Monday, September 12, 2011

Municipal Auditor General. A good idea ??

The press has been buzzing the last week or so about a proposal for a municipal auditor general.  Sounds like a great idea.  An auditor that would review the finances of municipalities to ensure that monies are being spent as they were said to have been, and that good value is being obtained for the taxpayer.

Good idea ?  Certainly, if you listen to the headlines and the soundbites it is.

There should never be any objection to another set of eyes or another viewpoint to examine how MILLIONS of taxpayer dollars are spent of course.  We should do all that we can in that regard.

However, it's important to note a few 'weaknesses' in the argument that some are putting forward.

FIRST, and most importantly:  many people would want the auditor general involved because they feel that a municipality , or any government, spent money on something they shouldn't have. And that then gets called 'a waste'. 

Well, because some, or a few, or maybe even one, person doesn't agree with something, doesn't make it a waste.  In a democracy, ideally, the government represents the will of the MAJORITY in their decision making, and sometimes, your idea might not be aligned with the majority.  So you don't get what YOU want... but that doesn't make it a waste.  Democratic elections are supposed to ensure us that we get representation of the people's will in government.

SECOND, and also very important, is to realize that municipal budgets are already independently audited and everything is published in the open.  Now, in large cities, with complex budgets, it may be difficult to drill into every line item and identify the details of the spending - but hopefully council watchers or media/press or even council members will keep their eyes peeled and notice anomalies that should be indicators of a problem. Someone should certainly be asking for more details when, for instance, staff travel goes up 200% in a year or equipment purchases go up significantly. 

In Port Moody, we have a relatively small budget and it is fairly simple to read, however, there are always challenges.  One frustration in any municipality is that when we budget, we budget by activity (ie: parks, operations, utilities, recreation, etc) , but our financial reports we report by revenue and expenses.  It can be very difficult, if not impossible, to match these up (although, of course, someone can because they all draw on the same data).   Particularly challenging in some years because municipalities must balance budgets each year so there are a number of year end transfers to/from reserves for projects that are incomplete, ongoing or not started in the budget year.

We also include members of the general public on our finance committee, which is staff, council and members of the public, reviewing our spending plans each year and drilling into those details. We have a fairly effective system, with lots of 'eyes' on the budget, and we work in a completely open and transparent manner (our finance committee meetings only are closed to the public if we are dealing with specific staffing details or legal matters, and this is VERY seldom).

As I say above - of course, having another set of eyes is always good - particularly if it is a good set of eyes, with experience in municipal issues and the ability to dig into the details.  If the province moves ahead with this, I would say  we should, as a city , support it. 

My first choice, however, is to create what I call a 'sustainability review and audit task force' - a task force consisting of councillors, staff, and outside experts, who can review our processes and projects 'in the rear view mirror', to ensure that we are doing things as optimally, and financially responsibly, as possible, and also that we are meeting our sustainability goals.  They always say 'hindsight is 20/20', so , we should be taking advantage of that clarity, reviewing our processes , and making any improvements for 'next time' that we can.

This will be one of my first priorities following the 2011 municipal elections, to setup this task force and to find the experts to help us improve our processes.

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