NOMINATED AG WANTS TO CURB CERB FRAUD
SAYS MECHANISM NEEDED TO IDENTIFY FRAUD IN AID PROGRAMS AND RECOUP THE MONEY
Financial aid programs like CERB should have mechanisms that allow the government to identify fraud and recoup the money, says the Trudeau government’s nominee for the role of Canada’s auditor general.
“I very much understand that many organizations were forced to make very quick decisions. And when we have to make decisions quickly, there is a chance that there are mistakes. When we’ll arrive to audit the (financial aid) programs, what we’d expect to find is a mechanism to identify mistakes,” said Karen Hogan, who was nominated to be the next Auditor General of Canada last week.
“And if there were mistakes, that there be a mechanism to rectify those mistakes, which includes having that money reimbursed if necessary,” she added.
Hogan was responding a question from Bloc Québécois MP Maxime Blanchette-joncas during a meeting of the Committee on Public Accounts. The MP asked for her thoughts on reports of Canadians who, mistakenly or intentionally, received COVID-19 aid payments to which they were not entitled.
Last week, the National Post reported on a series of internal government memos that told civil servants to process Canada Emergency Response Benefit (CERB) even if they suspected fraud in some cases.
One said Employment and Social Development Canada (ESDC) staff should approve payments and not refer cases to the Employment Insurance integrity branch if they detect potential abuse.
Another set of instructions told ESDC staff Canadians should still receive CERB even if records indicate the applicant quit voluntarily or was fired for possible misconduct — seemingly in contradiction to the legislation.
Last week, Prime Minister Justin Trudeau responded that “getting that help to the 99 per cent of Canadians who needed it quickly and rapidly — even if it meant accepting that one or two per cent might make fraudulent claims — was the choice that we gladly made” over rigorously checking every application.
But Hogan says those reports of fraud means it will likely expand the scope of the Office of the Auditor General’s (OAG) audit into CERB. The OAG has already been tasked by Parliament to audit the government’s management of the COVID-19 pandemic.
“Making payments properly to Canadians is important. When we approach any audit, you have to look at the risk of fraud. As soon as we suspect an incidence of fraud, or we suspect fraud, it increases risk. In that case, it means it will increase our sample size or the work we will do,” Hogan told committee members.
Hogan, the current assistant auditor general whose nomination as AG has to be approved by Parliament, warns that a lack of funding has severely hampered her office’s ability to fulfil all the audits asked of it in a timely manner.
“Having resource constraints puts a strain on our ability to deliver our mandate to the degree we would like to,” Hogan told the committee.
“One of the first things I will have to do is to continue the work of (predecessors) Mr. Ferguson and Mr. Ricard to ensure that we have adequate funding, both in the short term and in the long term,” she said.
The nominee stopped short of saying how much money her office requires, but her predecessor Sylvain Ricard has told parliamentarians over the last year that the OAG needs a $10.8 million top-up to its $88 million annual budget.
But the effects of the OAG’S budget crunch, coupled with requests by the government to audit COVID-19 spending and its infrastructure plan, has significantly hampered its ability to conduct other important audits.
“With the current funding that we have, we’ve unfortunately had to make the difficult decision of having to delay and defer audits in order to make sure that we can allocate the right amount of resources to deal with investing in Canada and COVID-19,” said Hogan.
For example, she expects all reports planned for release next fall to only be published some time in 2021 at the earliest. Her office is also sitting on at least four reports that are ready to be published now, but whose release is delayed by the global pandemic.
Hogan also said that she plans to continue the push for a new “independent” funding mechanism that won’t oblige her or her successors to ask the government which it audits for budget increases.
“An independent funding mechanism is what’s best for our office, thus removing the need for us to turn to a department. Currently, it’s the Department of Finance, which is a department that we audit,” she explained.
The lack of funding has also created a significant technological capability gap for the OAG, whose main IT system is still running on DOS, an operating platform put in place in the late 1980s and now considered obsolete.
“We received some money in 2018 and we dedicated a part of it to fixing our IT deficiencies. We cannot let those deficiencies continue,” Hogan said.