Auditor presents fiscal snapshot, responds to resident letters

Arlen MacLaine
By Arlen MacLaine
July 23rd, 2013

At last week’s meeting senior Audit Manager Andrea Kramer presented council with a ‘snapshot’ of the 2012 financial audit as part of the 2012 annual report.  The report had already been approved, and she was there mostly to answer questions.  Kramer qualified her presentation by reiterating the purpose of the audit.  

“We provide independent opinion that the financial statements, as presented, are fairly stated.  It is a historical report, looking back at the results for the year ending 2012,” she said.

The conclusion of the report, which is available in its entirety on the City’s website, reads “In our opinion, the consolidated financial statements present fairly, in all material aspects, the financial position of The Corporation of the City of Rossland as at December 31, 2012, and its financial performance and its cashflows for the year then ended in accordance with the canadian public sector accounting standards.”

What was more interesting, was Kramer’s discussion of questions she had received from residents. (Because of confidentiality issues, names and other information could not be revealed.  The documents will be discussed at the August 12 meeting of council, and then will be public domain)

The first letter had to do with the investigation into the arena project.  It asked if the city hd a process to reallocate unspent funds following the completion of projects and also if the city had a process to ensure that capital projects are properly authorized and budgeted before they are begun.

“We didn’t identify any process in place to formerly reallocate unexpended funds.  Council may wish to consider policy to supplement the financial plan as a guide to management in this regard,” Kramer said.  “There is no mandate in place, but I thought this was a good suggestion.”

Another letter asked whether there was a process requiring confirmed GST/HST registration.  If a company puts on a GST number and it’s not legitimate, where does that go?  Kramer responded, “There is no formal process in place, and it isn’t practical for your AP clerk to be verifying everyone.  However, it would make sense, under large contracts, to verify that number.”

The same letter asked if the city has a process to ensure that all contracts issued by the city follow the requirements of the city’s purchasing policy.  “We looked at the Columbia/Washington project, in which there was significant documentation. However we didn’t find any evidence of deviation from the policy,” Kramer responded.  “The city has a purchasing policy, and a document retention policy, and monitoring of compliance falls with senior management, and to a certain extent the oversight of council.  In 2012 we didn’t find any major projects, that we looked at that deviated from that.”

The former CAO was also brought up in a letter, concerned about potential retirement payout irregularities.

“We examined the whole 3 years, and no payments were made that weren’t owed to him, said Kramer.  “There were some unusual arrangements in how he arranged to have the last week of December paid as early as May, and some…interesting ways to do it with payroll, and we do suggest that senior management not request the payroll clerk to make any unusual adjustments.  It’s prone to error, and it’s just a little unusual.  But at the end of the day we didn’t find any amounts paid that were not owed to him, and we did a detailed examination for the full three years.”

Kramer also provided a letter to management, highlighting some observations on internal controls, as a derivative report.  However, like the other letters from citizens, this will be discussed at the August 12 council meeting, and no further information is available until then.

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