Canada. Royal Commission on Financial Management and Accountability : The Royal Commission On Financial Management and Accountability was established under Order in Council P.C. 2884, 22 November 1976, under Part I of the Inquiries Act (R.S.C., 1970, c.I-13) and on the recommendation of the Prime Minister, as amended by the following Orders in Council: P.C. 3322, 24 December 1976 and P.C. 45, 13 January 1979. The Commission was mandated to inquire into and report upon the management system required in the inter-related areas of: (i) financial management and control, (ii) accountability of deputy ministers and heads of Crown agencies relative to the administration of their operations, and (iii) the evaluation of the administrative performance of deputy ministers and heads of Crown agencies, and the interdepartmental structure, organization and process applicable thereto, including in particular: (a) the development, promulgation and application of financial management policy, regulations and guidelines by central agencies; (b) procedures to ensure that necessary changes in policy, regulations and guidelines are identified, and policy regulations and guidelines are adhered to (c) systems and procedures to ensure effective accountability to government and, where appropriate to Parliament, of the administration of government departments and agencies, and (d) the organization necessary in central agencies, government departments and Crown agencies to achieve the foregoing. The commissioners were Allen Thomas Lambert, Chairman; John Edwin Hodgetts, Oliver Gerald Stoner and H. Marcel Caron. Caron resigned and was replaced by Robert Després as Commissioner (See Order in Council P.C. 3322, 24 December 1976). The secretary was John Rayner.
On 22 November 1976, the President of the Treasury Board, Robert Andras, announced the appointment of the Royal Commission on Financial Management and Accountability. Its purpose was to examine financial management and control by the Government of Canada over the administration of public funds. It was not surprising that this announcement came on the same day as the release of the annual report of the Auditor General for the year 1975-1976 which critized government spending and lack of accountability. The Auditor General, J.J. Macdonell, wrote:
"I am deeply concerned that, on the evidence of the two year examination carried out by the audit office, Parliament and indeed the government has lost or is close to losing control of the public purse."
The Auditor General also reported that:
"financial management and control in the Government of Canada is grossly inadequate. Furthermore, it is likely to remain so until the government takes strong, appropriate and effective measures to rectify this critically serious situation."
One financial analyst, Douglas Hartle, blamed the government's lack of financial control over public money and expenditures, in part, on the implementation of the recommendations contained in the report of the Royal Commission on Government Organization of 1962-1963. As a result of it, decentralization of financial administration took place and the position of Comptroller of the Treasury was abolished. In Hartle's words:
"it is one of those ubiquitous ironies of life that the very loss of financial control in the narrow sense trumpeted by Macdonell arose largely from the implementation of Glassco Commission recommendations that central agency financial and personnel controls be largely eliminated. Remember the Glassco phrase: 'Let the managers manage'. Well, deputy heads were gradually given a great deal of discretion. Unfortunately, Glassco forgot, as did those responsible for implementation, that delegation of authority without the concomitant burden of responsibility (read accountability) is a recipe for disaster. And accountability requires some means of monitoring how discretion has been exercised."
In his annual report of 1975-1976, the Auditor General made several recommendations to increase government control over financial expenditures. These involved the reorganization of the Treasury Board Secretariat by the appointment of a comptroller-general, an officer at the deputy minister level to serve as chief financial officer for the Government of Canada.
The Government of Canada decided to appoint a royal commission on financial management and accountability because it was reluctant to act immediately on Macdonell's recommendation for the establishment of the office of comptroller-general. The appointment of a comptroller-general, as Andras put it, "calls into question not only fundamental aspects of government organization but also some of the basic tenets of our parliamentary system of government". The government held that final responsibility for financial control, "rests with Parliament and Parliament alone and this can only be exercised if the principle of collective and individual responsibility of Ministers to Parliament is upheld", Andras said. (See: The Toronto Globe and Mail, 23 November 1976; the Ottawa Journal, 24 November 1976; Remarks by the Chairman, Allen T. Lambert, to a Press Conference on the Progress Report of the Royal Commission on Financial Management and Accountability, 16 December 1977; Douglas G. Hartle, "The Report of the Royal Commission on Financial Management and Accountability (The Lambert Report): A Review", Canadian Public Policy, Vol. 3, Summer 1979, pp. 366-382; Donald J. Savoie, The Politics of Public Spending in Canada, Toronto, University of Toronto Press, 1990, pp. 109-114 and pp. 127-132 and News Release, Treasury Board, 22 November 1976).
No public hearings were held. But, the commission held meetings with over 400 people, including key participants in financial management at the federal level, such as deputy ministers, assistant deputy ministers, heads of Crown corporations, the Auditor General and his staff, directors general, directors, senior managers, Cabinet ministers, Members of Parliament and Senators. It also met with officials of provincial governments, with senior managers in government at London, Paris and Washington, as well as with several private sector groups in Canada. The Commission received 36 submissions. RG33-122 General Inventory
