CFI Among Those Blasted by Auditor-General for Being Unaccountable
The Canadian Foundation for Innovation (CFI) was cited by Auditor-General Sheila Frazer today as one of the federal foundations "shielded from parliamentary and public scrutiny." CFI, a $3.6 billion foundation, is not subject to federal Access to Information legislation.
Some are warning that in the absence of public accountability for federal foundations such as CFI lies the making of scandals of larger proportion than the sponsorshiop scandal.
Last November CFI gave $3.6 million to Trent University for the DNA Cluster project. Trent, like all Ontario universities, is exempt from provincial Freedom of Information legislation.
"Given the significant sums involved, I am concerned about the lack of adequate accountability to Parliament," Ms. Fraser said.
Federal computers vulnerable, Fraser warns
Globe and Mail On-line - February 15, 2005 (Updated at 2:39 pm EST)
Canadian Press with Globe and Mail Update
Ottawa - Sensitive government information is vulnerable to computer hackers, and billions of taxpayer dollars are squirrelled away in federal foundations without public scrutiny, the Auditor-General says.
Sheila Fraser's latest report Tuesday is a tale of troubling possibilities rather than a blockbuster scandal.
But the woman who blew the lid off the sponsorship imbroglio has nonetheless put Prime Minister Paul Martin's Liberal minority on notice that bigger and potentially more-damaging problems lie buried in the government's machinery.
In Question Period, Conservative Party leader Stephen Harper said that allowing foundations to operate without scrutiny showed that the federal government "has learned nothing from the sponsorship scandal."
"That scandal happened because the Liberals stashed millions away from the watch of parliament," he charged.
"Now we have even after repeated warnings billions of dollars continue to be hidden away in these unaccountable foundations. When will the government learn and put foundation spending under the scrutiny of parliament and the Auditor-General?"
Mr. Martin insisted that the foundations prepare public reports and that their heads can be summoned to appear before parliamentary committees. He also sought to deflect Mr. Harper's attack by accusing the Tory leader of ignoring the good work done by these foundations.
"The fundamental point that the honourable member seems to be raising is he's questioning in fact the validity of the Canadian Foundation of Innovation and other such foundations," Mr. Martin said.
"Let me tell you ... he should go to the universities and the teaching hospitals in this country and ask them what they think about the Canadian Foundation of Innovation. He will find they support them. They are supporting fundamental research in this country, Mr. Speaker, and that is what is important."
Ms. Fraser's report Tuesday came a year after an earlier report provoked Mr. Martin to call a judicial inquiry to get to the bottom of the $250-million sponsorship program. Now, she has reissued a warning about Ottawa's penchant for plowing year-end surpluses into arms-length foundations.
Those foundations, such as the $2.5-billion Millennium Scholarship Foundation and the $3.6-billion Foundation for Innovation, are shielded from parliamentary and public scrutiny, she says in her new report.
With $7.7-billion out of public view in foundation coffers — and rumours of new such projects being launched in next Wednesday's federal budget — the Liberal government has not made good on promises from the past two years to improve the transparency of foundations.
"Given the significant sums involved, I am concerned about the lack of adequate accountability to Parliament," Ms. Fraser said.
In simple terms, the various foundations could harbour the kinds of contracting irregularities, insider back-scratching and lack of value for money that bedevilled the sponsorship program — but without the kinds of public audits that would ever bring such practices to light.
Also troubling, Ms. Fraser said, the federal government is not even meeting "it's own minimum standards" for information technology security, two years after she first warned of the danger.
"It means that government systems and the sensitive data they hold are vulnerable to security breaches.
"As more and more government services are offered on-line, individuals and businesses need to have confidence that the information they share will be well protected."
Ms. Fraser also emphasized Tuesday that the government has made "unsatisfactory progress" in improving the governance of Crowns corporations, some of which were involved in questionable sponsorship deals.
The sponsorship inquiry is set to begin its second stage later this month in Montreal, where Justice John Gomery will attempt to follow the money trail through a series of federally contracted ad agencies.
Ms. Fraser's latest revelations are sure to give critics fresh ammunition to fire at Mr. Martin.
Among them:
- It took more than three years for Ottawa to start addressing recommendations about Crown corporations made in a 2000 audit.
- It takes too long to appoint Crown corporation board members and CEOs. Four Crowns lack a permanent CEO, and in the 15 largest, more than one-third of board members' terms have expired.
- There is no formal mechanism for communicating government expectations to Crown corporations.
Small measures have been taken since Ms. Fraser first raised her concerns more than four years ago, well before suspect involvement by Canada Post and the Business Development Bank of Canada in the sponsorship program became public knowledge.
She noted that those small improvements do not keep pace with the public appetite for reforms in the wake of celebrated business scandals such as Enron, Nortel and WorldCom.
"Recent developments in the private sector have raised the bar for corporate governance, and this will require much more attention," she said.
| The Auditor-General's report |
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