More On The 400 Audit

Some additional thoughts on what happened yesterday with the 400 Building audit report.

WHY WASN’T THE AUDIT REPORT RELEASED AT 8:30 A.M.

Is it true that someone wanted changes to be made to the Audit Report at the in camera Audit Committee meeting at 10:30 yesterday? I wonder what those changes were and who was the one who wanted them made and why?

I expect that in order to make changes, their procedure would require a reconsideration of the Report. My guess would be that there were not enough votes to get that reconsideration.

When exactly was the Audit Report printed for distribution to the public? Was it really done after 3:30 p.m. yesterday?

BUTTING IN

Can't the Mayor keep his nose out of other people's business? Does he have to micromanage everything including matters that are none of his business.

The Star reported:

• “But Mayor Eddie Francis, who is not a member of the audit committee, said he spoke with the office of the Auditor General of Ontario and the KPMG lawyer about the importance of releasing all of the report sooner rather than later.
  
  “The public had an expectation that all these issues would come out, and that the entire audit would come out,” Francis said. “It was important, from my perspective, that the public expectation be met…”
  
  Francis noted that the audit committee acts independently of city council.”

If that is the case, then why did Edgar intervene? Isn’t this an improper intervention in the audit process? It is exactly what he did in the WUC matter when he called up the Auditor General and had a private conversation with him.

TAKE THE MONEY AND RUN

Our ex-CAO is a really lucky guy, winning the lotttery and not having to buy a ticket.

The CAO of Innisfil left his job at the end of June, a couple of weeks before the near riot involving CUPE workers. John Skorobohacz was able to get that job and take his multi-multi-thousand dollar severance payment from Windsor taxpayers with him even though he resigned. How fortunate!

He had a bit of an inside track since

• “Skorobohacz had only been gone six months from his Windsor city clerk's position -- to take on the CAO's job at the Town of Innisfil near Barrie --when he was hired back by a new mayor and council.”

I wonder if John will still think that the near riot was the low point of his professional career after he reads what KPMG has to say about his role in the 400 building audit. It was not very complimentary at all. The Star did a nice number on him too. But then again, he is not around to defend himself so it was easy.

The KPMG comments came in relation to explaining the long delay in having the 400 building audit completed. Here are a few of the comments that were made:

1. The former CAO does not appear to have provided his support for the project, and the City Auditor was never able to get access to the records required to complete its audit before preparing to his April 2007 draft report.
2. We found a number of instances demonstrating a strained relationship between the former CAO and the City Auditor as well as between the former CAO and the Audit Committee.
3. October 11, 2005 -- -- CAO receives a proposal from Brodel Management review the City’s performance with respect to project planning and implementation of the 400 CHS building
4. Early October, 2005-- -- the CAO and City Auditor meet to hold an audit the entrance meeting. The purpose… is for the auditor to gain support of the CA over the project
   
   It is clear that this required support was not received
5. October 13, 2005 -- --in our view, it would be expected that these types of records would be readily available, requiring minimal time or resources from Administration to produce.
   
   The response from the former City Engineer was:
   
   “There are simply no resources available to assist with the audit at this time or at any time in the foreseeable future.”
6. Mid-October to mid–November-- -- a representative of Brodel interviewed approximately 20 City Administration and management staff… these interviews appear to have been authorized by the CAO. It appears inconsistent that all of these individuals could be made available to assist with the Brodell review when they were not available to assist with the Audit process
7. April 3, 2006… it appears to be indicative of an atmosphere of mistrust between Administration and the City Auditor.

And it goes on and on and on… However, we learn that on April 13, 2008

• “The Mayor also apparently reviews a copy of the draft audit report around this time.”

I very much liked this finding of KPMG.

• “We found no evidence of the mayor or council intervening in the audit process.”

That is a perfect bureaucratic response that does not say that they did not intervene, only that KPMG could find no evidence of it.

You can read the rest of the Report for yourself. It is not very long.

IGNORE THE AUDITORS, STILL GET PROMOTED

It seems that Ms. Federica Nazzani, Holy Names grad and Airport General Manager is no more. It is now President and CEO Nazzani.


Remember, she was the one who had the great successes such as:

• "YQG is not being recognized as a cargo airport by either forwarders or shippers


• Lufthansa "hadn't known it [the Airport] existed before being hired to study it, which is disquieting"


• Lufthansa told Council when delivering their report that YQG is:
  "Small and practically unknown to the greater airline world."


• "Francis said some of the freight forwarders -- those who are hired to handle cargo for customers -- contacted during the study weren't even aware Windsor's airport is open for business."

But to me her biggest claim to fame is:

• "Airport records two years late
  
  Audited statements for 2007 and 2008 by the operator of Windsor Airport were not turned over to the city's external auditor KPMG until after the accounting firm raised concerns Thursday during the city's audit committee meeting...
  
  "I was pleased to hear the information was made available to KPMG, but why the delay?" said Coun. Bill Marra, another audit committee member.
  
  "The information was not forthcoming and (KPMG) was waiting a lengthy period of time for it. This certainly seems unusual. The bottom line it's been resolved, but the auditors were concerned enough to identify it as an issue."
  
  Airport board member Coun. Drew Dilkens said they have been clueless over YQG audited statements of the last two years being incomplete and withheld."

THE FURNITURE TENDER AUDIT

More messes:

• the City breached its implied obligation under the “bidding contract” to treat all bidders fairly and evenly. Further, the City breached the “bidding contract” with the bidder which submitted a compliant bid (Eagle) when it awarded the contract for Part A to a bidder - Monarch – which had submitted a non-compliant bid.



• With respect to the award of a contract for WPS, the City did not follow by-law 9-2000 and sole sourced the furniture purchase to the supplier awarded the contract for Part A, namely Monarch.



• It appears that Tayco, Eagle and Artopex (the last being the supplier to Mayhew and Eagle) all complained to the City about the process but have not subsequently commenced proceedings (so far as we are aware) to pursue perceived rights. The City has an arguable limitations defence should claims be asserted by any of these three parties.



• (iv) What Are the Implications of Making the Issues Respecting the Tender Public?
  The issue is one of risk management. The City will have to assess the likelihood that any of the bidders will take action against the City. If the assessment is that there is no serious chance of a bidder taking action (keeping in mind that only one bidder can recover substantial damages), then the report may be made public, from a purely legal perspective.If the City is concerned that one or more bidders will bring an action against the City, then the City may consider either redactions from the report or preserving the report as an in camera document.
  
  The City should consider not making the report on the Tender public at all. Owner errors in running bid processes – stemming from a lack of understanding of the “bidding contract” – are very common. The difficulties with the Tender do not involve any form of outside interference with the process. Canada obtained the furniture it wanted from the lowest pre-qualified bidder (although not necessarily the lowest compliant pre-qualified bidder).



• Miller Thomson LLP has advised that there is nothing unlawful or extraordinary about a municipality using outside consultants, such as experienced architectural firms, for the procurement of specialized items such as specific kinds of furniture. However, the work of these consultants is normally very closely coordinated with the municipality's purchasing department. Due to insufficient levels of staffing in the City’s purchasing department at the time, that close coordination did not occur in this case.



• a) The impacts of the errors on the furniture tender are similar to those that occurred on the RFP award, which are covered 400 CHS Report I-A.



• b) There was a measurable financial cost to the City for the errors made.

MAKE THE AUDIT COMMITTEE COMPLETELY TOOTHLESS

It is not enough to stall off audit reports for years; let’s kill everything until after the next election.

Our Mayor has stated:

• “Asked if he thinks the way the audit committee functions needs to change, Francis said yes. “I said that way before this report came out, and way before — long before — the invoice came out.”
  
  Francis said this is likely the first major project undertaken by the audit committee, and there needs to be redefinition and refinement “so that there’s a clarity of roles and expectations.”
  
  Among the audit committee members are city councillors Bill Marra and Alan Halberstadt.
  
  Francis said it’s his belief that the audit committee should be free of politicians.”

I would have thought that the proper answer, given the mess that has been revealed in several audits recently, is to beef up the Audit department and not worry so much about the Audit Committee itself.

I do not remember the Mayor being concerned about this issue when the Audit Committee was invisible during the Windsor Utilities Commission fiasco when his actions were being looked at closely.

I wonder if the Arena audit will be next.

THE LET’S MOVE ON DEFENCE STRIKES AGAIN

• “Asked if he thinks the report was worth it, Francis said that audits are useful tools — but he added: “I need to put this in perspective. This project is three-quarters of a decade old. This project started in 2002... There has been a lot that has changed in this corporation since then.”
  
  Francis noted that several of the report’s recommendations have already been implemented by the city, and that the value of an audit is dependent on its timeliness.
  
  “I believe this audit has taken a very, very long time,” he said."

Unfortunately, the Audit revealed that there are many weaknesses that our Mayor has not looked at and still remain outstanding.

But who cares. Just read mini-Gord's column today.