Advertisement

Journal of Business Ethics

, Volume 113, Issue 3, pp 441–459 | Cite as

Crisis, Committees and Consultants: The Rise of Value-For-Money Auditing in the Federal Public Sector in Canada

  • Clinton FreeEmail author
  • Vaughan S. Radcliffe
  • Brent White
Article

Abstract

This paper investigates the key drivers behind the origins of value-for-money (VFM) audit in Canada and the aims, intents, and logics ascribed by the original proponents. Drawing on insights from governmentality and New Public Management, the paper utilizes analysis methods adapted from case study research to review a wide range of primary documentation (e.g., Hansards from the Public Accounts Committee, House of Commons debates, the so-called Wilson report and the FMCS study) and secondary documentation (newspaper articles, Office of the Auditor General internal publications, journal articles). Major findings indicate a rise of a management consulting culture within the Auditor General’s office following the appointment of James Johnson Macdonell. VFM legislation effectively operationalized practices drawn from management consulting expertise by invitation of the consultant. It was offered as an answer to the growing scope and size of government, which had become problematized by the Auditor General in terms of parliament losing control over the public purse. The Auditor General’s invocation of financial crisis led to a substantial broadening of mandate and increase in resources for that office.

Keywords

Value-for-money auditing Governmentality New Public Management Public Sector Management Office of the Auditor General Canada 

References

  1. Arens, A., Elder, R., Beasley, M., & Splettstoesser-Hogeterp, I. (2007). Auditing and other assurance services (Canadian 10th ed.). Toronto: Pearson.Google Scholar
  2. Boisclair, F. (2008, March). Value for money auditing. CA Magazine, pp. 45–46.Google Scholar
  3. Boston, J., Martin, J., Pallot, J., & Walsh, P. (1996). Public management: The New Zealand model. Auckland: Oxford University Press.Google Scholar
  4. Brown, G., & Godbout, Y. (1989). The Office of the Auditor General and value-for-money audit. Fredericton, NB: Office of the Auditor General of New Brunswick.Google Scholar
  5. Burchell, G., Clubb, C., & Hopwood, A. G. (1985). Accounting in its social context: Towards a history of value added in the United Kingdom. Accounting, Organizations and Society, 10(4), 381–413.CrossRefGoogle Scholar
  6. CCAF. (1988). Accountability, accounting and audit: Responding to a decade of experience. Ottawa: CCAF.Google Scholar
  7. Cheveldayoff, W. (1975). Controls criticized - Tell Ottawa to cut its deficit. Globe and Mail, Toronto.Google Scholar
  8. Christensen, M., & Parker, L. (2010). Using ideas to advance professions: Public sector accrual accounting. Financial Accountability & Management, 26(3), 246–266.CrossRefGoogle Scholar
  9. Dean, M. (1999). Governmentality: Power and rule in modern society. London: Sage.Google Scholar
  10. Fleischman, R. K., Kalbers, L. P., & Parker, L. D. (1996a). Expanding the dialogue: Industrial revolution costing historiography. Critical Perspectives on Accounting, 7(3), 315–337.CrossRefGoogle Scholar
  11. Fleischman, R. K., Milles, P. A., & Tyson, T. N. (1996b). A theoretical primer for evaluating and conducting historical research in accounting. Accounting History, 1(1), 55–75.CrossRefGoogle Scholar
  12. Fleischman, R. K., & Radcliffe, V. S. (2003). Divergent streams of accounting history: A review and call for confluence. In R. K. Fleischman, V. S. Radcliffe, & P. A. Shoemaker (Eds.), Doing accounting history: Contributions to the development of accounting Thought (pp. 1–30). London: JAI.CrossRefGoogle Scholar
  13. Fleischman, R. K., & Tyson, T. N. (2003). Archival research methodology. In R. K. Tyson, V. S. Radcliffe, & P. A. Shoemaker (Eds.), Doing accounting history: Contributions to the development of accounting thought (pp. 31–47). London: JAI.CrossRefGoogle Scholar
  14. Flesher, D., & Zareski, M. T. (2002). The roots of operational (value-for-money) auditing in English-speaking nations’. Accounting and Business Research, 32(2), 93–104.CrossRefGoogle Scholar
  15. Foucault, M. (1979). Discipline and punish: The birth of the prison (Surveiller et punir: Naissance de la prison) (A. Sheridan, Trans.). London: Penguin Books.Google Scholar
  16. Free, C., & Radcliffe, V. S. (2009). Accountability in crisis: The sponsorship scandal and the office of the comptroller general in Canada. Journal of Business Ethics, 84(2), 189–208.CrossRefGoogle Scholar
  17. Gendron, Y., Cooper, D., & Townley, B. (2001). In the name of accountability: State auditing, independence and new public management. Accounting, Auditing and Accountability Journal, 14(3), 278–310.CrossRefGoogle Scholar
  18. Gibbens, R. (1982, October 6). Crown units key to successful auditing. Globe and Mail, Toronto.Google Scholar
  19. Guthrie, J., & Parker, L. (1999). A quarter of a century of performance auditing in the Australian Federal Public Sector: A Malleable Masque. ABACUS, 35(3), 302–332.CrossRefGoogle Scholar
  20. Hansard. (1970). Minutes of proceedings and evidence of the Standing Committee on Public Accounts—June 16, 1970. Ottawa: House of Commons.Google Scholar
  21. Hansard. (1973). Minutes of proceedings and evidence of the Standing Committee on Public Accounts—October 30, 1973. Ottawa: House of Commons.Google Scholar
  22. Hansard. (1975). Commons Debates, October 30, 1975. Ottawa: House of Commons.Google Scholar
  23. Hansard. (1977a). Commons Debates, June 27, 1977. Ottawa: House of Commons.Google Scholar
  24. Hansard. (1977b). Minutes of proceedings and evidence of the Standing Committee on Public Accounts—Tuesday, May 17, 1977. Ottawa: House of Commons.Google Scholar
  25. Hansard. (1977c). Commons Debates, April 25, 1977. Ottawa: House of Commons.Google Scholar
  26. Hansard. (1977d). Commons Debates, April 26, 1977. Ottawa, House of Commons.Google Scholar
  27. Hansard. (1977e). Commons Debates, June 29, 1977. Ottawa, House of Commons.Google Scholar
  28. Hartle, D. (1979). The report of the royal commission on financial management and accountability (The Lambert Report): A review. Canadian Public Policy, 5(3), 366–382.CrossRefGoogle Scholar
  29. Henderson, M. (1984). Plain talk! Memoirs of an Auditor General. Toronto: McClelland and Stewart.Google Scholar
  30. Hicks, R. (2010, March). An Auditor General who is both independent and accountable: Working effectively within Alberta’s Westminster model democracy. Information Bulletin, p. 136.Google Scholar
  31. Humphrey, C., Miller, P., & Scapens, R. (1993). Accountability and accountable management in the UK public sector. Accounting, Auditing and Accountability Journal, 6(3), 7–29.Google Scholar
  32. Jacobs, K. (1998). Value for money auditing in New Zealand: Competing for control in the public sector. British Accounting Review, 30(4), 343–360.CrossRefGoogle Scholar
  33. Johnson, T. (1995). Governmentality and the institutionalisation of expertise. In T. Johnson, G. Larkin, & M. Saks (Eds.), Health professions and the state in Europe (pp. 7–24). London: Routledge.Google Scholar
  34. Lapsley, I. (2009). New Public Management: The cruelest invention of the human spirit? ABACUS, 45(1), 1–21.CrossRefGoogle Scholar
  35. Lapsley, I., & Pong, K. (2000). Modernization versus problematization: Value-for-money audit in public services. European Accounting Review, 9(4), 541–567.CrossRefGoogle Scholar
  36. LeClerc, G., Moynagh, W. D., et al. (1996). Accountability, performance reporting, comprehensive audit—An integrated perspective. Ottawa: CCAF-FCVI.Google Scholar
  37. Luscombe, N. (1975, October). No rest in retirement. CA Magazine.Google Scholar
  38. Lutsky, I. (1975). CICA president sees role of accountants expanding to include more social concerns. Globe and Mail, Toronto, B4.Google Scholar
  39. Macintyre, A. (1981). After virtue: A study in moral theory. London: Duckworth.Google Scholar
  40. Miller, P., Hopper, T. M., & Laughlin, R. C. (1991). The new accounting history: An introduction. Accounting, Organizations and Society, 16(5/6), 395–403.CrossRefGoogle Scholar
  41. Miller, P., & Rose, N. (1990). Governing economic life. Economy & Society, 19(1), 1–31.CrossRefGoogle Scholar
  42. Miller, P., & Rose, N. (2008). Governing the present. London: Polity Press.Google Scholar
  43. Morin, D. (2001). Influence of value for money audit on public administrations: Looking beyond appearances. Financial Accountability and Management in Governments, Public Services and Charities, 17(2), 99–118.CrossRefGoogle Scholar
  44. Morin, D. (2008). Auditor general’s universe revisited. Managerial Auditing Journal, 28(7), 697–720.CrossRefGoogle Scholar
  45. Muller, H. J. (1952). The uses of the past. New York: Oxford University Press.Google Scholar
  46. Napier, C. J. (1989). Research directions in accounting history. British Accounting Review, 21(3), 237–254.CrossRefGoogle Scholar
  47. Normanton, E. (1966). The accountability and audit of government. Manchester: Manchester University Press.Google Scholar
  48. OAG/BVG. (1974). Report of the Auditor General of Canada to the House of Commons—1974. Office of the Auditor General. Ottawa, Information Canada.Google Scholar
  49. OAG/BVG. (1975a). Report of the Auditor General of Canada for the fiscal year ended March 31, 1975 (Office of the Auditor General. Ottawa, Information Canada).Google Scholar
  50. OAG/BVG. (1975b). Supplement to the annual report of the Auditor General of Canada to the House of Commons for the fiscal year ended March 31, 1975 (Office of the Auditor General. Ottawa, Information Canada).Google Scholar
  51. OAG/BVG. (1976). Report of the Auditor General of Canada for the fiscal year ended March 31, 1976 (Office of the Auditor General. Ottawa, Information Canada).Google Scholar
  52. OAG/BVG. (1977b). The new mandate. AG (an internal newsletter of the Office of the Auditor General). (Office of the Auditor General. Ottawa, Information Canada).Google Scholar
  53. OAG/BVG. (1978). Report of the Auditor General of Canada1978 (Office of the Auditor General. Ottawa, Information Canada).Google Scholar
  54. OAG/BVG: 1980, Report of the Auditor General of Canada1980 (Office of the Auditor General. Ottawa, Information Canada).Google Scholar
  55. OAGNB. (2005). Report of the Auditor General, 2005 (Vol. I). Fredericton: Office of the Auditor General of New Brunswick.Google Scholar
  56. Perkin, H. (1989). The rise of professional society: England since 1880. New York: Routledge.Google Scholar
  57. Power, M. (1995). Audit and the decline of inspection. London: CIPFA.Google Scholar
  58. Power, M. (1997). The audit society: Rituals of verification. Oxford: Oxford University Press.Google Scholar
  59. Power, M. (2000). The audit implosion: Regulating risk from the inside. London: ICAEW.Google Scholar
  60. Radcliffe, V. S. (1998). Efficiency audit: An assembly of rationalities and programmes. Accounting, Organizations and Society, 23(4), 377–410.CrossRefGoogle Scholar
  61. Radcliffe, V. S. (1999). Knowing efficiency: The enactment of efficiency in efficiency auditing. Accounting, Organizations and Society, 24(4), 333–362.CrossRefGoogle Scholar
  62. Robson, J. (2010). Don’t audit MP expenses. Ottawa Citizen, Ottawa.Google Scholar
  63. Rose, N. (1996). Governing ‘advanced’ liberal democracies. In A. Barry, T. Osborne, & N. Rose (Eds.), Foucault and political reason: Liberalism, neo-liberalism and rationalities of government (pp. 65–80). Chicago: The University of Chicago Press.Google Scholar
  64. Rose, N., & Miller, P. (1992). Political power beyond the state: The problematics of government. The British Journal of Sociology, 43(2), 173–205.CrossRefGoogle Scholar
  65. Rose, N., O’Malley, P., & Valverde, M. (2006). Governmentality. Annual Review of Law and Social Science, 2(5), 1–22.Google Scholar
  66. Saint-Martin, D. (2000). Building the new managerialist state. Oxford: Oxford University Press.Google Scholar
  67. Savoie, D. J. (2008). Court government and the collapse of accountability in Canada and the United Kingdom. Toronto: University of Toronto Press.Google Scholar
  68. Sinclair, S. (1979a). Cordial but not cosy: A history of the Office of the Auditor General. Toronto: McCelland and Stewart.Google Scholar
  69. Sinclair, S. (1979b). How the auditor general got the legislation he wanted. Toronto: Financial Post.Google Scholar
  70. Skaerbaek, P. (2009). Public sector auditor identities in making efficiency auditable: The National Audit Office in Denmark as Independent Auditor and Modernizer. Accounting, Organizations and Society, 34(8), 971–987.CrossRefGoogle Scholar
  71. Staff. (1976, December 13). The Auditor-General’s bite is worse than his bark. Maclean’s Magazine, Toronto, p. 22.Google Scholar
  72. Sutherland, S. (1980). On the Audit Trail of the Auditor General: Parliament’s Servant, 1973–1980. Canadian Public Administration, 23(4), 616–644.CrossRefGoogle Scholar
  73. Sutherland, S. (2002). The Office of the Auditor General of Canada: Government in exile? School of Policy Studies Working Paper. Queen’s University, Kingston.Google Scholar
  74. The Hill in Brief. (1975). More power for auditor. Ottawa Journal, Ottawa.Google Scholar
  75. Tomkins, C. (1989). Monitoring and auditing value for money in the UK: The scope for quantitative analysis - A comment. Financial Accountability & Management, 5(3), 185–189.Google Scholar
  76. Ward, N. (1961). The public purse. Toronto: University of Toronto Press.Google Scholar
  77. Wilson, J. R. M., M. Belanger, et al.: 1975, Report of the Independent Committee for the Review of the Office of the Auditor General of Canada (Office of the Auditor General. Ottawa, Information Canada).Google Scholar
  78. Woods, A. (2010). Auditor battles Ottawa’s culture of hidden receipts. Toronto Star. Toronto, Torstar A1, A4.Google Scholar

Copyright information

© Springer Science+Business Media B.V. 2012

Authors and Affiliations

  • Clinton Free
    • 1
    Email author
  • Vaughan S. Radcliffe
    • 2
  • Brent White
    • 3
  1. 1.Queen’s School of BusinessQueen’s UniversityKingstonCanada
  2. 2.Richard Ivey School of BusinessUniversity of Western OntarioLondonCanada
  3. 3.Mount Allison UniversitySackvilleCanada

Personalised recommendations