Evidence of meeting #133 for Public Accounts in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was projects.
A video is available from Parliament.
4 p.m.
Auditor General of Canada, Office of the Auditor General
I think it depends how you're going to frame it. Every case needs to be evaluated on its own merit.
4 p.m.
NDP
Matthew Green NDP Hamilton Centre, ON
I have a case for you. In your overall findings, you found that “[t]he foundation poorly managed conflicts of interest”, where the foundation's records show the conflict of interest policies were not followed in 90 cases.
Specifically, you identified this:
The spouse of one of the foundation's senior managers was a partner at the human resources recruiting firm that the foundation used to support its process to appoint directors.... The senior manager declared the perceived conflict of interest to the then-CEO. The board was only made aware of the perceived conflict over a year later, despite this situation relating to board appointments.
To be clear, and on the record, does that framing, to you, capture the current acting CEO Ziyad Rahme's hiring of his own wife to recruit board members who subsequently gave Mr. Rahme his bonuses and also selected him as the acting CEO after the previous CEO resigned? Is that accurate?
4 p.m.
Auditor General of Canada, Office of the Auditor General
If I may, Mr. Chair, there's just one point of clarity I'd like to provide. The 90 cases were not linked to this.
The example the member is talking about is cases that we highlighted where there are other instances—
4 p.m.
NDP
Matthew Green NDP Hamilton Centre, ON
[Inaudible—Editor] specific to the hiring of his wife, who would then be responsible for appointing the directors, who would then be responsible for his oversight.
4 p.m.
Auditor General of Canada, Office of the Auditor General
I'm getting to that. Those were other instances that we felt the conflict of interest policy for the foundation just did not address. In our view, this is a risk. While it wasn't directly linked to funding, it was definitely a conflict of interest that should have been declared, and the board should have been made aware of it sooner, yes.
4 p.m.
NDP
Matthew Green NDP Hamilton Centre, ON
In all the projects that you reviewed, did you find any funding applications that were approved without having the appropriate supporting documentation, such as project details, milestones or completed budgets?
4 p.m.
Auditor General of Canada, Office of the Auditor General
When we concluded that there were 10 projects that were ineligible, two were clearly the seed funding, because we felt it did not comply at all with the contribution agreement, but the remaining eight were cases where the file just didn't support why these projects were eligible. Without that evidence there, it's difficult for us to conclude that they were eligible.
4 p.m.
NDP
Matthew Green NDP Hamilton Centre, ON
Were you able to cross-reference those files with the files that were identified as having potential conflicts of interest?
4:05 p.m.
Auditor General of Canada, Office of the Auditor General
We were. With two, there was a crossover. It's actually quite complicated. There is the conflict of interest crossover “double-up” in instances, but there were definitely at least two projects that we deemed ineligible that were cases in which a conflict of interest had been declared and the person continued to vote.
4:05 p.m.
NDP
Matthew Green NDP Hamilton Centre, ON
Thank you.
Did you come across instances where the board bulk-approved a set of project applications without proper documentation being received or reviewed by the board?
4:05 p.m.
Auditor General of Canada, Office of the Auditor General
I would describe two instances that, we believe, did not follow the contribution agreement.
The contribution agreement is clear that funding should always be given based on merit, project by project. For the seed stream of projects and then the COVID payments, there was batch approval, which we believe should not have been done that way. That violated the contribution agreement between the government and—
4:05 p.m.
NDP
Matthew Green NDP Hamilton Centre, ON
Ms. Urie would recall that I sat on the cross-examination that ultimately discovered that the chair of the board was receiving copayments and hadn't recused herself. She has since stepped down.
Is it safe to say that in the instances that were bulk-approved without proper documentation there was also an overlap with the conflict of interest that you identified in the cases?
June 20th, 2024 / 4:05 p.m.
Auditor General of Canada, Office of the Auditor General
Absolutely. Sixty-three cases of COVID payments were in conflict of interest. Later on, the way the COVID payments were approved did not follow the contribution agreement. There are two things at play with those payments.
4:05 p.m.
NDP
Matthew Green NDP Hamilton Centre, ON
The contribution agreement would also trigger things like financial compliance. Is that correct?
4:05 p.m.
Auditor General of Canada, Office of the Auditor General
The contribution agreement between the federal government and the foundation really sets out how they should determine eligibility.
4:05 p.m.
Auditor General of Canada, Office of the Auditor General
They would have to demonstrate that it's a new technology, that it's innovative, and that there would be tangible environmental benefits for the Canadian population.
4:05 p.m.
NDP
Matthew Green NDP Hamilton Centre, ON
Did you come across any cases where executives brought forward board-related projects that had been rejected by reviewers on multiple occasions and yet still moved forward for a second or third time with a new reviewer?
4:05 p.m.
Auditor General of Canada, Office of the Auditor General
If you permit me, Mr. Chair, I'm just going to ask Mathieu to answer that.
4:05 p.m.
NDP
4:05 p.m.
NDP
Matthew Green NDP Hamilton Centre, ON
Knowing all the conflicts, knowing all the ways in which bulk approvals happened at the board level and conflicted with board members, are you confident that all applications were treated fairly and that evaluations and approval processes were consistent across all applications?
4:05 p.m.
Auditor General of Canada, Office of the Auditor General
It comes back to how we did our sampling. We did a statistical sample, because we couldn't sample all projects that were available. We looked at those in the allegations, and those were separate, but in our statistical sample, we felt that there were enough errors that at least one in 10 projects in the streams that remained was also likely ineligible, which is why we made the recommendation that it wasn't just the 10 we found and that they needed to do more work to determine whether there were others.