Millions of taxpayer dollars are inappropriately spent in House of Commons procurement while politicians are not justifying expenses ranging from homes to flights to gift-shop knick-knacks, reveal two new reports from federal auditor general Michael Ferguson.

But the forgiving report mostly gives members of Parliament and senators a pass. The vast majority of political spending remains secret, and the problems that were found were mostly attributed to a lack of clarity in the rules.

The secretive honour system in Ottawa is being mostly well-followed, Ferguson concluded. He refused to criticize the system itself.

Ferguson found that seven of 10 procurements by House of Commons administration did not comply with policies. In one case, a $600,000 contract for professional services was given to a company that did not meet the minimum mandatory standards.

The House spends $60 million on procurement each year. Auditors looked at 59 purchases making up about $15 million. Of those, 41 did not comply with the rules.

In some cases, contracts were not signed or were signed only after the fact. In other cases, no reason was given for why work went to a certain company instead of going through a competitive tender process.

Auditors looked at seven procurements that required a conflict of interest form. Five either had no form or the forms were signed only after the purchases were underway.

On the Senate side, one senator successfully expensed a trip to Washington, D.C., without showing any evidence it was a business trip. Four other trips between senators’ homes and Ottawa were expensed with no explanation.

But those hoping for a politically explosive expose of fraud similar to the audits in Nova Scotia, Newfoundland and Great Britain will be greatly disappointed.

Ferguson’s staff did not audit any members of Parliament, their staffs or their offices. Auditors did not examine the Board of Internal Economy, the secretive group of MPs who police political expenses. They did not look at professional services that MPs paid out.

Auditors did look at MP spending but scrutinized less than one-half of one per cent of all expenses (just 264 out of about 85,000 in 2010-11).

Ferguson’s report did not name names.

“He skimmed over things pretty lightly,” said Gregory Thomas, executive director of the Canadian Taxpayers Federation.

“He didn’t pay attention to the things most Canadians most wanted him to pay attention to.”

Thomas pointed to Toronto city council, where councillors’ expenses can be found online. He said Ottawa still acts like an Old Boys club, where all of the 85,000 expenses are kept secret.

Democracy Watch said Ferguson is “simply failing to fulfil his legal duties” by not doing a full audit of the $500 million that MPs spend annually.

Ferguson’s reports offered several recommendations, but he found that “for the most part, things were handled well.”

It was the first audit of the House and Senate in 20 years and was three years in the making after MPs tried to stonewall former auditor general Sheila Fraser when she first tried to conduct the audit in 2009.

The MPs eventually bowed to public pressure, but it turns out they needn’t have worried.

Despite being pressed by reporters, Ferguson made no comment about MPs policing their own expenses in secret.

He said his job was only to look at whether the rules are being followed properly.

“What’s preventing me from making an opinion on the rules is because we didn’t ... assess whether they were satisfactory or not,” Ferguson said.

“That’s not what the audit was about. That’s not what the audit was ever intended to be.”

Ferguson found that most, but not all, expenses followed proper procedures.

But almost seven per cent of House expenses were not properly authorized. Over five per cent lacked supporting documents such as receipts or invoices, while almost five per cent were not properly coded.

But almost 99 per cent of expenses were found to be for their intended purpose and related to parliamentary functions.

Auditors found several expense irregularities on the Senate side.

Of 25 senator hospitality transactions tested, three were for purchases from the Parliament Hill gift shop. Auditors found that senators do not have to confirm the purchase of small gifts that are tied to the business of their jobs.

In two of seven cases studied, senators did not back up whether they were actually living in Ottawa residences they were expensing.

Over seven per cent of expenses were not properly authorized, while more than five per cent lacked supporting documentation. Over six per cent were not found to be for their intended purpose, related to parliamentary functions or in accordance with the rules.

(pmcleod@herald.ca)