The Law Requires It.... Auditors must tell

Anonymous has left a new comment on your post "Wherefore Ombudsman?":

Sorry. I'm playing catch up & the meeting was not streamed. Who found the mistakes? Council members or Staff? 
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The law requires corporations to have annual audits prepared and presented to the shareholders.
A municipality is no different. Taxpayers are the shareholders.
Monday night Council  met as the Audit Committee  to receive in public the annual financial statement from the town's auditors.
Findings were set out in a public meeting.
Council were provided with an agenda for a closed meeting to receive a report from staff following the auditor's presentation. 
Two reasons were given. One was for the security of property; the second to protect individual privacy.
I was able to accept the second reason.

I am not going to post  the financial statement. 
I can state  there is no evidence of wrong-doing . 
The auditors are legally  responsible  to report what they found during the audit.
If everything is as it should be, they say so. 
If  things are  not as they  should be, they say so.
They make observations on their findings.
The audit took longer than usual.Presentation was late 
Information requested from staff took longer to receive.
There appears to be a lack of qualifications and training; a management responsibility. 
I  must  try to keep separate public comments from the closed  session exchange. Public revelations were the reason for  private discussion. 
There is no way to sugar-coat the situation.
Two specific issues may help to clarify:
$2 million  received for naming rights of the rec complex have been
received in annual instalments. At the time of the deal, Council, 
directed, the annual instalment be directed to making the debenture payment on the facility.
 It was built years before it was scheduled and development charges were not on hand  to pay for it.
It seems, $1.2 million dollars of the funds found their way into the development charge reserve fund.  They did not belong there  and  it took time to discover that's where they were.
$1.2 million dollars is not chicken feed. Not being able to find it 
 must have caused tension.

$700,000  lost revenue was a different issue. 
Five golf courses appealed their assessment. In 2011, three appeals were decided and the town lost $700,000 in assessment revenue.
There was a shortfall .

A third problem was  handling of grants  from the Federal government for "shovel-ready" projects.  The grants were  new. No process was  in place to handle receipts and payment from the grant.     

I am not a accountant. A clean audit  has always been of vital importance to myself  as a scrupulous amateur.
From a Councillor's perspective, despite assurances of no evidence of fraud,  this situation is a worry. .
A previous Council directed the  payment for naming rights  to  the annual payment on the debenture debt for the recreation centre. 
If it wasn't used for that purpose, where did the money come from for the annual payment?
The treasurer plans to write a report..
$325,000 represents a point in the tax rate. Did we include the payment in the operating budget? Was the budget increase a point higher than it needed to be? 


$1.2 million went into the Development Charge Reserve fund. It didn't belong there. It swelled the fund by that amount.The fund is currently in deficit. It means we spent money on something  we didn't have money for.
The artificial turf at St Max's High School perhaps. 
The money will have to be repaid.
Funds for a teen centre  will e impacted. .
 . 
A loss of $700,000 revenue in 2011, due to successful  appeals by three golf courses, skews last year's  budget figures by that amount That much revenue lost sends last year's  tax increase up by another two points.
Two more golf courses are likely to  have successful appeals in 2012.  It means total revenue from golf courses  has been  overestimated by a $1 million. 
It means the 2012 budget adopted by Council and the resultant  tax increase imposed were not  accurate. . 
For high rollers, it may seem like small potatoes.
For a scrupulous amateur like myself, I am not sublime. 
  
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