Draft 1996 audit pointed to sponsorship problems....

Canadian Broadcasting Corporation ^ | Sept. 30, 2004 | CBC News

[danielmryan]

Draft 1996 audit pointed to sponsorship problems, but not final report

Last Updated Wed, 29 Sep 2004 22:01:22 EDT

OTTAWA - There was mystifying testimony at the inquiry into the sponsorship scandal on Tuesday, when a 1996 audit was produced. The draft of the audit warned of dire consequences unless the problems were corrected. But in the final report those warnings were gone.

INDEPTH: Sponsorship Scandal

The audit of what was then the section of the Department of Public Works that administered advertising contracts, found recurring problems. Contracts were backdated, there was no evidence all potential suppliers were given the opportunity to bid, and bids weren't always properly evaluated.

But in their final report the auditors from Ernst and Young summed up the situation by saying the rules were generally being followed.

Inquiry commissioner Justice John Gomery told the panel of three auditors that he was "mystified" by their actions. "You didn't rewrite it, you watered it down," he said. "Why did you water it down?"

The auditor's draft warned the government to respond immediately or risk legal action and embarrassing public attention. It also suggested the government might not be receiving value for its money. Those points were taken out of the final version.

"Why were they dropped?" asked Neil Finklestein, the inquiry's co-counsel.

"I do not recall," said Deanne Monaghan, a partner at Ernst and Young.

Justice Gomery appeared frustrated. But neither Monaghan nor two former associates, Madeleine Brillant and Julie Morin, could recall the reasons for the changes.

The auditors also faced criticism for including a detail in the final version's executive summary. They indicated there was no evidence of personal gain from any of the irregularities they found. However, Monaghan testified that in order for that conclusion to be meaningful her firm would had to have done a forensic audit and it didn't do that.

But Monaghan disagreed the audit was watered down. "On reflection and with the benefit of hindsight, I would have made it stronger. Certainly at the time we felt it was a reasonable conclusion, as far as the general assessment on the contracting policies. We felt we definitely did raise a red flag."

It's debatable whether the stronger language of the auditor's draft report would have made much difference. The final report had little effect. The government expanded the advertising section into the sponsorship program and promoted the man in charge, Chuck Guité.

Written by CBC News Online staff

[danielmryan]

Interpretation with context: Canada at its best is, at heart, dull and boring. When "Big Excitement From Canada" spontaneously develops, you should assume that there is a distraction of one sort or another at the heart of it. The above should indicate what you should further assume is being covered up in that manner.

If you've ever wondered why so many Canadians "meddle" in United States affairs during times like these, now you know. A new spate of Canadian meddlers is another sign that a distraction is taking place.