The City of Sherbrooke could better supervise its paramunicipal organizations and ensure better monitoring of the objectives set for each of them. This is one of the findings of Auditor General Andrée Cossette, who tabled a first report Monday after only eight months at the job of the City of Sherbrooke.
The report includes seven value-for-money audit engagements, two financial audits and two compliance audits. It has about 70 recommendations.
Overall, the Auditor General notes that “the City does not fully play its role of guardian and overseer of the proper use of public funds in relation to the amounts entrusted to [paramunicipal] bodies” and left free to set up their own monitoring process.
“The accountability of agencies to the City is variable and not centralized. Organizations send different information to different people in the City. There is no centralization of information, especially to know how much each agency costs. We can see that it has been recommended in Laval and Terrebonne as well. It allows to have all the information.
“The role of elected officials on boards of directors can sometimes be confusing and can sometimes contradict their role as elected officials,” she adds. Occasionally, decisions are made on the board of directors and are not part of the City’s agenda. Board members may believe that the City supports a decision because the elected member voted for, which is not necessarily the case. ”
Ms. Cossette invites elected officials to think about “and to review their role and responsibility within CAs”
Andrée Cossette recommends that a governance and monitoring policy and a body be set up to report to the municipal council on the quality of the governance of paramunicipal organizations.
If Ms. Cossette is interested in four paramunicipal organizations, including Destination Sherbrooke, Commerce Sherbrooke and Sherbrooke Innopole, it is in Animation Center-ville that the recommendations are the most numerous. The four organizations received a $ 7.8 million contribution from the Ville de Sherbrooke in 2018.
It points out that there is no management agreement between Animation Center-ville and the City and that the lease of the Granada Theater has expired since 31 December. There is no code of ethics and professional conduct for directors and employees, no rules for free tickets, travel expenses, meals and entertainment. Andrée Cossette also recommends that access to the safe be reviewed.
“They have a new executive director and a lot of changes have been started. Much remains to be done too. Too many people have access to the safe. I recommend that only the people whose job it is to have access to it. They should always be two to have access to the safe. ”
At Commerce Sherbrooke, the management agreement has expired since December 31, 2014. “We do not renew these agreements, it is not normal. It is through these conventions that a city speaks. ”
The Auditor General also recommends the implementation of a travel expenses policy, a code of ethics and professional conduct and a review of Commerce Sherbrooke’s mandate. “It should clarify its roles and responsibilities,” says Ms. Cossette.
With regard to Destination Sherbrooke, Ms. Cossette speaks of a “structure that meets the criteria of good governance. Here too, the management agreements have been overdue for several years. It is recommended to introduce performance indicators and clarify the guidelines for situations of conflict of interest.
Finally, at Sherbrooke Innopole, “the roles and responsibilities of the various authorities are not documented”. It is suggested that an investment valuation policy and valuation allowance be put in place. Sherbrooke Innopole manages $ 2.1 million in investments in various companies. As at December 31, 2017, the valuation allowance was $ 370,367.
Succession management is problematic
Succession management is a problem for the Ville de Sherbrooke, with 239 employees over 50 years of age and likely to retire in 2018 or 2019. This would be an increase of 260% in departures from to the average of the years 2015 to 2017.
“The municipal administration does not have a complete and up-to-date view of the situation for all the key positions it will have to replace in the short term. I can not conclude that the City has a vision and a comprehensive succession management strategy, “reports Auditor General Andrée Cossette in her report.
Ms. Cossette notes that each department manages its succession autonomously but that none of them has a complete succession management plan, so that the City can not assess the risks for the organization.
By looking at all municipal services, Cossette concludes that four of them are at high risk of not being able to fill the vacant positions. Four others have moderate risk while five have low risk.
The Auditor General suggests, among other things, taking stock of the situation and preparing an action plan.
“The City has great challenges to replace the positions that will leave in the short term. The City must put in place a mechanism to ensure the transfer of knowledge from key people who will leave with a lot of knowledge. In the fiscal year, 36% of the positions likely to leave are positions that are needed to provide services to the population or positions where there is a scarcity of the workforce and where efforts must be made to attract interesting candidates. ”
Contracts paid in duplicate?
Other topics covered by the Auditor General include payment to suppliers. “Internal control over financial control has many shortcomings. When a system has shortcomings, and all systems have shortcomings, compensatory controls are put in place. They have not always been rigorously applied, so some suppliers may have been paid twice. What I recommend is to do the analysis of what we paid and see if we have paid double suppliers. We know that there have already been complaints made to suppliers. ”
Ms. Cossette is unable to quantify the amounts that could have been paid in duplicate.
In the same vein, in terms of fuel management, she notes that “we do not check whether the price charged by the fuel supplier corresponds to the negotiated price”.
In the financial statements, Andrée Cossette mentions that 1232 capital projects are “open”, some since 2007. These projects present a total of $ 475 million in financing.
“By-law 1 states that after three years, the project should be closed unless there is a reason to leave it open. When we go back to 2007 projects, the elastic band starts to stretch. ”
Two projects in 2007 are still in progress, compared to 28 in 2008 and 122 in 2010.
Finally, Andrée Cossette suggests replacing the financial system, which was supposed to be ready in 2018 and was delayed until 2020. The project, valued at $ 9M in 2016, will eventually cost $ 13M. The current version has not been updated since 1999.