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Auditor General Sheila Fraser photographed in Ottawa, May 13, 2011. Her term as Auditor General ends at the end of May.

Auditor-General Sheila Fraser has spent a decade looking at federal spending, finding messes at every turn and forcing governments into action with her blunt findings.

But as her 10-year watchdog mandate nears its end, Ms. Fraser is looking to the future.

She is worried about the problems that lie ahead, prompting her to call on the government to educate Canadians on the long-term challenges facing the country and to show courage in tackling complex financial problems.

While she remains apolitical in her statements, Ms. Fraser's unprecedented warnings constitute a challenge to the newly re-elected government of Stephen Harper to take the long view, even if the issues that worry her - global warming, an aging workforce and crumbling infrastructure - aren't necessarily "sexy."

"The public must be aware of the challenges ahead," Ms. Fraser says in an interview with The Globe and Mail and L'Actualité. "Canada is a country where people, as a whole, are relatively prudent on financial matters. Let's not forget the 1990s when the government reduced spending, increased taxes and was re-elected with a larger majority. There aren't many other countries where that happened."

Pointing to billions in upcoming spending on bridges, the Parliament Hill precinct and computer systems, Ms. Fraser laments the fact Canada doesn't publish long-term projections like the United States, which looks 75 years down the road. She adds that in her view, Canadians don't want to hand down a huge debt to future generations.

"There is the deficit, issues linked to the aging population and questions of climate change. How will we deal with these, in addition to all of the other spending demands on the government?"

Ms. Fraser is retiring at the end of the month. It will be up to her still-unnamed successor to table the reports she prepared before the dissolution of Parliament in March, including one about the G8-G20 Summit that was partially leaked during the election.

Newly re-elected to a majority, Mr. Harper will be sending a clear signal about the direction of his government with his appointment of a new auditor-general. He can choose an outspoken critic of government waste like Ms. Fraser, who deliberately adopted a policy of "plain language" in her reports, or select more of a quiet accountant type.

While Ms. Fraser frequently made headlines for her scathing audits, this is the first time she has issued a clear challenge to the government to confront future challenges head-on.

"One of the important things for me are long-term finances. In almost all of the audits that we did, we noticed a lack of funding for large expenditures to come," she says.

Ms. Fraser put the government under the microscope with her arrival as the second-in-command at the Office of the Auditor-General in 1999, before becoming Auditor-General in 2001. She is set to retire as one of Canada's best known auditors, in part for her role in exposing the extent of the sponsorship scandal in 2002 and 2004.

"That was surprising," she says. "An accountant doesn't expect to get stopped walking down the street."

She initially balked at the Chrétien government's demands to probe three sponsorship contracts that had been awarded to Groupaction Marketing Inc., saying she refused to be part of a political game.

"We can easily guess that the government asked us to do the job in order to answer in the House that the file was in the hands of the Auditor-General, hoping we'd take a year to do it," she says. "We finished our audit in six weeks."

Ms. Fraser also explains her refusal, after the Conservatives came to power in 2006, to accept an infusion of new funding.

"There has to be internal mechanisms [in departments and agencies]to detect and solve problems. There is a limit to what the office can do," she says.

Ms. Fraser, now 60, has no formal plans after May 31, except a trip to Italy. She says this is her last full-time job.

As she looks back on her mandate, Ms. Fraser is proud of having modernized the office's work habits.

"About 20 years ago, the only thing that counted was the ability to produce. Now, with younger workers and families, people want a better balance, and we had to adapt," says Ms. Fraser, who broke the glass ceiling as a woman in the world of accounting.

Sheila Fraser's greatest audits

2001 - The Auditor-General revealed Ottawa sent home-heating cheques to 1,600 prison inmates and 7,500 dead people.

2002 - After reviewing three sponsorship contracts to Groupaction Marketing Inc., Ms. Fraser referred the file to the RCMP and embarked on a full audit of the program, saying senior bureaucrats broke "just about every rule in the book."

2002 - Stepping into the thorny issue of gun control, a report showed the cost of the firearms registry ballooned to $1-billion. "What's really inexcusable is that Parliament was in the dark," Ms. Fraser said.

2003 - Ms. Fraser took on George Radwanski, saying financial statements were falsified to hide overspending at the Privacy Commissioner's Office.

2004 - After a two-year audit, Ms. Fraser concluded the sponsorship program was "designed to put money" into the pockets of Liberal-friendly advertising firms, with Crown corporations engaged in "highly questionable methods." The report led to the creation of the Gomery inquiry.

2006 - Ms. Fraser revealed football Hall of Famer and the ombudsman for inmates, Ron Stewart, spent most of his summers at his island cottage, while claiming vacation time in cash.

2007 - As the U.S. was set to require passports for all air travellers, Ms. Fraser revealed Passport Canada had no plans to deal with a sudden surge in applications.

2009 - Looking at a series of potential crises, Ms. Fraser said Ottawa moved too slowly to get ready for pandemics, natural disasters and terrorist attacks.

2010 - Using her public clout, the Auditor-General convinced MPs to open their books to determine if rules governing expenditures are both adequate and being followed.

2011 - While the report is not yet public, drafts that circulated during the election campaign show Ms. Fraser will be highly critical of discretionary spending in the lead-up to the G8 summit, mostly in the riding of Industry Minister Tony Clement.

Daniel Leblanc

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