An external audit of Rights and Democracy has dismissed the Conservative government-appointed board's allegations of financial mismanagement at the federally funded human rights promotion agency, according to a leaked copy published online.

Gérard Latulippe, president of Rights and Democracy, laughs as prepares to start his testimony before the Commons foreign affairs committee on April 15. (Fred Chartrand/Canadian Press)The leak came as a planned parliamentary committee appearance by the Montreal-based agency's senior board members was cancelled without explanation on Thursday.

The audit, published on the Globe and Mail's website, found no wrongdoing at Rights and Democracy, despite the concerns expressed earlier this year by the Conservative government-appointed board members over the agency's management under former president Rémy Beauregard.

Beauregard died of a heart attack in January after a fractious board meeting.

Instead, the audit recommends that the new board of directors should "review, define and establish the strategic orientations of Rights and Democracy and communicate them to management personnel."

After months of ignoring promises to release the findings of the audit, Rights and Democracy finally handed over the report to the Commons foreign affairs committee this week.

The audit says some old bookkeeping deficiencies are being cleaned up, recommends better organization of some files and refutes a claim of secret, monthly $30,000 payments to the agency's Geneva office.

Battle over funding Mideast groups

Created by the Progressive Conservative government of Brian Mulroney in 1988 to encourage democracy and monitor human rights around the world, Rights and Democracy is supposed to operate at arm's length from government.

But the poisoned atmosphere at the agency came to a head almost a year ago in a battle that pitted established members of the organization against newly appointed board members.

The new members objected to three small grants given to Middle East organizations that were critical of Israel's human rights record.

After Beauregard's death, the members alleged he and others in the agency abused their positions and misused funds. The organization hired law firms, private investigators, auditors and a public relations team at a cost of $400,000.

MPs on the committee were sworn to secrecy about the report's contents, but NDP MP Paul Dewar said there's "nothing there." He called for the entire board to be fired so management can start with a clean slate.

"In fact, they went on a witch hunt," Dewar told reporters. "They found nothing."

Bob Rae, a Liberal member of the foreign affairs committee, wouldn't discuss the audit's contents but said he found the document "unremarkable."

Confusion over hearing cancellation

After the Globe obtained and published a copy of the audit around midday Thursday, word got out that the scheduled closed-door committee appearance by the agency's new president, Gérard Latulippe, and its chair, Aurel Braun, wasn't going to happen.

During Thursday's question period, chief government whip Gordon O'Connor told the House of Commons that the motion governing the hearing stated that in the event of the House adjourning for the holidays, the two men would be asked to appear before the committee at 10 a.m. Thursday morning for two hours.

"I was told they weren't available," O'Connor said. "I further advised the members that the House is adjourning at three today and all committees will cease operations."

Rights and Democracy spokesman Stéphane Bourgon said he talked to the clerk of the committee earlier this week and was told that if the House rose on Wednesday after question period, the two men would be asked to appear at 10 a.m. the same day.

He said he told the clerk that the 10 a.m. appearance was too early and suggested a 1 p.m. appearance instead, which he said was accepted.

On Wednesday, when the House did not rise, Bourgon assumed that meant the scheduled 3:30 p.m. time still stood, which he confirmed by phone with the committee clerk on Thursday morning.

But at 1 p.m. Bourgon said he received another call, this time saying the hearing was cancelled, with no reason given.

With files from James Fitz-Morris and The Canadian Press