Prime minister's own office broke expense rules

The Privy Council Office and the Prime Minister's Office have repeatedly broken the government's tough rules for hospitality spending, an internal review of expenses has found.

Rule requiring prior approval for expenses widely flouted, internal review finds

An internal report has found that hospitality expenses by the Privy Council Office and the Prime Minister's Office continue to run foul of Treasury Board rules requiring they be pre-authorized. (Adrian Wyld/Canadian Press)

Prime Minister Stephen Harper's own department has repeatedly broken the government's tough rules for hospitality spending.

An internal report on how the Privy Council Office spent $340,000 on hospitality found widespread flouting of a basic rule — that is, public servants must get prior approval from a supervisor before spending the cash.

The review of 2,100 hospitality claims over 13 months, ending last June, found employees repeatedly failed to get a green light before racking up expenses.

The average claim was for about $160, for drinks, meals and other largesse.

The survey examined expense claims in the Prime Minister's Office as well those run up by the Privy Council Office, Harper's own department and the central organ of the Canadian government.

Auditors initially found several instances in which hospitality expenses were incurred without pre-authorization. But they were assured by senior managers that the problem had since been corrected.

So auditors randomly selected 20 more-recent hospitality claims — and found only half had been authorized in advance, clear evidence that the rules continued to be flouted, despite the protestations of senior management.

Money spent without prior approval

"For the majority of hospitality expenditures, Accounting Operations receives the pre-authorization form after the expenditure has been incurred," says the internal report.

The practice is specifically banned by the Financial Administration Act, and since coming to power in 2006, the Conservatives have further tightened spending on hospitality to curtail alleged abuses.

Last Nov. 24, Stockwell Day — then Treasury Board president — announced another crackdown on hospitality, citing as an example of abuse a $31,700 reception thrown by Statistics Canada for 400 people in 2005.

Day said the event "was not a good signal to be sending" as Canadians tighten their belts — and that a more restrictive policy would kick in on Jan. 1. 

The Canadian Press later reported Harper had personally approved a $47,000 event for 600 employees in Privy Council Office.

Hospitality was budgeted at $7,400 for the PCO event, held three months before Day's tough-talking announcement and roughly equivalent in value to the Statistics Canada reception.

A spokesman for the Privy Council Office says that since Jan. 1, managers who fail to pre-authorize hospitality tabs are required to explain why and what they're doing to stop the problem.

Raymond Rivet also says they are including a reminder about pre-authorization in training sessions that began in February.

The so-called assurance review was completed in early March, but only recently released. The report does not provide any details of the offending hospitality claims.

The 2009 federal budget imposed a two-year freeze on spending for travel, conference and hospitality government wide. Privy Council Office reduced its bill for those items to $3 million in 2010-2011, down from $3.8 million in 2009-2010, and $4.1 million the previous year, Rivet said.