Audit and Finance Standing Committee, June 16, 2021
Meeting recap (the important stuff):
The Audit and Finance Standing committee got a follow-up report from the city’s Auditor General Evangeline Coleman-Sadd about her team’s 2019 audits.
Two of the three departments audited by the AG in 2019 still have outstanding recommendations that they have not implemented. Most of the discussion was centred around the Department of Transportation and Public Works audit. One of the unimplemented recommendations has to do with the city not getting the best value for its money when deciding to repave streets. Essentially, projects are spread out around the city because of a slew of reasons that can generally be summed up as ‘Political.’ That is to say, even if one district has every single one of the projects that absolutely need to be done this year, it can be perceived as unfair if one district is getting everything and some less important stuff elsewhere isn’t getting done.
The other big criticism from the AG was that the Department of Transportation and Public Works had no performance objectives tied to council priorities. And when the department takes over streets and other infrastructure from developers there’s little to no evidence to suggest that TPW workers are doing the required inspections and due diligence before the city takes over the roads. The recommendations to fix these two issues are still outstanding, so it’s unclear how much work, if any, has been done to remedy them.
The committee also decided to approve Neptune Theatre’s ask for $100,000 to survive through COVID shutdowns. They also gave $539,000 to the organic waste facility which needs some renovations due to corrosion. Corrosion issues are common with organic composting facilities.
Who said what (paraphrased):
Russell: First up, the follow-up review from the 2019 audits.
Evangeline Colman-Sadd, Auditor General: I’m here to follow up with three audits from 2019. Here’s how the numbers stack up:
Colman-Sadd: We were told by managers that the delay in fixing these issues is due to COVID. Payroll has changed some things. All the outstanding recommendations relate to monitoring. Some staff have access to their own records, so there needs to be a way to monitor it. Same with changing employee banking changes, and managing time records. Some of the controls that were in place were relaxed due to COVID but it’s a time when we need more controls, not less. Purchasing card program, all of the recommendations were completed. Road and sidewalk management has a lot of outstanding recommendations.
Colman-Sadd: We have upcoming follow-up reports, the LED street lights, HRM’s new website and HRM fleet vehicle use. Questions?
Hendsbee: Did the change in the methodology of asset management for streets affect the audits? The LED conversion, will it include the ‘ghost lights’ that don’t technically belong to the city, province, or anyone? Hopefully your audit will review those.
Colman-Sadd: On asset management, there was a new system that wasn’t fully implemented at the time of our audit. For questions about how it’s working today, that’s for TPW management. There was a recommendation to have deadlines to implement the new asset management system, but that recommendation is not complete. There wouldn’t be any new work for the LED lights, so if it wasn’t there initially we don’t follow up.
Hendsbee: Did I read it right that you want more checks and balances on contractors before they’re hired?
Colman-Sadd: That’s one of the outstanding recommendations. We found there wasn’t enough inspection of the roads before taking them over from developers. There was limited evidence that staff did site visits, tried to identify or address issues, or did material testing. We don’t know how much has been addressed if management tells us they’re not finished implementing it, we just believe them and wait until they’re done.
Morse: Can you say more about roads and sidewalks, how could it be better connected to council’s goals? How are we missing value for money? Performance measures?
Colman-Sadd: We expected there would be short and long term goals linked to council’s objectives, and there weren’t any. That was still outstanding. Value for money, there’s an effort to spread projects around, while there might a lot of high priority projects, we’re not always doing the very highest priority if they were in a district that was getting a lot of work done already. Performance measures, we found a lack of performance targets, but results weren’t compared to the targets, and then eventually the targets just disappeared. We expected to see some, and some that were reported publicly, and some that were for internal evaluation.
Savage: The TPW recommendations, they were accepted by management?
Colman-Sadd: Yes.
Savage: How much do you follow up with the department instead of this committee?
Colman-Sadd: Generally, we reach out to the management, and get the contacts for the departments. Then we reach out to the departments and ask them which ones they have completed. Then we assess the ones the departments are complete. We also communicate with them to make sure we’re on the same page with what our recommendations are. When they say the recommendations are complete we’ll spot check it, depending on what the audit is.
Savage: Do you and the business unit agree when recommendations are complete?
Colman-Sadd: Sometimes. Sometimes people say it’s complete when it’s not. Sometimes that’s a miscommunication, sometimes they’ve done a lot of work done but just one or two more steps to get it over the line.
Savage: TPW is pretty dynamic and fast moving. Do you sit down and talk about timeline based on the workload that the TPW does?
Colman-Sadd: Some of it is a learning process. The ideal process is a committee like this one to ask for an implementation plan from the business unit. That provides good information for follow up for an auditor. Some units don’t put an implementation date, and that’s fine. Sometimes they just don’t know and need more information.
Cleary: Two of these are more complex, the asset condition, the more money we spend on roads the better the roads will be. We’ve increased spending year over year and the pavement condition index is going down (seems like that should be audited to figure out why that is). The higher priority projects, there are political factors. If you have too much construction on one roadway it can have a detrimental impact on residents. Do you recall in your discussions with TPW, if those came up?
Colman-Sadd: Those were marked as incomplete, so not really. But when we first doing the audit, we did have some conversations. Part of these recommendations are figuring out what acceptable is. A Cadillac and a Chevette are both acceptable cars, for example. Completing every project isn’t needed for this recommendation to be complete. We need standards and a plan, and deadlines. The value for money one is challenging, we were looking at why the money was spent on the project it was spent on, but the supporting documentation for those decisions based on value for money weren’t there.
Deagle-Gammon: What is the next step for those that are incomplete? TPW is complex, I get that. On payroll management, there was a program that was paused, is it as easy as saying ‘okay restart it’? Does that come from you? The business unit?
Colman-Sadd: This particular recommendation, we were told they had already started it but just needed documentation. But then when COVID started they just stopped it. I don’t really understand how COVID had an impact on that. For me the takeaway for that one is that if the control is necessary then they needed to run it. But if they stopped it for 6-8 months, do they really need it?
Morse: Back to sidewalks, if priorities were made more clear, how would that be measured? What sort of rationale or criteria would you like to see for how sidewalks get prioritized?
Colman-Sadd: It was mostly roads, funding got allocated across districts. There are political factors but we wanted to see if we were getting value for money. We may also not be maintaining our road network to the best of our ability. TPW management was installing a system, and they felt that when they did that they could plan for what-if scenarios. Maybe that system isn’t in place yet and that’s why it’s incomplete?
Russell: Up next, Neptune Theatre funding request.
Savage: *Reads the motion for agenda item 12.2.1* We have a lot of theatres in the HRM. I think we sometimes forget how banged up the performing arts are due to COVID. Neptune’s trying to keep that going, they’re a bit different, they have a facility in the heart of Halifax. They’re up against it. We’re going to support Bus Stop Theatre, we should support all the theatres we can.
Deagle-Gammon: It says Neptune is an anchor organization, what does that mean?
Jamie MacLellan: It means that their operating budget is over $3 million a year. We have two, Neptune and Symphony NS.
Deagle-Gammon: Has Symphony NS approached the HRM?
MacLellan: No, they may have challenges but they don’t have a brick and mortar building.
Russell: Is the art gallery an anchor organization?
MacLellan: They’re a provincially funded program, they could be considered an anchor organization based on their budget though.
M/S/C – Vote – Aye – Unanimous – Neptune Theatre funded
Russell: Budget changes to compost facility recapitalization.
Cleary: *Reads the motion for agenda item 12.2.2 as written*
Morse: Can someone make clear how much time this investment will support? Until 2023?
Andrew Philopoulos: They’ll operate until the new facility in 2023.
Morse: So two more years.
Hendsbee: To me, it sounds like we’re having another corrosion issue, we had the same issue at Otter Lake, is this because we’re having corrosion issues that can be fixed by fixing the structure? Have we taken over these facilities? Who owns them?
Philopoulos: All of our organics facilities have corrosion challenges, so there’s nothing new here. It’s a timing issue with the new contract. We needed to do an independent assessment after the initial contract, and that’s why we’re here now. Come April 1st the Miller Compost facility is ours.
M/S/C – Vote – Aye – Unanimous – Compost facilities funded
*Meeting adjourned*
Present:
Councillor Paul Russell, Chair (District 15)
Councillor Cathy Deagle-Gammon, Vice Chair (District 1)
Councillor David Hendsbee (District 2)
Councillor Trish Purdy (District 4)
Councillor Shawn Cleary (District 9)
Councillor Kathryn Morse (District 10)
Absent:
N/A
Interviews:
N/A – COVID
Previous meeting minutes and current agenda:
A former Naval Officer turned journalist, Matt Stickland is committed to empowering his community to ensure that everyone has access to the information they need to make their city a better place.
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