Research Highlights

The Accountability Gap in BC

Local governments in British Columbia manage billions of taxpayer dollars each year. They build infrastructure, deliver essential services, and shape the daily lives of residents. Yet despite this scale, most operate without independent oversight. This absence is not a minor technicality—it leaves a gap in accountability and weakens confidence in how public funds are managed.

Provincial legislation requires public budget consultations, audited financial statements, and open council meetings. These measures provide some transparency, but they do not answer the fundamental question: are local governments delivering on their responsibilities effectively, efficiently, and economically? Independent oversight fills this gap. Performance audits move beyond financial reporting to examine outcomes, identify risks, and recommend improvements that strengthen governance and resilience.

BC’s Experience with Oversight

British Columbia once had an Auditor General for Local Government (AGLG), created to provide independent performance audits of municipal operations. An external review confirmed the office’s value, but it was later closed for political reasons. Since then, only the City of Vancouver has established its own Auditor General. Across the province, billions are spent without independent review.

The Vancouver office has already demonstrated measurable returns—approximately three dollars saved for every dollar invested. Toronto’s municipal Auditor General has reported as much as eleven dollars saved per dollar invested. Oversight is an investment, delivering positive returns—financially, in accountability, and in public trust—at a time when local governments are under pressure to do more with less.

Equally important are the non‑financial impacts—where the value lies not in direct savings, but in prevention and preparedness. Improved emergency readiness or stronger cybersecurity, for example, are benefits less easily measured yet no less critical. Taken together, financial and non‑financial impacts demonstrate that oversight strengthens governance and builds confidence in institutions.

International Models

International experience offers valuable lessons. The following are illustrative examples of how audit offices operate across both local governments and senior-level bodies, demonstrating accountability across multiple tiers of government.

• Washington State Auditor’s Office:

Audits cover more than 2,000 local governments, encompassing the largest counties to the smallest special purpose districts, as well as state agencies, and include financial, accountability, and performance audits. Recognizing the breadth of its mandate, it also operates a Center for Government Innovation, publishing guides and resources to spread lessons across the sector.

• Audit Office of New South Wales (NSW):

Conducts financial and performance audits of councils and NSW state agencies. In its Local Government 2024 Report, the Office reported issuing unqualified audit opinions for 124 of 128 councils and examined key risks including financial sustainability, fraud, and cybersecurity. Overall council expenditures totaled $16.3 billion. A 2023 audit of council cybersecurity also examined the role of state agencies responsible for guidance and support to local governments.

• Audit Scotland & the Accounts Commission:

Audit Scotland supports the Accounts Commission, which holds councils and other local government bodies to account, while also auditing Scottish Government departments and public bodies. In addition to financial and performance audits, it conducts Best Value audits in local councils to ensure good governance, effective resource management, and a focus on continuous improvement.

• Audit Wales:

Audits the accounts of 22 councils, as well as national park authorities, fire and rescue authorities, and more than 700 town and community councils, alongside Welsh Government bodies. Its Financial Sustainability of Local Government (2024) report reviewed strategies across all 22 councils, focusing on long-term financial sustainability, councils’ understanding of their financial position, and reporting to support regular oversight.

Common Thread

Although each office takes a different approach, shaped by its legislative authority and institutional role, the common thread is that their mandates extend across local government and senior levels of government.

A Path Forward for BC

Legislation already requires audited financial statements from local governments, and that structure works well—no change is needed. Rather than revisit an old political debate about reopening the AGLG, a more efficient approach would be to expand the mandate of the BC Auditor General to include performance audits for municipalities—restoring the oversight once provided by the Auditor General for Local Government.

This approach would leverage existing infrastructure, expertise, and credibility while ensuring oversight is conducted in accordance with Canadian auditing standards. The legislation also allows for examinations or investigations when the rigour of a full performance audit is not required—an approach well-suited to emerging issues in local government.

Crucially, this alignment would allow systematic review of areas where provincial and municipal responsibilities intersect—precisely where accountability can blur and value for money can suffer. It would ensure that someone independent, outside of government, is asking the tough questions that citizens themselves cannot easily pose.

Conclusion

Independent oversight at the municipal level is essential. When billions are spent without review, accountability fades and confidence in institutions weakens. Restoring oversight would provide assurance that local governments are meeting their responsibilities effectively and efficiently.

Oversight is not simply about catching mistakes after the fact; it is about building stronger, more resilient communities by ensuring governments deliver value today and are prepared for tomorrow. British Columbia should follow a similar approach to the other organizations above, ensuring that tough questions are asked from outside government and that citizens receive the accountability they rightly expect for the public funds entrusted to their local governments.

Author

Gordon Ruth, FCPA, FCGA, Former Auditor General for Local Government, British Columbia & CAAF Associate