Both the federal and provincial governments have auditors general to scrutinize their books, not just to see if the numbers balance but to rule on whether taxpayers are getting value for money.
Beyond making sure that money budgeted for office supplies is actually spent on office supplies, for instance, the report of the auditor general flags instances when department managers pay far too much for what they were getting. Additionally, they take an external look at whether business goals of government departments and programs are actually being met with all the money they spend.
These services are not cheap, but in the long run they pay dividends to taxpayers far beyond their own audit budgets.
Alberta’s auditor general, Fred Dunn, is responsible for an entire department; this year’s budget is $21.7 million. Even so, he had to cut or postpone 27 of 80 planned audits this year for lack of another $2 million.
That’s auditing one provincial government, with many departments, but a unified budget reporting system.
Now, consider all the municipalities in Alberta, each with its own style of budgeting and who knows what variety of methods of reporting.
But government MLA Art Johnson of Calgary-Hays believes an auditor general can scrutinize the books all these villages, towns and cities for $500,000 to $700,000 a year and compare apples to apples between them all.
If that were true, a municipal auditor general would be a fabulous investment. But it’s not true. Not even close.
Let’s give you an example. External audits on the books of non-profit societies in Red Deer that receive United Way or government contract funding probably exceeds a quarter million dollars a year.
It would be interesting for people who donate to local charities to know just what portion of their donated dollars goes into the offices of accountants and auditors before anything is spent on staff or programs dealing with poverty.
But these audits are vital, because people who give money to funding agencies like the United Way or pay taxes to government, which contracts services to non-profits, want to know that charities operate honestly and efficiently.
The numbers have to add up and an auditor signing off on the books of a local charity is putting his or her professional stamp on the document. Due diligence is not cheap.
The same applies to municipalities. Red Deer posts an annual audited financial statement every year, just like every other town and city, and anyone who wants to can see the document.
The process is expensive and ongoing, and we all pay for it.
So how MLA Johnson believes these audits can be scrutinized again in any depth at all and compare statements between municipalities for less than a million dollars a year — or less than $20 million a year — is a mystery.
Bill 202, the private member’s bill that Johnson is sponsoring to do this, is probably going to whither on the vine. As it should.
Yes, there are efficiencies to be gained. Yes, there have been instances of less-than-straighforward municipal financial reporting.
Yes, some municipalities have gotten into financial trouble over the years. It happens.
But if you put it to the taxpayers, they would probably say they trust the audit regulations already in place. They’d also say the millions that a provincial municipal auditor general would cost are better spent fixing potholes or building parks.
Greg Neiman is an Advocate editor.