buckets of public money going out the window to a small army of private consultants? Not a pretty scenario for a cash-starved city. And not pretty either that the mayor, through overt and implicit pressure, has made sure no one is monitoring on our behalf. But at a little-noticed administrative committee meeting last Tuesday, councillors finally got on the case. While committee members stopped short of supporting Etobicoke councillor Rob Ford's motion for a police investigation into a number of questionable consulting contracts with the city, they did call on the audit committee to direct auditor Jeffrey Griffiths to conduct a forensic audit. (Councillors say calling in the cops is premature because so far Griffiths has uncovered no evidence of anything illegal.)
It's about time someone scared up a little scrutiny.
Two years ago NOW first reported on Rhode Island software designer Michael Saunders's lucrative and longstanding consulting contract with the city's finance department.
The article focused on the relationship between then megacity treasurer Wanda Liczyk and Saunders and his company, Beacon Software. NOW reported that Liczyk had hired Saunders when she was chief financial officer in the former city of North York to set up and manage its tax billing system, and that years later that system knocked off another publicly developed computer program, establishing itself as the billing software for the new megacity -- all without going through an open and competitive bidding process.
Among other things, NOW asked how Liczyk had come to depend on Saunders, who flew into Toronto every week from Newport, stayed at the Novotel Hotel on the city's dime and billed millions of dollars over the years for the day-to-day management of the system. But Liczyk never answered our questions and neither did Saunders. And aside from causing a momentary stir amongst the bureaucrats and oblivious councillors, there was an eerie silence.
At the time, Mel ruled council with a nod of his head, and it seemed that no councillor wanted to risk censure by casting aspersions on Mel favourite Liczyk. Now that Lastman's hold is slipping -- and Liczyk and former CAO Mike Garrett are gone -- there is a sudden surge of courage.
"At the very least, some expenditures have taken place without proper authorization," says administration committee chair Lorenzo Berardinetti. "It appears that certain expenses were paid without proper council authorization. The question is, does it go further than that?"
Berardinetti's committee finally requested last winter that Griffiths take a peek at how city staff go about hiring outside help.
The auditor conducted an "assessment of a sample of 90 payments made to various consultants and a review of 26 consulting contracts that were active in the year 2000."
Griffiths' findings, released in July, revealed several problems: among other things, contracts awarded without competition, bypassed purchasing procedures, suspect sole sourcing and hiring consultants without documented justification.
Without identifying Saunders or Beacon Software directly, Griffiths did address Saunders's tax-billing and water-billing consulting contracts with finance, along with another obscure contractor's.
Griffiths reported that in 2000 the city paid them each hundreds of thousands of dollars above what their contracts stipulated, including amounts for airfare, hotel accommodation and meals.
According to documents recently released through a freedom of information request and obtained by NOW, the purchase-order value of Beacon's contract in 2000 was $180,000, but the city actually paid the company $536,000.
As for the hotel, meals and airfare claims submitted by Beacon, the auditor notes that these were paid by the department without supporting invoices.
This past summer, council voted to finally wrap up Beacon's longstanding arrangement with the finance department at the end of this year and to train city staff to run the program.
Now, as then, city staff explain Beacon's arrangement with finance as a simple case of expediency.
"Where we made the mistake collectively as staff was that we should have reported out fully at council," says acting city treasurer Shirley Hoy.
As for the exorbitant expenses that were paid by the city, Hoy says staff will tighten up in the future.
"Again, we've certainly learned from that, and if you see what we've done, for example, with the contract we have with (efficiency expert) David Gunn, we reported out fully," she says. "We were very clear that his expenses only include transportation and accommodation, and they're capped."
While Hoy is stuck cleaning house, there are still many unanswered questions swirling around the handling of these consultants. Although the auditor's report was released in July, the matter has been bounced from administration committee to audit committee and council, ultimately delaying the deeper probe that the administration committee finally recommended last week.
Some councillors believe there has been a concerted effort to stop further investigation into the contracts.
"The mayor's office is obviously corralling the votes that send the issue from admin to audit to admin to council back to admin and then back to audit," says councillor Sandra Bussin. "And actually what it's doing is highlighting that there's a real problem here. So I think the mayor's office, strategically, is making a big mistake."
Ford says one of the mayor's staff was sitting right behind him during the administration committee meeting last week and told him to back off when he put forward the motion for a police investigation.
"It burns me up," says Ford. "I told these guys (in the mayor's office), "Your boss can do whatever he wants. He wanted (the city's former CAO) Mike Garrett fired, he called an in-camera meeting and had him fired overnight.' I said that if he wants this thing investigated, he can do the same thing. I asked, "Why isn't he doing this?' and they couldn't give me an answer."
It's now in the audit committee's court to direct Griffiths to finally demand some answers.