Auditor's probe of fishy contracts only scratches the surface
Where there’s smoke, there’s fire, except at City Hall. When it comes to getting to the bottom of horrendously mismanaged outside contracts at the city, there’s just more smoke, delays, leaked auditor’s reports and a lot of public hand-wringing by clueless councillors impersonating bulldogs.
The public can be forgiven for glazing over when they hear about a public inquiry into the highly inflated MFP computer leasing contract or the latest leaked auditor’s findings on U.S. consultant Michael Saunders, who billed millions in fees and expenses, no questions asked, while he ran the city’s tax and water billing systems. After months of allegations and bluster from council, the simple fact is that not a single person has been held accountable for what is at least years of gross mismanagement of millions of taxpayer dollars and at worst possible criminal wrongdoing.
But it’s hard to make a case when, for one thing, the city’s auditor, Jeffrey Griffiths, can’t seem to get his hands on computer records of payments to Saunders — documents that I’ve had in my possession for nearly three years.
Of course, delay and obfuscation are the names of the game at City Hall.
Just last week, the Toronto Star obtained a copy of a confidential report by Griffiths revealing the findings of his six-month “forensic” audit into the city’s handling of contracts with Saunders’s company, Beacon Software, and another small U.S.-based firm, Remarkable Software.
Griffiths found, among other things, that between 1998 and 2001 Beacon and Remarkable were paid in U.S. dollars, did not provide receipts when they submitted invoices for expenses, charged for “above normal” airfares to the U.S., charged airfares for family members and car rentals and entertainment expenses in the U.S.
As well, Griffiths reports that they billed for time when they were on their way back to the U.S., and also billed for days for which they’d also submitted invoices for entertainment expenses and were not in the office.
This report comes a year after Griffiths first looked at these arrangements as part of a “random” audit into a number of city contracts. And it comes two years and nine months after NOW first revealed Saunders’s longstanding contractual relationship with the city of North York’s finance department and the new amalgamated city, and how that relationship was stickhandled for years by former North York and Toronto chief financial officer Wanda Liczyk.
As I first reported in these pages in September 1999, Rhode Island-based Saunders had been hired by the former city of North York in the early 90s to develop and manage that municipality’s computerized tax billing system. The contract was never tendered, and it continued practically uninterrupted into the new megacity, until it was finally cancelled under a cloud in the fall of 2001.
To say that council has been painfully slow to pursue this matter would be charitable.
Making matters more shocking is the fact that Griffiths also reports that “we have not been able to locate details relating to the contracts with the former city of North York.”
But that doesn’t necessarily mean documents from that time no longer exist. The auditor simply took it at face value when the finance department told him material from the former city of North York could not be located. Griffiths, apparently pressed for time and resources, decided not to go digging through mountains of archival material looking for invoices and receipts from the North York years that may or may not exist.
But considering that this is supposed to be a forensic investigation that will determine whether the city has the evidence to proceed with legal action, his decision is troubling.
“I wouldn’t accept anything at face value from the North York finance department,” says councillor David Miller.
As I reported in my original story, I obtained computer printouts from the city summarizing hundreds of thousands of dollars paid to Saunders for fees and hotel accommodation in each of the years from 1992 to 1998.
Have those records now disappeared? If not, where are they? And why can’t the auditor get his hands on them?
When council’s audit committee meets today (Thursday, June 13), councillors could very well tell Griffiths to go back and do some more digging.
There is also talk of rolling the affair into the judicial inquiry looking into the MFP mess, although it’s unclear whether that would be within the inquiry’s mandate.
“The public deserves to know just how rotten the system is, and that people be held accountable for it in a public way, ” says Miller. “The public inquiry would do that. And it doesn’t mean somebody ends up getting charged. The result of the public inquiry may just be that it becomes very clear that the way North York did business — imported to the city through the finance department — was totally unacceptable.”
Council could also decide to have an outside lawyer come in and determine what part, if any, of Griffiths’s findings is worth handing over to the police.
Last time, however, the city got nowhere when it went to the police with a questionable land lease deal between the Toronto Economic Development Corporation and Toronto sports magnate Steve Stavro. Apparently, the cops need the case neatly wrapped.
“The police will not investigate something unless you make it simple, in terms of fraud,” says Miller.
Unfortunately, Griffiths’s audit only raises more questions. email@example.com