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http://www.cbc.ca/story/canada/nati...port050215.html
Auditor general questions foundation funding
Last Updated Tue, 15 Feb 2005 14:53:50 EST
CBC News
OTTAWA - The federal government is unable to hold 15 private foundations accountable for the more than $9 billion it has given them since 1997, Canada's auditor general said Tuesday.
* INDEPTH: Auditor General
Sheila Fraser (CP file photo)
Sheila Fraser also said about $7.7 billion of the money, which otherwise would have made Ottawa's substantial budget surpluses even bigger, is still sitting unspent in the foundations' bank accounts, gathering interest.
"Given the significant sums involved, I am concerned about the lack of adequate accountability to Parliament," she wrote. "Important gaps remain in the external audit regime and ministerial oversight."
Fraser's latest report also warned that:
* Canadians' sensitive personal information, held by various federal government departments, is vulnerable to security breaches from hackers. She found that the government doesn't meet its own minimum standards for computer security.
* The government is dragging its heels on appointing board members, chairs and chief executive officers to key Crown corporations and agencies. Fraser said four corporations had no top executives controlling them at the time of her audit, even though Canada's 43 Crown corporations manage more than $78 billion in assets.
* The government has made only "slow and unsatisfactory" progress in basing its decisions on sound financial information.
* The Canadian International Development Agency has started giving out more of its foreign aid budget in the form of grants, which aren't subject to the same performance conditions as the more traditional donations. Since 1999-2000, Fraser said, grants have increased from $6 million to $148 million, with the latter figure representing more than eight per cent of the agency's total money pool.
Fraser's report, tabled in the House of Commons Tuesday afternoon, pointed out that although the 15 foundations receiving big government grants are audited and file annual reports, they are private corporations.
* FROM FEB. 15, 2005: Foundations come under auditor's scrutiny
That means they fall outside the scrutiny and control of Parliament and aren't subject to access to information laws or government contracting regulations.
Leading up to the auditor general's report, Finance Minister Ralph Goodale said he had talked to Fraser about ways of making the foundations more accountable and transparent.
Martin helped establish foundations
The 15 foundations were set up while Prime Minister Paul Martin was finance minister to promote science, education, technology and research. They include the Canada Foundation for Innovation, Canada Health Infoway, Genome Canada, the Aboriginal Healing Foundation and the Millennium Scholarship Foundation.
The government argues foundations are more efficient at making those kinds of long-term investments.
But Fraser's finding that many of them can't spend the money they have been given is sure to raise political hackles.
Opposition MPs have often accused Martin of trying to hide the size of budget surpluses rather than spend them on delivering programs. Last year's surplus was projected to be $1.9 billion, for example, but came in at $9.1 billion instead.
The current year's budget surplus is estimated to be $8.9 billion, and at least $5 billion of that could be earmarked to set up yet another private foundation. This one would establish a national child care plan for Canadian families.
Results sometimes lacking
There also have been problems with making sure the foundations produce results.
For example, Canada Health Infoway was set up five years ago to develop a national system of electronic medical records. Several CEOs and $1 billion later, doctors are still waiting for the system.
The Canadian Medical Association's past-president worried that it would turn into another expensive exercise, like the billion-dollar-plus gun registry. The current head of the association, Dr. Albert Schumacher, is more understanding of the lack of progress.
"Many Canadian physicians are still not connected to high-speed [internet] hookup because of distance and because of place, so this is a struggle we're still trying to overcome," he said.
Slightly more than a year ago, Fraser released a damning report on the sponsorship program, designed to raise the profile of the federal government in Quebec after the 1995 sovereignty referendum. In her Feb. 10, 2004 report, she found that up to $100 million in public funds went to Liberal-linked ad firms for work of debatable value.
* FROM FEB. 10, 2004: Auditor general gives details of 'scandalous' sponsorship program
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