City auditor finds deficiencies in expense reporting, whistleblower policies

City of Nanaimo employees who raised concerns were disciplined, says KPMG

The City of Nanaimo’s auditor is recommending that the municipality strengthen its whistleblower policies and review its expense reporting.

KPMG provided a 2017 audit findings report to the city on Monday to be formally presented at the finance committee meeting on Wednesday, May 9.

The auditor found that the city’s financial statements “present fairly, in all material respects, the consolidated financial position of the city,” but went on to identify other areas of concern.

The report found “significant deficiencies in internal control over financial reporting” and outlined problems in respectful workplace and serious misconduct reporting; expense report review, authorization and policies; consistency of hiring practices; and governance understanding and responsibilities.

In regards to whistleblower policies, KPMG found that employees “raised concerns regarding the appropriate usage of city funds and the ability to collect funds owed to the city,” and while their initial concerns were said to be handled effectively, when the issue was raised a second time, “disciplinary letters were placed in the complainants’ employee files.” According to the report, the respectful workplace policy was revised five times between January 2017 and January 2018 and “three of the revisions related to the individuals designated to manage complaints.”

story continues below

KPMG recommends city council review its respectful workplace and reporting serious misconduct policies, and suggests complaints against senior leadership should be reviewed by the mayor or a designate.

KPMG also found deficiencies in expense reporting, as the city’s chief administrative officer and chief financial officer reviewed and approved each other’s expenses.

“This cross approval process provides for the opportunity of collusion between the two parties and is not an appropriate internal control,” the report notes.

On hiring practices, the auditor’s report found that the city has a “well-established hiring protocol,” but found in some situations, “steps in the process have been bypassed at the senior management level, that advice from human resources was not followed, and that candidates have been hired into positions without having met all the usual screening requirements.”

KPMG noted that at the start of the audit process, there was discussion with the city about “significant risk of management override of controls” and that was one of the focus areas in the audit.

John Van Horne, the city’s director of human resources, said in an e-mail that the audit report is being reviewed.

Asked about his concerns, he said the city wishes to provide clear guidelines and supportive processes for employees, “so it’s unfortunate when a shortcoming of any policy is identified.”

He said the city will work to “shore up the policies” to address concerns raised by the auditor.

“The finance and audit committee, through council, may provide some direction to staff but generally we do any necessary updates to operational policies at the staff level,” Van Horne said. “KPMG has recommended that particular policies fall under council’s approval, an idea which I think has a lot of merit as well.”

The audit findings report is accompanied by a staff report authored by Laura Mercer, deputy chief financial officer, and dated May 9.

Her report notes that “the city’s auditors, KPMG, have completed the audit work and are prepared to issue an unqualified opinion that the financial statements fairly represent the financial position of the city.”

Staff’s recommendation is that the finance and audit committee recommend council approve the City of Nanaimo’s 2017 annual financial statements.

RELATED: City investigating ‘allegation of significant concern’



editor@nanaimobulletin.com

Like us on Facebook and follow us on Twitter

Just Posted

UPDATE: Discontent City campers don’t plan on leaving

City of Nanaimo issues trespass notice at downtown homeless camp

RDN and CUPE 401 ratify three-year deal

Collective agreement retroactive to Jan. 1 and runs until the end of December 2020

UPDATED: Nanaimo city manager gone

Tracy Samra is no longer with the City of Nanaimo

No fare discounts for Island residents, says B.C. Ferries CEO

Mark Collins spoke about B.C. Ferries’ vision and mission last week in Qualicum

Trans Mountain pipeline: How we got here

A look at the Kinder Morgan expansion, decades in the making

City showcases power of public works to Nanaimo students

City of Nanaimo holds second Public Works Day

VIDEO: Regional district and B.C. Transit show off NextRide bus technology

New technology for Nanaimo bus riders will allow for real-time tracking

Vancouver Island wife brings husband back to life with CPR, thanks to 911 dispatcher

‘The dispatcher literally taught me CPR over the phone’

Suspected scammer attempts to use Black Press newspaper to dupe woman

Canadian Anti-Fraud Centre offers tips after Langley resident received suspicious call

Vote points to abortion being legalized in Ireland

Voters asked whether to keep or repeal Eighth Amendment to Roman Catholic Ireland’s Constitution

COLUMN: Women’s breasts really aren’t that big a deal

A follow on some Princeton, B.C., students gained considerable exposure when they dropped their bras

Canadian soccer officials talk up World Cup bid at Champions League final

Current bid calls for 2026 World Cup games to be staged in the U.S., Canada and Mexico

Most Read