Mar 29, 2015

Fire the Auditor General for Local Government? It’ll cost us


When BC Community Minister Coralee Oakes fired the Auditor General for Local Government (AGLG) last week the issue that had been in the news was the performance of her office.  However, AGLG Basia Ruta has now taken the matter to the courts and the issue there is likely to be the independence of her office.  I think it is likely that Ruta will win on that one and despite athe hefty payout for severance taxpayers will be stuck with, it is a good thing if she wins.

Hiring an Auditor General for Local Government (AGLG) was controversial from the moment it was proposed. The idea came as a promise to the business community when Premier Christy Clark was running for leader of the Liberal Party.

But the AGLG was to be a different sort of auditor than the Auditors General who review the spending of the provinces.  For the main part, provincial auditors are chosen with the consent of both the government and opposition in the legislature.  They report not to a government Minister but to the legislature as a whole.  They are rigorously independent.

Unlike the provincial auditor who is chosen by and who reports to the legislature, municipalities were given no say as to either the choice of AGLG or who the office would report to. Instead, the AGLG was appointed by a Minister who had the power to fire her, just as Community Development Minister Coralee Oakes subsequently did.  The AGLG was appointed on the recommendation of an “Audit Council,” also appointed by the Minister that has the power to comment on audits from the AGLG. They can also recommend to the Minister that the AGLG be removed.

The Audit Council is comprised of an accountant, a lawyer, two business people and the former Chief Administrative Officer for the District of Saanich.  Saanich, by the way, was next in line for an audit by the AGLG on their capital procurement practices when the AGLG was fired.

So from the beginning local governments were worried about the independence of the AGLG.  Was she there to act as a truly independent auditor? Or was she there to impose provincial policies and to carry the messages from people like the Canadian Federation of Independent Business?

As it turns out, when Basia Ruta was appointed AGLG, she had some of the same concerns.  I work for the Canadian Union of Public Employees. In May 2014 I met with her and raised concerns about her independence given that she was appointed by a Minister and reported to a Council also chosen by a Minister.  She said her office was “functionally independent” and that she alone recommended what was to be done.  Her independence, she said, was supported by professional standards.

Ruta said the Audit Council provided feedback on Service Plans and could provide commentary on reports.  However, she said she would lose her accreditation if she permitted the Audit Council to change the content of reports.  Her deputy said that the Audit Council had no decision making authority and that they were part of the accountability mechanism.  All this happened months before issues about her office blew up in the media.

When issues about her office did blow up, Ruta said publicly that she had no alternative than protecting her independence. This meant partisan bodies, like the Minister or a Council the Minister appointed, should not have the power to appoint someone to review her office.  She also said she would be open to a review by the provincial Auditor General, who is independent.

Since 2013 we have watched the promised deadlines from the AGLG’s office continually slipping away.  An earlier review of her office basically showed it to be in chaos.  Almost all of her staff were unhappy with management. They complained about lack of oversight of consultants working for the office and the poor quality of consultant reports. The AGLG, from the time of her appointment, made the most important of mistakes: she over-promised and under-delivered.

Now AGLG Basia Ruta has been fired. The government that fired her has said there will be no severance. Ruta has said she will sue the government to honour the financial commitments of her five year contract.  Despite everything else that has, or has not happened, I think Ruta is going to win her case.

The Legislation says that “The minister must appoint an independent auditor…”  The AGLG believes her professional standards compel her to protect that independence.  I think the chances are pretty good a judge will agree with her.

I suspect many local government leaders are quietly hoping Ruta wins her case. If they are going to have a municipal AG imposed on them, a judicial finding that the office can and should be truly independent from provincial whims would be a relief for local governments.  It would also be a relief to have an AGLG independent from “Audit Councils” made up of business friends of the provincial government.