The Canada Revenue Agency is facing renewed scrutiny after an internal audit found signs of unconscious bias and inconsistent practices in how it audits registered charities, raising questions about fairness and transparency.Blacklock's Reporter says the findings come amid a legal dispute with the Jewish National Fund, which is challenging the loss of its charitable status after 57 years. The fund alleges it was unfairly targeted and subjected to bias during the audit process, and a Federal Court of Appeal judge recently ordered the agency to release internal records related to the decision..The 22-page internal report, titled Charities Audit Process and dated January 14, found that while auditors and employees were generally aware of unconscious bias, there was a lack of clear standards and documentation to ensure impartial and consistent decision-making. It noted “missing clearly defined criteria,” “limited ability to prevent unintentional errors,” and “uneven recordkeeping.”Audits of charities have sharply increased, jumping from 142 in 2021 to 222 annually — an increase of 56% — though the report offered no explanation for the rise. The report was made public two weeks after the Federal Court ruling and highlights internal concerns over impartiality in tax investigations..Auditors said the Charities Directorate did not have fully defined roles and responsibilities to manage bias risks and noted the agency’s information systems were inadequate to meet current needs. The report also revealed that manager approvals and file monitoring were sometimes undocumented, with decisions around audit risks and compliance actions not always clearly explained.The Jewish National Fund and another charity, the Ne’emen Foundation Canada, both lost their charitable status on August 10, 2024. Auditors faulted the fund for keeping financial records in Hebrew and failing to demonstrate control over donations sent to Israel.Justice Elizabeth Walker, in her June 10 ruling, acknowledged the fund’s claim that the decision to revoke its status may have been influenced by public and media pressure. The court ordered the revenue agency to disclose internal communications that may reveal whether such pressure played a role in the audit findings.
