Does Manitoba need special auditor to probe municipalities?

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This article was published 02/03/2012 (5350 days ago), so information in it may no longer be current.

Another small municipality is under scrutiny by the province’s auditor general, who says Manitoba may need a special auditor’s office dedicated to investigating towns and cities.

After the province and its independent watchdogs received more than 100 complaints from citizens, auditor general Carol Bellringer agreed recently to look into troubles in the Rural Municipality of Lac du Bonnet.

The saga there dates back to the 2010 election, and has pitted one councillor and a group of vocal residents against the new reeve and council. Critics say the reeve is in a conflict of interest because he has worked for years as the RM’s building inspector. They say council has shirked due diligence and proper process, most recently related to a new sewage lagoon project.

Lac du Bonnet is the fifth municipal government to face an investigation by the auditor general or the ombudsman in the last decade. No large-scale corruption has been unearthed, though both independent watchdogs found shoddy governance and financial accountability in all the municipalities they investigated.

More damaging, the local turmoil often creates deep divisions on councils and within communities, where rumours and personal animosity mingle with fact.

Bellringer and acting ombudsman Mel Holley say they are seeing an increase in the number of complaints about municipal issues. And Bellringer says it may be time to create a municipal auditor to oversee the province’s nearly 200 towns, cities, and RMs.

“Manitoba needs to close the loop on the accountability cycle, and we need the functions of a municipal auditor,” she said.

British Columbia is setting up a separate auditor general’s office for municipalities, a move that outraged some mayors and councillors. They called it needless bureaucracy and an intrusion into the autonomy of duly-elected local governments.

The NDP government in Nova Scotia is also creating a municipal auditor. Two years ago, the Alberta government toyed with the idea.

In Manitoba, Bellringer said, a municipal auditor could work out of her office or form a separate agency. Or the province could use the services of outside firms brought in to scrutinize towns and RMs.

Winnipeg already has its own arms-length auditor.

In 1997, the Filmon government rewrote the Municipal Act to give towns and cities more autonomy. Some say the act enables the province to take a hands-off approach to dysfunctional councils.

RM of Lac du Bonnet Coun. Vera Cardinal, one of the chief critics of the RM’s reeve and council, says she is frustrated by the province’s “lackadaisical, we-don’t-give-a-darn attitude” to complaints about how the RM is managed.

At a meeting in early February, officials from Manitoba Local Government recommended mediation for councillors. They weren’t willing to look into complaints or determine whether the Municipal Act or conflict-of-interest legislation had been followed, said Cardinal.

On the flip side, municipal leaders argue they are accountable to their citizens at election time and don’t need to be micro-managed by a paternalistic province.

Association of Manitoba Municipalities president Doug Dobrowolski says he favours transparency and accountability but isn’t keen on the idea of a municipal auditor general.

“I think right now there are enough checks and balances in the system,” he said.

Dobrowolski said staff from Manitoba Local Government sit down with municipal officials to help them navigate tough issues, and the AMM offers professional development for staff and politicians. The avenues of complaint, through the auditor general and the ombudsman, are adequate, he said.

Local Government Minister Ron Lemieux agreed.

“They are a body of government and I don’t believe they should be babysat,” said Lemieux, who was not interested in the idea of a municipal auditor. “We think the provincial auditor is doing a fantastic job and her recommendations are going to address a lot of the complaints coming forward.”

But Bellringer says there are gaps she can’t fill.

Municipalities submit annual audits to the province, but Bellringer said those audits are not probing enough to catch problems before they escalate.

And, she said, municipalities can’t be called to account before a legislative committee to ensure recommendations from her audits are being followed. Except for a follow-up review, it’s tough to know whether things are improving in a municipality she’s investigated.

And, she said the Municipal Act doesn’t lay out when and how the province can or should intervene in a troubled town government. Instead, the complaints land on her desk or the ombudsman’s.

In Lac du Bonnet, Reeve Karl Gugenheimer said he’s had assurances from at least two lawyers his job as the region’s building inspector does not put him in a conflict. He believes the auditor general will find council has followed proper procedures and its finances are in good order. Gugenheimer said he didn’t expect the level of dissent and division when he got elected just over a year ago.

“I thought it would be common sense, day-to-day work. I did not think it would be this carnival,” he said. “It’s amazing how much trouble just a few people can make, with no sound proof of any kind.”

maryagnes.welch@freepress.mb.ca

Messy municipalities

AT least five Manitoba municipalities have been investigated by the auditor general or the ombudsman’s office in the last decade.

 

St. Clements

IN 2002, the province’s auditor general found the rural municipality had committed a laundry list of Municipal Act violations. The RM failed to provide complete and accurate financial statements and plans, and suffered from weak governance and oversight. “Weak accounting, budgeting and project management practices may have contributed to the RM’s operating deficits and its mill rate increase,” wrote then-auditor general Jon Singleton

 

La Broquerie

IN 2010, the RM of La Broquerie earned the reputation as the province’s most dysfunctional council. That summer, the RM’s former chief administrative officer alleged some politicians installed hidden cameras in nearly every room in the town hall to spy on rival councillors, staff and the public. And, she said they violated many town policies and procedures, as well as provincial legislation, by trying to control information and shut out rival councillors. There were also weird tales of an old, unregistered handgun kept for years in the town hall’s vault that ended up in the hands of a councillor.

Weeks later, an investigation by Manitoba’s ombudsman uncovered sloppy administrative practices — and a few unanswered questions — but no evidence of the kind of widespread fraud and corruption alleged by the former CAO.

A couple of years earlier, the RM was the subject of a special investigation by the auditor general, who found conflicts of interest, shoddy expense accounting, poor record-keeping, and spotty policies and bylaws.

 

Killarney-Turtle Mountain

IN 2007, the province’s ombudsman came down hard on the municipality for failing to meet “an acceptable standard of transparency or accountability.” At issue was the town’s use of a special levy on taxpayers to fund a new rec centre, the cost of which skyrocketed to $10 million from $6.5 miliion before taxpayers were properly informed or able to object. The ombudsman also found the province and the Municipal Board failed to offer proper oversight during the process.

 

St. Laurent

AFTER complaints about tendering and conflicts of interest emerged, the province’s auditor general launched an investigation of the rural municipality in late 2009. The AG found significant spending was improperly tendered or not tendered at all, a councillor may have voted on a $5,300 contract to his own company, and some councillors were improperly charging the RM for per diems. And, the AG’s report detailed a divisive 3-2 split on council, where three councillors formed an alliance against the reeve and one other councillor.

 

Lac du Bonnet

THE rural municipality is the latest one to earn an auditor general’s investigation. Critics say the reeve is in a conflict of interest, council routinely fails to follow an open and fair process, and imprudent spending abounds.

But others say the turmoil is a hangover from the 2010 election, when area farmer Cindy Kellendonk ran unsuccessfully for reeve. That election was bizarre — Kellendonk was charged with assault after she bumped a video camera held by the wife of an RM councillor. The Crown later dropped the charges. And opposition Coun. Vera Cardinal claimed she was the target of intimidation tactics during the race, including a death threat nailed to her garage wall and a dead cat left in her driveway.

The auditor general’s review of Lac du Bonnet is limited in scope to just a portion of the complaints, but a formal report will be issued when the review is finished.