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Audit committee still finding its feet

Facilitator Bea Clark. GLORIA J KATCH PHOTO

 

BY GLORIA J. KATCH
Special to the VOICE

Earning the public’s trust was clearly on the minds of staff, municipal councillors and committee members last Monday as it bandied about thoughts on its future goals and objectives.

At incoming CAO David Cribbs’ suggestion, the committee renamed itself to the Finance and Auditing Committee, to reflect a broader spectrum of responsibilities. However, the committee had difficulty prioritizing its goals and terms of reference, and moved that task to a September 19 meeting, when Cribbs noted it would give the staff and committee time to get “its house in order” over the summer months.

As a part of a facilitation session on how to define the committee’s terms of reference, Councillor Ron Kore noted that many residents appeared to expect it to be on a discovery mission to look into past wrong-doing by previous councils, and have asked him, “How much money did they take?”

“Everyone thinks there is this great conspiracy,” said Kore, and there is an expectation that the committee will unravel it.

Despite the fact that nothing fraudulent was unearthed by independent auditors Deloitte earlier this year, Treasurer Teresa Quinlin said she didn’t believe the public fully understood the ramifications of their investigation. She noted the difficulty in attempting to “educate the public” on the difference between corruption and fraud on one hand, and merely not agreeing with several of the decisions made by the previous council on the other.

Facilitator for the meeting, Bea Clark, a consultant and previous Director of Workforce and Business Development with Niagara College, said the committee is being developed in part to, “learn, understand and provide answers” to the public’s questions about finances. However, she noted, the purpose of the committee is to apply “forward thinking,” with the knowledge of how the Town manages its finances and be able to improve on the past.

“I worked with the provincial government, and when you explain [finances] to people they look at you like you have two heads,” said Clark, noting there are grants, funds, and levies, which also often change. She admitted explaining financial accounting to one’s neighbour was “a challenge.”

Current chair of the Active Transportation Committee and a founder of the Summerfest Committee, Clark indicated she would provide a summary of the meeting based on the issues discussed. Clark noted there were roughly six areas of interest, which were alluded to throughout the meeting, particularly in reference to the big financial areas of concern: the audit report itself, the Meridian Community Centre, transportation/public works, capital projects, cash and replenishing the reserves, and the operating budget.

Quinlin and Deputy Clerk Charlotte Tunikaitis noted a timing issue with receiving utilities invoices, for example. Tunikaitis said she doesn’t examine June’s bills until the end of July, and the report would not be received by councillors until a week prior to the August council meeting.

As Sobeys franchisee, Ron Kore said in his experience there was a certain amount of financial forecasting that was done to estimate expenses. He and others viewed the committee’s role as an oversight committee. The terms of reference indicate the committee’s job is to be able to act independently from council and to be able to challenge management, when necessary.

“When we see a spike in costs, I think we’re here to figure out why it’s happening, so it doesn’t happen six more times,” said Kore.

The committee acknowledged their role as overseeing the figures prior to them being received by council. When Michael Cottenden was asked what his concerns were as a volunteer committee member, he replied being able to understand “what kind of reporting” systems are being used to generate financial records, and that some guidance will be needed on that.

The Deloitte report also acknowledged the Town has adapted several new, but accepted accounting practices. Cottenden suggested a separate report be completed for the community centre, given that it’s the Town’s “largest asset.”

Quinlin replied other reports were being compiled on the MCC, and transportation costs, and Kore asserted that Councillor Bob Hildebrandt was doing a “good job” on the Utility Sustainability Committee, looking into energy efficiency.

Committee Chair John Wink suggested that capital budgets and cash reserves should be reviewed on a monthly basis. However, Tunikaitis said the cash reserves are estimated in conjunction with the capital budget, which is currently being reviewed quarterly. Quinlin said while replenishing the reserves is important, it didn’t make sense to review the reserves every month.

There was some discussion about what roles the committee should play. While Wink noted that council had to make the final decision, the committee was a “good way to test some of the policies” for efficiency, and to ensure the process was conducted properly, such as issuing tenders on the purchase of a firetruck, for example.

Clark noted that the public wants to have faith in an open process, and is confident that it’s credible and transparent. She pointed out the importance of ensuring “all the steps are in place, and you have all the information and be able to influence the decision before it goes to council.”

Earlier in the meeting, CAO Cribbs said he wasn’t aware of any policies on items, such as cash, assets management or borrowing, but that the committee could establish policies that reflect “best practice” methods. One of the committee’s goals, noted Quinlin, is to establish a risk management framework, which would mitigate risk factors in various areas. According to Kore and other councillors, the other component to policy-making is to follow the old axiom, KISS—keep it simple, stupid.

 

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