The legislative assembly chambers, home of debates and Question Period, may have the highest profile, but it is at the committees where much of the real work happens behind the scenes in the legislature.
As it turned out, the activities of the Public Accounts Committee took centre stage last Monday at the legislature. The committee includes several Northwest MLAs including Herb Cox (the Battlefords), Larry Doke (Cut Knife-Turtleford) and Randy Weekes (Biggar-Saskatchewan Valley).
Appearing that morning was provincial auditor Judy Ferguson, who had a number of things to say about their audit into the Global Transportation Hub land deal. Here is the Hansard account of her remarks.
Ms. Ferguson: — Thank you very much, Madam Chair, Deputy Chair, members, and officials. … I just wanted to reinforce a couple of points that we raised at the last meeting. And the reason that I do that … is that our office is a bit concerned that our finding — which is the audit did not find evidence of conflict of interest, indications of fraud or wrongdoing by GTH management or the board of directors — is not well understood and has really I think overshadowed our audit conclusion. When we sit back and pause as an audit office, we think this may stem from an insufficient understanding of audit, and perhaps that’s impacting the understanding of the results of our GTH audit.
So as noted in our report, and as we raised in the November 8th Public Accounts Committee meeting, our office did not do a forensic audit or audit the activities of private sector individuals or corporations. Rather, as we expressed at that meeting and in the report, the GTH audit focused on GTH processes to acquire land. The purpose of the audit was not to accuse or vindicate individuals or entities involved in specific land transactions, as may have been the purpose of a forensic audit.
As previously emphasized, we did the audit in accordance with generally accepted auditing standards. We refer to these standards as GAAS. … GAAS doesn’t allow the auditors to ignore risks of fraud due to ... or errors or irregular acts, as they relate to the objective of the audit. … GAAS expects auditors to identify such risks, carry out audit procedures in response to those risks, and assess the audit and evaluate the audit evidence.
In addition GAAS recognizes, owing to the inherent limitations in audits, there’s always the unavoidable risk that an audit carried out under GAAS may not detect fraud, wrongdoing, or conflict of interest. To acknowledge this limitation, we stated that the audit did not find evidence of conflict of interest or indications of fraud or wrongdoing by the GTH management and board of directors.
… we want to emphasize that the audit did not conclusively state that there was no conflict of interest, fraud or wrongdoing with respect to these land transactions related to GTH. As indicated in our report, our conclusion is that the audit did not have effective processes to acquire land for the purposes of transportation logistics hub from the private sector reflecting fair value. As our office has previously stated, ineffective processes have left taxpayers exposed to increases in land value and paying for increased land prices.
Later in the meeting, committee member Larry Doke had questions for the provincial auditor with respect to whether a forensic audit should be done.
Mr. Doke: — Thank you, Madam Chair. As I said earlier, I thank you for your clarification on your opening statements, and that’s good. So as the official opposition and others have asked for a forensic audit, do you think that that’s necessary?
Ms. Ferguson: — Our office hasn’t been asked to do a forensic audit … but if our office was asked to do a forensic audit, I think we would probably pause on that at this point in time, because we understand that there is a police investigation under way and the scope of the investigation does include the activities related to GTH’s acquisition of land from the private sector. And so our office would pause in terms of doing that, in that it might ... It would result in a duplication of use of public resources to do that work.
Mr. Doke: — Thank you. And I guess that asks or answers the second part of my question if in fact ... I believe the opposition has forwarded that to the RCMP. So if the RCMP are conducting an investigation, of your opinion then you wouldn’t be doing a forensic audit at the same time?
Ms. Ferguson: — Yes, that is what I was trying to express.
Mr. Doke: — Okay. Thank you.
What Ferguson had to say was fresh ammunition for Opposition leader Trent Wotherspoon in the afternoon, as he again sought answers from Premier Brad Wall on the topic of the GTH land deal in Question Period.
Mr. Wotherspoon: — Mr. Speaker, this morning at Public Accounts the auditor asked for some time to “reinforce a couple of points.” Mr. Speaker, she was concerned that her conclusions were, “not well understood,” and, Mr. Speaker, that a line in one press release has, “ ... really I think overshadowed our audit conclusion.” Mr. Speaker, the Auditor wanted to “ ... emphasize that the audit did not conclusively state that there was no conflict of interest, fraud, or wrongdoing …”
Mr. Speaker, will the Premier acknowledge that the lines he’s used time and time again are wrong? Will he retract those comments, his weak and tired talking points, and will he finally start to answer the questions that Saskatchewan people are deserved in that government’s GTH [Global Transportation Hub] land scandal?
The Speaker: — I recognize the Premier.
Hon. Mr. Wall: —Thank you, Mr. Speaker. I thank the member for his question. There was no scandal. The member keeps using that description. Clearly, Mr. Speaker, that’s not been the case, as evidenced by the Conflict of Interest Commissioner’s report on the matter with respect to the member who was the minister at the time, and it’s also consistent with what the Provincial Auditor found and did not find.
Mr. Speaker, I was very careful to quote the press release from the Provincial Auditor over and over again as late as last week. Again, from the Provincial Auditor’s press release that accompanied the report: “The audit did not find evidence of conflicts of interest, or indications of fraud or wrongdoing by the GTH management or Board of Directors.” Now one of the board of directors would have been the minister.
Well here’s what else she said this morning: she referenced generally accepted accounting standards. She said GAAS doesn’t allow the auditors to ignore ... doesn’t allow the auditors to ignore risks of fraud due to ... or errors or irregular acts, as they relate to the objective of the audit. Rather, as we previously highlighted, GAAS expects auditors to identify such risks, carry out audit procedures in response to those risks, and assess the audit and evaluate the audit evidence.
What the auditor is saying is that generally accepted accounting standards would require an auditor to not ignore risks of, signs of fraud. And so in the accompanying press release, she says …“The audit did not find evidence of conflicts of interest, or indications of fraud or wrongdoing by the GTH management or Board of Directors.”
The Speaker: — I recognize the Leader of the Opposition.
Mr. Wotherspoon: — Mr. Speaker, that Premier should be embarrassed, plain and simple ... [inaudible] ... Saskatchewan people is nothing but a disrespect to try to dismiss this as not a scandal with millions of dollars that have been wasted, where taxpayers have been ripped off, where nuns have been ripped off, is nothing short of a disrespect to all people in this province.
Let me try again: “ ... we want to emphasize that the audit did not conclusively state that there was no conflict of interest, fraud, or wrongdoing . . .” Will the Premier agree with the auditor here today? Does he agree that this clarification is very important? And will he change his and his Sask. Party government’s arrogant dismissal of this very serious issue?
The Speaker: — I recognize the Premier.
Hon. Mr. Wall: — Mr. Speaker, there is so much that needs to be corrected in the hon. member’s preamble every single time he stands up, including, Mr. Speaker, this notion, this ridiculous notion that the government was dismissive of concerns with respect to the transaction.
In fact it was the government, in fact it was our office that asked the auditor to look at the matter. It was our office, when asked, would we make all of the cabinet materials available ... And that’s not always done, Mr. Speaker, as we know the tradition of cabinet documents and their confidentiality. We were asked, would you make all of the emails, all of the cabinet documents available for the independent officer of the legislature to review?
Mr. Speaker, we did exactly that. We said, absolutely. Everything should be available for the auditor and her team …
Wotherspoon would later take aim at Doke’s exchange with Ferguson.
Mr. Wotherspoon: — … Today, one of the Sask. Party committee members repeated a point that the Premier and his minister often use, that a forensic audit apparently wouldn’t be needed. But, Mr. Speaker, the auditor’s answer was very clear on this as well:
“... if our office was asked to do a forensic audit, I think we would probably pause on that at this ... time because we understand that there is a police investigation under way and the scope of the investigation does include the activities related to GTH’s acquisition of land from the private sector.”
To be fair, she said that she’d pause before going ahead, but because of an RCMP investigation into this scandal.
Will the Premier finally stand up and admit that his justification he’s been using against a forensic audit has been wrong? Will he start answering, stop obfuscating, and finally open up his office and fully co-operate with the RCMP’s criminal investigation into his government’s GTH scandal?
The response came from Minister of the Economy and the GTH, Jeremy Harrison.
Hon. Mr. Harrison: — … The Provincial Auditor did directly address the issue of a forensic audit. She said that there would be ... She would put it on pause, I believe, even if requested by the committee.
So, Mr. Speaker, I would quote the Provincial Auditor as well in terms of the quantity of information provided in the audit that she did do. On June 8th, her quote: “And frankly, if we did a forensic audit, there would be a lot of matters that we included within our report that would have not been provided to the committee.” Meaning there was actually more information provided to the committee in the context of the audit that she did, Mr. Speaker.
The Speaker: — I recognize the Leader of the Opposition.
Mr. Wotherspoon: — Well, there they go again, Mr. Speaker.
