September 14, 1903

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The MINISTER OF FINANCE.

No. the letter of credit matter does not come before the treasury board.

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CON

Adam Carr Bell

Conservative (1867-1942)

Mr. BELL.

I am aware of that. But the point in dispute, the ground upon which the

Auditor General refuses the letter of credit, comes before the treasury board ?

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The MINISTER OF FINANCE.

No, it does not, the money has been actually paid. Under the letter of credit system, the Auditor General deals with the matter after payment. After payment is mad#, all that the Auditor General can do then is to place on record his view of the matter and submit it to parliament. That is not a matter for the treasury board.

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CON

Adam Carr Bell

Conservative (1867-1942)

Mr. BELL.

I understand that the Auditor General issues a credit to a department, the department issues checks against it, and at the end of the month, or whatever period is arranged between the bank afid the department, the accounts and the checks are returned to that department. Then the credit having been issued, the check is handed to the representative of the bamk, for the amount that has been paid out, then a new letter of credit is issued for the future.

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The MINISTER OF FINANCE.

That is right.

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CON

Adam Carr Bell

Conservative (1867-1942)

Mr. BELL.

In every case in which the Auditor General audits an account, it is an account that has been paid.

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The MINISTER OF FINANCE.

Under that system, yes.

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CON

Adam Carr Bell

Conservative (1867-1942)

Mir. BELL.

Occasionally the Auditor General gets an account which he thinks should not be paid, or he thinks it has been paid out of an appropriation that was not intended for that purpose. These are the two grounds upon which, I fancy, difficulties would arise between the Auditor General and the department, and having been dissatisfied as to that particular matter, he proceeds to correspond with the department, and if he does not in the end get satisfaction the matter is referred to the Finance Department.

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The MINISTER OF FINANCE.

No, it is not. The only case where the treasury board has the right to overrule is where there is an account pending for payment, where the Auditor General sees objections, and then the'treasury board may overrule. But that does not come under the letter of credit system at all.

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CON

James Clancy

Conservative (1867-1942)

Mr. CLANCY.

What means is there of correcting abuses where accounts have been paid ? If the Auditor General says : On the last letter of credit there were accounts paid that should not have been paid, and I think I should be justified in withholding another letter of credit. How are those abuses corrected ?

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The MINISTER OF FINANCE.

I am afraid I am imposing on the patience of the House in speaking so often-the only means of correction would be for the Auditor Gen-

350*

eral to refer to the department, and if the department does not afford a satisfactory explanation, does not adjust the matter and make a correction of an error, if there has been one, then the only thing the Auditor General can do, and I submit the only thing which he should do, or which we can permit him to do, is to set forth in writing his views on that matter and place them before parliament.

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CON

Adam Carr Bell

Conservative (1867-1942)

Mr. BELL.

That is usual.

* The MINISTER OF FINANCE. It is usual, but if in the meantime, because, the Auditor General has a difference with the department about some $10 expenditure last month, if 300 men are awaiting for their money within the mouth, I think the 300 men should be paid.

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CON

Adam Carr Bell

Conservative (1867-1942)

Mr. BELL.

That argumeiltum ad ho-miilem is hard to resist.

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LIB
CON

Adam Carr Bell

Conservative (1867-1942)

Mr. BELL.

My point is this : Admitting that there is, always has been and will be in the future, differences between any Auditor General who proposes to do his work with zeal and with pride in that work, and the government of the day, can there not be some explanation given or some adjustment reached that would avoid the necessity of introducing this legislation ? Now, in this particular case the Minister of Finance might perhaps tell us what is the crux of this question just now, what is that particular point upon which the Auditor General refuses to give a letter of credit, in consequence of which members of parliament are being refused payment of their indemnity ? There must be some point upon which he and the department differ. As I understand it-I have not had time to read carefully the report of the Martineau commission and the further report issued by the Auditor General-it seems to me that the whole question to-day between the Auditor General and the Finance Department is whether or not he should receive a certain statement from the banks with which the government are doing business. If that is the case, surely the government can get over that difficulty without resorting to legislation. As I understand it, the Auditor General asserts that he should receive, at the end of each balancing period, a statement showing the number and the amount of the cheques paid under a certain letter of credit. I may be in error, but that is my impression. Under the legislation as at present existing, it seems to me the treasury board could just as easily make a new regulation authorizing the supplying of a statement by the bank to the Auditor General at the end of each balancing period, as it could put in force these other changes that were recommended by the Martineau commission.

I think if they did that the deadlock for the moment would be settled, and it would not be necessary at a time like this, late in the session, to introduce this legislation. This is a matter that will attract a great deal of attention throughout the country and will provoke a great deal of criticism and possibly of ill-advised criticism by parties who have not sufficient knowledge of the matter to discuss it intelligently. It has become manifest on this occasion that even members of parliament are not well advised as to the character of the machinery that exists in the Auditor General's Department, i would suggest that the difficulty could be overcome by conceding to the Auditor General what he claims in the shape of a statement sent to him as well as to the Finance Minister, showing the number of checks issued under that letter of credit. The difficulty could surely be overcome at this time without resorting to this legislation.

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The MINISTER OF FINANCE.

My hon. friend is misinformed. There is no statement that the Auditor General requires in any shape or form from the Finance Department that is not furnished to him.

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Mr. BELT@

I am quite prepared to agree with that. The Finance Minister is speaking with perfect accuracy when he says that there is no statement which the Auditor General requires which he does not receive.

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The MINISTER OF FINANCE.

There is no statement which the Auditor General desires from the Finance Department that is not given to him, I do not even limit myself to what the law requires.

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CON

Adam Carr Bell

Conservative (1867-1942)

Mr. BELL.

I am speaking of the statement from the banks. As I understand it, the Auditor General wants a duplicate.

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The MINISTER OF FINANCE.

There is no difficulty of that nature whatever. Everything that the Finance Department gets from the bank is furnished to him. There is no question of that at all. The only question is that the Auditor General stands for the old method while the government have preferred to adopt the report of the Martin-eau commission. I do not myself think that the difference between the two is of vital importance; but since the commissioners, a body of capable and experienced men, ad-yised a change, we thought it would be well to adopt it. The Auditor General thinks that is unnecessary, and he prefers the old method. We have adopted the new one, under the advice of the commissioners, and we say that, under the statute, the treasury board is the proper judge as to whether that system should be adopted or not. We have adopted it, and we are advised that we are entirely within our rights. We do not think that the Auditior General is the proper judge of these things. That is the point of difference.

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September 14, 1903