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Local government auditor general legislation introducedPosted: November 29, 2011

The provincial government last week introduced new legislation that if passed in the spring will mean more scrutiny being applied to local government operations around B.C.

Local government reaction, thus far, has either been muted or cautious, to the proposed establishment of an Office of the Auditor General for Local Government (AGLG), as announced by Premier Christy Clark last week.

Premier Christy Clark

“This office will support the goals of the ‘Families First Agenda’ by strengthening local government accountability and ensuring B.C. families receive the best possible return on investment for their taxpayer dollars,” Clark stated. “Enhanced stewardship of assets and service delivery means a better quality of life for British Columbians and that’s what we’re aiming for.”

The primary purpose of the AGLG, which will be based out of Surrey, would be to help local governments find efficiencies in spending and improve program effectiveness by providing neutral, non-binding advice. The AGLG’s role has been designed to maximize value for money by undertaking performance audits and providing information to assist local governments in choosing how best to respond to their communities’ priorities.

Like all auditors general, the AGLG would make recommendations for improvements, not impose solutions. It will be up to local governments to decide what action to take on any recommendations provided by the AGLG. Local governments’ ability to make policy decisions about taxation, land use and other services would not be restricted, a government press release explained.

“This government is committed to being open, and the Auditor General for Local Government would provide British Columbians with the opportunity to access audit reports about the value they are getting for their money,” said Ida Chong, Minister of Community, Sport and Cultural Development, who introduced the legislation. “The same reports would give local governments important information about how to streamline processes and identify the most efficient use of public funds, maximizing the use of taxpayer dollars.”

UBCM president Heath Slee

Union of British Columbia Municipalities (UBCM) president and Regional District of East Kootenay Electoral Area B director Heath Slee said provincial municipalities have some concerns about how the AGLG would be held accountable.

“Our main concern at this point is that the AG for Local Government will not be reporting to representatives from the local government system but to a council that will be appointed by provincial cabinet. This approach is at odds with precedent and we have concerns that it muddies the accountability of the office,” he said.

The UBCM membership considered a Municipal Auditor General Policy Paper at the 2011 Convention in September, and endorsed the following resolution:  “THEREFORE BE IT RESOLVED that UBCM, while disagreeing on the necessity to create an office of the Municipal Auditor General, due to the fact that requirements of such an office are already met under existing local government legislation and regulations, endorse in principle the policy paper and instruct the UBCM Executive to continue negotiations with the provincial government.  The Policy Paper set out a number of principles intended to guide policy development for this initiative. The following identifies how key elements of the Bill relate to these principles.

“Consultation between the province and local governments is critical: UBCM has been consulted on the drafting of the legislation; UBCM must be consulted prior to audit council appointments; Changes should build on existing systems, avoid duplication and meet specific objectives; The AGLG is specifically precluded from undertaking audits currently required under local government legislation (i.e., financial audits now performed by independent auditors).”

Fernie Mayor elect Mary Giuliano

Newly elected City of Fernie Mayor Mary Giuliano said UBCM members generally viewed the AGLC as being “duplication of services as well as a cost that wasn’t needed. It sounds great to hear that “getting the most value for money will be easier for local governments now that the province is introducing legislation to establish an Office of the Auditor General.” I am not sure as to how this will help local government until implementation takes place and local government finds “efficiencies in spending” while ‘responding to communities’ priorities,’” she said, adding, “I look forward to hearing how we can “streamline processes and identify the most efficient use of public funds, maximizing the use of taxpayer dollars,” as stated by Ida Chong.  This goal is one that every municipality wants to reach and certainly one that here in Fernie we have strived for since I became a member of council nine years ago. I think only time will tell whether UBCM delegates were correct in their assumptions or whether Premier Clark is correct in stating that ‘Enhanced stewardship of assets and service delivery means a better quality of life for British Columbians,’” she concluded.

MLA Norm Macdonald

Columbia River-Revelstoke MLA Norm Macdonald, a former Town of Golden mayor and council member, said he doesn’t believe further scrutiny is required for municipal governments as they “the most highly scrutinized level of government when it comes to spending.  As it stands, local governments are required to have more frequent elections than either provincial or federal governments.  All council and committee meetings are open to the public, unlike caucus and cabinet meetings.  Public consultation is required for annual financial plans for local governments. Local governments, unlike federal and provincial governments, are not authorized to run a deficit budget and they are required to issue annual reports including reports on performance against defined goals.
Adding another layer of scrutiny will only cost B.C. taxpayers more money in added salaries, he continued.

“It seems likely that if there were further audits required, they could easily be managed by existing staff within the Ministry of Community, Sport and Cultural Development. Or, the Auditor General for the Province could be tasked with overseeing municipal governments as well,” he suggested.

“It is somewhat ironic to watch the B.C. Liberals insist that local governments must have an Auditor General when this government has a dismal record of ignoring recommendations made by the Provincial Auditor General or even going so far as to actively thwart attempts by the Auditor General to investigate issues such as the government’s involvement in the Basi-Virk corruption trial,” he concluded.

According to the government press release, the Auditor General for Local Government’s (AGLG) core mandate is to conduct performance audits (also called “value-for-money” audits) in order to provide local governments with objective information and advice on achieving efficiencies in local government operations.

Performance audits, with a number undertaken each year, would: Investigate questions such as whether a service is undertaken as economically and efficiently as possible, whether a service is effective in achieving its intended results, and whether local governments are sufficiently monitoring their operations; examine a specific local government operation – not the entirety of its operations.

Performance audits would not call into question the merits of policy decisions or objectives of a local government.

The Act provides that the AGLG has scope to conduct performance audits of: any municipality or regional district; corporations or other entities controlled by these local government bodies.

The Act states that the AGLG is to be appointed by the Province, based on a recommendation of an Audit Council. The AGLG’s term is five years, with a maximum of two terms permitted.

The AGLG would: prepare annual service plans laying out general objectives of the office in the upcoming year, including themes and priorities for performance audits; have sole discretion in selecting performance audits to conduct, provided they are consistent with the priorities identified in the annual service plan; provide non-binding recommendations to audited local governments in the form of performance audit reports; ensure audited local governments and the Audit Council have the opportunity to comment on a draft performance audit report before it is published; include in the final performance audit report a summary of any comments provided by an audited local government; publish performance audit reports to make them publicly available; publish other reports, such as reports on recommended practices arising from performance audits that may be relevant to local governments generally; prepare and publish annual reports outlining results achieved by the AGLG’s office in the previous year.

Ian Cobb/e-KNOW

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