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Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..01 Our audit conclusions and findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .04 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..06 Rules and procedures need improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Annual report needed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..25
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| Introduction | .01 .02 .03 |
The Department provides organization and
record keeping services to the Premier and the Government
and ensures compliance with The Election Act. The
Department also provides support to the Premier in his
role as: Head of Government; Chair of Cabinet; Chair of
the Planning and Priorities Committee; and Head of the
political party with a mandate to govern. In 1996, the Department received $13.1 million from the General Revenue Fund and spent this money on its programs. Volume 2 of the Public Accounts contains information about the Department's expenses. The following is a list of major programs and spending.
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.04 In our opinion:
- the Department complied with the authorities governing its activities relating to financial reporting, safeguarding assets, revenue raising, spending, borrowing, and investing except for the matter referred to in paragraphs .15 to .24; and
- the Department has adequate rules and procedures to safeguard and control its assets except for the deficiencies reported in paragraphs .15 to .24.
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1996 Fall Report77
.05 We also report another matter for the Legislative Assembly's attention at paragraphs .25 to .29.
.06 The public wants to know who gives money to candidates and political parties and who later receives money from government organizations. The public also wants to know where candidates and political parties spend their money for election since the public reimburses them for some of their expenses.
.07 The Department's operations include a Chief Electoral Officer (CEO). The CEO is responsible to ensure compliance with The Election Act (the Act).
.08 To meet this public need, the Act requires candidates and political parties to file returns showing who gave them more than $100. If they receive donations through agents, the returns must show the names of the original donors. Also, the Act requires the CEO to collect anonymous donations identified in the returns and pay them into the General Revenue Fund. In addition, most government organizations now annually make public a list of persons who received money from them. Chapter 6 lists those organizations that do not make public a list of persons who received money from them.
.09 To ensure candidates and political parties disclose where they spend their money for election, they must submit returns to the CEO. These returns are public documents. The CEO also uses these returns to reimburse candidates for their election expenses.
.10 Our concerns with the Department relate to its public accountability and how the CEO carries out his responsibilities under the Act.
.11 As part of our work, we audit the CEO's compliance with the Act. As stated earlier, our audit focuses on authorities relating to financial reporting, safeguarding assets, revenue raising, spending, borrowing, and investing. In particular, our work focuses on ensuring reimbursements to candidates are proper and ensuring the CEO collects all anonymous donations over $100. As a result, much of our work relates to candidate and political party returns.
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.12 In 1994, we made a report to the Standing Committee on Public Accounts regarding election expenses. The Report recommended changes to The Election Act to give the CEO more authority. We thought the CEO needed authority to issue directives:
- specifying the information contained in and accompanying candidates' returns;
- requiring candidates' business officers to maintain adequate rules, procedures, books, and records to prepare proper candidate returns; and
- requiring auditors to comply with generally accepted auditing standards and to verify compliance with the Chief Electoral Officer's directives.
.13 The Assembly recently passed The Election Act, 1996. The new Act is not yet in force. The Act gives the Executive Government the power to decide when the Act comes into force. When this Act comes into force, it will give the CEO the authority we recommended in 1994.
.14 Recently, there is public concern regarding the use of "special funds" (including contributions from federal political parties) to finance political parties and candidates. The concern relates to the public's need to know who gave the money to the "special funds" that was later given to political parties and candidates. Our concern with this matter relates to ensuring the CEO collects all anonymous donations over $100 and pays them over to the General Revenue Fund. Paragraphs .15 to .24 describe more fully this matter.
.15 The Chief Electoral Officer (CEO) needs to improve the rules and procedures for identifying anonymous donations of more than $100 to candidates and political parties.
.16 We asked the CEO what system he uses to identify anonymous donors. The CEO relies on the candidates and the political parties to inform him of any anonymous donations received.
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1996 Fall Report79
.17 We think the CEO's rules and procedures are not sufficient to identify anonymous donations of more than $100. Therefore, we are unable to conclude whether the CEO has complied with The Elections Act.
.18 We think the CEO should improve his rules and procedures. The CEO could issue guidelines to candidates and political parties setting out his interpretation of the Act. Also, the CEO could review the candidates' and political parties' returns for questionable donations, e.g., donors who appear to be special funds or related parties, or who make unusually large donations. If the CEO identifies such donors, he should ask for more information from candidates and political parties to decide if the donors are agents or political parties under the Act. If the donors are agents or political parties, they must show the names of original donors of over $100. If they do not show the names of original donors, they cannot use the money and must submit the donations to the CEO.
.19 In addition, at the date of this Report, we have not finished our work at the Department since the CEO has not finished his work.
.20 As stated earlier, the CEO is responsible to ensure candidates and political parties comply with The Election Act. He is currently investigating the special funds referred to earlier. He wrote to three political parties seeking information about special funds to ensure compliance with the Act.
.21 We think the CEO asked for sufficient information to decide if the special funds are agents or political parties under the Act. If the CEO decides the special funds are agents or political parties, he will need to obtain more information to determine if there are anonymous donations.
.22 We will report in a future report to the Assembly if the CEO collected all anonymous donations to candidates and political parties relating to the special funds. As stated earlier, all anonymous donations over $100 are to go to the General Revenue Fund and thus cannot be used by candidates and political parties.
We recommend
.23 The Chief Electoral Officer should improve the rules and procedures for identifying anonymous donations of more than $100 to candidates and political parties.
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1996 Fall Report80
.24 The Chief Electoral Officer told us he has not viewed a large donation to be questionable in and of itself. Also, he told us this is consistent with established contribution patterns and with past practice of previous Chief Electoral Officers. In addition, he told us that concerns arising from disclosures made to him in 1996 concerning certain reported donations have caused him to make inquiries of the political parties directed towards ensuring full and adequate disclosure.
.25 The Department does not prepare an annual report on its activities.
.26 The Government Organization Exemption Regulations exempt the Department from preparing an annual report. However, the Standing Committee on Public Accounts recommended that all government departments provide annual reports on their activities and to do so in a timely manner.
.27 The public could use an annual report to understand and assess the performance of the Department.
.28 The annual report should provide useful information on a timely basis. The annual report should describe:
- what the Department is all about;
- what the Department has done (including audited financial statements);
- where the Department is now; and
- what the Department plans to do.
We recommend
.29 The Department should prepare an annual report on its activities.
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1998.05.13 |