A municipal auditor general isn’t a cure-all for local government waste

Local governments across the province spend nearly $10 billion of our hard-earned money annually

By Niels Veldhuis and Charles Lammam

Fraser Institute

BC Premier Christy Clark’s recent announcement that her government will create an auditor general for local government (AGLG) is a ray of good news for British Columbians.

After all, local governments across the province spend nearly $10 billion of our hard-earned money annually with little real scrutiny.

Although municipal finances are currently audited, the audits only determine if the finances are accurately reported – not whether taxpayers received value for the money.

As Canadians have witnessed at the federal and provincial levels, auditor generals across the country expose numerous government failures every year – from cost overruns and governments failing to achieve their stated objectives to governments simply spending our money unnecessarily.

There’s little doubt that a municipal auditor will expose similar accounts of government waste at the local level. While the increased exposure of government failure is important, the real question is what will be done about it?

According to the Clark government, the AGLG’s role will be to conduct performance audits to determine if taxpayers are getting value for money. Put differently, the AGLG will investigate local government programs and initiatives to assess whether they’re delivered efficiently and whether the desired results were achieved.

But the AGLG, like its federal and provincial counterparts, will be limited in that it will not “question the merits of policy decisions or objectives of a local government.” In other words, the AGLG will not comment on policy choices; only on the quality of their implementation. The AGLG will also provide non-binding recommendations to the audited local governments through publicly released reports.

Without the ability to question the merits of policy decisions and the authority to force municipalities to respond to audits with measurable plans to overcome issues identified by the auditor general, British Columbians should be wary of the proposed AGLG’s effectiveness.

Of course, the audits and public reports will receive significant attention, especially in the media, putting increased pressure on politicians and bureaucrats to deliver better value. But the experience from other levels of government shows that increased exposure does not lead to significant corrective action.

For instance, at the federal level, the auditor general highlighted more than 300 cases of government waste between 1992 and 2006. These failures amounted to an estimated cost of up to $125 billion. Importantly, the failures occurred regardless of the party in power and many reoccurred despite previous warnings by the auditor general.

To ensure British Columbians get better value for money, other reforms are needed.