MPs expenses, this excerpt from an auditor general's report made for interesting reading.

"The report described significant deficiencies in administrative organizational arrangements, in financial management and control, and in personnel administration in the House of Commons. It stated that, although services to Members and to the House appeared to be of high quality, the quality of general and financial administration was below a minimum acceptable standard."

The report is not from our current auditor general, Sheila Fraser. Because, as we now know, the MPs won't let her examine their expenses or those of the House of Commons.

The author of the above report was an auditor general most people have never heard of: J.J. Macdonell. He was the auditor general in 1980 when he sent this letter to Speaker of the House, Jeanne Sauvé. The predecessor of the newly-elected speaker had invited Macdonell to audit the House of Commons books. But then an election got in the way, which meant he couldn't interview MPs as part of his audit. So instead, he conducted an "interim" audit and found enough weaknesses to suggest that Sauvé authorize a full audit, which she eventually did.

Enter Kenneth Dye, who served as the country's top auditor from 1981 to 1991. During his tenure, he did two audits. These audits are made up of two parts: random checks of the MPs' expenses (the kinds of things making news in Nova Scotia with the RCMP's investigation) and value-for-money or "performance audits," which are the types of probes that determine whether taxpayers' money is being spent wisely.

In both audits, Dye says he found no evidence of "hanky panky," but some weaknesses in the way the House of Commons was run. And that's significant for an organization whose budget has grown from $96-million in 1980, when that interim report was written, to slightly more than $500-million and growing.

Although they're dominating the headlines, MPs budgets (those that they use to pay their staff and run their offices) only make up about 15% of that $500-million -- a tiny percentage.

The largest chunk of money is spent running the entity we know as the House of Commons: hiring, recruiting and training staff, buying supplies and computers. The performance audit examines how this largest chunk - 85 percent - of the money is spent.

It was in this area where Dye found "deficiencies." And it was because of these deficiencies that previous Speakers were willing to allow auditors general to conduct these value-for-money, or as they're called these days, "performance audits."

I had a chance to speak to Dye about his audits the other day. Slowed down by painful arthritis in his legs, he eased his way into a sturdy chair to chat. And he had plenty to say. He began with the note of caution that characterized his tenure as the country's auditor general. He had no reason to suspect that there is anything seriously wrong. He assumes that the politicians followed his recommendations, which is why he's at a loss to explain the refusal by Board of Internal Economy (the committee of MPs responsible for overseeing the Houses' expenses) to allow present-day Auditor General Sheila Fraser, to do what he did about 20 years ago.

Indeed, she may still find some of the same weaknesses he identified back in 1991 when he wrote:

"The indicators of inadequate management of employee performance include: inadequate goal setting and evaluation; high sick leave and accident rates; poor analysis and management of overtime expenditures; and, weaknesses in dealing with performance problems. Each indicator is not conclusive, but taken together they provide a consistent picture of the need for better management of employee performance."

Flipping through the green-covered report

that I had obtained from the Parliamentary library shortly before our conversation (listen here)

jogged Dye's memory, allowing him to identify other weakness that he found in areas such as accounting.

"We didn't feel they were putting the numbers together correctly and as professionally as they should, given the size of the operations," he says making clear to point out that he had similar concerns about accounting services in many government departments.

So what did he recommend?

"To improve the staff. And train the (accountants) in their jobs so they could do their job properly."

Staff is important. I looked at some of the information the House does provide on MP's expenses. These are general ten-line items that include categories such as "staff and other expenses," "advertising," "office lease," "travel" and "other," the smallest category that eats up less than one percent of the $73-million dollars of total MP expenses from April 2008 to March 2009.

Just over half of the total is taken up by "staff and other expenses." So we can see why this area is so important, says retired Queens University political science professor Ned Franks.

"You might ask the question, how well are human resources managed? Is the staff training, staff development, recruitment, working properly," says Franks.

Pressure seems to be mounting on the politicians in general, and the Board of Internal Economy in particular, to open the books. Ken Dye believes the pressure might be too much for the politicians to ignore. So we'll have to stay tuned.

In the meantime, unless there is another audit, we won't know whether the recommendations in his 1991 report forced the House of Commons to do a better job managing the men and women who toil in anonymity every day to ensure that the nation's business gets done.

For feedback about this story or suggestions for other blogs, please feel free to contact David McKie, at david_mckie@cbc.ca.