“Eye on City Hall”
A column of Information, Analysis, Comment, and Unfiltered Opinion
Reprinted from Oshawa Central Newspaper
Bill Longworth, City Hall Columnist
March 7, 2011
You can hardly pick up a newspaper these days without reading about more waste and abuse of public monies by public officials.
As I write this column, the Toronto Star headline screams about spending abuses on Toronto Police paid duty assignments whose officers are paid $65 an hour for unnecessary assignments around construction sites where the work could be done equally well by a few barricades....but such is the strength of public unions that negotiate the laws and hourly rates necessitating this public waste.
In 2009, Toronto taxpayers paid $7.8M on uneccesary police duty assignments, notwithstanding the extra wastage spent by the Provincial Government ($3.5M), City of Toronto entities (Toronto Water, Toronto Hydro, TTC---$2.6M) Construction Companies ($5.5M), Utility Companies ($5.2M)---most for work that could be performed by a few $5 barricades and reflective plastic traffic cones.
These paid duty assignments as well as paid court appearances, which probably act as an incentive for many officers to be quite aggressive in laying traffic charges, account for the incidence of many police officers earning well over $125,000 on Ontario’s Public Salary Disclosure List.
In Toronto, irresponsible, if not criminal, spending problems have surfaced within the Toronto Community Housing Corporation.
A week or so ago, Toronto’s Auditor General disclosed extensive wastage of public funds by staff officials of the Toronto Community Housing Corporation who expensed $40,000 of public money for a Christmas Staff dinner while many residents of Toronto public housing undoubtedly went without a Christmas dinner, $1000 for Holt Renfrew Chocolates, and $800 for staff massages at a summer picnic. Beyond these transgressions, TCHC staff disregarded corporate procurement policies and purchased big ticket items with sole sourced contracts, less than arms length deals, and spent $25M on an unsolicited proposal.
TCHC was governed by a Board of Appointed Citizens plus some politicians and resident appointees. But this civilian oversight was insufficient to properly supervise the spending approved by employed officials of the Corporation.
The Civilian Appointees to the TCHC, like politicians elected to oversee public organizations, simply do not have the skill, expertise, or intimate knowledge of the workings of the large organizations and, like stealing candy from a baby, hired bureaucrats can easily hide inappropriate and wasteful spending from prying eyes.
As I’ve said repeatedly in my columns, and in my campaign for mayor, the only way to insure growing productivity and efficiencies in public expenditures is to squeeze these out of the system with reduced annual capital allocations to force spending cuts, combined with a directive that there be no service cuts.
In addition, It would be helpful if all public senior managers were hired on renewable term contracts to insure their easy dismissal if they were unable to produce these growing efficiencies with decreasing tax allocations.
After all, this is the strategy the City of Oshawa implemented to control the investigations of its highly paid Auditor General who will have his 5 year term with its handsome salary renewed only as long as his reports remain supportive of city operations, politicians, and senior bureaucrats. He doesn’t have the independence of the Toronto Auditor General or those holding the position at the Provincial and Federal Levels. He’s literally a sheep in a wolf’s costume!
Jobs for Life guarantees, like those in Toronto for city CUPE employees, muzzles politician's abilities to work for increased productivity and increased cost efficiencies through contracting out. This is unusual job security foreign to the private sector. This iron rice bowl type of employment has even been abandoned in China where it led to an unproductive, unmotivated, and inefficient workforce that hindered China’s international industrial competitiveness.
Even here in Oshawa, city employee’s job security, salaries, and benefits are the envy of Oshawa’s work force.
Of course, appointed community representatives are often just as good as politicians and bureaucrats in hiding self-serving expenditures from prying eyes.
I was once invited to a fancy restaurant dinner by a federally appointed member of the Oshawa Harbour Commission who blatantly advised me, and the manager of a well-known local media organization eating with us, to order from the right hand column on the menu---the price column. It seems that blowing public money is contagious to all positions of public trust. Burning up OHC cash seemed a greater priority than what we ate.
Even highly respected politicians like long serving Mississauga Mayor Hazel McCallion is under an investigative cloud for donating only minimal proceeds from her charity fund raising events to advertised recipients, and of course, her potential conflict of interest charges for unduly influencing her son’s hotel development project in her city. It seems, no matter your moral compass at the beginning, increased tenure in the job moves you closer to the ethical edge.
I have commented often on all of the fat and waste in governments of all levels and of all stripes in these columns and have stated unequivocally that, while politicians contribute their fair share to this waste of taxpayer’s resources, they do not have the skills or the detailed knowledge of the government operations they oversee on our behalf to eliminate fraud, irresponsibility, deception, cheating, lying and unlawful or unethical conduct that occurs on their watch.
And the trust we have in politicians to come clean with the facts is often compromised by their proclivity for putting unjustly favourable or incomplete spins on the facts.
According to a report on Preventing Fraud and unethical behaviour in Government presented by Deloitte and Touché Canada, one of the largest and most prestigious audit, consulting, financial advisory, risk management, and tax service accounting firms in the country, a typical organization loses 6% of its revenue to occupational fraud, and 10.5% of these cases are government related with average losses of $45,000 with one in six occurrences resulting in losses exceeding $1M.
Frighteningly, governments failed to prosecute in 26.1% of these cases out of fear of bad publicity.
The report also indicates a direct relationship between employment tenure which is presumably correlated with increased responsibility and size of fraudulent loss, and presumably politicians move closer to that ethical line with increased public service....providing context to the Hazel McCallion case quoted earlier.
Internal fraud according to the Deloitte report is perpetrated by false financial reporting, kickbacks and bribes, phantom vendors, submission of fraudulent expense accounts, and payroll fraud...and we frequently read of such crimes against the taxpayer through investigative journalism or criminal investigation...unfortunately though, not in Oshawa where we have no news watchdogs over city council, except for this columnist and a few interested and public minded citizens who expose some transgressions that do escape the top secret mindset of city council and administration.
A recent highly publicized example of fraudulent and criminal misuse of taxpayer monies was exposed in the Gomery Inquiry which investigated bid rigging, fraudulent sole-source advertising contracts, and kickbacks totalling in excess of $100M, some of which was filtered back to political party election preparedness coffers.
Ron Fraser, Oshawa’s Auditor General, works under a 5 year renewable contract which makes him a “yes” man for city bureaucrats and politicians. His terms of employment require that his investigations result from city council direction and his renewable term precludes him from raising any fuss normally associated with Federal or Provincial Auditors General or indeed the Toronto Auditor General, all whose contracts make them much more independent from the political and bureaucratic functions in which they work.
In terms of some investigative work to discover huge wastages and lost tax savings in the city, I’d suggested politicians direct the auditor general to look at:
1) Mileage and private automobile use allowances paid to high auto expensing city staff members and suggestions on how to save money in this area. Two Toronto employees were billing $20,000 per year, in addition to their salaries.Without a daily press or any investigative reporting in Oshawa, and a press controlled in large part by city advertising revenues, it is hard to pin down this kind of excess and wastage of public monies in Oshawa, but you can bet your bottom dollar, it’s just as bad.
2) Cost of duplications of service between city and regional levels of government and cost savings that would result from eliminating Oshawa Municipal Government and Administration
3) Cost of individual consultant’s reports to city hall, how and why they were sourced, how their fees were set, and their relationship to any city hall bureaucrats or politicians.
4) Commission Time/Study, Productivity and work efficiency studies in the various city hall departments to improve cost effectiveness
5) Analysis of the city hall general vote plebiscite process and strategy to establish whether voters were sufficiently informed of the impact of the change.
6) Costs and effectiveness of city PR, advertising, and promotion activities
7) Investigation of City Expense Accounts, staff and politician’s use of city charge cards,
8) And the list goes on....
Unethical conduct and spending by both politicians and bureaucrats alike will continue to go unreported like the MBA scandal did until uncovered by interested citizens interested in digging to find the truth.
And city taxpayers will continue to be penalized with the highest taxes in the GTA as this wastage continues!
Political and bureaucratic greed will continue to trump trust in serving the public.
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