Victoria should consider implementing a whistleblower policy as a guard against misconduct, KPMG Enterprise says in its annual audit of the city’s 2012 financial statements.
“Without such policies, employees of the city may not report areas of concern and misconduct, risks and fraud that otherwise would have been reported may go undetected,” the report said.
KPMG also noted the city filled a risk management position during the year, while an internal audit position was left vacant.
“Given the size and complexity of the city there are areas where fraud may occur and go undetected without proper controls in place. The internal audit function works towards continuous improvements of controls and helps to limit the risk of fraudulent activity,” the report said.
“The city should investigate opportunities to add internal audit capability using existing staff or contractors, or jointly conducting such work with other [regional] municipalities.”
Council asked staff to report back on KPMG’s recommendations.
Victoria Mayor Dean Fortin said he believes there are enough policies in place to protect both employees and the city’s interests.
Fortin said he expects staff to bring forward a recommendation about a whistleblower policy.
“It’s something, I think, that has been recommended year after year … and we investigated it,” he said.
“We have good policies that allow for those sorts of concerns, in regards to having independent officers [such as the city manager and solicitor] that report directly to council.”
[Update: Mayor Dean Fortin said whistleblower legislation will be brought forward in May for city council's consideration]
Wael (Bill) Fanous was hired in February 2010 as the city’s first director of internal audit and risk management. Fanous resigned in December 2011 to take a job in Alberta. His position was not filled.
Coun. Ben Isitt said councillors were not consulted on leaving the position dark and it should be restored.
“I think it’s prudent fiscal management to have an internal risk management function that’s at arm’s length from both political and senior management influence,” Isitt said.
Before he left, Fanous was preparing a presentation for councillors outlining top risks facing the city.
That presentation, recently released through a media Freedom of Information request, outlined a variety of issues including: tax increases of 4.0 to 5.5 per cent between 2011 and 2015 to meet expenses, the city’s $500-million infrastructure deficit (not including Crystal Pool), major upgrades to computer and information systems and the new Johnson Street bridge’s “tight” budget.
Councillors never saw the presentation because it wasn’t finalized before Fanous left, city director of communications Katie Josephson said.
The risks identified in the presentation were dealt with in budget and strategic planning sessions and within specific project reports, she said.
