Town council to work with 41 recommendations from financial practices review

 

Representatives from the Ministry of Municipal Affairs and Housing and Deloitte brief town council and administration on the financial practices report at the Aug. 11 meeting.

Representatives from the Ministry of Municipal Affairs and Housing and Deloitte brief town council and administration on the financial practices report at the Aug. 11 meeting.

By Ron Giofu

 

Town council got the results of its financial practices review and is going ahead to work with the 41 recommendations that were contained within.

Representatives from the Ministry of Municipal Affairs and Housing and Jamie Lanoue from Deloitte presented the report to the town. Lanoue, whose firm actually conducted the audit after being retained by the MMAH, said the review looked at the years 2009-13 and lasted from June 25-July 14.

Lanoue said they “tested specific key controls” and did a “root cause analysis” of the town’s financial state. Among the 41 recommendations, most of which were not seen by council as the full report was not handed in until the meeting itself, were to address reserve shortfalls, focus on debt repayment, seek opportunities to increase revenue, raise capital through the sale of town assets, review of capital and operating accounts monthly and to look for shared service opportunities with neighbouring municipalities.

Developing a long-term financial plan was also among the suggestions made by Lanoue.

Some of the problems were caused by such reasons as staff turnover in the financial department, overestimating development charges, poor record keeping and reporting of reserve funds, neglecting accounting records, not having financial statements audited in a timely fashion and poor communication with council.

“This was not an audit,” said Lanoue. “It was a review.”

In his report to council and in the report now posted on the town’s website, Deloitte stated: “While there have been recent improvements, the Financial Management and Practices at the Town of Amherstburg are at a low level of maturity and will require significant management attention and investment in order to improve to a desired state. Management should develop a roadmap and work plan for implementing the opportunities for improvement outlined in this report over the next 24 months.”

Councillor John Sutton queried both Lanoue and ministry officials as to why it wasn’t an audit, something council had unanimously asked for Jan. 20. Ginette Brindle, regional director with the MMAH, said the ministry determined that a review was the appropriate course of action after hearing the town’s concerns and hearing about the problems in the media. She said the minister made the offer and council accepted that offer.

“There’s been allegations of missing money. That’s why cries for an audit have come forward,” said Sutton, who asked if there was anything uncovered in the review to suggest if there was any evidence to the contrary. Brindle responded that there was no need to proceed further and have an audit.

“Why did you feel that the people of Amherstburg didn’t deserve an audit?” asked Councillor Diane Pouget, who noted there were allegations and numerous concerns from residents and council members.

Brindle said each situation is unique but reiterated the minister believed a financial review would be the course of action that would give residents the answers they were looking for.

“We thought we were getting an audit,” said Pouget. “Obviously, we didn’t.”

Council, who awarded external auditing services to KPMG later in the meeting, were also called out for not having tendered the service in recent years as a bylaw calls for it to go out every five years. Lanoue said previous audits were not done illegally, but that the town had violated its bylaw by not going out for tender.

Deputy Mayor Ron Sutherland, using Texas Road as an example, said he was told if there was a plan in place to pay for it and was told yes only to be told three months later they couldn’t actually do the project. He said council voted Jan. 20 to find out who misused funds and where the problems started.

“I think someone should be held accountable,” Sutherland said.

Both Sutton and Councillor Bob Pillon questioned why the report wasn’t before council prior to the meeting.

“I’m very upset. It’s not right,” said Pillon. “How did that happen?”

Pillon also wondered why some of the problems weren’t rooted out by the town’s own auditors in previous years, and asked what can be done in the future to prevent a reoccurrence.

“I don’t want to see the town get in the predicament again,” he said. “What could I have done to catch this?”

Interim finance director Wendy Dade said “management practices had fallen down” with Lanoue adding that council might want to look at its committee structure and set up a committee on financial matters to assist the treasury department.

Council agreed to work with Deloitte and town administration to deal with the implementation of the 41 recommendations. Council will also sit down with Deloitte to discuss the recommendations, one that Brindle suggested should be done in public session. Council members sparred over a second public meeting to discuss the issue with residents with Pouget originally suggesting two weeks, then a month. However, that motion was withdrawn until council has their meeting with Deloitte first.

“I don’t think it’s a bad idea to take it to the people of this town,” said Councillor Bart DiPasquale.

Sutton said his motion to implement the 41 recommendations stood as is with Councillor Carolyn Davies fearing the meeting could devolve into a “pissing match” like the “lynching” at the Essex Power public meeting. Davies said the meeting had to be “thoughtful” with council having to get a better grasp of the report.

Pillon agreed that more time was needed to meet with Deloitte and get a handle on the recommendations.

“You might as well have a meeting that makes sense, not a lynching,” he said.

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