Thursday, October 27, 2005

Dingwall Affair is "Completely Obfuscated"

An independent audit of Dingwall's expenses puts him in the clear as to his expenses, or as David would say, it "completely exonerates" him.


The criteria the audit used to "exonerate" Dingwall, as required by the board of directors, were: Were Mint rules were followed?

This says nothing about the actual rules themselves, or if value-for-money that was obtained.

In fact, the limited scope of the audit raises more questions than it answers. If his expenses were "legit" by the rules of the Mint, why was Dingwall able to expense golf memberships?

If most of the expenses were on staff, why was staff included in his office expenses? Why weren't they part of the staff of the Mint, and paid a regular salary?

What if any controls does the Mint place on the absolute dollar amounts spent by their chief officers? Are they allowed to infinitely spend money as long as receipts were retained?

To all the conservatives beating themselves up about poor Dingwall's reputation: grab your ****. Relax. Pallister has a right to be upset about the spending of a man who thinks that the Mint spending has no connection to the Canadian Taxpayer.

This is the same guy who said to Guite "You won't rat on them. You won't rat on us" and you're worried about how questioning his expenses looks?

mk looks at the Dingwall here:
Now, it’s certain that the review completed by the auditors was done according to Canadian accounting standards, that’s a given. When a firm is hired to conduct a review or an audit, it will use due diligence within its scope to issue an unbiased, honest answer — they must as their reputation and liability are on the line.

This is a side issue, but mk is putting a little too much stock in auditors. I'm training to be one, but even I know the industry is in disrepute because of serious ethical lapses. A good question to ask is whether PwC has other more lucrative management and advisory service contracts with the Mint.

We'll keep going:
Though, more often than not, if there were an aspect of the finances which was specifically left out of the scope by the client, then because numbers in accounting are so pervasive, the auditors probably would have been able to find fraudulent activity through other means - whether or not they would be able to state these findings in the review is uncertain. If this were the case, however, the firm might have rejected offering an opinion on the engagement it was hired to do. So it’s highly probable that the findings in the Dingwall audit are accurate — unless another audit was conducted that offered a different opinion, then you can be certain that the review is accurate.

The problem is not whether the sample size or immaterial amounts were left off the plate. I'm sure Dingwall has every last receipt, especially since he kept one for his gum.

The problem is the focus of the audit. What about conducting an operational audit, which would focus on the validity of the Mint's rules, and the controls in place to prevent out of control spending (receipts or no)? An operational audit would also focus on the value obtained for the money spent. Who are these staff members that he hired? What exactly did they do for a half million/year? How many? How much? Why did he need that many assistants?

I don't really doubt the findings of the audit, I just think the scope and restrictions placed on it render it meaningless.

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