January 26, 2007
John Morlu, II
Auditor General of Liberia
The GAO must be seen as the only institution that will justify government’s claims that, this time—unlike previous times—it is truly working to bring about the desired social change and lift the country out of poverty and decadence. Fiscal indiscipline germinates underdevelopment and social unrest. It drives away people’s zeal and commitment, and creates a nation of faked patriots and lip-servants.
Other nations—be they developed or underdeveloped—are developing a new mindset that pits them against corruption and misappropriation of public funds. They now resolve that the public property is sacred and cannot be taken for granted. Fraud, waste and abuse must be tackled on all fronts!
That landmark audit report was politicized as it was scrutinized by politicians. But the audit withstood the test of time. It was meticulous, professional and honest. Such achievement by any auditing entity requires the support and commitment of the government totally interested in financial probity, advancing the cause of its people and eradicating corruption.
always see the bigger picture; they put their countries first and foremost.
They bask in public service to leave a lasting, impressive legacy. This is why
their accountability mechanisms are sound-proof, supported and independent,
which in turn germinate respect, honor and trust for their countries and
The Office of Auditor General of Liberia is pleased to bring you a reflection of the Office of the Auditor General of Canada headed by Sheila Fraser on a landmark audit conducted in 2002 as published by INTOSAI, the International Organization of Supreme Audit Institution, a United Nations sponsored organization for all auditing institutions in the world. “AG Frasher talks, the world listened,” lamented a Canadian Profession of Accountancy. But like any individual heading a front-line institution to defend and promote the public interest, her institution was questioned and tested, but with share honesty, dedication and competent work, she and her team were able to weather the storm against public scrutiny.
We want Liberians to read this reflection and think about the valuable lessons contained therein, and how we can benefit from such experience and exercise, as we embark on a new course to build an accountable governing system that will withstand the test of time.
Auditor-General of Canada
In March 2002, the then
Minister of Public Works and Government Services asked the OAG to audit three
contracts totaling 1.6 million Canadian dollars (1.1 million euros) that had
been awarded to a communications agency in the late 1990s for advertising
services designed to increase the visibility of the government of Canada. That
audit report, presented to Parliament in May 2002, revealed significant
shortcomings at all stages of the contract management process. Because of the
nature of the findings, we referred the government’s handling of the three
contracts to the Royal Canadian Mounted
Police (RCMP), our national police service. We also decided that we would
undertake a governmentwide audit of the sponsorship program and advertising
activities of the government of
Sponsorships were intended to
increase the visibility of the federal government in the
Audit Findings on the Sponsorship Program
Our audit found that Parliament had not been informed of the program’s objectives or the results it achieved and was misinformed as to how the program was being managed. Those responsible for managing the program broke the government’s contracting rules in the way they selected advertising firms and awarded contracts to them. We found significant shortcomings at all stages of the contract process: in making the decision to contract the work, developing the contract specifications, selecting the contractor, and ensuring that the government received the contracted goods or services before paying the contractor.
There was a lack of transparency in decision making. No written program guidelines provided clear criteria for eligibility, and no written objectives indicated that the program had been part of a national unity strategy. Moreover, a lack of documentation prevented us from determining why an event was selected for sponsorship, how the dollar value of a sponsorship was determined, or what federal visibility the sponsorship would achieve. Furthermore, there was little oversight of financial activities, and fundamental principles of control were violated. Roles and responsibilities were not segregated to eliminate opportunities for fraud or an override of controls by management. There was little evidence of analysis to support the expenditure of more than 250 million Canadian dollars (173 million euros) from 1997 to March 2003. Over 100 million Canadian dollars (69 million euros) of that was paid to communications agencies as production fees and commissions.
In some cases, sponsorship funds were transferred to Crown corporations using highly questionable methods that appeared to have been designed to provide significant commissions
to communications agencies while hiding the source of funds and the true nature of the transactions. Some payments were based on false invoices and contracts. Appearing before the Standing Committee on Public Accounts, I informed parliamentarians of the appalling lack of regard for rules and regulations that we saw in the way contracts were managed. Equally disturbing was that it happened in the very department, Public Works and Government Services, that is supposed to ensure prudence, probity, and fairness in contract management throughout the government. The problem was not a lack of rules but the failure to observe existing rules.
Our audit revealed that the government had run the sponsorship program in a way that showed little regard for Parliament and its financial administration legislation. Controls and oversight mechanisms that should have been in place had collapsed. Moreover, politicians and senior bureaucrats were reluctant to recognize their responsibilities and to be accountable for their actions.
The Gomery Commission
Our governmentwide audit report on the sponsorship, advertising, and public opinion research activities of the Canadian government was tabled in the House of Commons on February 10, 2004. A few days later, the government announced the creation of a Commission of Inquiry into sponsorship and advertising activities. It also hired a special counsel to recover funds that might have been improperly received through the sponsorship program. The government cancelled the sponsorship program in December 2003, several months before we tabled our audit in the Canadian legislature.
The public inquiry, headed by
Justice John A. Gomery, a judge of the Superior Court of Quebec, had a double
mandate: (1) to investigate and report on questions raised in our report and to
make recommendations to the government of
But our meticulous adherence to
methodology and professional standards stood us in very good stead throughout
the events. And the Gomery inquiry concluded its hearings without any serious
challenge to the credibility of our report. Justice Gomery commended our work
in his final report: “It became apparent to me throughout the hearings that,
with virtually no exceptions, the conclusions of the Auditor General of
Given that an audit had never been
the subject of a public inquiry in
We have also taken steps to further strengthen our audit evidence to ensure that it can withstand a vigorous challenge. For example, we have decided that interview notes should be signed by interviewees when the contents are evidentiary in nature. As soon as our report was tabled, the public discussion about it became extremely political as the government and opposition parties engaged in a political tug of war about who was responsible. When we saw how the public debate was evolving, we stopped giving media interviews. Despite this decision, we continued to be mentioned in news stories about the “sponsorship scandal,” as it was called by the media, for many months. The parliamentary Public Accounts Committee later commended our work, noting the following:
Efforts were made by some witnesses to discredit or refute certain elements of the Auditor General’s report [on the sponsorship program]. These efforts were generally self-serving and wholly unconvincing. From past experience, the
[Public Accounts] Committee is quite familiar with the audit methodology employed by the Office of the Auditor General and the vetting process the Office [SAI Canada] follows to confirm the findings that methodology produces. This process is painstaking and thorough.
The overwhelming weight of the evidence presented to the [Public Accounts] Committee has consistently confirmed and strengthened the observation and conclusions made by the Auditor General in her report [on the sponsorship program].
That our report
withstood intense public scrutiny reflects well on the rigor of our audit work
and the professionalism of the men and women who work at the Office of the
Auditor General of
Finally, it was rewarding for me, as head of our supreme audit institution, to ascertain firsthand that Canadians and parliamentarians continue to hold our office in high regard and have great confidence in the quality of our audit work.
The Auditor General of
Source: Sponsored by the General Auditing Office (GAO),