That was the minor Twitter explosion last week, as the auditor report into terrorism funding appeared to indicate that such a huge sum of money spent on government anti-terrorism initiatives went down the drain. So did the Harper government actually lose $3.1 billion dollars? The quick answer is...
You can pretty much trace the whole thing to this laughably bad story in the Toronto Star:
In a report released Tuesday, Michael Ferguson looked at Canada’s security spending in the wake of the Sept. 11, 2001 terror attacks and discovered that the government was unable to explain how it spent almost a quarter of the cash.As ye olde news story inverted pyramid starts meandering down the page, you start seeing the little cracks in the tale:
NDP Leader Thomas Mulcair jumped on the finding and accused Harper’s Conservatives of mismanagement.
“Will the prime minister hold his minister of public safety accountable for this $3 billion boondoggle,” Mulcair said in question period.
“The auditor general himself said today this has nothing to do with improper use of government money,” the prime minister told the Commons.
In all, some $12.9 billion was earmarked for the initiative. However, departments and agencies reported spending just $9.8 billion between 2001 and 2009, leaving $3.1 billion unaccounted for, Ferguson writes in his audit report.It still looks pretty damning, though there are some clues in the second half of this story that shows things aren't exactly as lost-money as the Star had been hoping for.
However, audit officials chalk up the discrepancy to lax bookkeeping. The audit suggests several scenarios for what may have happened: the funding may have lapsed and never been spent; or it may have been spent on anti-terror efforts but reported as other program spending; or it may have been spent on program unrelated to security.
“We didn’t find anything that gave us cause for concern that the money was used in any way that it should not have been,” Ferguson told reporters at a briefing.
Look, we all know the Toronto Star dreams of returning the Liberal Party of Canada into the halls of power. The Adscam boondoggle is still haunting that party, and the Red Star just dreamed of catching Stephen Harper in his own version of the story. This one even raises the stakes: $3.1 billion dollars! Where could money of that magnitude have disappeared to? This is where
Then, however, you look at the actual text of the audit, which the Star article even linked to. It's only 8 pages long plus some legalize at the end, though apparently that's way too much reading for the likes of these excitable geniuses:
#cpc on $3B boondoggle: The $3B isn't lost, we just don't know where it is. Why'd the AG bring it up then? Shut up, that's why! #cdnpoli
— Jeff Jedras (@jeffjedras) May 3, 2013
So what does the auditors report say about this $3.1 billion dollars the Harper government lost?
The audit covered the period between the proclamation of the 2001 federal budget and 31 March 2009.Now the likes of Graham Sproule may have short memories (he claims not to remember the Liberal government whatsoever), so I'll provide this handy link: Stephen Harper became Prime Minister in 2006. From 2001-2003 Jean Chretien was the Prime Minister. Paul Martin was the Prime Minister from 2003-2006 (though you can get away with 2005, since he spent his 2006 portion in full on losing campaign mode). Here's a little wrinkle into the auditor's report that the Toronto Star didn't bother to mention: oh yeah, Harper was the Prime Minister for less than half the time discussed in this report, but we thought that was a pretty obscure fact to waste column-inches on.
Well, with the Red Star managing to miss this pretty notable part of the story, is there other stuff in the auditor's report that we should start looking into? After all, even the most dim liberal readers could probably have noticed that the Prime Minister kept bringing up what the auditor actually was saying: specifically "nothing to do with improper use of government money".
So let's turn back to the auditor's report. I mean, you really should just spend the extra 20 minutes right now and read the whole thing, but let's pull a couple passages out:
Our analysis showed that departments and agencies reported about $9.8 billion in spending by 2009, about $3.1 billion less than the amount allocated for PSAT activities. Our review of the financial and non-financial information reported by departments and agencies showed that projects were consistent with the announced objectives of the Initiative. However, information to explain the difference of $3.1 billion between the funding allocated to departments and agencies and the amount reported spent was not available.One of the key things to examine when looking at this report is that it very very carefully never says exactly what Sproule or Mulcair have been saying about the audit: that government money was misspent, or lost, or wasted. What they are talking about is a discrepancy between two very different pieces of information:
a) How much money the government actually spent on anti-terrorism initiatives.
b) How much money the government announced they would be spending on anti-terrorism initiatives.
The second number is one of those numbers that Members of Parliament really really like. They really love standing in front of podiums with catchy slogans in both official languages about how much they are "investing" in Canada. (Bonus link: Rona Ambrose in front of a bunch of bilingual podiums...podia?). You get to stand up in front of the newsmedia and a supportive audience about to be bestowed with federal largesse. They talk about their "commitment" and their "dedication" to "improving" infrastructure or providing jobs or protecting the citizenry, et cetera et cetera et cetera. That's the fun part about government spending.
It's the first bit, the actual spending of the money, that is less fun. That means actually sitting down in a quiet room and writing a cheque. Every time you do that you're taking money that you the government used to have, and giving it to somebody else. Now you don't have that money: the accountants have actually removed it from your future calculations. It's contributing to the federal deficit, which you don't want to be responsible for. It's money you can no longer promise tomorrow. The recipients will act thankful for almost 35 femtoseconds before instantly taking to the streets to demand that you give them more and that there's so much more good you could do if only you weren't so tight with the purse strings. They muse that perhaps the Opposition could give them more money than you and may just decide en masse to vote for them. See? Actually spending this money sucks.
How does a politician reconcile this horrible conundrum? Easy: they stick to the announcements. All the benefit of spending money, no actual money spent. The end result? Well, to be frank, the end result includes things like $12.9 billion earmarked for anti-terrorism initiatives and less than $10B actually spent on it, which annoys auditors and confuses liberals on Twitter. As the auditor noted, by 2009 departments and agencies had "only" spent $9.8 billion dollars. Boy, you're thinking to yourself, that's a lot of money! Well, it is. Was it well spent? For the most part probably not, but take some solace in the fact that $3.1 billion wasn't wasted. Well, not wasted on this: the tricky thing about government spending is that we already know the total spent (and that it exceeds the total taken in), so in reality that $3.1B not wasted on terrorism spending is wasted instead on Indians or behind-schedule warships or whatever the hell Ambrose was promising while standing in front of that ungodly "Strong Women" podium.
8.23 We asked Secretariat officials for information on whether such reallocations had occurred and whether assurances were provided by departments. We were informed that discussions took place between the departments and agencies and the Secretariat as part of the normal program challenge function. However, financial information on reallocations was not captured. The Secretariat, however, worked with us to identify several possible scenarios:The auditors are pretty sure its one of these. For all the talk about the "missing" billions, there's no indication that this money was even spent. After all, the government can announce money spent today, and then not spend it tomorrow. The second option is similarly delicious, we'll examine that in a moment. The final one, you note, is almost the same as the first except it explicitly noted as I did that the federal government is already spending a metric shit-ton of cash right now, and worrying that $3.1B didn't get wasted on Program X but rather was kept in general revenues which are already funding Program Y with more money than the taxpayer has actually provided seems silly (even for a liberal). The "$3.1B tax refund cheque" gag is the biggest offender in this nonsense: this is notably different than Adscam which was a misuse of government money actually physically provided to people. The auditor's report did look into this, by the way, and these were the findings:
The funding may have lapsed without being spent.
It may have been spent on PSAT activities and reported as part of ongoing programs spending.
It may have been carried forward and spent on programs not related to the Initiative.
8.25 We reviewed a sample of proposals submitted by departments and agencies, and approved by the Treasury Board, to better understand how they supported the government’s objectives for the Public Security and Anti-Terrorism (PSAT) Initiative. PSAT objectives were broadly stated, and we found that activities proposed by departments and agencies to address them were equally broad. Departments and agencies spent funds on improvements to equipment for border officers, for repairs to married personnel quarters at Canadian Forces Base Shilo, and for the services of a security expert to advise a host country on security matters related to the staging of an international sporting event. Nevertheless, activities were deemed to be within the Initiative objectives.Specifically there's no indication money went to places it shouldn't have gone -- at least in the sense that it didn't get used at least nominally on government spending that fell within the realm of "anti-terrorism" initiatives. Please note, yet again, that this lets both the Liberal and Conservative governments off the hook. This wasn't another Adscam, which all things considered would probably be good for the Liberal Party. (As an aside, their Twitter boosters can't figure out why this auditor report isn't being used by their party to hammer the government. This -- and that half the timeframe was while they held the big chairs -- would be the reason).
Now its time for us to look at that second option from the auditors: It may have been spent on PSAT activities and reported as part of ongoing programs spending.. Let's pull an example from the auditor's report: it mentioned how this money was spent on "repairs to married personnel quarters at CFB Shilo". Because nothing puts the fear of Allah in some smelly Muslim terrorists like a fresh coat of paint in a soldier's wife's living room. But I digress. When the repairs to CFB Shilo's living quarters were announced, what was the amount funded? Say the repairs cost $15 million dollars, to pick a wild number. Was it announced as part of the anti-terrorism initiative? Or was it "Standing on Guard For Thee" on the podium, and this was about funding upgrades on military bases? Was it perhaps "Building a Better Canada", and an announcement for infrastructure upgrades on federal government buildings? See what I mean? Now we see that $9.8B may even be an exaggeration of what was spent on "The Initiative" as the auditors (who may have been busy watching reruns of Nikita) described it. The $15 million dollars could be quoted three different times: $45M earmarked for the project and $15M spent.
Let's pick another real-life example: in 2008, the federal government announced a big funding boost to the Toronto Transit Commission (TTC). We're talking about a billion bucks here from various sources, most of which are apparently being "reallocated" as per the news release: another auditor's nightmare, as a $12.9B earmark could be "reallocated" a couple three dozen times over a decade. Now let's pretend that this news release mentioned "enhanced security" as part of its funding, and let's say it was $15M (I just like the number fifteen today, apparently). Was that $15M from the anti-terrorism initiative? Or from the transit initiative? Should the transit initiative promising $303.5M actually be promising only $288.5M, with the $15M from anti-terrorism provided separately? Maybe yes, maybe no, though again as per politics the transit announcement would cover everything...then they'd announce $15M separately a month later not mentioning that it doesn't bump the price up to $318.5M. This is what the auditor meant when they added this:
8.32 Recommendation. The Treasury Board of Canada Secretariat should review its program for monitoring the Public Security and Anti-Terrorism (PSAT) Initiative and have a mechanism in place that would allow reporting of both financial and non-financial information on government-wide initiatives.
The Conservative government's response, by the way, to this auditor's report was to....wholeheartedly endorse it:
The Secretariat’s response. Agreed. The Treasury Board of Canada Secretariat reviewed the PSAT reporting framework in 2010. The Secretariat is using the outcomes of this review to feed into an exercise to explore improvements by March 2014 to reporting financial and non-financial information for future government-wide initiatives, as applicable, in a way that is consistent with established departmental accountabilities for monitoring and reporting on expenditures and results.What was the Prime Minister's response, as quoted in this equally laughable story from Southam?
The auditor general has made some suggestions on how we can be more clear in our tracking in the future. We will do that.Again note the massive differences between this audit and, say, the response from Chief Dances-With-Burrito on the (far more devastating) audit of her band's funds last year. The online Harper-haters freaked out when an audit of the incompetent Indians running the show at Attawapiskat had actually spent money (unlike in this audit), that they had no justification that any of the money actually spent had been spent properly (unlike this audit), and that money had been spent without paperwork to account for it (unlike in this audit). They demanded an "audit" of the Harper government, and with this latest auditors report had been hoping they'd found it.
They haven't, of course. This audit is about the federal government (across two different parties and three Prime Ministers) allocating funding initiatives for a hot-button issue which then received a significant amount of federal money (all of which was spent properly) but due to politics and cross-department integration it was unclear if this money wasn't going to be spent otherwise and highlighting a minor problem with how the government records spending. The government quickly took steps to implement recommendations to prevent this problem in the future (to little fanfare) and went onto spending large amounts of money which, though not "lost" in an accounting sense nor in a government mismanagement or corruption sense, probably shouldn't be spent.
But enjoy the brief foray of a liberal complaining that tax dollars have been spent on transit in Toronto.