Audit takes a look at City of Vernon's purchasing activities

by Richard Rolke - Vernon Morning Star posted Aug 31, 2015 at 11:00 AM
B.C.’s auditor general for local government has released an audit on the City of Vernon’s purchase of goods and services from 2010 to 2012. The audit states that while the city has worked to improve the procurement process, eight of 25 transactions tested showed non-compliance with city policies. Among them were inappropriate expense approvals. Mayor Akbal Mund says the audit covers previous administrations and the city has taken action to improve its procurement procedures. However, while he is pleased with how purchases are handled, Mund says recommendations in the AGLG audit will be considered. "We will look at it and there's always room for improvement. There's nothing wrong with an outside auditor taking a look at what you do," he said.
------------
City bending rules : Audit
by Jennifer Zielinski |CASTANET - Aug 31, 2015 / 1:29 pm
A performance audit report on the City of Vernon has been completed by B.C.'s auditor general for local government. In summary, it appears that in 2011 a city department direct-awarded a $35,000 purchase order to a vendor to provide services without involving the purchasing services department in the transaction, contrary to the city’s purchasing policy. The report states the city’s files contained no written contract, but only a purchase order, which also contradicts city policy. There was also a lack of compliance in the procurement of legal services, according to the report. The city procured legal services contrary to the requirements of both its legal services policy and its professional services policy. Acting Auditor General for Local Government Arn van Iersel, who lead the report, indicated the city breached its purchasing-card policy limit on the size of individual transactions. The report's executive summary says van Iersel believes there is a need to strengthen procurement policies and improve compliance in order to minimize risk to the organization. The city needs to strengthen its gathering of information on operational procurement, monitoring and reporting of meaningful results to senior management, van Iersel said. "In our view, if the City of Vernon adopts the recommendations in this report and continues to look for ways to increase value for money, it will generate lasting benefits for taxpayers." The City of Vernon is one of six local governments the province set out to audit on the topic "Achieving Value for Money in Operational Procurement" during 2013-14.
--------------------
Don Quixote Note. This audit is for the period 2010 to 2012. The City's reaction to the recommendations in the audit are at the end of the report.

The audit can be found here:  http://www.aglg.ca/includes/docs/Audit_Topic_1_Report_2_City_of_Vernon.pdf
------------
City of Vernon receives AGLG Performance Audit Posted August 31, 2015
The City of Vernon was pleased to receive the Auditor General for Local Government’s (AGLG) Performance Audit Report that noted the City’s commitment to managing procurement transactions, related risks and obtaining value for Vernon residents and taxpayers. The audit found that the City was committed to managing procurement transactions and related risks and obtaining value for taxpayers. Further, the report noted that the City worked to achieve continuous improvement in its procurement, seeking to increase the efficiency and effectiveness of this function.

Mayor Akbal Mund has committed to addressing the recommendations contained with the audit, noting that many of the recommendations have already been implemented by the City since the audit period was concluded in 2012.

“The City of Vernon has pursued continual improvement of our purchasing environment,” said Mayor Mund. “The City has moved to a centralized purchasing environment, and implemented electronic purchase orders and document scanning of paid invoices—all in a move toward improving efficiency. Further, our Council has full stewardship of the budget and consistently monitors results of the Corporation of the City of Vernon. We are committed to financial and operational best practices so that we can continue to provide value to our residents and business owners in Vernon.”

Following Premier Christy Clark’s announcement to form the office of the AGLG at the 2012 UBCM convention, then-Mayor Rob Sawatzky stepped forward to volunteer the City of Vernon as one of the first B.C. municipalities to receive the performance audit. At that convention, Premier Clark announced the purpose of the AGLG was to find and share best practices among B.C. municipalities. Mayor Sawatzky was confident that constructive recommendations from the AGLG report combined with recommendations from the Core Service Review completed by KPMG in 2013 would allow the City to deliver improved value-for-money services to Vernon’s taxpayers as well as provide best practices that would benefit other B.C. municipalities.

“The City looks forward to reviewing AGLG-recommended best practices for local governments in B.C. to consider,” said Mayor Mund.

Will Pearce backs service review

Richard Rolke - Vernon Morning Star Published: June 06, 2012 1:00 AM
Vernon’s new chief administrative officer won’t speculate on possible job cuts. Will Pearce took up duties Monday and one of his tasks will be assisting council with a core service review. “When one looks at a review, one of the steps is to look at the services being provided and assess if they are highly valued or if there is a desire to get budgets under control,” he said. Some residents have expressed concerns about the number of employees at city hall, but Pearce won’t go there yet. “It’s a loaded question until we do the review,” he said, adding there is a need for organizations to periodically consider how they conduct business. “It’s an opportunity to make sure we’re delivering the right services. If not, we need to make some adjustments.” A new administrator can change the tone of day-to-day operations, but Pearce doesn’t believe city staff should be worried. “To deliver services, you need skilled, motivated and committed individuals delivering services. My job is to ensure we have that environment. Our commitment to council and the community is to deliver services the best we can,” he said. “An administrator will not succeed if they create a negative environment and undermines trust and an individual’s ability to do their job.” Pearce was chief administrative officer in Cranbrook and he has also worked in Okotoks, Alta. and Calgary. “I’m not an advocate of revolutionary change, It undermines productivity,” he said of his style. “I’m an advocate of evolutionary change. Any organization that stands still will die. If people have expectations that tomorrow will be the same as today, that is unrealistic.” The 60-year-old Pearce who replaces Leon Gous as CAO, says he has been impressed by his experiences so far at city hall. “The folks I have met are professional and service oriented. They are working towards the long-term goal of improving service and that’s all I can ask for,” he said. Pearce expects a multi-year business plan will be developed with council. “I will work closely with mayor and council and determine their objectives. What do they see as the future of the community? Are there strengths and weaknesses?”

Province names Audit Council members

VICTORIA– Five British Columbians have been named to the Audit Council overseeing the Auditor General for Local Government (AGLG), ensuring the independence of the office, announced Ida Chong, minister of Community, Sport and Culture.

The installation of the Audit Council is a crucial step toward establishing the autonomy of the AGLG. The Audit Council’s first task will be to make a recommendation to the minister as to who should be appointed Auditor General for Local Government. 

The Audit Council will also be responsible for monitoring the performance of the AGLG by reviewing and providing comments on performance audits, annual reports and service plans. It will also disseminate information about recommendations made by the AGLG.

The council is comprised of a broad mix of professionals from different parts of British Columbia with backgrounds in accounting, law, finance, business and local government. The five members appointed today are  Anthony Ariganello (chair), J. Richard Heney, Donalda MacDonald, Lisa Payne and Timothy J. Wood. (more)

By Richard Rolke - Lake Country Calendar Published: April 24, 2012 10:00 AM

The scope of cuts is becoming more clear at Lake Country’s municipal office.  As part of an organizational review initiated in November, the district has eliminated nine management and union positions. “This is the beginning of a process and the process is to provide the best service possible to taxpayers,” said Alberto De Feo, chief administrative officer. As part of going from seven to five departments, the directors of human resources, corporate services and development services have been laid off. “We were top heavy at the directors’ level for the number of staff we have,” said Mayor James Baker. The union positions include a planner, a building inspector, two customer service clerks, an RCMP clerk and one corporate services clerk. Some of the unionized staff will be moved into other duties within the district. De Feo is confident the eliminated positions won’t negatively impact operations. “When you do something like this, you have to review priorities and what can be done,” he said. De Feo would not speculate on what other restructuring could ultimately impact staff. “There are a number of recommendations in the (business systems review) report and council has asked me to review them and come back with more recommendations,” he said. The district is also looking for efficiencies in terms of services it receives through contractors. “The cost per capita on road maintenance and sewer services is pretty high,” said De Feo. The Regional District of Central Okanagan provides emergency dispatch and geographical mapping. Management salaries are also under review and  changes to the land use application process are expected as a way of encouraging development. “We’ll streamline the process and provide a much better service to applicants,” said De Feo. If all of the restructuring report’s recommendations are implemented, the municipality could save $700,000, with half of that coming from payroll. “A one per cent tax increase is equivalent to $80,000. By eliminating staff, we’re saving about four per cent in taxes,” said De Feo. “We have an issue of how to pay for aging infrastructure. Council had to make a decision on where the money will go?” A position focused on economic development and pursuing government grants has been created. “It’s a way of the municipality getting revenue that’s not directly property taxes or fees,” said Baker.

Auditing municipal spending

Feds put shine on looming public-service cuts

By Kathryn May, Postmedia NewsNovember 26, 2011

OTTAWA – The federal government is dressing up its deficit-reduction review as an opportunity to transform and "renew" the public service and the way it delivers services to Canadians.  It’s a message that Treasury Board President Tony Clement has been pitching of late while the Privy Council Office is sending similar messages for deputy ministers to bring to their employees as they wait to find out where the axe will fall in the upcoming budget.  “We are in effect, laying the foundation for the public service workforce of the future,” Clement said in a speech last week. “This is, to me, an opportunity; an opportunity to ensure that what the government is doing is being done as effectively and efficiently as possible. This is also our chance to modernize our government.”  But Gary Corbett, president of the Professional Institute of the Public Service, said putting the best face on job losses and reduced services won’t change the “doom and gloom” many workers feel before the budget.  “You can put lipstick on a pig and it’s still a pig. Dress it up however you want. It still means they are reducing the public sector and service to Canadians,” Corbett said.  Departments are supposed to appeal to their employees to “think about the long-term interest of the country and the institution.” A document being circulated, called “Key Messages on Deficit Reduction and Renewal of the Public Service,” says the public service that emerges from the review should be stronger, streamlined, higher-performing, and focused on its core business. There will be fewer rules, less hierarchy, more efficient processes and fulfilling jobs. “Given the current financial environment globally, within Canada and within government, it makes good sense to step back, recalibrate and set a new direction,” said the document. (more)

Mixed reaction for new auditor

By Richard Rolke - Vernon Morning Star  Published: November 27, 2011 1:00 AM

Scrutinizing the books at municipalities and regional districts is creating divisions.  The provincial government has introduced legislation to create an office of the auditor general for local government. “By law, we must have a balanced budget,” said Mike Macnabb, a Regional District of North Okanagan director.  “If they’re doing any auditing, it should be at the provincial level. It’s unnecessary oversight.” Macnabb suggests the recent elections demonstrate the accountability officials have to voters. “The taxpayer has clearly said things are not going in the right direction and they have elected other people,” he said.  However, there is also support for a municipal auditor. “As audits are done, the full results will be released to municipalities and they will indicate best practises,” said Bob Spiers, a Vernon councillor, of expenditures and operations. “Municipalities will be able to make sure practises are kept in line.” Spiers doesn’t believe the process will be onerous. “Municipalities should find it comforting that someone on the outside is looking at ways to make local government more efficient,” he said. Victoria says the main purpose of the auditor general is to help local governments find efficiencies in spending and improve program effectiveness by providing neutral, non-binding advice. It also states the auditor general will not impose solutions. “It will be up to local governments to decide what action to take on any recommendations provided by the AGLG. Local governments’ ability to make policy decisions about taxation, land use and other services would not be restricted,” states a provincial government release.
------------- 
EDITORAL: Auditor general a good move Published: Nov 27, 2011 1:00 AM — Langley Times

Premier Christy Clark’s announcement that a municipal auditor-general will be appointed is good news for taxpayers, and it could be helpful to municipalities as well, should they choose to adopt a conciliatory approach.  When Clark suggested this new office, many mayors and councillors condemned it, stating that their expenditures were already audited. This is disingenuous.  A year-end audit by an accounting firm is far different from specific performance audits of specific programs. Year-end audits pronounce judgment on general financial management, and rarely single out specific programs. On rare occasions, auditors will include a note about a specific program that raises some questions, but it is not part of their job to follow up.  A municipal auditor-general should be able to follow up on some of those types of “flagged” issues, as well as issues that are raised by taxpayers. Some of these may revolve around specific programs, particularly ones where accountability is less than transparent. Both provincial and federal auditors-general have performed many such valuable services, and the small amount it costs to run their offices has been more than justified by the savings they have identified. It can be safely said that they are one of the very few branches of government with a mandate to try and save money for taxpayers.  If municipalities accept the reports and advice from the new auditor-general, it could go a long way towards improving their financial management. It will also help them to be more accountable to taxpayers.
----------
Don Quixote Note: Mandate of the Auditor General for Local Government

Mandate of the Auditor General for Local Government

 SURREY– Getting the most value for money will be easier for local governments now that the Province is introducing legislation to establish an Office of the Auditor General for Local Government (AGLG), announced Premier Christy Clark today. “This office will support the goals of the Families First Agenda by strengthening local government accountability and ensuring B.C. families receive the best possible return on investment for their taxpayer dollars,” said Premier Clark. “Enhanced stewardship of assets and service delivery means a better quality of life for British Columbians and that’s what we’re aiming for.” The primary purpose of the AGLG would be to help local governments find efficiencies in spending and improve program effectiveness by providing neutral, non-binding advice. The AGLG’s role has been designed to maximize value for money by undertaking performance audits and providing information to assist local governments in choosing how best to respond to their communities’ priorities. Like all auditors general, the AGLG would make recommendations for improvements, not impose solutions. It will be up to local governments to decide what action to take on any recommendations provided by the AGLG. Local governments’ ability to make policy decisions about taxation, land use and other services would not be restricted. (more)

  

AuditorGeneral for Local Government:

The Auditor General for Local Government Act (the Act), provides that the Auditor General for Local Government’s (AGLG) core mandate is to:

·         Conduct performance audits (also called “value-for-money” audits) in order to provide local governments with objective information and advice on achieving efficiencies in local government operations.

·         Provide recommendations to the audited local government in the form of public reports.

·         Issue recommended practices arising from performance audits.

Performance audits would:

·         Investigate questions such as whether a service is undertaken as economically and efficiently as possible, whether a service is effective in achieving its intended results, and whether local governments are sufficiently monitoring their operations.

·         Examine a specific local government operation – not the entirety of its operations.

A number of performance audits would be undertaken each year.

Performance audits would not:

·         Call into question the merits of policy decisions or objectives of a local government.

The Act provides that the AGLG has scope to conduct performance audits of:

·         Any municipality or regional district.

·         The two boards providing water and sewerage/drainage services in Metro Vancouver.

·         Corporations or other entities controlled by these local government bodies.

More local government bodies, such as the Islands Trust, could be added in the future through a regulation. (more)

  

Budget:

 The Act provides that the Office of the AGLG is to be provincially funded. The AGLG would receive a salary comparable to those with similar roles in the B.C. government and to municipal auditors general in other provinces. The Audit Council members would be paid per-meeting at a rate comparable to other board appointees.

Minister Chong heckled over plans for municipal auditor general

By Ian Austin, The ProvinceSeptember 27, 2011

Cabinet minister Ida Chong had a tough sell Tuesday to a hostile crowd at the Union of B.C. Municipalities convention.  Chong, along with deputy minster Don Fast, tried to pitch Premier Christy Clark’s promise of a ‘municipal auditor general’ – a watchdog to check the bottom line on, basically, the hundreds of local politicians gathered and listening in. Chong, B.C.’s Minister of Community, Sport, and Cultural Development, spent much of the first 48 of the 60-minute panel trying to calm the nervous, angry politicians.  A few rude questions later, and the panel was shut down with more than a dozen people still lined up to grill the minister. The local politicians said they’re already prohibited from running deficits, and they’re already audited every year. Chong countered that ‘limited numbers’ of audits would be of the ‘value-for-money’ variety. “Why don’t we have a ‘value-for-money’ audit for the municipal auditor general?” heckled one of the crowd.  The idea surfaced when Clark made the MAG pledge during her run for the B.C. Liberal leadership – but Tuesday Burnaby Mayor Derek Corrigan called it a “thoughtless campaign promise.  “‘Will the province intervene, how much will it cost, how much can we expect taxpayers to pay for this?” asked the mayor.  Port Coquitlam Mayor Greg Moore said he expected lots of resistance Thursday morning when the UBCM delegates will decide where they stand about the proposed municipal watchdog.  “I think a lot of people will be there to speak against it,” said Moore, the UBCM’s Metro Vancouver representative. “A lot of local governments question this - ‘Where’s the need for this?’ and ‘Why?’”

Municipal auditor plan ruffles feathers

By Tom Fletcher - BC Local News  Published: August 10, 2011 4:00 PM

VICTORIA – The B.C. government's plan to appoint a municipal auditor-general has raised concerns in local government circles, but the minister responsible says it won't mean the province is going to start telling local councils how to tax and spend money.  Community, Sport and Cultural Development Minister Ida Chong met with the executive of the Union of B.C. Municipalities in late July to discuss the plan. According to a summary sent by the UBCM to its member councils, the UBCM executive complained about the lack of consultation and asked Chong if local councils' policy decisions would be exempt from a municipal auditor's authority, as they are in other jurisdictions.  Chong said in an interview Wednesday that B.C.'s municipal auditor won't overrule local governments, but "performance audits" would highlight areas where communities can save money. The service will benefit to the 160 local governments in B.C., especially the smaller ones, she said.  "More than half of our municipalities have populations under 5,000," Chong said. "They don't have the capacity to do value-for-money audits or performance audits." Smaller communities also receive unconditional grants from the province, and a municipal auditor-general would check whether they are spent effectively. All municipalities get federal and provincial cost-sharing grants for major projects, and an auditor-general could compare a group of communities to see which ones are more efficient.  Premier Christy Clark promised a municipal auditor general while running for the B.C. Liberal leadership. Her platform promised to expand the provincial auditor-general's office to include a municipal auditor, and to "review the municipal taxation formula." Chong said municipal tax rates wouldn't be the first priority, but a municipal auditor general may choose to compare rates and their effect on industrial development.
The B.C. government has been critical in the past about the heavy tax burden some municipalities place on industrial property, especially in the struggling forest industry. The issue was studied before last year's Union of B.C. Municipalities convention, where the B.C. government rejected a request to chip in $25 million in bridge financing for municipalities to reduce industrial tax rates. Former finance minister Colin Hansen​ told the convention that high industrial taxes are a problem municipalities need to fix themselves.  Chong's office has sent out a survey to municipalities and regional districts across B.C. The survey asks municipalities if an auditor should have authority over other local bodies as well. The B.C. government took similar steps to oversee school districts, imposing common payroll and personnel systems on boards of education and appointing "superintendents of achievement" to monitor district efforts to raise student performance.

Developers question city

Richard Rolke - Vernon Morning Star Published: January 13, 2011 6:00 PM
The City of Vernon is perceived to be competing directly with developers.  A draft value for money review of the planning and building services department indicates some developers believe they are going head-to-head against the city and its policies.  “Hesperia, Vernon’s arm’s length company, was developed to provide affordable housing during prosperous economic times,” states the report from Acton Consulting, which is overseeing the review.  “Another source of confusion for developers is the city’s real estate manager. There is uncertainty about the manager’s job which has led to speculation in the community that the city may be in competition with the developers.”  The consultant recommends that prior decisions be reconsidered to ensure they reflect current council’s intentions. Mayor Wayne Lippert believes that step is necessary. “A business background says you should always review what you are doing,” he said. Suggestions that the Hesperia housing initiative may compete with developers is fair comment, according to Lippert.“It’s something we’ve heard and something we’re addressing,” he said.However, Lippert insists the goal of Hesperia was to set aside land for a mix of commercial housing and not for the city to actually develop the site.“We have plans and we know what we want to happen there but that’s as far as we should go,” he said, adding that the Okanagan Avenue site could be sold.“Let the developers take over.”

In terms of historical council decisions impacting current planning and building processes, the consultant points to the licence and permit fee structure.  “The fees are front loaded so applicants pay fees at the onset of applications. This can create additional work if the application is not approved or if there are unanticipated fees later in the process,” states the draft report.  The consultant also highlights differences among current council members about Vernon’s future.  “The divergence in opinion makes it difficult for council to collectively move toward a unified vision for the city’s future.”  Coun. Bob Spiers would not speculate on what previous council decisions may be revisited.  “Until we see the final report, it’s too early to say,” he said.  The value for money review of the planning and building services department should be completed in February.