Auditor General Act

The Auditor General Act is a federal Canadian statute, cited as R.S.C. 1985, c. A-17. Its long title describes it as an Act respecting the Office of the Auditor General of Canada and sustainable-development monitoring and reporting. The current text is published by the Department of Justice on Justice Laws.

The Act makes the Auditor General the auditor of Canada's accounts, including accounts relating to the Consolidated Revenue Fund. It authorizes the examinations and inquiries the Auditor General considers necessary in order to report under the Act. For suppliers, the most relevant part is the power to inquire into recipients of federal funding.

What the Act gives the Auditor General

The Act sets out the powers and duties of the Auditor General. These include examining whether public money was spent for the purposes Parliament approved and with due regard to economy and efficiency. The Auditor General then reports on what those examinations find.

The Act also covers sustainable-development monitoring and reporting, which is part of its formal long title. The Office of the Auditor General describes its mandate and role in its departmental plan statement on canada.ca.

Section 7.1 and recipients under funding agreements

Section 7.1 authorizes the Auditor General to inquire into the conduct of a recipient of federal funds under a funding agreement. The inquiry can examine whether the recipient:

• fulfilled its obligations under the agreement;
• used the funds with due regard to economy and efficiency;
• maintained its accounts and the essential records concerning the amounts received;
• used the funds consistently with relevant environmental considerations.

The full wording of the provision is in the consolidated Act in PDF. Read the section itself when you need the exact scope of an inquiry.

How the Federal Accountability Act widened the reach

The Federal Accountability Act expanded the classes of recipients of grants, contributions and loans into which the Auditor General may inquire. It also refers to providing the Auditor General with information from recipients under funding agreements. The amending provisions appear in the 2006 annual statutes.

This change is why the Act is relevant to organizations that receive grants, contributions or loans, and not only to government departments.

A Canadian statute, separate from NATO audit

The Auditor General Act is not a NATO procurement term. NATO has its own audit body, the International Board of Auditors for NATO (IBAN), which audits NATO expenditure. IBAN's role is described on the NATO website. Suppliers working on NATO-funded contracts should treat IBAN and the Auditor General of Canada as separate audit frameworks.

What it means for a supplier bidding on Canadian public contracts

The Act is a statute. It is not a standard solicitation clause or a certification you sign with a bid. If you receive federal money under a funding agreement, section 7.1 means the Auditor General can inquire into how you used it.

Plan your record keeping around that. Keep accounts and essential records for every amount received, be able to show you met your obligations under the agreement, and be able to show the funds were used with due regard to economy and efficiency. Your specific obligations depend on the wording of the funding agreement or contract you sign, so read those terms closely and have your finance team confirm that your records meet them.