While I agree there needs to be significantly more oversight over nonprofits and associations funded by the federal or provincial gov't or state for you guys, its pretty typical for almost all funding agreements that exceed X dollars (usually low amount) to require an audit by an accredited firm. For associations its a very low threshold (250K) here in canada before you're subject to an audit if you're a soliciting association.
So if you say gov't should outsource auditing because they don't have the capacity internally to do it, okay that already happens. If you say gov't do the audit, well well now how much sophistication they have.
Now, what should happen is significantly more scrutiny of funding applications because right now its a joke, and scrutiny of activity reports, not necessarily the financial portion, because again the funding often goes to use for other activities. But again, I am pretty involved in applying and use of funding and its always fairly low capacity people on the other end that I am submitting things to for review.
Currently there should in theory be some financial oversight already in place, but as we know the gov't is just ticking boxes when it comes to monthly, quarterly, annual funding req's, whatever the contribution agreement states. I don't know how you bolster gov'ts capacity frankly, private is always going to pay more for talent. You're often just going to get the tick and bobers in gov't who want to go home at 4:30 and don't care.
I perause some of the finance and accounting subreddits and every time someone makes a post saying they want work life balance or don't want a job they have to work overly hard in, the responses are always, go work for the government. And so, that's not only the mindset, but also the capacity you have to work with and the pay is in line with such talent. You have to re-invent gov't if you want them to actually provide quality oversight.
To be clear though on my position, there needs to be change, at-least from my own routine interactions with NGOS, associations and private business supplied with CA money.
The real answer to why these NGO's do not have oversight is because there is a desire to have a level of deniability.
A lot of these NGO's are setup and funded to further our national interests. Some of those interests are basically setting up/funding opposition groups in places like Georgia or Belarus or some other country we want to influence how they behave politically.
So instead of having us interfere directly (something we regularly accuse our geopolitical enemies of doing), we put up a wall of plausible deniability with funding these supposed independent NGO's that we know nothing about what they actually do. "wink wink"
I don't think his point is that we need to outsource auditing, rather it's that these entities get funding but have no accountability for it, something that's unheard of in the private space. It doesn't really matter whether it's an NGO or a government agency, accountability is central and should be mandated here. If government doesn't have the necessary accounting capabilities, ok fine, maybe they contract EY/PWC or whomever to audit these things on an ongoing basis, but to simply operate under current model is nonsensical.