Cost of audit into Senate expenses expected to hit...
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May 20, 2015  |  Vote 0    0

Cost of audit into Senate expenses expected to hit $21 million

The $21-million price tag attached to the upcoming audit of expenses claimed by senators suggests thousands of hours went into the unprecedented investigation


OTTAWA — The astonishing $21-million price tag attached to the upcoming audit of expenses claimed by senators suggests thousands of hours went into an unprecedented investigation that is expected to rock the troubled institution once again.

The expected cost of the audit, which auditor general Michael Ferguson said he expects to deliver to the Senate the first week of June, far exceeds his previous look into the workings of the Upper Chamber, with his 2012 report on the Senate administration costing just over $1.8 million.

The investigation by forensic accounting firm Deloitte into the travel expenses of Pamela Wallin, meanwhile, cost the Senate $390,058.

The Deloitte reports into the living expenses of Patrick Brazeau, Mike Duffy and Mac Harb came with a combined bill of $138,784.

At least one politician, who otherwise wants to do away with the Senate, suggests there should be no regret over spending the money.

“This is about doing due diligence,” said NDP ethics critic Charlie Angus. “It’s going to take a lot of money to go through all the documents to find out where all the bad apples are, as opposed to the one bad apple.”

Senators have been grumbling quietly for months about just how thoroughly auditors have been combing through their books, asking why someone claimed a per diem when sandwiches were served at a committee meeting, for example, or, as Sen. Nancy Ruth complained, there was free breakfast on the plane.

The Office of the Auditor General refused to comment on or provide a breakdown for the $21-million figure, first reported by CTV News and confirmed by the Star Wednesday.

“The full cost of this audit will be made available once we have completed our work,” spokesman Ghislain Desjardins wrote in an email.

Dan Simunic, a professor of accounting at the Sauder School of Business at the University of British Columbia, said the cost would be massive if it were in the corporate world.

“It is huge. I think it’s safe to say that this is a very, very large audit cost, probably way in excess of any amounts that they will recover,” Simunic said.

Simunic, who has done research into the production and pricing of audits, said it would be difficult to compare a government audit to a corporate one, but an audit of financial statements would normally cost a company with $10 billion in assets about $1.4 million.

And the cost of labour for an accountant doing a forensic audit would be about $200 per hour, suggesting the amount of work that went into this one over the past two years.

The Senate budget for fiscal 2015-16 is $89 million, including $18 million for the salaries and pensions of senators.

Heather Chew, a spokeswoman for the Senate administration, acknowledged there would have been costs on the Senate side, but could not provide a figure.

“On our side, it is not unusual for the employees of an organization undergoing an audit of this scope and scale to support the process by responding as required to information requests from the auditor. That was certainly the case with Senate administration. Do we have a number in terms of hours spent? No,” Chew wrote in an email Wednesday.

Senate Government leader Claude Carignan would not confirm the cost.

“The auditor general independently managed every aspect of his audit, including costs, and we have not been informed of these costs,” Carignan said in an email sent by a spokeswoman.

As to whether it was worth it, Carignan said: “We invited the auditor general to conduct this audit in our ongoing commitment to transparency and accountability and to help the Senate be more efficient. The auditor general independently decided on how he wanted to conduct the audit, on what were the audit parameters and on the resources he deemed necessary.”

Toronto Star

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(1) Comment

By StatusQuoContinues | MAY 21, 2015 06:19 PM
This is nothing compared to what will be have to be repaid, those who will be put behind bars, and all those who will loose their pensions and benefits because of their criminal acts.......................I suggest ANY public sector worker who is found to have criminally breached the rules be terminated, and either forfeit 100% of their bonuses, pensions, and benefits upon conviction or rot behind bars for twice as long as their citizens would. It's time we hold the "highly educated professionals"s to account, and hold them to a higher standard - You want to fly high with the big boys you can pay the price when you fail.
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