NPA City Councillor Colleen Hardwick Calls for the Establishment of an Independent Auditor General Office for the City of Vancouver

“… Vancouver is the only major Canadian city that does not have an Auditor General’s office that operates independent of the city’s management and administrators.”

– Councillor Colleen Hardwick


September 29, 2019, Vancouver, B.C. – NPA City Councillor Colleen Hardwick is calling for the establishment of an Independent Auditor General Office for the City of Vancouver; one that would report directly to Council and be independent of the City’s management and the City’s other internal audit functions. She is bringing a motion forward at this Tuesday’s Council meeting that she hopes her Council colleagues from all parties will not only support but embrace wholeheartedly.
 
“When I looked into the subject of Municipal Auditors General this past spring and summer, I was genuinely surprised to discover that Vancouver is the only major Canadian city that does not have an Auditor General’s office that operates independent of the city’s management and administrators,” said Councillor Hardwick. “No matter where you look across the country, independent Auditors General are the norm in major cities and they have been for many years. Clearly, this is an important accountability mechanism that’s missing in Vancouver and Council needs to take a serious look at that.”
 
In her motion, Councillor Hardwick cites several examples of major Canadian cities that have an independent Auditor General (or a comparable City Auditor office) including the cities of Toronto, Ottawa, Sudbury, and Windsor in Ontario, the cities of Edmonton and Calgary in Alberta, as well as Winnipeg, Halifax, and Montréal – to name just a few.
 
In Toronto, to cite just one example for 2018, Auditor General Beverly Romeo-Beehler’s independent office completed 12 audits, as well as one extensive investigation, and made 185 recommendations to Toronto City Council – generating an $11.7 million return on investment on the 2018 Auditor General office budget of $6.7 million serving a population of 2.5 million.
 
Currently, as Hardwick notes in her motion, the City of Vancouver does have an internal audit division, which is staffed with professional auditors. However, the internal audit division does not report directly or independently to Council: They report to the City’s internal audit management team consisting of the city manager, deputy city manager, director of finance, and director of legal services.
 
The City’s internal audit division serves an important function, but it is just one of three distinct types of municipal audit functions that should ideally be in place (i.e., Independent Auditors General, External Auditors who audit a city’s financial statements, and Internal Auditors that report to senior staff). Each of these audit function plays a different but interdependent role, and each can add significant value to a municipality.
 
Councillor Hardwick says the size, scope, and nature of Vancouver’s operating and capital budgets, which have a combined total that now approaches $2 billion annually, along with many competing budget priorities, makes it necessary that Council explore, and seriously consider, governance best practices observed in other major Canadian cities, such as an Independent Auditor General. She believes it is incumbent upon the City and its Council to inspire public confidence and to have accountability mechanisms in place that provide and ensure the best possible stewardship over public funds while actively and continuously seeking to better identify and mitigate risks the City faces, improve accountability, strengthen management controls, and enhance the efficiency and effectiveness of City operations.
 
Additional background points from Councillor Hardwick’s motion are appended below. A complete copy of Councillor Hardwick’s motion can be found on the City’s website at the following link: https://council.vancouver.ca/20191001/documents/motionb6.pdf.
 
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Media please email media@npavancouver.ca.
 
 
Key Background Notes:
 
■ Auditors General at the municipal level report directly to a City Council, or a Committee of Council, and typically have a mandate to set their own audit plan, publicly report the results of audits, serve independently from City management, and greatly assist Councils in holding themselves and City administrators accountable for the stewardship of public funds and the achievement of value-for-money within municipal operations.

■ The City’s Internal Audit (IA) Division consists of “a team of five certified internal audit professionals” dedicated to completing a variety of audits focused on “effectiveness, efficiency, and economy” to provide “an independent and objective assurance function which helps promote the City’s efficiency, effectiveness, and accountability.” They report to the City’s internal audit management team consisting of the city manager, deputy city manager, director of finance, and director of legal services.

■ In July 2011, the Union of British Columbia Municipalities (UBCM) issued a Context Paper entitled, “Municipal Auditor General Context Paper: Background and context to the proposed Office of the Municipal Auditor General under consideration by the Province of British Columbia.” UBCM’s Context Paper makes note of “generalized statutory powers in Alberta and BC” that allow a local government to establish a Municipal Auditor General and assign duties to the Office. In addition, UBCM states that “the natural persons powers of municipalities and broad corporate powers of regional districts should be sufficient for Councils/Boards to establish an Office of the [Municipal Auditor General] and assign duties to that Office, if they so choose.”

■ Section 162 of the Vancouver Charter states that “The Council (a) may establish and equip such departments and offices as it may from time to time deem expedient in the exercise of its powers, and may assign such functions and duties to the persons employed in such departments and offices as the Council may from time to time decide.”

■ In addition to calling for the establishment of an Independent Auditor General Office, Councillor Hardwick’s motion also calls on Council to:

  • Set a target date of March 1, 2020, for the appointment of an Independent Auditor General, with an initial office budget of $1 million annually, the funds for which would be integral to the City’s 2020 Operating Budget and recouped from savings and efficiencies identified by the Auditor General in subsequent City of Vancouver Budget years.
  • Form a committee of Council, comprised of all eleven elected members of Council, to direct the establishment and implementation of an Independent Auditor General Office for the City of Vancouver, including directing the search for and appointment of an Auditor General, with a target date of no later than January 1, 2020, for the committee of Council to have met to review initial recommendations. 
  • Direct staff to obtain three independent outside legal opinions, as well as advice from appropriate provincial ministries and advisory bodies such as the Union of British Columbia Municipalities, regarding the existing legislative provisions under which an Independent Auditor General office could operate without further enabling legislation, and for staff to report back to Council on this specific question by December 1, 2019. 
  • Request that the City’s Internal Audit (IA) Division, which reports to the internal audit management team consisting of the city manager, deputy city manager, director of finance, and director of legal services, make a presentation to Council before the end of October 2019 with an overview of the division’s findings and recommendations over the past six years. 
  • Empower the Mayor, on behalf of Vancouver City Council and the City of Vancouver, to write to the Premier of British Columbia with a formal request – should that prove to be necessary – to initiate any legislative process or processes provincially that may be required to provide for any specific legal protections or powers that may be required for the effective operation of an Independent Auditor General office. 

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