Accountability

Trust in AG is broken

A message from an informed reader includes this:

Over the past week the Liberals have waged a pressure campaign to overturn the Legislative Assembly Management Committee [LAMC] decision to bring in an out-of-province auditor, and to have the BC Auditor General Carol Bellringer investigate instead.

What really astonished me was when Carol Bellringer also launched a media campaign that she should be the one to lead the audit. Her media comments included criticisms of Premier Horgan, and objection to an out of province auditor (Vancouver Sun, Jan 24).

She repeated these objections and criticisms in CBC Radio interviews last week, and astonishingly even went so far as to proclaim Dep. Clerk Kate Ryan-Lloyd to be above reproach in all things, even though the interviewer had not raised this subject.

It is wholly inappropriate for Ms. Bellringer to make such biased comments, and these should definitely disqualify her from leading the audit. Even if Bellringer had not made any remarks, the LAMC was right and wise to “unanimously” vote to look at bringing in an out of province auditor. Bellringer cannot deny that she and her office had a role to play in oversight, however slight it may (or may not) have been. For that reason alone, the BC Auditor General should NOT lead the audit. 

Why are the Liberals and Bellringer objecting to an external auditor so much? Mary Pollack claimed on CBC Radio that Bellringer would have access to more info than an external auditor. That is a sham excuse; it is a customary practice to bring in an external auditor. In fact, irony of ironies, Ontario’s government hired Gordon Campbell to lead an inquiry in the spending and accounting practices of their previous government.

It smells like the Liberals and Bellringer are eager to keep this “in-house”. Why?

To overlook the dozens of meetings Craig James had with former Liberal AG Geoff Plant in 2018, or the meetings with Christy Clark, just prior to and just after her resignation?? Just a thought.

This is urgent. CBC Radio news aired multiple clips of an interview with Mary Pollack on Saturday proclaiming that the NDP had agreed to this. That was false; it appears the LMAC will now vote on whether to go the BC Auditor General, or out of province.

Mainstream media is not questioning Bellringer’s unprofessional and inappropriate conduct last week. So, I have written to several of the NDP and Green members to beg them not to fall for this trick.

I agree with these statements. In December, the BC Auditor General proved to me the agency cannot be trusted.

Denying widely accepted definitions, they claimed benefits worth billions of dollars allowing natural gas producers to avoid paying royalties were not “tax expenditures” and therefore did not need to be reported.

The Auditor General argued that royalties, which once contributed billions of tax dollars to BC’s treasury, were not tax revenues, so corporate subsidy programs that reduced royalties were NOT tax expenditures.

However, when families buy children’s clothing and footwear and reduce payments of provincial sales tax by signing a certificate of exemption (FIN 425), that IS a tax expenditure.

Besides the AG’s willingness to shape work to suit political expediency, there are other issues.

In my early career, I worked as a financial auditor. I know it is fact that professional accountants hesitate to reveal long-standing irregularities after audits in numerous prior years failed to note existence of those same problems. It is preferred to minimize importance and continue skating over previous audit defects.

For evidence of my assertion, check out the years-long failures of Arthur Andersen & Co at Enron, Waste Management and WorldCom. Or, those of Price Waterhouse Coopers at Tyco, AIG and Freddie Mac. Or, those of Ernst and Young at Lehman Brothers and KPMG in the UK, where the Financial Reporting Council found the company’s work was inadequate in 50% of audits reviewed.

In 2012, BC Auditor General John Doyle raised serious concerns about financial mismanagement at the Legislature. For this and other difficult issues raised, Liberals fired him and attempted to deny benefits due him by contract.

Carol Bellringer knew the sensitivities of her office when she accepted the appointment. Since then, she seems to have been willing to make waves… but only small ones.

Despite, John Doyle’s clear warnings about financial impropriety at the Legislature, Ms. Bellringer has signed independent auditor reports each year with statements like this one a year ago:

In my view, the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

In my opinion, the financial statements present fairly, in all material respects, the financial position of the Legislative Assembly of British Columbia as at March 31, 2017…

Bellringer’s audit of finances at the Legislative Assembly during the year ended March 2018 was complete. But, in November, she was quoted by The Star Vancouver:

We have not issued an opinion on the current-year financial statements — and I’m not prepared to do so until I know what’s going on.

We completed … the work we normally do to be finished, then all this happened.

Having raised no pubic concerns, eight months after year end, the Auditor General was bewildered.

Yet, this same auditor who failed to discover corrupt practices in the Legislature now wants exclusive right to re-audit those transactions. According to Liberal spokesman Vaughn Palmer, Bellringer “rejected the insinuation she would somehow be auditing her own findings and/or things she missed earlier.”

Insinuation? No, that would be fact.

Experts in fraud investigations know that specialized training is needed to expose malfeasance, particularly when numerous parties are colluding to obscure truth. What the BC Legislature needs is a full examination by forensic investigators like those at Rosen & Associates of Toronto.

If the Horgan Government and the LAMC allows Auditor General Bellringer to direct a re-examination of the Legislative Assembly’s financial records, that is a clear sign, they’ve made a choice to sweep yet more scandalous behaviour under the carpet.


The Auditor General Act requires that the existing Auditor General remain in place at the Legislative Assembly. My suggestion is that a company like Rosen & Associates do a forensic examination. That work would be supplementary to standard financial audit work by the BC AG.

Given that potential fraud has been exposed, Ms. Bellringer ought to welcome expert assistance.

She does not. That is unfortunate.

14 replies »

  1. This is particularly disturbing in light of the chance that the Nanaimo by-election may prove fatal to the Horgan government and that Wilkinson and crew will have ample time and resources, not only to stifle any unwelcome inquiries into the past, but to continue along the same (somewhat interrupted path of looking after selves and friends rather than the people of the province. We should already rue the day that Horgan decided not to clean house immediately upon occupying the government benches.

    Liked by 1 person

  2. To think that she should re audit her own work is beyond all thought of reality! Too bad John Doyle could not be given clearence to testify like some of the Govt workers that were fired with non disclosure. We are in big big trouble if this happens. Who is she to demand this,

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  3. Absolutely she should not and has proved herself to be nothing more then a lapdog! EVERYWHERE John Doyle looked he found financial problems and the silence from the present Auditor General ever since she has been employed tells me that she is nothing more then an appointed BC Liberal hack who should be replaced immediately!!

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    • Bill

      If what you say is factual then why did Horgan and Company not do away with Bellringer? Do you actually believe Horgan is so inept that he would leave Bellrjnger in place if she is biased and in fact dishonest?

      If so then what does that say about him?

      Please clarify.

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      • To the bestow my knowledge (may not be all that great) there are swaths of people at Hydro, Ferries, ICBC, as well as in gaming, energy portfolios, forestry; that Horgan failed to do the major housekeeping that might have started this process earlier. His lack of zeal with Hydro and subsequent decision to continue with Site C indicates that there are a lot of things we aren’t seeing.

        Liked by 1 person

      • -> BCMQ

        Because the Auditor General is appointed by the whole Legislature, not by the Government.

        The value of an independent audit lies both in the fact that the auditor is, and is seen to be, independent of audited entities. Independence requires a freedom from undue influence or politial pressure.

        My suggestion that outside accountants and forensic investigators reexamine Legislative Assembly finances would allow the BC AG’s independence, such as it is, to be preserved, yet her competence tested. If, significant defects in work of the provincial audit agency are found by outsiders, that could then be referred to the entire Legislature for review.

        The Horgan Government alone is not entitled to remove Bellringer during the term of her office.

        But, I suspect you knew that already.

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  4. I do find it rather interesting that Bellringer has the Confidence of the Premier. It seems to me that The Premier is very familiar with Bellringer and if he had concerns we would have heard something, would we not?

    Taking your point as to the Appointment by the whole Legislature Weaver and his Minions would certainly be in play.

    Perhaps you are correct, as things now sit many Citizens from all Parties have concerns with the lack of Transparency and Accountability. It may be advisable to have a completely Independent Forensic Audit, it would certainly expose any problems and be fully transparent.

    I feel it is important to address this immediately and whether it be Bellringer or an Independent there is no time to waste.

    As I type this I find myself leaning to the Independent Audit of the Speakers Office and Legislative Assembly, we must somehow restore the confidence of the People in ourvProvincial Government and it must be done as soon as possible.

    No I did not know that already, I am always more than happy to learn something each and every day, thank you.

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    • Law states, “The Legislative Assembly may not appoint a person as Auditor General unless the committee unanimously recommends the appointment of the person.”

      Also, “By a resolution passed by 2/3 or more of the members present in the Legislative Assembly, the Auditor General, for cause or incapacity, may be suspended from office, with or without salary, or removed from office.”

      Like

  5. The Office of Auditor General for British Columbia is one of several public institutions tarnished by the actions of politicians over the past two decades.

    Auditor General John Doyle was ousted after he went to court in an attempt to obtain documents relative to the special indemnities involved in the BC Rail plea deal. An audit of special indemnities was conducted by the Acting Auditor General installed after Mr. Doyle departed.

    In May of 2013, the Acting Auditor General told the Vancouver Sun that the audit would be completed in a few weeks, and would probably not include the Basi or Virk indemnities “at all”.

    Six months later the report was released, and the Basi and Virk indemnities were not only included, but were the centrepiece of the audit. The secret plea deal to waive Basi and Virk’s liability for the $6.4 million in accumulated legal fees created by the indemnities was whitewashed in the most superficial and illogical manner imaginable. Bear in mind that even former Attorney Geoff Plant publicly wrote that the deal as constructed would be illegal.

    The Acting Auditor General refused to answer my questions regarding his report, saying he could only answer to the Legislature through the Select Standing Committee on Public Accounts. I therefore twice sent my questions to the committee which was reviewing the audit report through Kate Ryan-Lloyd, Deputy Clerk and Clerk of Committees. The questions were never asked, and the BC Liberal majority on the committee voted down a motion by NDP MLA Corrigan to have the two deputies that cooked the deal attend and answer questions about it.

    We need an external entity to conduct a forensic audit in the present situation.

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  6. The reader’s comments at the head of this article demonstrate that media friends of the B.C. Liberals continue protecting and assisting them.

    Where is concern about the very large numbers of questionable transactions shown to us by Plecas? Hard to find outside of new-media.

    But, loyal soldiers are advocates for the auditor general. They trust her, perhaps because she failed to find fault in hundreds of millions spent by Legislature officers and, in audit session interviews with key officials, heard no hint that people were being fired if they exercised approval responsibilities with too much diligence.

    Believe me, those interviews would have occurred because the first thing auditors do is review systems of internal control at the subject enterprise. Those determine paths taken during the course of a review.

    Need I add that Norm is on the right track here. I hope MLAs take note.

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  7. We need an external auditor. Lets take this back to the BCRail scandal, and have Corrigans questions answered as well. This all began when Gordon Campbell was Premier as far as I can see.
    I’m easily ready for an provincial election.
    Set the opposition voices free in a debate to be voted upon.
    No one counts the true cost of corruption to unduly influence events with its flawed logic which appears to be its telltale sign.
    What a treat to read here the knowledgeable conversations with you people.
    For whom does the bell toll? Not for the Bellringer!
    You people make our democracy come alive!!

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  8. You can listen to one of the CBC Radio interviews I heard with Ms. Bellringer last week. It’s available in a CBC BC Today open line show podcast, which was broadcast province-wide on Jan 24: JAN. 24, 2019 Spending at the B.C. Legislature. Targeting sexual predators.

    In this interview, Ms. Bellringer excuses her role in (not?) signing off on the 2018 audit because “as everybody knows..” No, most people don’t, including me.

    She takes credit for the reports of her predecessors, “Our office wrote some strong reports…” obscuring the fact that she as AG has not written any damning reports. She opines about what expenses were signed off on, what would have been in the “audit selection” of her office…

    She should avoid any commentary and especially any prejudgement. But most damning in my view is her full and complete endorsement of a staffer in the Clerk’s office, see below. Regardless of how blameless this person may well be, it is never appropriate to make such statements especially when she acknowledges she does not have access to all the facts and documents.

    Most egregious, at the end of her interview with CBC’s BC Today open line show, Ms. Bellringer makes the following comment about one of the Clerk’s staff, Kate Ryan-Lloyd, indicating that Ms. Bellringer is not only “too close” as the committee correctly stated but that she is also biased.

    “Not looking at that (Plecas) report in particular, but just what one hears, that that culture has been changing. We certainly… The individuals at the Legislative Assembly that we work most directly with… and I am going to call out Kate Ryan-Lloyd, she’s the most spectacular employee of the legislature and she plays a big part in setting a very strong ethical tone.”

    Like

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