The former Liberal government went to great lengths to hide the true costs of the controversial gun registry, Auditor General Sheila Fraser said in a scathing report released Tuesday.

Though the decade-long expense of the controversial registry through the end of fiscal 2005 has been tallied at $946 million -- coming in below an earlier approximation of $1 billion -- government officials concealed the actual amount, Fraser said in her first report since the minority Conservatives came to power earlier this year.

"It is more than simply a disagreement between accountants," Fraser told a news conference, in reference to the 2004 decision that hid nearly $22 million in overspending by the Canadian Firearms Centre that year alone.

"We believe that decision did not respect the government's own policies nor the Financial Administration Act. So this is a serious matter."

In addition to the 137-page main chapter, Fraser issued a separate 25-page special report on the registry to detail the way senior bureaucrats buried the cost of the gun registry.

The report finds that nobody kept written records of key meetings.

Fraser also noted that government officials refused to give up their client-solicitor privilege on conversations over the legality of the accounting decisions, denying the auditor general from access to key information.

"These officials also stated that legal advice should not determine the correct accounting treatment," says the report.

The main gun registry chapter outlines how errors in the Canada Firearms Centre's first registration computer system were repeated during the second generation registration system.

The first system, which was estimated to cost $94.5 million, had been pegged at nearly $190 million by 2005.

An "ill-considered" decision to develop a second system, says the auditor, is now years behind schedule and is costing about $90 million in costs against an initial approximation of $32 million.

Fraser said that the Firearms Centre made inroads in tightening organization and reporting indirect costs.

But she added that the accuracy of registry information can't be confirmed and that the centre's performance reports fail to prove about how well the program is performing.

"It is critical that any program in government be able to show what they are accomplishing," said the auditor.

The Firearms Centre must "start to develop some of those performance measures and improve them over time."

Fraser's criticism came as Public Safety Minister Stockwell Day prepared to announce changes to the controversial gun registry.

CTV News has learned those changes will include an amnesty for rifle and shotgun owners, which would mean that only handguns and semi-automatic weapons will be placed on the list.

Reaction

NDP Leader Jack Layton said Fraser's audit is "truly a sordid and shocking tale," while Treasury Board President John Baird said the audit provided "a painful conclusion to their 13 (Liberal) years in power.''

Outside the Commons, former Liberal justice minister Irwin Cotler insisted that the Liberal government didn't hide any gun registry funding.

"The word `hide' imputes a certain (bad faith),'' he told reporters.

"There was nothing that I participated in that was done intentionally. ... Clearly the auditor general has identified that there were errors.''

Appearing on CTV Newsnet's Mike Duffy Live, former public safety minister Anne McLellan, who is now out of politics, said the issue came down to whether the money in question should have been reported in the 2002-2003 or the 2003-2004 fiscal years.

Baird told Duffy the Liberals didn't have Parliamentary authority to spend the money, and instead of getting that authority, "they used some very creative accounting."

Other areas

Fraser's report also outlined shortcomings in the management of First Nations, military recruitment and tax debt collection.

"Taken as a whole, the eight chapters of this year's report paint a picture of mixed progress," Fraser said, noting most of the troubled areas are longstanding.

Fraser's damning indictment of program administration under the former Liberal government is likely to provide fodder for partisan bickering in the House of Commons.

Other findings in the auditor general's report:

• Canada's military is doing a poor job of recruiting and retaining new members, Fraser found. Despite the processing of some 20,000 applicants, a Canadian Forces recruiting program has produced only 700 trained soldiers since 2002.
• The Canada Revenue Agency can't seem to work out who owes an accumulated total of $18 billion in undisputed back taxes still owing at the end of March 2005, nor how to collect on those tax debts. Fraser says the agency will have a hard time improving its debt-collection record without making significant changes to the way it operates.
• The federal government has made "unsatisfactory progress" on recommendations aimed at helping natives, including failure to implement land agreements and examine patterns of drug deaths.
• Ottawa too often entered into long-term leases for office space that ultimately cost more than if the buildings had been purchased.