The Conservative government does not have the authority to force parliamentarians to disclose details of their expenses to the auditor general, Prime Minister Stephen Harper says.
Government sources told CBC News that privately Harper is keen to see the matter of expenses resolved, with more transparency.
Harper's authority comments come amid increasing pressure on MPs and senators to open the books on their expenditures after similar audits in Nova Scotia and Britain triggered scandals and police investigations.
Last June, Sheila Fraser asked if her office could conduct a "performance audit" on $533 million of annual spending by both the House of Commons and Senate. But Parliament's all-party Board of Internal Economy issued a news release last week stating the proposed audit "would go beyond the scope of the auditor general's mandate."
When asked by reporters on Friday why Canadians shouldn't be able to see the expenses, the prime minister responded the government was solely responsible for the spending of ministries, while the board is in charge of Parliament's expenses.
"This is a matter that is not under the government's jurisdiction," said Harper, who was in Niagara Falls, Ont., to announce funding for the expansion and renovation of the Niagara Falls History Museum leading up to the 200th anniversary of the War of 1812.
"Parliament is independent on these matters and, through the Board of Internal Economy, makes its own decisions."
But Harper did say his "biggest concern" was for Parliament to work to limit the growth of its expenses, similar to the "clear steps" his government has taken on its own spending.
"We're limiting the growth of government expenditures and we'd like to see Parliament do the same thing," he said.
Board approved legal settlements for MPs
The Board of Internal Economy sets the rules for MPs' expenses, worth about $170 million a year, and also decides how to spend more than $330 million on the administration of the House of Commons.
The expenses of Parliament are audited by the private accounting firm KPMG, but only the broad outlines of the expenses are made public. The details aren't disclosed.
The board often examines commercially confidential matters, said former Liberal minister Don Boudria, who sat on the board for nearly a decade. "It could be a contract for computers, or all kinds of things like that, that the board is involved in, as it must," Boudria told CBC News.
But Boudria said the board also handles some sensitive legal information, such as payouts in harassment cases or employment disputes.
Minutes of some of the board's meetings between June 2008 and December 2009 show that the board approved legal fees or legal settlements for MPs at least four times.
MPs on the board have defended their decision to deny Fraser's request for a performance audit, saying there are already sufficient "control mechanisms" in place.
But several Liberal and NDP MPs have called for the decision to be reversed, saying they have been inundated with mail from constituents who are angry their representatives in Parliament will not allow the audit. So far, the Bloc Québécois is the only party to offer its public support for Fraser's goal.
On Wednesday, Liberal Leader Michael Ignatieff said he wants the auditor general to meet with the board. But he wouldn't commit to supporting Fraser's call for a full audit, saying Canadians "don't want us to go through receipts of this meal and that meal."
Over the past few days, CBC News has tried to contact the board's spokesmen, Conservative House leader Jay Hill and Liberal MP Marcel Proulx, but neither has commented on the matter.