A taxing problem

Erica Butler always files on time.

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Sheila Fraser may very well be Canada’s most popular civil servant. After filing her February 2004 Auditor General’s report outlining, among other things, the shameful and probably criminal pilfering of public funds that we’ve come to know as “the sponsorship scandal,” Fraser started receiving cards and letters of thanks from Canadians. A couple from Cape Breton even sent flowers. It’s not every day that an accountant inspires this kind of public admiration, but then it’s not every day that an auditor general’s findings result in a full-blown, government-toppling scandal. Mostly, the auditor general’s office issues reports filled with practical bits of advice — ways to tinker with the system to make it operate a little more efficiently and effectively.

Dartmouth councillor Gloria McCluskey doesn’t necessarily want to topple the SuperCity’s government, but she does want us to have a Sheila Fraser — that is, an independent auditor to look at how well the city works. “I want to know whether we could be doing things better,” says McCluskey. And so the former Dartmouth mayor has proposed a comprehensive external audit of all HRM departments.

McCluskey has a bit of experience with audits. The city of Dartmouth underwent one in the early nineties when she was councillor. “The city administrator came to us and said we should do one to see how we could save money,” says McCluskey. “One of the things that came out of it was we set up a fleet management department because our trucks were everywhere and nobody knew where they were. For what it cost us, we really gained.”

Of course, as you might suspect, the SuperCity has not been going around completely audit-less for the past decade. Under provincial law, HRM hires an external firm to audit its financial statements every year. And, since 2003, we have also had two internal auditors working on staff.

There are two main differences between what we have and what McCluskey wants: independence and mandate. McCluskey would like to see auditors completely separated from city staff, both hierarchically and physically. “I want somebody to come who isn’t even in the same building,” says McCluskey. “Somebody that’s apart who comes directly to council.”

However, according to councillor Len Goucher, the chair of council’s audit committee, HRM’s internal auditors are independent. “Their final responsibility is to report to the audit committee and to council,” says Goucher. “Their findings are ours. They are very independent in their action.”

However, a recent staff report in reaction to McCluskey’s proposal says that the internal auditors actually report via the Chief Administrative Officer. So, not a direct line to council exactly, but the same line that all other HRM staff reports take. “To me that’s not independent,” says McCluskey.

And then there’s the question of mandate. “When they audit our financial statements they don’t go into how many trucks you have in public works that could be doing the same work as the trucks you’re using for recreation,” says McCluskey. “I’m after an efficiency and effectiveness audit; how economically we’re doing things.”

Although “identifying operational improvements” is one of the goals of HRM’s internal audit team, Goucher admits that reports coming from internal auditing focus more on managing financial security and risk than they do in improving efficiency or economy.

McCluskey’s proposal for an external, comprehensive audit didn’t pass at council, nor did it fail. Instead, councillors voted to refer the matter to their audit committee. Currently, says Goucher, finance department staff are preparing a report on the possibility, due sometime in February.

Share your independent thoughts about audits: ericab@thecoast.ca

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