While municipalities railed against the establishment of a municipal auditor general at the recent Union of BC Municipalities (UBCM) convention, B.C.’s business community supports the idea.
“We have a strong interest in ensuring efficient use of public funds at all levels of government and lots of information and transparency around decisions that are made to raise taxes, raise revenue and then expend revenue,” said Jock Finlayson, executive vice-president and chief policy officer of the Business Council of BC.
“[A municipal auditor general] is really in the spirit of enhancing that at the local level.”
Establishing a municipal auditor general was one of Premier Christy Clark’s byelection campaign promises.
The province plans to introduce legislation in the fall to establish the new role. It has stipulated that a municipal auditor general would conduct value-for-money audits annually to:
•review the economics of an activity;
•measure effectiveness; and
•identify best practices.
The province has emphasized that a municipal auditor general would not:
•make or overrule policy decisions of elected officials;
•set or order changes to taxes; or
•make binding recommendations or impose requirements.
Finlayson said besides increasing scrutiny on local governments, a municipal auditor general would provide benchmarking information on budgets and programs so that taxpayers can assess how their government’s decisions stack up.
“If one municipality is able to deal with waste management at half the cost of another, then it might be useful to ask, ‘Why is that? What efficiencies have they achieved?’ Perhaps they’ve outsourced the service rather than providing it in-house.”
John Winter, president and CEO of the BC Chamber of Commerce, said the presence of a municipal auditor general would encourage politicians to act more judiciously before raising taxes.
“Many times we witness government saying, ‘We need this, we need that, so we’ll just add to the tax bill without going through a prioritization of some sort or creating the opportunity to review programs and eliminate some to pay for others that become priorities.’ When the threat of an audit report is there, politicians are much more wary of doing things in a reckless way – not to say that they already are [doing so], but right now there is no safeguard.”
Winter added that, for businesses, municipal taxation is a top concern, given that they face higher municipal tax rates than residents do. In extreme cases, that rate is seven or eight times higher.
He added that because businesses don’t have a vote in municipal elections, it’s easier for local governments to increase their taxes rather than add to residential tax bills.
“It’s easier if you need more money to assess it to the silent partner.”
Burnaby mayor Derek Corrigan was one of the most vocal opponents to the municipal auditor general plan at the recent UBCM convention.
He said local governments see it as a waste of provincial tax dollars.
He pointed out that municipalities are already looking for ways to get the best bang for their buck.
“Municipalities get $0.08 out of every $1 of taxation, and we have to use it very, very carefully. So if there is another municipality doing something better, we will steal that idea immediately. We have absolutely no pride when it comes to getting better ways of doing things from another city.”
Corrigan added that a municipal auditor general would criticize municipalities after the fact rather than providing up-front advice.
“That puts a municipality in a situation where they can’t un-ring that bell; they can’t change the project that has been completed.”
But Ida Chong, minister of community, sport and cultural development, said a municipal auditor general will be a valuable resource for municipalities.
“If you’re doing nothing wrong and you’re doing really well, you guys are going to get kudos. And if they find there’s something you can help save dollars on, wouldn’t you want to?”
Chong has yet to state how much a municipal auditor general’s office will cost the province, but she estimated that it will employ six to 12 auditors.
Chong said she hopes to see the first audits to start next spring or summer. •
Province’s track record with AG
The provincial government has responded to 74% of the recommendations made in performance or value-for-money auditor general audits since April 2009, according to an annual fall followup report.
The report from the provincial auditor general’s office determined that of the 273 recommendations made since April 2009:
•64% have been fully or substantially implemented; and
•10% have been addressed through alternative action by the respective agency.
The report assesses 13 areas of the work performed by the auditor general’s office, including:
•Aspects of Financial Management (Management of Working Capital by Colleges and School Districts, Managing Fraud Risks in Government, Infrastructure Grants and Year-End Government Transfer Expenditures);
•Audit of the Agricultural Land Commission; and
•Upkeep of the Provincial Roads Network by the Ministry of Transportation and Infrastructure.
