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What is the Auditor General’s Role in Public
Sector Accountability?
Public sector accountability is
based on the premise that governing bodies are best served by
knowing whether the responsibilities conferred on government
departments and agencies are satisfactorily performed and intended
results are achieved. The Auditor General brings an independent
audit process to the manner in which these conferred
responsibilities are discharged in the public sector and reports
directly to the House of Assembly on the results of these
audits. The role of the Auditor General complements the
accountability relationship which exists between Government, its
departments, agencies of the Crown, Memorial University of
Newfoundland and the House of Assembly.
How is Government Accountable to
the House of Assembly?
The way Government spends public
money is very important to Newfoundlanders and Labradorians.
Control of the public purse is
carried out on behalf of the people by their elected
representatives, the Members of the House of Assembly. While it is
up to Government to draft budgets and spending estimates, Government
cannot collect or spend taxpayers' money without the approval of the
House of Assembly. After Government spends the money entrusted to
it, there is an obligation to report back to the House of Assembly
on how the money was used. This, the obligation to answer for
actions taken, is the basis of the accountability relationship that
exists between Government and the House of Assembly. As the
governing body in this accountability relationship, the House of
Assembly is responsible for: 
To assist this process, the
Government provides information about how it used the public funds
entrusted to it.
But what assurance do Members of
the House of Assembly have that this information is appropriate,
credible and complete? How can Members know that the information
they receive accurately reflects the results of the activities of
Government?
What is the role of Legislative Auditors?
The House of Assembly in this
Province, as in Legislative Assemblies in other jurisdictions in
Canada, uses the services of an Auditor General to assist it in
carrying out its oversight responsibilities. Historically, the
Assemblies have understood well the need for an independent
Legislative Auditor and recognized the position's unique
contributions to the public accountability process.
From the view of legislators, the
value of Legislative Auditors has not simply been in their technical
expertise, it has also been in their ability to conduct audits that
may not please those being examined, and to report their findings
publicly. This has made their roles indispensable. They have
subjected the operations of the public sector as a whole to regular,
independent examinations, acting first and foremost in the public
interest, as acknowledged champions of open and transparent
government.
Defining the unique and vital role
of Legislative Auditors in the public accountability process
revolves around four key points:
As a result of working exclusively
in the public sector, Legislative Auditors have acquired extensive
corporate and operational knowledge of Government. They are
specialists in the field of public sector auditing and their
credibility with legislators (for example, on topics such as
emerging public sector trends and accountability issues) is thus
well established. Given their extensive interaction with
legislators, Legislative Auditors are in the notable position of
being aware of, and understanding legislators' concerns.
Furthermore, having a
whole-of-Government mandate has allowed Legislative Auditors to
speak to legislators about broad Government matters and to better
identify those accountability and performance issues that have the
greatest impact on Government. As a consequence, Legislative
Auditors are better able to promote consistency of accounting across
government organizations, and to make informed decisions about the
selection, conduct and reporting of audits.
Why is Independence the Cornerstone of
Legislative Auditing?
Independence, the state of being
impartial and free from bias and conflicts of interest, is the
cornerstone of legislative auditing. Anything that impedes an
honest, straightforward and sincere approach to the performance of
an audit will reduce public confidence.
In Canada, Legislative Auditors
enjoy the confidence of legislators and the public, and their
independence is unquestioned. The fact that this independence is
largely backed by legislation instills public confidence in the
process. For instance, were a legislative audit to reveal
significant matters critical to government, those matters would, by
law, have to be made known to legislators and the public.
The legislation under which the
Office of the Auditor General in Newfoundland and Labrador operates
is the Auditor General Act. This legislation was assented to
on 31 October 1991.
What is Professional Independence?
To be independent in appearance as
well as in fact, Legislative Auditors have been granted the freedom
to act without undue direction or interference from government.
In practice, and subject to
legislation and professional standards, this means that Legislative
Auditors are able to determine when and how audits will be conducted
and who will conduct them. It is they, for the most part, who have
the license to set the audit program for their jurisdictions,
choosing the bodies to be audited and determining the nature and
scope of audits to be conducted.
From a public accountability
perspective, this degree of independence is crucial. Only in this
way can there be assurance that all matters of importance are
subject to thorough examination, no matter how the results might
reflect on those being audited.
What
is Personal Independence?
Bolstering the independence of
Legislative Auditors even further, legislators, not
Government,
generally make decisions pertaining to the auditors' appointment,
tenure, reappointment, remuneration and resources. Such decisions
are overseen and approved by each Legislative Assembly as a whole.
In this Province, the House of
Assembly has assured this independence by appointing the Auditor
General for a 10 year non-renewable term as an Officer of the House
of Assembly, with removal permitted only for cause or incapacity. As
well, the Auditor General Act provides the Auditor General
with immunity from legal action.
How do Legislative Auditors differ from Other
Audit Professionals?
Being an Officer of the House of
Assembly means being, above all, responsive to the Assembly's
interests and wishes. This position as the Assemblies' Officer,
combined with the responsibility to audit the whole of Government,
is what sets Legislative Auditors apart from other audit
professionals working in the public sector.
What is meant by “whole-of government”
mandate?
The Auditor General is the only
official channel through which the House of Assembly is regularly
and consistently kept informed of Government's stewardship of public
funds.
The House of Assembly has granted
the Auditor General a “whole-of government” mandate, covering
organizations as diverse as Government departments, agencies,
commissions, boards and Crown corporations. In this way, the House
of Assembly is assured of receiving the Auditor General's
conclusions and recommendations for the entire Government entity,
regardless of whether or not the executive branch of Government has
hired a private sector auditor to audit a specific organization or
program of Government.
What is the Breadth of Audit Coverage
Legislative Auditors in Canada meet
their auditing objectives by examining a very broad range of
issues. These issues are not necessarily the same ones encountered
in the private sector, mainly because of the basic differences
between organizations in the private sector and those in
government. For example, because government organizations have
public policy objectives, the results of their operations cannot be
assessed based solely on their financial statements.
Recognizing this distinction,
Legislative Assemblies have broadened the scope of the work that
Legislative Auditors may do to obtain the information they need to
hold government accountable. This information focuses on the
financial, operational and compliance with authorities performance
of government organizations.
To Whom does the Auditor General Report?
As an independent Officer, the
Auditor General reports directly to the House of Assembly, at least
annually, on anything the Auditor General feels should be brought to
the Members' attention. The reports become a matter of public record
and cover a wide range of issues of interest to legislators and the
public, including compliance, evaluation of accountability
relationships, management practices and control systems, and review
of program results compared to established criteria. Having one
auditor reporting to the House of Assembly is an efficient and
effective means of ensuring that Members receive the information
they need to hold Government accountable. The Auditor General also
has direct access to the Public Accounts Committee. This provides a
formal means of discussing reported audit findings with Members.
To Whom are the Legislative Auditors
Accountable?
Questions are raised from time to
time about what the appropriate involvement and role of a
Legislative Auditor should be and to whom Legislative Auditors are
accountable?
The fact is, Legislative Auditors
fulfill a distinctive position in the accountability regime of
governments. They have been able to serve the accountability
relationship between government and the Legislative Assembly because
they have sufficient independence from government to be credible,
they have mandates that are set out in legislation, and they have
the forums to report directly to their Assembly. Moreover, they have
acquired the necessary expertise to carry out their role
effectively.
Such independence as that bestowed
on Legislative Auditors requires that they themselves be accountable
to their respective Legislative Assemblies. This means that
Legislative Auditors are obligated to report directly to the
Assembly on how they carry out their responsibilities and how the
services they are providing add value to the accountability
process.
The resources available to the
Auditor General are determined through discussion with the House of
Assembly Management Commission. This Commission is a Committee of
the House of Assembly, over which the Speaker of the House presides,
and is responsible for all matters of financial and administrative
policy affecting the House of Assembly, its offices (including the
Office of the Auditor General) and its staff. The
Auditor General
Act requires that estimates of the sums required to be provided
by the Legislature for the payment of salaries and other expenses of
the Office of the Auditor General be submitted to the Commission for
its approval. As well, each year, the financial statements for the
Office are to be audited by an auditor appointed by the Commission,
with the audited statements being tabled in the House of Assembly.
Who
Audits the Auditor General?
Each year, the
financial statements for the Office are to be audited by an auditor
appointed by the Commissioner, with the audited statements being
tabled in the House of Assembly.
As well, the Public
Service Commissioner, the Government Purchasing Agency and the
Office of the Comptroller General have the authority to and
regularly review related aspects of the office's operations of the
Office of the Auditor General.
Furthermore, a sample
of our audit files are periodically reviewed by a representative of
another Canadian Legislative audit office to ensure that our files
comply with Canadian generally accepted auditing standards.
How Many Staff are Employed with the Office?
To fulfill its legislated mandate,
the Office of the Auditor General has approximately 36
positions at the Head Office in St. John’s and 5 at its District
Office in Corner Brook. The Office is responsible for:
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auditing financial statements and other
accountability documents;
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evaluating management practices and control
systems; and
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determining compliance with legislative and other
authorities.
Eighty percent of audit staff hold
professional accounting designations. The staff, with their
extensive experience in legislative auditing, is one of the Office’s
greatest assets. |
