John Doyle, B.C. Auditor General | BCBusiness

John Doyle, B.C. Auditor General | BCBusiness
John Doyle is the province's chief watchdog, regularly engaging in the "bookkeeping equivalent of hand-to-hand combat."

Holding your employers’ feet to the fire is an unenviable task, and one that seldom earns a repeat appointment. But as the province’s top accountant, John Doyle relishes the role of auditor general. The only question is: will he still have a job come October 2013?

OK. Anyone in any doubt that we have doubts about this situation?” B.C. auditor general John Doyle asks the table. Heads shake silently. All eight auditors gathered in the boardroom at the Office of the Auditor General (OAG) in Victoria are of one mind: the performance audit of a certain government program has identified critical gaps in its credibility. (The program’s identity, sorry to say, must stay under wraps in accordance with Section 9 of the Auditor General Act.)

Tipoffs, news articles, emails and brown envelopes pointed Doyle to the smoke (“and we’re stupid enough to go where others fear to tread,” he says dryly). Over the past five months, the team conducting the performance audit found the fire, the likes of which they just summarized for their colleagues as part of this “Challenge Check-In” meeting. “It sounds like extortion to me,” one of the staff interjects. Doyle nods. “In Australia that’s what we’d call a standover,” he says, referring to the outback equivalent of an underworld enforcer.

“So the first thing is to get the evidence documented and get it into the files properly structured so that EQCR [engagement quality control review] can take a look. And the second is making sure again that we’ve got hold of the right end of the stick,” says Doyle. “The question is going to have to be how to synthesize this without bringing the whole roof down on our heads.”

When the report goes public several months from this early June meeting, it’s sure to raise a ruckus. The fact that Doyle is heading straight toward the fire, not away from it, is emblematic: the man is fearless. Here is the man who engaged in what Vancouver Sun political columnist Vaughn Palmer described as the “bookkeeping equivalent of hand-to-hand combat” with the head of BC Hydro last November after calling attention to Hydro’s deferral accounts, for which the Crown corporation had no plan to settle up (more on that later). “Fearless is another way of saying ‘independent,’ with thick black lettering,” says assistant auditor general Bill Gilhooly. “If you have the means to be independent, then you have a duty to be fearless in carrying out your work, but your work must be beyond reproach.” So far Doyle and his office are ticking off all the right boxes. “Intimidation? I don’t think it even enters his vocabulary,” Gilhooly comments.

The biggest question mark surrounding Doyle, who’s currently in the fifth year of a six-year appointment, is this: is he so good at his job that he’ll be out of work when the option to renew his appointment comes up in October next year?

The word “audit” originates from the Latin word auditus, meaning to listen, which is exactly what the 111 OAG professionals housed at 8 Bastion Square, just across the street from the Victoria waterfront, do. They listen to what government programs aim to accomplish and then observe what they actually accomplish and report to the Public Accounts Committee of the provincial legislature on whether there’s a gap between the two. If there is, they suggest sensible ways to close it.

The auditor general is the only independent, non-partisan office checking up on whether government’s making good on its promises involving your tax dollars, from your hospital to your university to your lottery winnings to the electricity that lights your home. All told, the government of B.C. has around $50 billion in annual revenues, which is more than the 2011 revenues of B.C.’s five largest companies added together. It’s big business and there is room for improvement. For 12 of the past 15 years, the auditor general has given the province’s annual financial reporting a C grade. “The halo has slipped a bit there,” says Gilhooly, who leads the audit of the province’s summary financial statements, the largest financial statement audit carried out in B.C. “The term we used last year was that the government is hanging off the bar rather than standing on it,” notes Gilhooly.

The auditor general’s role is particularly pertinent today because British Columbians are a disenchanted lot. According to an Ipsos Reid poll from July 2012, among the provinces, people in B.C. are the most likely to say they don’t get good value for money from their provincial government. They also lead the polls in the level of distrust that they have for their provincial government. Federally, things aren’t much better: the percentage of Canadians who trust the feds to “do what is right” has fallen by over 30 per cent since 1968, according to data from Ekos Politics. “It seems there’s less confidence over the last five to 10 years in all levels of our elected government leaders, and they earn that,” says Wayne Strelioff, who served as B.C.’s auditor general from 2000 to 2006. “The role of the auditor general becomes more important in that kind of environment.”

“People in general are tired of all of the spin and what the auditor general does is provide a basis of fact as to what is true and what is not,” says Doug Horne, Liberal MLA for Coquitlam-Burke Mountain and deputy chair of the province’s public accounts committee. “[He] provides, for both sides of the house, a pillar of reality that I don’t think exists elsewhere.”

As for his perspective on his role, Doyle says simply, “They give me power and I give them reports,” adding, “there’s almost nothing that we can’t look at.” Groundwater resources, pine beetle-ravaged timber supplies, highway maintenance, the province’s starved environmental assessment office, the legislature’s own $70-million annual budget, carbon offsets, $6 million in waived legal fees for corrupt Liberal aides – the OAG has reported on it all or is in the process of doing so.

As contentious as these topics can get, the buy-in is considerable. Since 2008, 90 per cent of all recommendations made by the auditor general in his reports have been implemented by the departments and programs he has audited. “The influence of his recommendations does wash through the system,” says Vicki Huntington, the independent MLA from Delta South, who sits on the provincial government’s public accounts committee. “It’s like everything to do with government; the uncovering of a fact gets people moving on fixing the issue.”

And there’s the reward: “That’s very motivating for the staff. You can actually see the change happening,” says Gilhooly, who has worked in the office for 25 years. “It’s an exciting place to be.”

The B.C. OAG produces two types of audits: financial audits and performance audits (also called value-for-money audits). The latter is a specialty of legislative auditors and the idea is to look at the economy, efficiency and effectiveness of a program or organization to see if it’s achieved what it set out to. “This, as far as government and innovation goes, is fundamental to our ability to make things better,” says Horne, who is a champion of municipal auditors general. “One must assume that one can always get better at what one’s doing.”

At any given time, the OAG will have about 10 performance audits and anywhere from 20 to 35 financial audits on the go. In the past year, the OAG has issued 70 audit reports, resources and opinions, not to mention all the behind-the-scenes work that the office does checking up on whistleblowers, rolling out a cross-country Audit Learning Network or coaxing government to improve its performance with carrots before resorting to the stick.

The province of B.C. has had auditors general serving government as far back as 1861, but it wasn’t until the Auditor General Act of 1976 that the role was cleaved from government and given its independent status (thus becoming the first independent office to report to legislature. Today there are seven in total, and they include the police complaint commissioner, ombudsperson and information and privacy commissioner). “The auditor general’s independence is his most valued asset,” then-minister of finance E.M. Wolfe said to the legislative assembly in 1976.

“We hold onto that independence very dearly. It allows us to make judgments about what’s most important, to legislators and the public, to look at,” says assistant auditor general Morris Sydor, who is responsible for the sustainability and environment audit portfolio, which Doyle decided to beef up after arriving in B.C.

“Our office has had a large influence over the past 30 years in terms of helping improve the quality of management in government,” says Sydor, who has worked for the OAG since 1977, when the office first got underway with Erma Morrison (who served until 1986) at the helm. In its history, the OAG has had four auditors general and three acting auditors general, who hold the course while the selection committee decides on a new auditor general. To fill the position, the legislature forms a selection committee that reflects the composition of the legislative assembly (the current selection committee is made up of five government MLAs and two opposition). The committee must agree unanimously on a candidate, then takes its recommendation to legislature, which, as is customary in Commonwealth countries, votes unanimously on the committee’s recommendation.

Doyle himself was appointed by a unanimous vote in the legislature in 2007 but only after a lengthy – and long-deadlocked – appointment process that opposition MLA Rob Fleming accused the government of having “politicized” in debate. “That’s pretty well the last day that they all support the work of the auditor general: that day that they appoint him,” says previous auditor general Strelioff. “Almost the next day, when the auditor general has to take a position on whatever the issue is of the day, someone’s not going to like it.”
[pagebreak]

Parliament
Image: Madeleine Holland
The Office of the Auditor General, located in Victoria,
keeps the B.C. government accountable through a
series of performance and financial audits.

Doing the Right Thing

It’s early February and Doyle is seated behind his desk in a grey-and-white striped shirt, with an indigo CBC mug of coffee in hand. Over the course of several visits I make to his office, his facial hair changes like the weather. Sometimes it’s cloudy, other times clear. Today he sports a beard, his cheeks bushy below bespectacled grey-blue eyes. The 57-year-old Australian is dubious about the prospect of being written about. “I don’t like talking about myself. I just like to do the right thing,” he says.

The wall on his right is tiled with framed degrees, qualifications and oaths that span the Commonwealth. Before being recruited by the legislative assembly here in B.C., Doyle was deputy auditor general in Perth, Western Australia. Behind his chair are two monitors that have the OAG logo as their screen saver. The office has long gone paperless and his glass-covered desk is very tidy.

Shortly after Doyle arrived in 2007, the office did a team-building exercise that mapped out the staff’s key traits, which were colour-coded and printed onto oversized place cards. Doyle came out as a blue, green and red, which stood for logical, empathetic and innovative. “That’s what I am normally, and if I get into stress and strife and what have you . . . .” He flips his card around. “That’s what I become: highly logical.” Talk about useful. This man’s already hyper-logical brain is actually fortified by stress to become even more logical.

In the News


Headlines track Doyle's vigilance over everything from homelessness to hydro

Auditor general slams province’s finance records


Globe and Mail
July 18, 2008
Fresh from a rousing brawl with the Forests Ministry, B.C.’s new auditor general clashed again with the provincial government yesterday, calling its newest set of financial books misleading. 


Auditor general critical of Interior Health surgical services


Kelowna Capital News
August 30, 2008
Interior Health has work to do to improve surgical service according to a new report by B.C.’s auditor general, John Doyle.


Victoria hiding $170m in Games cost


Vancouver Sun
December 13, 2008
The B.C. government has hidden at least $170 million from the true cost of staging the 2010 Olympics and its $600-million Games budget could go a lot higher, auditor general John Doyle warned Friday. 


Homelessness plan needed: auditor general; Government lacks clear profile of population


Vancouver Sun
March 6, 2009
The B.C. government lacks a comprehensive plan to deal with homelessness, auditor general John Doyle said in a highly critical report released Thursday, adding that he believes homelessness in B.C. is getting worse. 


Auditor general raises concerns over agricultural land use


Chilliwack Progress
September 14, 2010
Last week auditor general John Doyle released his report on the Agricultural Land Commission (ALC) with considerable criticism for the status quo of management. 


BC Hydro executives’ bonuses based on non-existent profits: AG


National Post November 1, 2011
BC Hydro executives have taken home hundreds of thousands of dollars in bonuses based on profits the province’s auditor general says didn’t really exist.


Tenacious Doyle on B.C. Rail trail


Vancouver Sun
May 3, 2012
Auditor general John Doyle is headed back to court in his year-and-a-half-long effort to review the government decision to waive repayment of $6 million in legal bills for the two B.C. Liberal aides who pleaded guilty in the B.C. Rail case.

B.C. auditor finds ‘serious issues’ with Legislature finances


Vancouver Sun
July 27, 2012
The B.C. Legislature’s handling of its almost $70-million annual budget is such a mess that auditor general John Doyle says he can’t tell whether any money is missing or has been improperly spent.


Doyle has a professorial mien, which isn’t surprising, seeing as he was head of the school of accounting and finance at the University of Notre Dame in Fremantle, Australia. “I will always do the work I have to do without fear or favour,” he says. Sounds hard. “You learn it with bruises and pieces of wood sticking outside of your head occasionally,” he says. For someone with irreproachable standards for bullet-proof accuracy, Doyle’s wit is a welcome surprise. (Doyle is such a stickler for the truth he once insisted a Victoria tourism website change its description of the city’s weather from “Mediterranean” to “temperate.”)

Needless to say, thick skin is a prerequisite for the job. “He’s a bit prickly, right?” notes the Sun’s Palmer. “You wouldn’t be cut out for that job and the level of independence you need if you weren’t.”

Last October in debate, Bill Bennett, Liberal MLA from Kootenay East, likened being audited to taking castor oil. “They’re not being nasty,” Doyle noted of such comments; “they’re just saying, ‘Yeah, you need these guys around.’ You need people like me in each jurisdiction who can do this work, and typically we’re sort of a breed that’s pretty good at that.”

Speaking of breeds, of all the metaphors to describe an auditor general, canines keep coming up. Doyle himself has been described in the press as a cross between a ferret and bulldog. Even the OAG’s team in the Times Colonist 10-kilometre race ran under the banner “The Watchdogs.”

“There are a lot of governments that would like a lapdog poodle as their auditor general; your opposition parties, on the other hand, would like a raging pit bull,” says Ontario auditor general Jim McCarter. The middle road looks something like a “Labrador retriever guard dog,” he says. “You’ve got to have the backbone and the gumption to say publicly, in front of the media, what needs to be said,” adds McCarter. “Especially in the financial-statement accounting area, John is someone who would certainly be willing to call it the way he sees it.”

Perhaps the biggest test of Doyle’s mettle came in his decision to challenge the accounting practices of BC Hydro, the province’s second-biggest Crown corporation (only marginally behind ICBC in annual revenue). Last fall, the OAG reported that, as of March 2011, BC Hydro had deferred $2.2 billion in costs to the future with no existing plan to pay the money back. By 2017, the costs of deferred expenses were predicted to escalate to nearly $5 billion, the auditor general’s report warned. “Doyle has dramatized some issues here that I actually think it took an outsider with a sharp eye to bring to attention, and the foremost of those is the issue of the widespread use of deferral accounts,” says the Sun’s Palmer. “With the deferral accounts you’re saying, look at this practice that’s going to stick British Columbians with a lot of bills down the road.”

Doyle notes that the costs of deferred accounts were always in the fine print of BC Hydro’s financials but they were never communicated clearly to the public. “That’s the difference between technical opinion and actually reading the story,” he says. “In Ontario, when this happened, the hydro there racked up $19 billion of deferred assets to the government’s balance sheet and we’re heading in the same direction.” For the moment, BC Hydro can use deferral accounts for one more year under their current accounting standards before adopting the International Financial Reporting Standards, which do not allow for deferral accounts.

Another of Doyle’s high-profile cases involves the waiver of $6 million worth of legal fees incurred by the defense of two Liberal aides, Dave Basi and Bob Virk, who pleaded guilty to corruption in the sale of B.C. Rail in 2003. One month after the story broke in October 2010, Doyle started asking for the paperwork surrounding the government’s decision to waive repayment of the taxpayer-financed legal costs of the two bribe-takers as part of a wider review of government indemnities. “He has kept at it ever since and man, if you read the court record on that one, they threw up every barrier you can imagine against him,” says Palmer. “And he’s just kept at it.” Doyle is going to court again in September to gain access to the files, an endeavour that continues to eat away at his $15.752-million annual budget. (It’s interesting to note that the B.C. auditor general’s budget compares to a budget of $25.65 million for the Alberta auditor general’s office, which acts as watchdog to a provincial operating budget just slightly bigger than B.C.’s.)

“If you’re running up against the argument that public business perhaps should not be made public, then you probably know it’s more important that public business should be public,” says Doyle’s predecessor, Wayne Strelioff. “The strong leaders will embrace transparency and the practice of bringing clarity to performance. The weak leaders, at least in my view, do not encourage a contrary view and they obfuscate performance.” But it costs them. One recent poll found that, as in the rest of Canada, government’s record in transparency and accountability is as important to British Columbians as efforts to manage the economy.

The Ministry of Forests, Lands and Natural Resource Operations declined to comment on the auditor general’s timber report from this spring, but other departments were more forthcoming. “It’s been a pretty healthy process,” says Dave Duncan, assistant deputy minister in the highways department of B.C.’s Ministry of Transportation and Infrastructure, commenting on an audit that Doyle’s office undertook in 2010. “There isn’t a day where pretty much everyone doesn’t get on the highway or receive a good or service that touched the highway, so I think that’s why it was important to the auditor general, and we understood that.” The 32-page report on the provincial upkeep of roads, released in November 2010, recommends 10 ways the ministry could improve service delivery. Duncan says his department still revisits the list to identify the progress they’ve made. “We have found the recommendations to be valuable in planning and delivering our maintenance and upkeep programs moving forward,” he says. “On this particular file, I feel confident they’ve made a difference, and for the better.”

Back at the “Challenge Check-In,” an undercurrent of excitement has built up among those seated at the table, although, this being the auditor general’s office, it’s awfully subtle. “The consequences of us even considering there’s a lack of credibility here . . . this time around it’s actually going to make a difference,” Doyle says, as the meeting wraps up.

Afterwards, Doyle is back at his desk, both his hands wrapped in bandages, the result of a volleyball accident (“I took one for the team” he says, which is a bit funny because that’s what he does professionally, too). His desk is impeccably tidy, still. It’s a sunny summer day and outside, throngs of tourists throng the Victoria harbour. The B.C. legislative buildings are just visible from Doyle’s second-floor office window. Even when he’s resting his eyes, he’s watching our government. The all-party five-person special committee to appoint an auditor general, which decides whether or not to reappoint Doyle when his term expires in October 2013, formed just over a month ago, in late May.

“Somebody asked me once whether I would apply for the job if I knew what it was like, and the simple answer is, I don’t know,” Doyle says. “I am coming up next year to whether or not I want to stay, and the answer is, I do.” He sounds almost surprised at himself. “I would like to continue going forward.”

“He may face a bit of a fight for reappointment would be my guess,” says Palmer. “Both parties turn this idea over in their head: if you’re in opposition and you’re planning to be in government, do you really want this guy barking away at you and snapping and snarling, and if you’re in government and expecting to lose, then I guess you don’t care if he sticks around because he’ll be making life heck for the other side for a change.”

“I’m not going in there with any expectations, any expectations at all,” NDP MLA from Burnaby-Deer Lake Kathy Corrigan says of the selection committee, on which she sits as deputy chair. Corrigan also sits on the public accounts committee, where she’s seen Doyle at work. “But I would say he is fair, he is fearless in the work that he does and I think he’s extremely bright. I think we’ve been quite lucky to have him.”

“It will be interesting to see if they reappoint someone like Mr. Doyle,” says Delta South MLA Vicki Huntington. “The government should welcome an officer of the calibre of our auditor general, but government can sometimes not see beyond the end of its own nose.”