Public input encouraged as Rossland's audit begins

Andrew Bennett
By Andrew Bennett
March 15th, 2012

Rossland’s auditor, Amed Naqvi of the firm Berg, Naqvi, Lehmann (BNL), described the upcoming audit to council on Monday evening, and he also explained the important role of “concerned citizens” in the process.

Each year, municipal records are subject to a third party audit to ensure that the business of the city was procedurally legal and properly accounted, but limitations prevent the audit from covering every document.


BNL’s letter to council was clear: “We cannot guarantee that all errors, fraud or illegal acts, if present, will be detected.”


Due to the audit’s vast scope, Naqvi explained, it has to be restricted “or we’d be here forever trying to check every receipt and every invoice, and follow every employee around to make sure they don’t do anything wrong.”


Certain aspects of the city’s finances will be rigorously tested. Rossland’s books are approached with “moderate reliance on the city’s accounting systems,” BNL wrote to council, which means, “testing of controls is supplemented with a moderate level of substantive tests of details and transactions.”


In addition to tests, the audit relies on input from council, management, and the public to direct the audit towards key issues.


“If during the audit we find misstatements or omissions or errors,” Naqvi explained, the next questions they ask are, “How significant are [the errors], and how will they affect the decision-making process?”


Coun. Kathy Wallace asked Naqvi, “If the auditor were to receive a concern from a citizen, on whatever issue, how does that affect your scope of work and the potential cost to the city?”


Naqvi replied, “We actually encourage it from citizens. You don’t know where events are going to come from.”


Complaints to the auditor are addressed in section 172 of the Community Charter: “A person may complain in writing to the council or to the municipal auditor, if the person considers that (a) a disbursement, expenditure, liability or other transaction is not authorized under this or another Act, or (b) there has been a theft, misuse or other defalcation or irregularity in the funds, accounts, assets, liabilities and financial obligations of the municipality.”


“If we receive any kind of letter [from a concerned citizen], we look at it,” Naqvi said. “We usually talk to management, to say we have this letter. Then we discuss with management to see the financial and material significance. If we think it’s a specific event that could have significant consequences, we ask for a meeting with council.” 


Naqvi assured council that approval of extra work, if the event seemed to require a special or extended audit, was exclusively council’s decision to make. He noted, however, “if [council] says no, and we think it’s significant, it can affect our opinion.”


If council denies a request for a special audit on an issue raised by a citizen, Naqvi added, “The citizen, of course, can go to the Auditor General.”


Coun. Kathy Moore asked whether “regulatory compliance” was also in the realm of the audit: “Would you do something like look at a tender or a project and see whether that project complied with those policies?”


“We would,” Naqvi replied. “Generally, as part of our audit, we see that policies and procedures are being followed. If they’re not, we’ll point it out to management [in a letter].”


Then management responds to the letter, Naqvi said, suggesting responses such as, ‘It’s an insignificant item’; Or, ‘Yes, it’s a good point and we’ll make sure it’s carried out;’ Or, ‘I guess it slipped through the cracks’.


The auditor’s letter to management and their response are presented to council, Naqvi said. “Then council can take action.”


If you know of a financial, procedural, or policy issue you would like the auditor to investigate, you may contact the auditing firm Berg Naqvi Lehman at www.bnl.ca, or write directly to Amed Naqvi at anaqvi@bnl.ca.

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