Auditor General investigating McKinsey uses consultants herself | The influence of consulting firms
An expert sees a risk of conflict of interest, which the Office of the Auditor General of Canada refutes.
The Auditor General of Canada, Karen Hogan, once worked for a consulting firm.
A professor from the University of Montreal describes as a “hot potato” the investigation entrusted to the Auditor General of Canada into Ottawa's contracts with the consulting firm McKinsey. The Office of the Auditor General of Canada (OAG) itself has used eight consulting firms in the past three years.
This situation could pose a problem for the impartiality of the BVG, according to Denis Saint-Pierre, a specialist in comparative public administration and governance issues in the Department of Political Science at the Université de Montréal.
< p class="e-p">Even though the OAG has never done business with McKinsey, the professor sees it as a “perception” issue: Appearances of institutional conflict of interest should not be taken lightly.
“The Auditor General is, in effect, being asked to pass judgment on the work of a firm belonging to an industry with which her office is intimately associated. »
— Denis Saint-Martin, professor and researcher at the University of Montreal in administration and public policy
Since 2020, the BVG has spent more than 10 million dollars for various contracts with consulting firms that helped him with his audits. Among them are large firms like Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers.
These previously mentioned firms are also under scrutiny by a parliamentary committee originally formed to study the contracts awarded to McKinsey. Their leaderships will be invited to testify before MPs. But the auditor has no plans to extend her mandate.
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The use of contracting out to such consulting firms has more than tripled in the federal government between 2017 and 2021, a trend which, according to some scholars, erodes the ability of the federal public service to do its job.
Denis Saint-Martin would prefer the Office of the Auditor General of Canada to work only with its 700 employees.
The OAG explains that it uses external consultants for accounting and verification, and related services including technical assistance, professional development [training] and transformation initiative.
The BVG has a robust structure in place to manage conflicts of interest, explains its spokesperson Vincent Frigon. All employees sign an annual conflict of interest declaration, and all auditors [employees or contractors] sign a declaration of independence at the start of each audit engagement.
According to Denis Saint-Martin, all these mechanisms fall under self-regulation, it is the BVG itself [with its advisers from consulting firms] which oversees its own rules on conflicts of interest.
Denis Saint-Martin notes that most auditors general went through one or other of the major consulting firms before being appointed to their position. For example, Karen Hogan, the current incumbent, worked at Ernst & Young from 1997 to 2003.
The BVG does not see this as a problematic issue in the context of the audit on the awarding of contracts to the firm McKinsey. Its spokesperson adds that for a long time, the practical experience acquired within these firms was considered very important, even essential, training for all professionals wishing to obtain a professional accounting designation.
Before deciding to go ahead with the audit of contracts awarded by the federal government to McKinsey, the Office of the Auditor General of Canada consulted its databases to find out to assure that he had never done business with this firm.
The investigation into McKinsey has not yet begun. The OAG is in the planning stage. At this stage of the planning for this audit, we do not plan to use private audit firms, said the OAG spokesperson.
