The City of Lloydminster has released the findings of a forensic audit, which found the expenses claimed by a number of staffers were not compliant with city policy.
The audit examined the city’s managerial and fiduciary activities dating back to 2009. It reviewed the expenses of 45 individuals including the mayor, councillors, CAO and other management employees.
Using a pass vs. fail approach, they looked at 6,156 transactions. If a transaction failed any of the criteria laid out, it fails. If it has a combination of pass and unknown results, it is considered unknown.
Of those transactions, only nine per cent passed. Twenty-six per cent were unknown and 65 per cent failed.
The 6,156 transactions equalled to $1,210,154.54.
“Throughout the last couple of years, there was a lot of questions floating around the community, and the audit gave us some very clear answers to what was going on,” Mayor Gerald Aalbers said.
“But, I do want to caution with the thought that those may have simply been a signature missed. What it tells me is we need to ensure through our processes that those don’t happen because we want to ensure we do it right each and every time.”
Names were not provided in the report, employees were instead listed by number, from 1 to 45 in no specific order.
One standout was individual 39, who had $110,088.94 in transactions, with none passing. Over $97,925 in costs failed and $12,163.69 in the insufficient supporting documentation.
“There is no question in my mind that the money was spent on city business, but by the same token, it’s very important we ensure the processes are followed through and everyone is clear on the processes,” said Aalbers.
The report also looked into contracts entered into by the city. A notable contract looked into was AHHA Moments Inc. that was signed in 2013.
It was said the contract was a “significant conflict of interest,” and it had passed only one criterion, and failed 11 criteria.
The total net amount paid to AHHA Moments was $64,33.34.
Policy contravention was also looked at in the report to determine if the discrepancies appear to be a deliberate violation of policy or simple mistakes. The report said, “all discrepancies do not appear to be the result of simple mistakes, but a pervasive failure to ensure policy compliance.”
Throughout the report, a theme in the findings was a lack of documentation.
The report said “the lack of supporting documentation for such a large proportion of the expenses reviewed is not likely due to an oversight. It seems to be more likely that such an approach was a systemic and pervasive culture within the organization.”
Aalbers said the city has already made some changes to ensure this doesn’t happen again and that protocols are followed.
“We go back to the expense accounts that were put into place, it has been very clearly laid out the perspective. We went to a procurement card for the city, and that’s been accounted that way. There has been a lot of steps taken from where it was to where we are today,” he explained.
Aalbers said it was nice to clear the air and get all of it out there.
“I feel a lot better,” he said.
The audit was completed by MNP.
Council members were not available for comment on the findings, which are available to the public online at www.lloydminster.ca/reports.