LETTER: Mayor’s claims of closure ring hollow

Ken Holmes
By Ken Holmes
January 6th, 2013

Dear editor,

At the meeting in the Seniors’ Centre last Thursday, the Mayor claimed that a comprehensive audit of the Arena contracts awarded to the former building inspectors company had been done. He said many times that he doesn’t see the need for a more comprehensive investigation.

Anyone even with only a minimal knowledge of contracting procedures who reads the auditor’s letter of June 16th 2012 will quickly realise that it is very superficial. To be fair, the auditor’s letter does say that they were not engaged to do a forensic audit.  

Unfortunately, the document raises far more questions than it answers. For example: the auditor was satisfied that the amounts paid to ADA conformed to the budget. It doesn’t say how cost estimates were obtained in order to prepare the budget. It doesn’t say who prepared and approved the budget. Was it the former building inspector’s duty as project manager to do this? It would have been quite easy to put inflated amounts in the budget. Were the estimates reviewed and checked?

The report doesn’t say whether or not competitive bids were obtained. It doesn’t say whether or not bid evaluations were submitted to senior management for approval prior to award. If competitive bids were not solicited it doesn’t say how a sole source contract award to ADA was justified. It doesn’t say who approved the award of the contracts to ADA. It doesn’t say whether or not normal contractor pre-qualification procedures were followed. If they had, the building inspector’s company would probably not have qualified for the work.

The auditor was satisfied because the requisite number of signatures was obtained on cheques. Well, at least we know that one accounting clerk did her/his job properly. However, the auditor doesn’t address the bigger issue of who approved the invoices for payment by the accounting department. This would normally be a project manager’s duty. The report doesn’t say whether or not the former building inspector approved invoices for payment to his own company, ADA.

The report doesn’t say what documentation supported the invoices. Is it just a coincidence that all documentation related to these contracts appears to have gone missing?

There appears to have been no investigation into how the work was actually performed. The report doesn’t say whether subcontractors were hired and proper subcontracting procedures and documentation followed? It doesn’t say whether or not the building inspector hired tradesmen directly and supervised their work during his functions as project manager for the City. It doesn’t address whether or not hewas carrying out project management functions for ADA contracts during his working hours as a City employee?

The report doesn’t say whether or not final invoices were supported by Certificates of Completion and who signed them? It doesn’t deal with inspection of the work and acceptance procedures.

The auditor’s letter states that the City’s Chief Financial Officer became aware that the City’s building inspector was associated with ADA after invoices were paid. What action if any did she take on becoming aware of this, before Mr. Ward resigned and moved on to other employment elsewhere? This is not asked or answered in the auditor’s report.

The auditor does, however, agree with Councillor Moore’s concerns over the process by which ADA was awarded the work.  Unfortunately the process was not audited in depth.

Many more questions could be written here, but the purpose of this letter is to make people aware that a thorough investigation was not done, but should be.

Having worked in engineering, construction and maintenance all my working life, I find it hard to believe that contracts could be awarded, executed, and invoices paid to an employee’s personal business without somebody knowing about it.

Was the auditor instructed to do only a superficial accounting audit by the former CAO so that his lapses in management would not come to light? Since this Council delegated all of their powers to the CAO, he could dictate the terms of reference to the auditor.

 Council can claim ignorance since they have given up any responsibilities for oversight! The only Councillor who has shown any integrity by asking questions on this matter is Councillor Moore. Had it not been for her, this matter would have been swept under the carpet.

There is a need to make sure this cannot happen again. It’s fundamental that in order to put something right, you first of all have to find out what went wrong! This is why we have investigations like industrial accident investigations or coroner’s inquests. The purpose not to assign blame but to ensure that actions are taken to ensure that similar situations can’t happen again.

The only way is to have a comprehensive, independent investigation to answer all the questions that are not answered by the auditor’s letter and went unanswered at the Mayor’s public meeting.

The citizens of Rossland deserve this.

Ken Holmes


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