City general auditor tables seventh and final annual report



    MONTREAL, May 26 /CNW Telbec/ - Ville de Montréal general auditor, Michel
Doyon, tabled his seventh and final annual report, for 2008, before city
council on May 25, 2009. It also will be tabled at the agglomeration council
on May 28. This follows the 2008 financial audit reports tabled at the city
and agglomeration councils last March 30 and April 2 respectively, in
accordance with the Cities and Towns Act. With the presentation of this
report, Mr. Doyon marks the end of his seven-year mandate and will be leaving
the city on June 2.
    Although the main obligation of the general auditor is to audit the
city's financial statements and those of the organizations it controls, his
office also audited the following municipal activities.

    Highlights
    ----------

    SIMON Procurement: The general auditor examined the procurement section
of SIMON, acronym for the city's integrated management software package. It is
noteworthy that every year, more than one billion dollars in acquisitions are
processed by the "Purchase" module of the SIMON system. The audit reveals that
the Direction de l'approvisionnement (owner of the module) has no authority
over the measures implemented by the central departments and boroughs to
ensure compliance with a principle of internal control as fundamental as the
separation of duties. According to the general auditor, this can only
undermine the effectiveness of control over an integrated management system
such as SIMON. Moreover, the level of independence accorded business units,
especially the boroughs, is not in line with goals of the city procurement
policy, which aims to acquire goods, services and construction work at the
best possible price.
    Investment Fund: The general auditor analysed the investment fund the
city established in 2006 to ensure completion of Montréal 2025 projects and
promote growth in property values. The fund is primarily an additional budget
allowance, within the Three-Year Capital Works Budget, dedicated to municipal
infrastructure projects with the best real-estate profitability potential. The
general auditor's office chose three of the projects targeted by the fund in
2007. The audit reviewed each project's completion schedules, which indicate
the main steps to finish planned work, and found there were no delays. The
procedures taken by all stakeholders also make it possible to do an effective
follow-up of project costs and to approve, if necessary, any related
increases.
    Management of Work Orders (MWO): The general auditor's office examined
the MWO application, which, since 2007, has enabled public works departments
in the boroughs to process client requests. Analysis of the application found
that after a year, the boroughs still find it difficult to buy into the MWO
and the degree of use is far from standard. The system's added value appears
not to have been understood and various operations specific to public works
have not been deployed in the boroughs. The general auditor recommends that
the governance of the system be revised by designating a responsible body,
acting as a trustee, which would represent the interests of both the boroughs
and central departments. Moreover, the current accountability process within
the administrative framework deals only with processing citizen requests,
while a large part of the workload of the department deals with everyday
activities, which should be measured as they represent delivery of citizen
services.
    Contaminated Soil Management: Although the audit reveals that those
responsible for corporate departments understand their role, as well as the
laws and regulations applicable to the management of contaminated soil, the
knowledge of this field within audited boroughs seems problematic. The
Division de la planification et du suivi environnemental of the Service des
infrastructures, du transport et de l'environnement maintains the data bank on
contaminated land and is the only business unit to have access to it. Analysis
shows that the various business units should be more aware of the importance
of transmitting data on contaminated soil that could upgrade this bank.

    Final Comments
    --------------

    With the tabling of this report, the Montréal general auditor took the
opportunity to comment on a number of issues, such as control within the
framework of generally accepted accounting principles in Canada, the
presentation of financial information regarding city funds, the ability of the
general auditor to carry out his mandate, audit committees, governance and the
follow-up of recommendations.
    Control: M. Doyon notes that certain organizations audited by the general
auditor's office are not part of the municipal accounting entity, for example,
the Office municipal d'habitation, while others such as Stationnement de
Montréal are, yet are not obliged to be audited by the city auditor. In this
regard, M. Doyon and his fellow city general auditors already have made
representations to the ministère des Affaires municipales, des Régions et de
l'Occupation du territoire (MAMROT) to have the Cities and Towns Act amended.
The proposed amendment would incorporate the notion of control as defined in
the public sector accounting standards.
    Funds in the City: The general auditor finds that the term "fonds" takes
on varied meanings in city documents. In budget documents, for example, the
Fonds de l'eau is described as "an accounting fund that groups together
financial information related to water and enables follow-up of funding
reserves", but the Fonds de la voirie is presented as a "funding reserve". M.
Doyon recommends that the administration present separate statements for all
funds financed by a charge or special tax.
    Ability of the General Auditor: M. Doyon recommends that the city take
advantage of the next call for tenders for the audit of its financial
statements to ensure that work is shared equally by the general and external
auditors. Calculation of the general auditor's appropriation only takes into
account the municipality's operating budget, excluding the impact of
consolidation on the budget and financial statements. This recommendation also
has been made to the ministry in an effort to have the Act amended.
    Audit Committees: The general auditor recommends that the city appoint at
least one member of the opposition to sit on the audit committee. At present,
it comprises three members of the party in power, two representatives from
outside the city administration and two from the reconstituted municipalities.
He also recommends that the city name to the board of the Société de transport
de Montréal (STM) a sufficient number of elected officials with the necessary
financial knowledge to fill the seats of the STM audit committee without
having to appoint external members.
    Governance: central city: The general auditor asked the majority of city
elected officials and directors to fill in a questionnaire on critical issues
surrounding municipal governance. Of the two groups surveyed, 75% feel that
the master plan establishes strategic directions for central city management
and 71% think that it reflects citizen needs. The majority of elected
officials and directors agree that performance indicators make it possible to
follow up on completion of plans regarding financial matters. However, less
than one third mentions that activity reports are submitted to the executive
committee or city council. These results show that the city must continue its
efforts to improve the efficiency of its governance. In a concrete way and
over the short term, the general auditor therefore recommends that the
administration take steps to separate accountability for achieving the current
year's goals from budget forecasts for the coming year.
    Follow-up on Recommendations: Finally, the auditor notes that the
follow-up carried out in March 2009 indicates that 93% of the recommendations
made in the 2007 report are either completed or underway; 94% of
recommendations made between 2004 and 2007 are completed or underway and 78%
of the recommendations made between 2004 and 2007 are completed.

    The 2008 general auditor's annual report will be submitted for public
consultation on June 10 to a joint meeting of the standing committee of city
council on finance, administrative departments and human resources and the
standing committee on finance and administration of the agglomeration council.
These public hearings will be held at 7 p.m. in the council chamber of
Montréal city hall. Montrealers will have an opportunity at this time to ask
the outgoing general auditor questions about the report. The report is also
available for consultation on the city Web site at:
ville.montreal.qc.ca/verificateur.




For further information:

For further information: Patricia Lowe, Relations avec les médias, (514)
872-5467; Source: Bureau du vérificateur général


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