Six short paragraphs taken from provincial auditor general Jim Mc- Carter's 501-page annual report are a window into the frustrations and complexities of trying to get bureaucracies to do a better job.
The six paragraphs deal with the most sensational observation in the 2008 report -- that the province fails to collect an estimated $500 million in tobacco taxes annually, enough to cover the McGuinty government's projected deficit this year.
Their message is startling. Even the legal background will surprise most people.
Ontario's Tobacco Tax Act limits the number of cigarettes native reserves can buy from wholesalers. The formula works out to about 3.5 cartons a month for every adult smoker who is a reserve member, whether they live on or off the reserve.
Those cigarettes can be retailed to reserve members tax-free. The limit is supposed to ensure there aren't cigarettes left over that can be sold tax-free to non-natives.
Of course, it is common knowledge that many non-native smokers stock up at reserve "smoke shops." The audit report states that 21 per cent of Ontario smokers admit to buying illegal cigarettes on reserves.
Part of the problem is that native bands don't police on-reserve sales. But there is also the issue of who is supplying them with far more cigarettes than the law allows.
The auditor general knows. According to the report, in 2006-07 one "manufacturer/wholesaler" operating on a reserve sold two-and-a-half times the entire number of cigarettes that should have been allowed on every reserve in Ontario. The lost tax revenue from that business's illegal sales alone is estimated at $100 million.
Another unnamed, on-reserve "manufacturer/wholesaler" was selling to 16 reserves. It shipped an average of 27 cartons a month for every adult smoker -- eight times what the law allows.
There is no indication any of those companies were charged. In fact, charging them is not among McCarter's recommendations. The report's wording is much milder, suggesting the Ministry of Rev - enue "should ensure that a reserve's purchases from all sources, including on-reserve manufacturers and wholesalers, is limited to the tobacco allocation assigned to that reserve."
The ministry's response is correspondingly vague. It is aware of the problem and is working on solutions, but because most reserves fall under federal regulation, "there are limitations on the province's ability to enforce provincial tobacco tax laws."
"Limitations" of various types affect the suggested remedies for other problems: cross border smuggling; abuse of a system of different coloured tear-away tape that is supposed to be used on tax-free cigarettes; shoddy record keeping of sales and revenue in general.
An ongoing frustration is that the same problems were identified in a 2001 audit of the tobacco tax system. If anything, illegal sales have increased since then.
Many other sections of the audit hold true to that form. A problem is identified (school boards get millions to fix serious problems with school buildings but spend it on paint jobs and paving parking lots); recommendations are made (track spending, insist guidelines be followed); ministry agrees, says it is working on solutions. Repeat as necessary, ineffectively.
It is tempting to suggest that eliminating the auditor general's office and its $16.3 million budget is the only guaranteed way to save taxpayers some money.
Tempting, but not desirable. The office is the one government body that gives us the truth about government operations without the now-rampant spin.
Perhaps a better idea is to give the auditor general some enforcement powers. Let the people who track down the problem also track down the perpetrators.
Until that happens, McCarter could narrow the scope of what his office takes on every year, then spend more time keeping up the pressure on ministries for quicker fixes to a smaller number of problems.
Efficiency, after all, is what an audit strives to produce.