GOTCHA!

[Edward Campbell]

This story, reproduced under the Fair Dealing provisions (§29) of the Copyright Act from today’s Globe and mail is a two edged sword:

http://www.theglobeandmail.com/news/politics/transport-canada-fictitiously-expensing-millions/article1286306/

Transport Canada 'fictitiously' expensing millions
Officials billed $10.7-million in expenses since 2004 to stalled Mackenzie pipeline, files show; minister to launch investigation

Bill Curry

Ottawa
Monday, Sep. 14, 2009

Federal public servants at Transport Canada are routinely filing millions of dollars in expenses – including overtime, salaries and computers – toward a construction project that doesn't exist.

Further, The Globe and Mail has learned that public servants who object to the scheme are routinely overruled by their managers.

The Mackenzie Valley pipeline remains a mega-project that is perpetually on the horizon – yet it lacks the financial backing and environmental approvals to green-light construction.

The project seemed closer at hand when a fund was set up at Transport Canada six years ago so that the department could oversee the expected increase in air traffic and other transportation needs.

Though the pipeline remains in limbo, the department has kept the fund alive year after year, using it to cover millions in expenses that have nothing to do with the pipeline.

Documents released through access-to-information requests list the expenses, which total $10.7-million since 2004. Expenses continued to be billed to the pipeline project this year.

What's more, government documents show Transport Canada managers insisted employees bill all expenses to the fund for any travel that is loosely in the area of the proposed pipeline – listing 23 communities in the Northwest Territories as “Mackenzie Valley locations.” When employees noted their trips to the region had nothing to do with the pipeline, they were told that Transport Canada headquarters approved the use of the fund based on geography.

“To fictitiously spend money on a project that's not going anywhere, I don't think is appropriate,” said captain Daniel Slunder, who has spent most of his career working at Transport Canada's Ottawa headquarters. Earlier this year, Mr. Slunder took a leave from the department to head the union representing Transport Canada flight inspectors. Only then did he learn from members about the pipeline fund.

Mr. Slunder is chairman of the Canadian Federal Pilots Association, which represents Transport Canada pilots across the country who are responsible for inspecting aviation activities, from national airlines to small companies that operate bush planes.

“They don't want to do this any more and they're very frustrated when they see things being billed that they had no intentions of seeing billed,” he said. “Canadians want their money spent a certain way. The government will set its priorities according to where they want us to spend the money. And if we don't expend the money in a particular project, or the project doesn't happen, there's an expectation that the money comes back to the government to fund other projects.”

The Mackenzie gas pipeline is a project that has been debated for decades and recent estimates peg the cost at $16-billion.

Environment Minister Jim Prentice has said a deal is within reach this year, but the chairman of the Aboriginal Pipeline Group, the native-owned corporation that is partnering with oil companies in the project, recently said hope of a deal is slipping away.

A joint review panel examining the potential environmental impact of the project has taken years longer than originally expected.

In response to questions from The Globe, Transport Canada spokesman Patrick Charette said Transport Minister John Baird is launching an investigation into the matter.

“We are fully committed to the principles of transparency and accountability. As such, we are taking this issue very seriously,” Mr. Charette said. “The minister has instructed his officials to investigate fully and take all necessary and appropriate action.”

The list of expenses billed to the pipeline, as well as reports that mention the challenge managers were having in justifying the expenses, were obtained through access-to-information requests by researcher Ken Rubin.

The documents appear to support the union's allegations that only a small fraction of the expenses are legitimately related to the pipeline.

In one 2007 Transport Canada report on the pipeline fund, an unidentified official notes “it continues to be difficult to directly ascribe activities to the MGP [Mackenzie Gas Pipeline] project. General divisional activities remain high, which may, in some small part be related to MGP preparations,” the note states.

Transport Canada employees are going public with their concerns through their union even though shutting down the fund puts at risk the budget that helps fund their routine inspection duties.

Other internal documents suggest the push to bill expenses to the non-existent pipeline was driven in part by concern there was not enough money in other budgets to fund regular aviation inspection duties.

A recent survey of public service employees revealed Transport Canada officials working in the civil aviation field gave their managers poor marks. On a scale of zero to 100, employees in that field gave a score of 39 when asked whether “senior management makes effective and timely decisions.”

That compares to a score of 52 among all Transport Canada employees. Aviation employees gave a 41 score to the statement “I have confidence in senior management,” compared with a 59 score for the entire department.

It can be, I wager will be used to embarrass Transport Minister John Baird – or at least it could be if Baird could be embarrassed but he is, I think, immune to such soft punches – I expect howls of fake outrage from the opposition benches demanding his resignation.

It can, and I wager will be used (more quietly) against the civil service, which many Conservatives still believe is a hotbed of Liberal sympathizers.

It’s not clear to me that there is any scandal here. It was fairly common to bill expenses against certain “codes” (“lines” in the account books) that were both “full” of money and somehow, loosely related to the work at hand. Some funded projects and projects were always “underspent” and, unless I badly misunderstood the rules, I could, legally and properly, allow work from (overspent/short of money) Project 1234 to be billed to (underspent/full of money) Project 1235 provided they were, somehow, related, one to the other. I could not allow someone to travel to attend a symposium about radio, in support of an overspent project, and charge it to a project about tank gun upgrades but I might, properly, charge the trip to an underspent radar project.

The subtext here, I think, is the poisonous labour relations in government.

I think the Good Grey Globe “learned” about this because the Canadian Federal Pilots Association, the pilots’ union, spoon fed it, line by line, to reporter Bill Curry as part of their campaign against Baird and Treasury Board (their employer, per se). It – a non-scandal about accounting tricks – is a story because it might embarrass a minister during the run up to an might be election.

Gotcha!

 

[GAP]

Hmmm...Liberal fund set up in 2004, wonder how far back the Globe & Mail went back on accounting games....The Liberals were far better at it than the Conservatives....Hell, as far as I know, we are still paying the 5 cents a litre road tax Martin set up in 1995 to offset the deficit .....

 

[Larkvall]

Hmmm...Liberal fund set up in 2004, wonder how far back the Globe & Mail went back on accounting games....The Liberals were far better at it than the Conservatives....Hell, as far as I know, we are still paying the 5 cents a litre road tax Martin set up in 1995 to offset the deficit .....

If it makes you feel better the deficit is back.

This sounds like fraud. Maybe we should throw some of these civil servants in jail.

 

[GAP]

If it makes you feel better the deficit is back.

This sounds like fraud. Maybe we should throw some of these civil servants in jail.

It's not fraud....creative accounting is more like it...private businesses do it/government does it/whom ever has to account for expenses does it. As long as the two sub account charges have some relationship where the expenses could conceivably be accounted to, then they are both used. Just make sure you have a justification ready............

 

[armyvern]

It's not fraud....creative accounting is more like it...private businesses do it/government does it/whom ever has to account for expenses does it. As long as the two sub account charges have some relationship where the expenses could conceivably be accounted to, then they are both used. Just make sure you have a justification ready............

Anybody for SAing funds from one GL to another when one is underfunded & the other overfunded? You need to purchase Special sized footwear but have no monies left in the GL because someone within your own CoC put too little into that specific GL when entering "expected costs" this FY budget? Simply SA some funds over to it from the "Petroleum, Oil, Lubricants" GL which has 70% of it's funding left with only 10% of the year left to go because that same person in your CoC overestimated how much would be spent by your unit this year on POL.

At the end of the day - all the money is still accounted for and was all within the budget limit voted to the Dept, devolved to the bases, further devolved to the Units for example. Not a dime got spent that wouldn't have been spent anyway. The only difference is we actually SA the funds from an overestimated GL into the GL that requires the funds vice billing against something 'which isn't'; that way the spent monies actually show against the 'actual' area of goods or services purchased instead of 'some other' area.

As Edward has suggested - much ado about nothing.

 

[c_canuk]

it's pretty shady to keep open a project to draw funds from it if it has not been given the go ahead, especially if the department was granted additional funds for the project that they were directing elsewhere.

The manner in which they were drawing funds makes me think they may have been using it as a slush fund for activities that otherwise would not have been undertaken.

IE if I had a project that was pending approval for a new computer lab, and I used it's fin code to send myself on a networking symposium in the Bahamas knowing that the funding wasn't available under the regular training fin code. I'd be siphoning off funds from a project that may or may not go ahead, and those funds may have been needed for a more appropriate use.

It's one thing to spend money that's been allotted to your dept, it's another to request more for a new project then spend it on something unrelated.

I wouldn't say fraud exactly and it's not embezzlement, but it shouldn't be considered business as usual. Misappropriation of funds perhaps?

I'm not saying thats the case, but they still should have been using a process similar to Vern's example of transfering remaining budget from one area to another so that the books weren't cooked.