How I learned to stop worrying and love the (Audit) bomb

I have taken some criticism for not taking up arms against the City in light of the revelation that $1.25 Million was spent on payments to non-union staff in a manner that was not properly tracked, or coded, in the accounting systems of the City.

The payments, called Outside Policy Requests, involved the payment of bonuses and discretionary salary increases to 167 non-union city employees without council approval over the course of five (5) years.  Payments run the gamut from $123 to more than $95,000, the audit report said, though it was unclear if the $95,000 was a one time payment or the sum of five years of payments of $19,000.  A total of $316,000 was paid to just eight employees, but again, it wasn’t clear if this was a one time cheque, or if 8 employees received a discretionary raise in their salary of $7,900 per year (8*5*$7,900=$316,000). Perspective like that is important. Numbers add up quickly if you don’t mind the details.

Many have been very quick to judgment, calling for criminal investigations.  I’m not so sure criminal activity is so obvious on the telling of this story. We just don’t have enough facts, or enough of a breakdown of the numbers, to dream up a criminally masterminded scenario that goes above what might also be a simple distribution of raises to employees; staff who may simply have deserved raises in an atmosphere of “salary and wage freezes.”  {If you google Brampton city wage freeze, there is no shortage of our Mayor’s attempts to grandstand on this issue, while simultaneously adding four sunshine list personal staff to the payroll.}

So why am I so quick to shrug this off?

I am not shrugging off the issue. If council decides on a wage freeze, then yes, staff should implement a wage freeze. But we aren’t talking about civil servant disobedience and appropriate reprimands for employee insubordination here. We are discussing whether or not we should be calling in the PRP, OPP, RCMP and Detective Columbo to start putting thieves and embezzlers in jail… and that’s where I think the train is falling off the track on this story.

The auditor is not reported to have used the word “Fraud” in any of the reporting I have seen.  And in fact, if an auditor detected Fraud, they would have a positive duty to report the Fraud to the City, so the silence on this point is important.  These types of reporting duties are contained in numerous sources, such as the Public Sector Accounting Handbook and the Code of Ethics for CPA’s.  Even less directly, the Municipal Act requires cities to prepare and file annual audited financial statements with the Ontario Ministry of Municipal Affairs (MMA) {you know, Linda Jeffries’ Ministry right before she became our mayor, so we can assume she knows all of this stuff}, so issues of Fraud and Embezzlement and other criminal mishandling of money is hardly a “sweep it under the rug and hope no one notices” kind of situation. The Auditor is unlikely to be trading in their CPA licence for the sake of saving the skins of city employees they have no connection to, most of whom have probably already been fired anyway.  It’s not a likely scenario, and that is why I am not exactly sharpening my pitchfork and lighting my torch on this one just yet. It doesn’t make sense to call in the federales when no one but local candidates and the media have even used the F word on this story.

Do we need to implement best in class financial record keeping protocols? Yes. Absolutely. We should implement those immediately. We should always strive to do things better. Even Jose Bautista has a batting coach.

Is there a law in the Criminal Code that forbids managers from exercising their budgetary discretion to assign merit based pay increases or bonuses in light of a general city wide wage freeze? Hmmmmm…..  Without more information, I think we are really talking a matter of employee discipline, as opposed to a Crime.

For all of these reasons, I think it best that collectively we remain calm, allow the investigation to conclude in an orderly fashion, and get all of the information. And at the end of the day, trust that the very person (a licensed and regulated CPA who stands to lose their professional licence if they handle this situation incorrectly) who is already telling us about the mismanagement of funds, probably would have said Fraud if they thought there was Fraud, and is probably not staking all the years they invested in getting educated, licensed, trained, promoted and hired by the City on a lie from which they stand no opportunity to gain. Sometimes, you have assume that people will do the job you hire them to do after all.

Now, I realize that doesn’t jive with our Mayor and certain Councillors prefabricated narrative of championing the tax payer, saving us from the reckless spending of councils of old, and urging us to replace the Councillors that dare oppose such serene austerity measures, but let’s think about what contrivances are at play before we rush to judgment.

 

 

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