‘THE REAL NUMBERS?’
Councillor blasts city staff over $250M error
A city councillor says he’s concerned about the competence of city staff following an audit’s finding that more than $616 million was spent on consulting services over five years, and that $250 million of that was “miscoded.”
A report by the office of the city auditor released Thursday revealed that the city ’s consulting total of $529 million for 2013 to 2017 was incorrect because $87 million had been recorded as something else in the city’s financial reports and $153 million was coded as the incorrect type of consulting.
The errors “significantly impacted” expense reporting. Once corrected, the cost of engineering consulting rose by 119 per cent, to $375 million from $171 million. It also found the city spent millions less than reported on consulting fees for communications, management and other services.
Ward 11 Coun. Mike Nickel wants to know how a “quarter-billon-dollar accounting error” could have snuck through, and said it raises questions about the city’s budgets.
“You’ve got to wonder, are we seeing the real numbers at the end of the day?” he said.
Nickel said he is also troubled by the total amount the city is spending on consulting, given what he views as a rise in the number of middle-management positions in the administration. By his count, there are 140 directors and 34 branch managers.
“At the end of the day, you’ve got to ask, what is all this middle management even doing?” he said.
The audit also found the city spent an additional 72 cents for every planned $1 of consultancy spending because of “change orders” made when work on a project expanded or changed.
Nickel called the 72 per cent increase a “shocking ” number.
But the city’s chief financial officer Todd Burge said it’s not as bad as it seems.
“I wouldn’t characterize it as cost overruns. I think the reality is that scope changed, and work continued,” Burge said.
He said the city does need to get better about cutting projects off and putting out new tenders when it gets to the point of going beyond what was originally funded.
Burge also said the city uses consultants to fill gaps when they don’t have the right skill-sets in-house, and that they’ve already made changes to their procurement process that he thinks are helping.
The audit concluded that, overall, the city’s management of consulting is effective. A report by city administrators responding to the audit says it supports the recommendations and that improvements to staff training and reductions to unplanned change orders will be implemented by June 30.