POLITICS

Direct cost of audit, not counting routine costs, closer to $12M, Ferguson says

06/10/2015 02:27 EDT | Updated 06/10/2016 05:59 EDT
OTTAWA - Auditor general Michael Ferguson says the $23.6-million price tag for his critical audit of Senate spending is not out of the ordinary for his office.

Nor did it cost his office extra cash to conduct the sweeping two-year probe, which he says was paid for within the confines of his budget.

In an interview with The Canadian Press, Ferguson provides a breakdown of the costs for the audit released Tuesday.

He says the $23.6 million includes costs that would have been incurred regardless of what the auditors were working on, such salaries, utilities and office space.

He says those expenses, known as "allocated costs," account for about half the $23.6-million total.

That means the direct cost of the audit was between $11 million and $12 million.

"That really represents the opportunity costs," Ferguson said. "Those are the auditors that could have been doing something different."

Those direct costs aren't out of the ordinary for a large audit conducted by his office, he added.

On average, Ferguson said, auditors spent about 1,000 hours on each senator under review because some cases were more complicated than auditors expected.

He also said his office underestimated how much time each file would take, but "we ended up having to do all of the audit within our regular office budget."

Ferguson has come under criticism for the cost of the audit, given that his work identified just $991,917 worth of wrongful claims out of 80,000 transactions over the two-year span of the audit.

Earlier reports from The Canadian Press had the questionable spending pegged at nearly $977,000, based on having seen portions of the report before it was released to the public on Tuesday.

Ferguson said that direct comparison — spending $23.6 million to find less than $1 million in bad claims — shouldn't be the only measure Canadians use to judge the value of the Senate audit.

Ferguson pointed to a recent audit his office did on access to mental health services for veterans that didn't identify any savings and would likely cost government coffers to deal with the issues identified.

"In this audit, because people can look at what it costs and they can look at these itemizations, there's this natural sort of tendency to compare the million dollars to the ($23.6 million)," Ferguson said.

"It's easy to add up what we found and to look at the cost and do that strict comparison, but I think there's a lot more behind that to get to understanding."