Governing the Governors

It was once said to McLeod Governance by a very senior international Board Member that you only need to review the expense reimbursement approach to truly understand the organisational culture. 

Given the impenetrable nature of the corporate veil, the closest we get to a transparent examination of an organisation’s expense reimbursement system is when there are public funds in question.

And the Auditor General of Canada does not let us down.

Firstly the scope:

The objective of our audit was to determine whether Senators’ expenses and other transactions have been properly controlled and incurred for parliamentary business and with due regard for the use of public funds.

And what did they find?

We found that the oversight, accountability, and transparency of Senators’ expenses was quite simply not adequate.


We also found that Senators did not always consider the requirement to ensure that expenses funded through the public purse were justifiable, reasonable, and appropriate. We have noted areas where Senators could make decisions that would be more economical for taxpayers.

Thirty of the current and past Senators reviewed:

Incurred expenses for which there was such a pervasive lack of evidence, or significant contradictory evidence, that we were prevented from reaching an audit opinion

Not surprisingly:

The weaknesses and problems uncovered in the course of this comprehensive audit of Senators’ expenses call for a transformational change in the way expenses are claimed, managed, controlled, and reviewed.

On transparency of the process:

As a group, Senators are responsible for governing themselves and how the Senate functions. They design their own rules, choose whether to enforce those rules, and determine what, if any, information will be publicly disclosed.

As the Auditor General notes:

A structure in which individuals set rules that apply to themselves, and have the authority to make final decisions about how those rules are applied, may give rise to a perceived lack of objectivity, as those individuals may be viewed as looking after their own interests.

And ignorance of the law should no excuse:

The Senate should enhance the training and guidance provided to all Senators and their staff to ensure that there is a consistent understanding and application of the principles and the rules, policies, and guidelines that are used to implement those principles.

In the end this three word summation provides the best rationale for improving the system:

Transparency promotes trust

As a postscript this is another instance where the increasing trend of non written communication of the findings has been used – in this instance a YouTube video from the Auditor General.


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