September 14, 1903 (9th Parliament, 3rd Session)



I do not think that that is material to the Bill, but shall be very glad to answer my hon. friend. We thought it was wise to learn wisdom by experience, and therefore decided to have a careful examination made of the methods of conducting public accouuts in order to provide against what did happen occurring possibly again, or against anything else of a like nature. With that object in view, we appointed three gentlemen to make a special examination of the system. One of these was the deputy minister of Finance, Mr. Courtney ; the second was Mr. George Burn, general manager of the Bank of Ottawa ; and the third was Mr. Kent, chartered accountant of Montreal. These gentlemen made a thorough examination into the whole system, and their report in the main was highly complimentary to the system followed in the civil service of Canada. But they did point out what they believed to be one or two defects. They advised that instead of sending the bank statements and cheques back to the department from which they came, and thence to the Auditor General, as had hitherto been the practice, they should be sent to the Finance Department for examination and checking and thence to the Auditor General. This was intended to prevent the bank statements and cheques, as in the Martineau case, going back to the same department which issued them and thus falling into the hands of the very person who was guilty of the defalcation. That recommendation will be found in the report of the Martineau investigation in the possession of the House. The government thought that while the change was not of vital importance, still, as the commissioners had advised it, we should put it into operation. But while the treasury board accepted the recommendations of the commissioners, the Auditor General differed from the commissioners as to the wisdom of the change. Whether he was right or wrong, I do not profess to say. But what I contend is that it is not the business of the Auditor General but of the treasury board, under the statute, to make the regulations, and it is for the Auditor General to observe them. And according to the opinion of the Justice Department, every statement which, by the statute, we are obliged to furnish the Auditor General, has been furnished him.

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