City eyes hiring fraud investigator

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This article was published 16/04/2021 (1785 days ago), so information in it may no longer be current.

Some fear a push to hire a full-time investigator to probe complaints to the city’s fraud and waste hotline could come at the cost of other oversight, leaving the city more vulnerable to real estate scandals and project overruns.

City auditor Bryan Mansky is asking council to approve a new position to investigate hotline reports from city staff and residents, which would be funded by cash set aside for the city’s independent fairness commissioner.

The commissioner was originally required to review all real estate transactions but council reduced that mandate to sales, acquisitions, land exchanges and leases in May 2020. If the current proposal is approved, the commissioner would no longer be mandated to review specific transactions. Instead, the city auditor would use a “risk-based approach” to decide if a transaction should be audited by the commissioner.

The audit department itself would also conduct a combination of random and risk-based audits of real estate transactions.

In a report, Mansky argues Winnipeg’s planning, property and development department has improved policy compliance, so the changes shouldn’t create new concerns.

“With the implementation of audit recommendations and other process improvements… the overall level of compliance evidenced in the (independent fairness commissioner) audit reports has increased considerably,” he writes.

The commissioner role was added in 2018 to help prevent the city from repeating problems identified in several hotly criticized real estate transactions. For example, an external audit found the city severely mismanaged its purchase of the Canada Post building to become police headquarters by failing to complete an appraisal on the building or seriously consider other locations.

Originally estimated to cost $135 million, the police HQ price soared to around $214 million.

Coun. Kevin Klein fears lessening the commissioner’s work would amount to “moving backwards” on oversight.

Klein stressed the city needs both a fraud investigator and a fully funded independent fairness commissioner.

“Both of them are good positions to have and both of them need to be staffed appropriately or they will be useless positions,” he said.

Mayor Brian Bowman echoed the concern that reducing the role of the commissioner could erode checks and balances.

“I want to make sure that… I’m doing everything I can to try to safeguard taxpayers from having to go back to those days of cost overruns and scandals,” said Bowman.

The mayor said he expects to consider possible amendments to the plan before the executive policy committee votes on it on April 21. He expects that would include seeking ways to fund a fraud investigator without reducing the “incredibly important” role of the independent fairness commissioner.

Bowman stressed the fraud investigator position is worth the investment.

“We want those investigations to be conducted in a timely and thorough way because it does deter fraud, waste and wrongdoing. It helps mitigate risks,” he said.

The auditor’s proposal states the new position is needed to handle a surge of calls to the hotline, which it links to increased awareness of the line’s existence.

The hotline received 139 complaints that triggered 81 investigations in 2020, up from 114 complaints and 27 investigations in 2018.

Mansky estimates the new position would cost about $121,000 this year, which he proposes to fund through a reduction to the $242,000 budget for the independent fairness commissioner.

Coun. Cindy Gilroy, chairwoman of the property and development committee, said she supports the entire proposal but would like to see the change reassessed in about a year to ensure it doesn’t have unintended consequences.

“I think, at this point, what I’m seeing through the real estate department and the changes that we’ve made in property and planning, this makes sense,” said Gilroy.

joyanne.pursaga@freepress.mb.ca

Twitter: @joyanne_pursaga