On May 26, PEI MLAs unanimously agreed to name Darren Noonan the Island’s next auditor general. In moving the appointment, Finance Minister Darlene Compton said “I’m confident that he will ensure our government continues to be financially transparent and accountable in our management of taxpayers’ dollars.”
Today there are MLAs who want a do-over.
What no MLA knew that day is the recommendation, forwarded by an independent committee appointed by the Clerk of the Legislative Assembly, omitted a significant detail. Noonan, while unquestionably talented and accomplished, lacked the paper qualifications established by the Chartered Public Accountants of PEI, a self-governing body, to conduct or sign off on public audits - the meat and potato work of the Auditor General.
This lack of current credentials is understandable given Noonan’s career trajectory. For 16 years he was a respected public accountant, rising to partner in a prominent Charlottetown firm. Over the last 13 years, he built a single car dealership into multiple dealerships, which were sold last year. While he continued to be a member in good standing of CPA PEI, he did not practice public accounting during his tenure in the automobile industry.
CPA PEI represents 700 current and retired public accountants. It was formed five years ago when various accounting designations merged and oversees the onerous process when an accountant applies to renew their public accounting license. Regulations require completion of “1,250 chargeable hours of practice as a public accountant within the immediately preceding five years.”
Last week, more than a month after starting his new job, Noonan applied for the necessary credentials, even releasing a press release through the Clerk’s office, stating his application was granted.
But just as MLAs were denied full context (Noonan is only the third AG in Canada appointed without credentials established by a provincial governing body), his release glossed over the license renewal process.
We don’t know if CPA PEI waived the 1,250 hour requirement, which would gut its credibility as a self-governing body. If the requirement remains, how will the AG complete the necessary work, how will it impact his new role, who will pay for it and how long it will take to complete, because the auditor’s office is routinely understaffed and overworked. Regardless, the requirement speaks to the significant learning curve for any public accountant wanting to return to practice.
Legislative Clerk Joey Jeffrey says it’s the responsibility of CPA PEI to explain its actions. CPA PEI isn’t talking. Neither is AG Noonan. Silence does not build trust.
While Darren Noonan is the face of the issue, this is not about him. It’s about process, conflicting authority and public trust. Noonan has achieved much in his career, but in the past 13 years while the audit industry experienced significant structural and legislative change, he was growing a private business, for which he deserves praise. Some will argue his entrepreneurial background is of significant benefit. Maybe. But that misses the point.
This is about a flawed process, starting with a hiring committee comprised of two HR experts and an accountant with significant auditor general experience. A request to release names of the committee members was refused. What’s lacking is a front line perspective of the political nuances unique to the vital role the auditor plays in holding government accountable. Why not a former premier, cabinet minister or deputy minister instead of a second HR hired gun? This is not a middle management position.
The hiring recommendation was brought forward by the legislature’s Audit Committee, which includes Compton, Official Opposition leader Peter Bevan-Baker and the Clerk. MLAs were offered application scoring sheets and Noonan’s resume. There was no mention whether a legal opinion pertaining to the conflict between the Audit Act, used to select an AG but silent on credentials, and regulations giving CPA PEI the right to dictate public accountant standards, was asked for, or received. If no legal opinion was received, it should have been, and released to MLAs.
Instead no red flags were raised and when details became public, MLAs of all political persuasion were angered and embarrassed, resulting in a deterioration of trust between the Clerk, who overseas the operation of the legislative assembly, and its members.
PEI’s Auditor General is our last line of defence. The AG is charged with shining light in the dark corners of government and delivering unbiased examinations into how and why government does what it does. We must trust the AG will diligently and effectively ask questions and investigate on our behalf. Since the new government was sworn in, all members of the house have spent a large amount of time promoting trust, transparency, and doing government business differently. It’s unfortunate this process fails to follow that lead and unnecessarily taints the Office of Auditor General by planting the seed of doubt in a vital public institution.
Paul MacNeill is Publisher of Island Press Limited. He can be contacted at email@example.com