The Clerk of the Provincial Legislature is defending the controversial hiring to a 10- year term of PEI’s new auditor general, as the most qualified candidate.
Joey Jeffrey was responding to a story by The Graphic indicating Darren Noonan, while a member in good standing of the Chartered Professional Accountants of PEI, does not currently hold a license to conduct public audits, which CPA PEI mandates is a necessary requirement for the task.
“I’m confident in the process I put forward,” Mr Jeffrey said Friday evening. Part of that process includes the hiring of a three member selection committee comprised of two HR professionals and an accountant with “significant auditor general experience.” The clerk declined to name members of the committee.
The provincial legislature unanimously approved the selection May 26. Mr Jeffrey says he provided scoring results and resume to the legislature’s audit committee, which brought the recommendation forward.
It was not until after the hiring was formalized that CPA PEI objected, Mr Jeffrey said, based on Mr Noonan not being licensed to perform public accounting. To conduct or sign off on audits, CPA PEI requires chartered public accountants to complete a comprehensive program requiring completion of “1,250 chargeable hours of practice as a public accountant with in the immediately preceding five years.”
The debate centres on whether the self-regulating body governing the accounting industry or the independent provincial legislature has authority to dictate job requirements for the auditor general. Mr Jeffrey contends the Audit Act sets out the rules and regulations under which the auditor’s annual investigation of government operations and expenditures is conducted. The act is silent on whether the auditor must possess a license to conduct audits, which puts it in direct conflict with the rules governing chartered public accountants.
The Audit Act states: “The Auditor General shall audit, in such manner as he considers necessary, the accounts and records of the receipt and disbursement of public money forming part of the Operating Fund, and the assets, liabilities, revenues, expenditures, trusts and funds held by any agency of government or Crown controlled or owned corporation in so far as it is not subject to financial audit by an external auditor.” The act also gives him or her authority to delegate any duty, act or function.
Mr Jeffrey contends the Audit Act supersedes regulations guiding membership in CPA PEI. He describes the auditor as more of a manager of process, rather than an accountant actually conducting the audit.
“He has all the authority he needs under the Audit Act,” he said. “The auditor general is the supervisor.” Mr Jeffrey says two, unnamed, provinces have dealt with a similar scenario and in both cases accommodation was reached allowing the auditor to continue in their role.
He expects a similar resolution when Mr Noonan’s credentials are discussed by the CPA PEI board of directors Monday evening. “The assurance I’ve gotten is that he will be certified Monday.
“In the interest of professional collegiality, we are letting this process unfold. CPA raised the issue. We’ve basically been trying to play nice,” he said. “This is the first time where this has ever happened. CPA is asserting authority over, what is indeed, an independent office of the provincial legislative assembly.”
Mr Jeffrey would not say if the legislative assembly requested or received a legal opinion on which body has authority to dictate professional credentials.
In his opinion, Mr Noonan was the best candidate because of the broad swath of experience he brings to the job. For 16 years he was a respected public accountant, rising to partner in a prominent Charlottetown firm. Over the last 13 years, he went on to build a single car dealership into multiple dealerships which were sold last year. “There was a very rigorous process behind the appointment of Mr Noonan. I think there are transferable skills there.”
Whether it is enough to win over MLAs now upset at the revelation, and concerned about a loss of trust, remains to be seen. MLAs were not made aware of Mr Noonan’s lack of a public accounting license. Sources have described the hiring as creating an ‘awkward’ friction between the executive and legislative branches of government. Mr Jeffrey says the new AG is willing to do ‘whatever is necessary’ to calm the waters and ensure public trust.
“I do want people to feel comfortable in this process,” the clerk said.
Under the Audit Act the legislative assembly has authority to revoke the appointment with a two-thirds majority vote.