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City seeks to open up audit findings

The city wants to increase the transparency of its annual audit findings.

The city wants to increase the transparency of its annual audit findings.

Sitting as the standing committee on finance, city councillors on Monday endorsed a motion to publicly disclose recommendations from the annual audit report received from an external agency.

Every year the city is audited by an independent firm, as required by the Municipal Government Act. The results of the audit are a public document but the accompanying management letter has traditionally been shared only in private, as has all the follow-up discussions.

The letter typically contains five to 10 recommendations on improving efficiencies and processes, said Mayor Nolan Crouse.

“That’s wrong. We should be able to follow up in public and we should have the report in public,” he said.

Council business that touches on the ‘three Ls’ — land, legal and labour — are held in camera but all else is done in public and Crouse expects the audit results to conform to the same standard. If any items touch on the three Ls, the auditor can produce a second confidential report, he suggested.

Coun. Cathy Heron wondered whether such a policy would degrade the quality of the audit recommendations.

“They wouldn’t say as much publicly as they would say in private. That would be my only issue,” she said.

City manager Bill Holtby agreed that was possible.

“You may get a more watered down version of a public document,” he said.

Councillors and administration agreed that none of the information contained in the management letters in the last five years would be considered too sensitive to be made public. But chief financial officer Dean Screpnek said it’s the professional practice of the city’s audit firm, KPMG, to maintain confidentiality of all such information.

He wasn’t sure if the firm would agree to the change the councillors were seeking.

Coun. Cam MacKay said auditors’ primary concern is to limit their legal liability.

“Since WorldCom and Enron, all these accounting corporations want to not be sued, by saying everything is clean then later on fraud is discovered. That’s the primary source of their desire for confidentiality,” MacKay said.

He suggested the city find a different firm if their current auditor isn’t willing to comply with a desire for more transparency.

“I think we should push this. There is an auditor out there that will take our money and give us assurances that they’ve done a good enough job to not worry about being sued,” he said.

Crouse’s motion passed unanimously so the issue will proceed as a committee recommendation to council for official approval.

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