I am wondering when Canadians will wake up and realize that Paul Martin has stashed $8,700,000,000 of our tax dollars into private organizations and foundations which have been out of reach of our Auditor General (Below is part of the 2002 speech from the AG).
AG_2002 wrote:
The government's use of private foundations also raises serious accounting issues. The $7.1 billion paid through transfers to nine foundations from 1996-97 to 2000-01, for example, was treated as an expenditure, though at 31 March 2001, almost the entire amount was still in the bank account and other investments of the foundations. One could question, then, if the $7.1 billion was really an expenditure of the government.
The recording of these transfers as expenditures is an accounting treatment that enables the government to report a lower annual surplus, which we believe compromises the integrity of the government's reported financial results.
The issues raised in this year's report related to governmental accountability - or lack of it - through the use of delegated arrangements such as foundations were also underscored in last year's report - and were in fact first mentioned by Mr. Desautels in 1999. Though there is some evidence that the government is willing to address some of the problems, there is in my opinion some urgency for Parliament to ensure that the essential elements of accountability are established in these foundations.
Now if there are not essential elements of accountability in those foundations, we need ask if the money is even still there or is it just more smoke and mirrors to hide the fraud of billions of dollars?
The Auditor General once again spoke out about this issue in 2003 and was once again ignored.
LINK CACHED
AG 2003 wrote:
Transfers to foundations
The most striking example of this imbalance is the government's increased use of foundations as a means to achieve specific goals.
Since 1997, the Canadian government has transferred some $7.5 billion to 10 foundations. There are several issues that concern us about these transfers.
First, the government entered the $7.5 billion as an expense into its accounts. However, one of our audits found that only a tiny fraction of these funds had been put towards its ultimate intended purpose. The rest was sitting in the accounts of the foundations, gaining interest.
I believe that the government's accounts would better reflect reality if the expenses were recorded in the years when the foundations either make payments to recipients, or use the money according to their agreements. Otherwise, the true fiscal picture gets out of focus.
There are also issues related to accountability and governance with respect to these foundations:
None of the foundations submit corporate plans for tabling in Parliament. Some don't provide annual reports that describe their accomplishments in a credible way. This means that parliamentarians lack adequate information to study these reports properly.
The government has set up these foundations in an ad hoc manner. Parliament hasn't had the chance to fully consider how it authorizes and oversees this kind of public spending.
Weak oversight of foundations means that Ministers aren't able to answer properly about their results to Parliament, and ultimately, to all Canadians.
Finally, Parliament only receives reports audited by the private sector for the foundations. In our view, Parliament also needs to receive value for money audits conducted by the Auditor General of Canada to ensure proper accountability to Parliament.
The government needs to reconsider its accounting practices as they relate to the foundations. Doing so would go hand-in-hand with the announced change to full accrual accounting. In Canada, we have a Public Sector Accounting Board, which is the only accounting board in the world that is dedicated specifically to public service accounting. The Board is currently studying two projects: transfers to foundations and reporting entities, which will likely offer guidance on this issue. The government also needs to further strengthen the accountability and governance of the foundations.
GlobeandmailNov52003
AG_2002 wrote:
The government's use of private foundations also raises serious accounting issues. The $7.1 billion paid through transfers to nine foundations from 1996-97 to 2000-01, for example, was treated as an expenditure, though at 31 March 2001, almost the entire amount was still in the bank account and other investments of the foundations. One could question, then, if the $7.1 billion was really an expenditure of the government.
The recording of these transfers as expenditures is an accounting treatment that enables the government to report a lower annual surplus, which we believe compromises the integrity of the government's reported financial results.
The issues raised in this year's report related to governmental accountability - or lack of it - through the use of delegated arrangements such as foundations were also underscored in last year's report - and were in fact first mentioned by Mr. Desautels in 1999. Though there is some evidence that the government is willing to address some of the problems, there is in my opinion some urgency for Parliament to ensure that the essential elements of accountability are established in these foundations.
Now if there are not essential elements of accountability in those foundations, we need ask if the money is even still there or is it just more smoke and mirrors to hide the fraud of billions of dollars?
The Auditor General once again spoke out about this issue in 2003 and was once again ignored.
LINK CACHED
AG 2003 wrote:
Transfers to foundations
The most striking example of this imbalance is the government's increased use of foundations as a means to achieve specific goals.
Since 1997, the Canadian government has transferred some $7.5 billion to 10 foundations. There are several issues that concern us about these transfers.
First, the government entered the $7.5 billion as an expense into its accounts. However, one of our audits found that only a tiny fraction of these funds had been put towards its ultimate intended purpose. The rest was sitting in the accounts of the foundations, gaining interest.
I believe that the government's accounts would better reflect reality if the expenses were recorded in the years when the foundations either make payments to recipients, or use the money according to their agreements. Otherwise, the true fiscal picture gets out of focus.
There are also issues related to accountability and governance with respect to these foundations:
None of the foundations submit corporate plans for tabling in Parliament. Some don't provide annual reports that describe their accomplishments in a credible way. This means that parliamentarians lack adequate information to study these reports properly.
The government has set up these foundations in an ad hoc manner. Parliament hasn't had the chance to fully consider how it authorizes and oversees this kind of public spending.
Weak oversight of foundations means that Ministers aren't able to answer properly about their results to Parliament, and ultimately, to all Canadians.
Finally, Parliament only receives reports audited by the private sector for the foundations. In our view, Parliament also needs to receive value for money audits conducted by the Auditor General of Canada to ensure proper accountability to Parliament.
The government needs to reconsider its accounting practices as they relate to the foundations. Doing so would go hand-in-hand with the announced change to full accrual accounting. In Canada, we have a Public Sector Accounting Board, which is the only accounting board in the world that is dedicated specifically to public service accounting. The Board is currently studying two projects: transfers to foundations and reporting entities, which will likely offer guidance on this issue. The government also needs to further strengthen the accountability and governance of the foundations.
GlobeandmailNov52003
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