'Wrongdoing' in GTH news release may not have been the right word, says Sask. provincial auditor

Saskatchewan's provincial auditor says a key word in a much-quoted sentence from her news release about her Global Transportation Hub report may not have been quite right. She agreed the word was "probably" too imprecise.

Ever since the release of her June report on the controversial GTH land deal, the government has been continually quoting Judy Ferguson's release, which said "the audit did not find evidence of conflicts of interest, or indications of fraud or wrongdoing." 

Ferguson said she included that key sentence because it answers the question she knew some people reading the report might ask.

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Her report contains a long list of failures on the part of the management, board and minister of the GTH in the way that it purchased 204 acres from the private sector. Given all the problems Ferguson flagged, CBC's iTeam asked her what she meant when she said there was no evidence of "wrongdoing."

"Maybe we could have used a different word," she said. She didn't offer an alternative and added that many words can be second-guessed.

"I can do that with lots of words," Ferguson said. "I can do the same with words in your articles, too."

Auditor's office 'could have chosen their words much better'

Ken Rasmussen, a professor at the Johnson Shoyama School of Public Policy in Regina, has read the auditor's report and has been closely following the debate.

He suspects the auditor's office regrets its choice of words, which have become so central to the ongoing debate.

"I think they could have chosen their words much better," said Rasmussen. "I'm sure that they would acknowledge that now that that has become the linchpin, that one phrase from her press release, for the government's defence of itself."

Rasmussen pointed out that the report flagged many problems: The GTH failed to have a business plan, failed to keep key documentation, failed to conduct due diligence, spent too much on the 204 acres and purchased it in a way that wasn't financially responsible.

Rasmussen said the auditor's office wasn't "looking for wrongdoing in the a criminal sense. They were looking for issues around process. They found plenty of a different kind of wrongdoing."

Ferguson wasn't conducting a forensic audit

The provincial auditor's report explains that it is not a forensic audit. Instead, it was focused on examining whether the GTH had the appropriate processes and followed them.

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University of Regina accounting professor Morina Rennie said it's important to understand the news release comments about fraud and wrongdoing in light of the audit's purpose.

"The audit was designed to assess the effectiveness of the GTH's processes for land acquisition," said Rennie. "It was not designed to seek evidence about whether or not fraud or other wrongdoing had occurred."

In fact, in the report's 72 pages the words "fraud" and "wrongdoing" don't appear. 

Rennie said despite that, auditors are always supposed to be on the lookout for anything untoward.

That's a point Ferguson made to CBC as well.

"So generally accepted auditing standards require you as auditor to be alert to indications of fraud error and that type of thing," said Ferguson.

She said she was alert to those sorts of issues. That's what the sentence about fraud and wrongdoing was intended to convey to readers of the report.

"When we pulled it together and summarized it we thought: 'Jeepers. They're going to ask that question. We might as well answer it.' Simple as that," said Ferguson.

Auditor's office may have been naive

Rasmussen said while the auditor may have thought she was offering clarification, he suspects the government would have viewed that sentence as a lifeline.

"Certainly the government knew what that phrase meant and they knew how this was going to be spun, and it may have been some naivete on the part of the provincial auditor's office," said Rasmussen.

They haven't been as cooperative as they need to be, and of course it makes people think they're hiding something.- Ken Rasmussen, Johnson Shoyama School of Public Policy

He said the government has been using that phrase as its defence in the face of many legitimate questions.

"They haven't been as forthright as they need to be. They haven't been as cooperative as they need to be," said Rasmussen. "And of course it makes people think that they're hiding something."

He said the government has admitted that it made mistakes in the GTH land deal "but they haven't yet done a full accounting of what went wrong and why it went wrong and who benefitted and why those people benefitted."