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Post by Max on Sept 19, 2007 20:59:16 GMT -3
Staff cool to idea of an independent auditor
Posted By Denis St. Pierre - Sudbury Star
After an incredible 3 1/2 years of contemplating - some would say ducking - the issue, Greater Sudbury city council may finally be ready to decide if it should hire a municipal auditor.
And if it heeds the advice of its senior administration, council will reject the notion of employing an independent auditor, in the process ignoring a trend in municipal circles.
In a report to be debated by council tonight, the administration recommends the job of examining municipal operations for inefficiencies, waste, financial risks, etc., should be left to an in-house committee, rather than an auditor who would be independent of the bureaucracy and report directly to politicians.
Independent auditing of municipal operations has been unofficially, covertly pooh-poohed by the city's senior administration since the issue first arose in early 2004. It was that long ago that the council of the day decided to hire an external auditor to review the city's books.
However, it took several months to implement the 2004 decision and when action finally was taken, it consisted of an ill-fated, small-scale review of a single city service - snow removal.
After the senior administration convinced council a larger-scale audit of city finances was unrealistic and unaffordable, a southern Ontario consulting firm was hired to simply 'audit' winter road maintenance operations. The result was a revised system of removing snow from our roads and sidewalks that was projected to save millions. But the new plan incurred increased costs and ultimately was abandoned by council, as was the concept of further external audits of city operations.
During that period, senior administration also suggested to council that it would be expensive and not financially beneficial for the city to employ its own full-time, independent auditor.
That apparent bureaucratic aversion to oversight also can be read - perhaps cynically - into the staff report that was prepared for tonight's council meeting.
The report puts forward three options for extensive auditing of city operations. Hiring an independent auditor who would report directly to council is categorized as a third and most-expensive option.
In contrast, the report states that creating an "audit committee of council," would cost nothing while still meeting the city's commitment to "continue to demonstrate a high level of public accountability and continue to provide assurance to the public that municipal services are administered in an efficient, effective and economical manner."
Technically, the city already has an audit committee, which is an obligation imposed on municipalities by the province. City council's finance committee, which consists of the entire council, acts as the mandated audit committee.
The proposal put forward by city staff calls for creation of a new audit committee that would consist of four councillors and at least one citizen with "financial expertise."
The No. 2 option identified in the staff report consists of hiring an "internal auditor" who would report to the city's chief administrator and council, rather than be fully independent of the bureaucracy. But that option would come with a cost - about $215,000 annually, the report states.
The option of hiring an independent auditor would be more costly still - about $315,000 a year, the staff report suggests. That's because three new, permanent employees would have to be hired to support the independent auditor's role, according to the report.
The staff report also features a snapshot of the auditing approaches of 12 other Ontario municipalities. Curiously, the survey does not include the City of Oshawa. One might assume Oshawa would be a prime comparator, given that it recently became one of the latest municipalities to hire an independent auditor and that its population is about 160,000 - virtually the same as Greater Sudbury. But there's also the possibility the Oshawa experience belies some of the information put before Greater Sudbury councillors over the last few years.
For starters, employing an independent auditor in Oshawa has not been nearly as expensive as the costs projected by Greater Sudbury's administration. In its first full year of operation, Oshawa's auditor general's office has cost the city about $100,000 and has consisted of a single position - the auditor himself.
As for the value-for-money question, Oshawa council appears to believe the city is getting full value for its investment, although they acknowledge the experiment is only a year old.
"He's working on a top-to-bottom (audit) here at city hall. He also gives advice on all our financial undertakings and provides that critical second pair of eyes, as it were," says Oshawa Mayor John Gray, adding the independent auditor has had a positive influence on staff.
"It has caused our staff to be much more conscientious about what they're doing, so hopefully there are no leaks here at city hall," he says.
While he readily accepts he is not the most objective observer, Oshawa auditor general Ron Foster says "the proof is in the pudding" regarding the value of such positions within his and other municipalities.
In Oshawa's case, Foster says, his expertise and oversight already have led to savings and efficiencies on everything from legal costs to the tendering process and the hiring of consultants.
In Oshawa, the auditor's position is cutting down significantly on the cost of consulting jobs such as Greater Sudbury's now infamous hiring of a firm to audit the snow removal system.
With the expertise afforded by its auditor general, the City of Oshawa is able to avoid hiring a consulting firm to conduct such audits, or operational reviews, Foster says. Instead, he hires, then directs and supervises a single, independent expert for such jobs. Such an approach is much cheaper than hiring a consulting firm and waiting for the company to come back with its report (the method often followed by Greater Sudbury council), he says.
"We will get six of these reviews done for the price of contracting out one (review) to a contractor," says Foster.
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Post by Max on Oct 10, 2007 17:34:44 GMT -3
www.northernlife.ca/News/LocalNews/2007/09-27-07-council.asp?NLStory=09-27-07-councilFull audit now planned for city Date Published | Sep. 28, 2007 BY TRACEY DUGUAY The city will undergo a full, independent audit after council voted unanimously to amend a motion it approved just last week at its regular priorities meeting. An auditor general with full autonomy from city staffers will be hired in the new year to conduct a value-for-money audit. This new position will be hired by the city’s finance committee, which consists of all 12 councillors and the mayor, and will report directly to this committee. City staff will present a report to council in the near future outlying options for the term of employment (full-time versus contract), support staff needed, and the scope of responsibilities. There was also discussion about the possibility of outsourcing the work to a private company rather than hiring internally. Projected costs for the auditor role, along with support staff, will be built into 2008 budget. More information available in Friday’s edition of Northern Life. On Thursday, September 27, 2007 at 11:31, Jae said: About time, the next step is.. Will they follow through with the audit or not. On Thursday, September 27, 2007 at 13:25, Finally said: I get to congratulate council. Way to go. On Thursday, September 27, 2007 at 13:57, Trav said: Excellent and good on them going to appoint one from outside the city staff. maybe now we'll find out where all that money for the snowplowing went last year. On Thursday, September 27, 2007 at 16:34, Me said: So does Jim Gordon or Paul Marleau get the job? On Thursday, September 27, 2007 at 18:56, Brad Nailer said: BRAVO! A long overdue audit that was the key election platform for Paul Marleau. Time to cut the fat. Including bloated salaries, duplication of services, and the much over used "city car". Now we'll see what money is going where. Which specialty groups are getting how much. How much is it costing us to run the Provincial Tower and other buildings. (Did we ever find out how much we paid for that monster?) On Thursday, September 27, 2007 at 22:48, Me said: 18 million $. It should be sold, tomorrow. Real estate is up, so we'd net a profit, eliminate operating costs, and add a new massive ratepayer to the tax roll. On Sunday, September 30, 2007 at 08:28, Ok said: That's great but will this auditor spend their time searching for lost paper clips and post it notes or will they really find value for the dollar council will pay them?
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Post by Max on Oct 10, 2007 17:39:18 GMT -3
As you can see, on September I predicted Marleau would be in the running. We all know he helped the bus driver get elected. The now says anyone can apply. But the bus driver also said this about the expert panels he put together against getting elected, then, without allowing anyone to apply, the bus driver appointed his own hand selected panel members.
Could Paul Marleau be city auditor?; Former mayoral candidate thinks he has the right stuff
Posted By St.Pierre, Denis
Now that city council has taken the plunge and decided to hire a municipal auditor (after nearly four years of skittishly teetering on the water's edge) rest assured that all manner of municipal administrators, accountants and financial types are polishing their resumes for a shot at the new position.
And while it will be several weeks, if not months, before the competition officially begins, one familiar name has already surfaced as a likely candidate for the auditor's job.
Paul Marleau - husband of Liberal MP Diane, chartered accountant, former mayoral candidate, retired cable TV executive, former Greater Sudbury Utilities chairman, adviser to Mayor John Rodriguez in the last municipal election campaign - believes he has what it takes to be the city's first auditor general.
City council decided two weeks ago to hire an independent auditor to examine municipal finances and operations, with the expectation that the new position will be filled in the new year. The auditor will be completely independent of the municipal bureaucracy and will be directed by and report solely to city council.
Although Mayor John Rodriguez has insisted there has been no opposition within the municipal administration to the notion of hiring an independent auditor, the experience of the last four years - and direct acknowledgement from some councillors and city staff insiders - suggests otherwise.
A Paul Marleau candidacy is not likely to appease the worries of some top bureaucrats who never were crazy about having an independent auditor looking over their shoulders.
It's no secret that Marleau made a few enemies within the bureaucracy when ran for mayor in the 2003 municipal election. Marleau, who ran into late-campaign troubles and ultimately lost to Dave Courtemanche, suggested he would clean up some efficiency problems at the city, including the possibility of getting rid of some senior staff.
Marleau apparently also rubbed a few councillors the wrong way, particularly after helping Rodriguez defeat Courtemanche in last fall's mayoral election.
A former chairman of the city-owned Greater Sudbury Utilities, Marleau supported Rodriguez's plan to downsize the GSU board. The GSU board was indeed scaled back following Rodriguez's election, but the mayor's attempt to get Marleau appointed to the utility's new board of directors was shot down by two city councillors.
Undeterred, Marleau later offered his services, at no charge, to prepare a report for city council on various options for a more comprehensive auditing process at the municipality. He says his offer went unanswered, possibly because municipal bureaucrats and some councillors were not keen on soliciting his advice.
"I'm a s-- disturber," he said at the time. "The problem is, when I get involved in something like that, I go all out for the organization and that disturbs the status quo at times."
However, now that city council has decided to hire an independent auditor, "I've had indications from several councillors that they would like me to consider applying for it," Marleau says.
"I do have some interest in the role of the auditor general for the city because I think it's important that there is an independent person advising the mayor and council in financial matters and efficiencies and in getting value for the dollars that are spent and in the management affairs of the city.
"I think it's important that the mayor and city council have someone they can count on who is completely independent of the administration."
Whatever his relationship with the mayor and council, Marleau says he doesn't expect preferential treatment in the hiring process. Council will have several applications to consider once the process begins "and they will guard their ability to choose that person jealously," he says.
For his part, Rodriguez says he will welcome any and all applications for the auditor's job.
"We have a process," the mayor says.
"We outline the parameters of the job and then we invite people who are qualified to apply for it then council goes through the list and makes the decision.
"I would encourage Paul and I would encourage any other qualified person to apply. All I want is for us to get the best-qualified person who can do the job and they can come from inside the city or outside the city."
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Post by Max on Oct 16, 2007 23:16:19 GMT -3
Auditor hopeful raises eyebrows; Rodriguez supporter, former candidate, interested in job
Posted By Denis St. Pierre
Last week's report in this space has prompted some city hall insiders to suggest political cronyism and machinations may come into play in selecting the municipality's first auditor general.
The concerns stem from the stated interest in the new auditor's job by Paul Marleau, a political ally of Mayor John Rodriguez. Marleau, himself a mayoral candidate in 2003, was one of the highest-profile supporters of Rodriguez's election campaign last fall.
A chartered accountant, Marleau confirmed his interest in the auditor's job last week, noting he has been encouraged by a number of city council members to apply for the position.
Marleau's candidacy came to light a mere two weeks after city council made the momentous decision of hiring an auditor general, ending nearly four years of hand-wringing and procrastination over the issue.
The new auditor, who is not expected to be hired until the new year, will be charged with examining municipal finances and operations for efficiencies. The auditor will have complete independence from the municipal bureaucracy and will report directly to city council.
But to ensure transparency and accountability, a municipal auditor is expected to be independent not only of the administration, but also of individual members of council. That's where some city hall insiders and other observers have a problem with Marleau's candidacy.
Right or wrong, says one municipal bureaucrat, there is a perception among many at city hall that Marleau is in line for the job as "political payback" for his past support or the mayor.
"John (Rodriguez) already tried to get (Marleau) back on the GSU board ... Now it's the auditor's job," says the city manager. He was referring to Rodriguez's support earlier this year for Marleau's candidacy for a spot on the board of directors of city-owned Greater Sudbury Utilities. (Marleau did not get the position because two city councillors voted against the mayor and supported another candidate).
A fellow chartered accountant in the city says he's not sure Marleau's candidacy would pass the "independence test" required of a municipal auditor.
"How can he be independent as an auditor when he was a supporter of the mayor in his election campaign?" the accountant asks. "That's a key question when you're talking about an auditor and the mayor and Mr. Marleau will have to answer that, if he gets the job."
A former high-ranking city official says Marleau's candidacy for the auditor's job "is obviously a political thing" that threatens to undermine the tremendous, long-awaited opportunity offered by the new position.
"It's really sad, because this could be a really good thing for the city and if they bring in the wrong guy, it'll poison it for the future," the says the former official. "It looks like he (Rodriguez) wants to control this and that's not what this position is supposed to be all about."
The former city official also questions whether the retired Marleau has the up-to-date expertise the municipality needs from its first auditor general.
"You need more than just a chartered accountant," he says. "You need to know modern municipal government inside-out, best practices, policies ... you need public-sector auditing experience, risk-management, IT (information technology) systems," he says.
When asked last week about Marleau's candidacy, Rodriguez said he doesn't have a pre-determined favourite for the auditor's position. "I would encourage Paul and I would encourage any other qualified person to apply," the mayor said. "All I want is for us to get the best-qualified person who can do the job and they can come from inside the city or outside the city."
To date, a couple of city councillors have said, off the record, that they could support Marleau's bid for the auditor's job, while a couple of others have indicated otherwise.
Meanwhile, Marleau's stated interest in the job has so far generated positive feedback from a handful of taxpayers who have responded to the news.
"I wholeheartedly propose, support and endorse publicly the candidacy of Mr. Paul Marleau for the position," city resident Roland St-Onge says in a letter to the editor of The Sudbury Star.
As an accountant, former cable TV executive and former GSU chairman with a "no-nonsense approach to problem resolutions," Marleau "has all the necessary qualifications" for a municipal auditor, says St-Onge, who is encouraging other taxpayers to contact him with their views on the issue.
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Post by Max on Oct 19, 2007 18:37:31 GMT -3
Suggestions for auditor selection
This past spring, I made the initial proposal to city council for the appointment of an independent contractual auditor at city hall with a mandate to review the annual expenditures of all departments and municipal corporations under its jurisdiction.
I agree that the proposed auditor general position has to be completely independent and report directly to council if we are to achieve the much-needed fiscal efficiencies.
The municipal auditor general position can be secured under contract for a nominal and reasonable fee. The only other expenditure the city would incur would be for the services of a qualified assistant with information-technology skills and municipal accounting experience.
I strongly encourage Mayor John Rodriguez to approach the Ontario Ministry of Municipal Affairs to secure government funds to cover the expenditures of this three-year contract position. The ministry should recognize the merits and benefits for the city in having a municipal auditor general.
I am also of the opinion that council should, under advisement, consider during their deliberations the ideas put forth by their constituents. The end result should reflect the desires of the taxpayers: a selection committee comprised of two councillors, one being the chairman of the finance committee, two members at large from the public and Rodriguez as an ex-officio member on this committee.
Furthermore, past municipal employees, former elected municipal officials or anyone active within the City of Greater Sudbury or its corporation should be excluded from participating in the selection process and from applying for the municipal auditor general position.
Therefore, I support the candidacy of Paul Marleau for the position of the city's first municipal auditor general. He has all the necessary qualifications for the position, has gained great accounting experience within the private sector as a former cable TV executive and has proven beyond a doubt his business no-nonsense approach to problem resolutions, as a former chairman of the Greater Sudbury Utilities.
Roland St.-Onge
Sudbury
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Post by Max on Oct 19, 2007 18:39:10 GMT -3
Mr. St.-Onge supports Paul Marleau for the position of the city's first municipal auditor general.
He “strongly” suggests a selection committee be formed to select the new auditor general.
He goes on to state that “past municipal employees, former elected municipal officials or anyone active within the City of Greater Sudbury or its corporation should be excluded from participating in the selection process and from applying for the municipal auditor general position."
Paul Marleau sat on the Hydro Board, thus he is a past municipal employee of the city and would be excluded from applying for the job that Mr. St. Onge wants him to get.
Moreover, how does being an accountant qualify one to be an auditor?
Being given receipts for services rendered and matching them up to the service provided is what an accountant would do. We need someone who can clearly show the city how do thinks cheaper while receiving the same or better quality service.
Outsourcing every service is the answer. Breaking the city up into 3 operating sections would prevent anyone from gaining a monopoly of any service.
Our city has over 1,900 full time employees, (including 400+ non-union / management) over 1,000 part-time, and hundreds of contractors. This city could, and should operate with fewer than 200 employees with the remainder being provided by the private sector.
The goal is not to privatize for the sake of privatization but to eliminate government monopolies or monopolies created by government because monopolies protect inefficiencies.
Outsourcing shifts the delivery of the service to the private or non-profit sector but he does not shift the responsibility away from government providing the service.
Moreover, private service firms generally pay various fees and taxes like local business tax, vehicle registration, property tax or rent, fuel tax and income tax that government does not pay. The sum of all these fees and taxes paid to federal, provincial and local government amounts to 15% of revenue. The costs of these taxes are included in the price charged by the firms.
Therefore, when a resident pays government 100 $ for municipal services he gets only that service. But when he pays a price of 100 $ for contract service he receives not only the service but also a bonus of 15 $ worth of other unidentified government service that the firm in effect rebates to the resident via its taxes and fees.
Importantly, successful private bidders pay taxes to provincial and federal government and by the city pursuing these devices will put more money in government pockets, thus the city would be entitled to an award of more in grant aid from senior levels of government.
Government privatization is one of the most important policy issues of our time and the limits on privatization reveal that there are no limits on the extent to which public services can be privatized as long as the privatization is appropriate structured.
Currently there is also no incentive for city employees to save the ratepayer money as employees get paid as long as they are on duty and regardless of their performance. Do it and we'll pay you reeks more of prostitution than of professionalism. Strategic contracting management and competitive sourcing programs use business plan methodologies and require city department employees to bid against the private sector for the right to their departments work every 2 years.
Competitive bidding creates competitive pressure to reoccur, as contracts are re-bid forcing service providers to repeatedly strive to lower cost and improve performance and service quality, which provides a competitive advantage to the ratepayer. If a contractor does not do the job properly we can terminate the contract; something we cannot do with city workers.
Contract workers are not constricted by job classification restrictions; city workers are.
Compared with the public sector counterparts, private companies have fewer layers of management and more employee flexibility. Competitive bidding provides a culture of cooperation with city employees and increases employee motivation, something that is non-existence today.
Total dependence on a single supplier is dangerous, whether it is a government agency or private firm, and the existence of choice provides a form of insurance. If several providers are delivering the same service and one fails, or is subject to too many work stoppages, or is inefficient, or ineffective, or unresponsive, or unsatisfactory, or too expensive, the public can turn to another supplier; something we currently cannot do with city workers.
So while government is not obligated to bid out services it is obligated to the ratepayer to formally examine the advantages and disadvantages of different service delivery options. City employees start bidding with a cost advantage, as they pay no sales, property or income tax and fuel tax is cheaper for city departments.
This is not a de-unionizing anti-unionizing jugular attack on unions at all, as there are no barriers to unionization of the private sector. Moreover, under Ontario labour law, unions have a right to apply for successor union status with a successor employer who provides a service formally provided by the city, so employees can continue to be employed and unionized if they so choose.
Strikes by private employees have the same effect as strikes by public employees, but with 3 operating areas the striking union no longer has a monopoly over the entire city, and the impact of a strike will have no effect on services continuing to be provided.
Public employees are not entitled to greater job security than the vast majority of taxpayers who work without the dual protection of public-employee unions and tenure under a civil service system.
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Post by aaa11 on Sept 22, 2008 22:51:00 GMT -3
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