HomeMy WebLinkAboutCLD-020-07 Addendum 2
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Unfinished Business
REPORT
CLERK'S DEPARTMENT
Meeting: COUNCIL
~so\u\1(y) ". C:- Ch&- 01
Date: Monday, June 25, 2007
Report #: Addendum #2 to File #:
Report CLD-020-07
By-law #:
Subject:
COMPLIANCE AUDIT
RECOMMENDATIONS:
It is respectfully recommended that Council approve the following:
1. THAT Addendum #2 to Report CLD-020-07 be received;
2. THAT the Addendum to Report CLD-020-07 be lifted from the table;
3. THAT the Addendum to Report CLD-020-07 be received;
4. THAT the Rules of Order be suspended to allow for introduction of a motion to reconsider
Resolution #C-276-07 and to pass a motion to appoint a new auditor for the compliance
audit of the election financial returns of Mayor Jim Abernethy.
",
Reviewed bQ ~~"'k
Franklin Wu,
Chief Administrative Officer
PLB
CORPORATION OF THE MUNICIPALITY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1C 3A6 T (905)623-3379 F (905)623-0830
REPORT NO.: ADDENDUM #2 TO REPORT CLD-020-07
PAGE 2
At the Council meeting of June 11,2007, Addendum to Report CLD-020-07 regarding the
Compliance Audit of Mayor Abernethy's election financial returns was presented to Council. In
consideration of this matter, the following resolution was passed:
"THA T the Addendum to Report CLD-020-07 be tabled for two weeks to allow the
Municipal Clerk to find the services an auditor to complete the Compliance Audit."
In response to this resolution, letters have been sent to 83 Chartered Accountants in the areas
of Clarington, Oshawa, Whitby, Ajax, Pickering, Port Hope, Peterborough, Lindsay and one in
Toronto. With the exception of the Toronto company, the companies contacted were all listed
on the Chartered Accountants of Ontario website. The one exception is Horn Almand Chartered
Accountants who was recommended by KPMG LLP.
At the time of writing this report, responses have been received from 21 companies, four of
whom have indicated that they would be able to complete the Compliance Audit. The responses
from Arden Vanderhorst, Joseph Hilton, BOO Dunwoody and Jeffrey Rohr are attached as
Attachments #1 through #3. In speaking with Mr. Vanderhorst, it has been determined that the
experience he has with municipal election audits is in completing financial statements for
candidates, not in completing Compliance Audits. Information has been forwarded to Mr. Hilton
to allow for a fee estimate to be provided. Upon receipt of this information, it will forwarded to
Council. The information provided by Horn Almand Chartered Accountants is that they have
experience with compliance audits, they do not have a conflict and can provide a letter of
independence, the audit would take approximately seven to nine hours to complete, and the fee
estimate is between $1500 and $1800, with a small amount of out of pocket expenses.
It is respectfully recommended that the previous resolution of Council be reconsidered and a
new auditor be appointed to complete the Compliance Audit.
The Addendum to Report CLD-020-07 is attached as Attachment #4.
Compliance Audit
Attachment #1 to
Addendum #2 to Report
CLD-020-07
Barrie, Patti
From: Arden Vanderhorst, CA [arden@avdh.ca]
Sent: Sunday, June 17, 2007 10:44 AM
To: Barrie, Patti
Subject: Compliance Audit
Dear Ms. Barrie:
I am responding in reference to your letter of June 14, 2007 seeking a compliance audit of Mayor Abernethy's
election campaign finances. I have included my answers to your questions below:
Question 1
Yes, my firm has performed municipal election audits previously and has experience doing so.
Question 2
Yes, my firm would be able to complete the audit for the Municipality.
Question 3
I would be able to issue a letter to Municipality asserting my independence in the matter. I have no known ties or
dealings, whether or perceived or factual, to the named individual, members of Council, past or present, or the
Municipality itself.
Questions 4 and 5
My services are based on a hourly charge out rate of $160.00/hour plus GST. My fees for performing these
audits depend on the amount of information to be audited in addition to the availability and condition of the
information. Without an idea of these factors, it is difficult for me to estimate the time that would be required. If
however, you are able to provide me some specifics regarding the campaign's revenues and expenses, I can
better estimate the time and cost involved in performing the audit.
Please note that I am able to myself available in July or August to complete this audit sooner rather than later.
Should you have further queries, or able to provide me with further information, please do not hesitate to contact
me.
Thank you for consideration in this matter.
Regards,
Arden Vanderhorst, CA
(905) 665-8819
The information contained in this electronic mail message, including attachments, is confidential, may be
privileged and is intended for the use of the above-named individual or entity only. If you are not the intended
recipient, please notify me immediately by return e-mail, or by telephone 905-665-8819, then delete this email and
any copies from your system. Any dissemination, distribution or copying of this message or its contents is strictly
prohibited.
6/18/2007
Attachment #2 to
Addendum #2 to Report
CLD-020-07
Barrie, Patti
From:
Sent:
To:
Subject:
Hilton, Joe [JHilton@bdo.ca]
Tuesday, June 19, 2007 11 :23 AM
Barrie, Patti
Compliance Audit
Dear Ms. Barrie,
I am writing in response to your June 14, 2007 letter sent to our Oshawa office.
forwarded to our Barrie office for consideration.
It was
We respond as follows to your specific questions:
1. Our firm has considerable experience in providing auditor's reports on election
campaign finances pursuant to section 78 of the Municipal Elections Act.
2. We would be able to complete the audit for the Municipality.
3. We can provide a letter of independence. The only matter that we are currently aware
of that may reasonably be thought to bear on our independence is in regards to past
services provided to Mr. Abernethy. In or about 2000 Mr. Stephen Meek, a partner from our
Markham office, provided tax planning services to Mr. Abernethy in connection with the
sale of a family business. To the best of our knowledge at this time, we have had no
other dealings with Mr. Abernethy, the Municipality or the other candidates.
4 & 5. Before providing a fee estimate and timing, we would like to see a copy of the
audit report on Mr. Abernethy's election campaign finances. We would also like to see
details of the allegations against Mr. Abernethy to better determine the scope of work
that may be required. After review of this information we will provide an engagement
letter detailing the terms of our engagement fo~ your acceptance along with confirmation
of our independence.
Please contact the undersigned if you have any questions or concerns at this time.
Sincerely,
Joseph J. Hilton, BScH, CA'CBV
Senior Manager
Financial Advisory Services
300 Lakeshore Drive, Suite 300
Barrie, ON L4N OB4
T: 705-726-6331 F: 705-722-6588
www.bdo.ca
BOO Dunwoody LLP
Chartered Accountants and Advisors
The information contained in this communication is confidential and intended only for the
use of those to whom it is addressed. If you have received this communication in error,
please notify me by telephone (collect if necessary) and delete or destroy any copies of
it. Thank you.
1
Attachment #3 to
Addendum #2 to Report
CLD-020-07
Barrie, Patti
From: Jeff Rohr Ueff.rohr@laingrohr.com]
Sent: Tuesday, June 19, 20074:45 PM
To: Barrie, Patti
Subject: Compliance Audit (Mayor Abernethy)
Ms. Barrie,
Thank you for considering our firm as auditors for the compliance audit of Mayor Abernethy's election campaign.
In response to your questions, I am pleased to provide the following information:
. Our firm has had experience in auditing election campaigns at the Federal, Provincial and Municipal level.
. Our firm would be able to complete the audit for the Municipality
. We can provide the Municipality with a Letter of Independence
. We work on a fee for time basis. Provided the records are in decent shape and all proper receipts and
documentation are readily available, our fee for this service would not exceed $1,500. This fee would
encompass the audit report only. Any required attendance at councilor other meetings would be billed
separately.
. We would need approximately 2 weeks to complete the audit from the date that we received the
information.
I trust that you will find the foregoing satisfactory. Should you require any further information, kindly contact our
office.
Yours very truly.
Jeffrey L . Rohr, C.A.
Jeffrey L. Rohr, C.A.
Laing & Rohr, Chartered Accountants
282 King Street East
P.O. Box 187
Oshawa, Ontario
L1H 7L 1
Tel: (905) 579-6245
Fax: (905) 579-7667
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6/20/2007
.Cl!Kpn
Attachment #4 to
Addendum #2 to Report
CLD-020-07
REPORT
CLERK'S DEPARTMENT
Meeting:
COUNCIL
Date:
Monday, June 11, 2007
Report #: Addendum to File #:
Report CLD-020-07
By-law #:
Subject:
COMPLIANCE AUDIT
RECOMMENDATIONS:
It is respectfully recommended that Council approve the following:
1. THAT the Addendum to Report CLD-020-07 be received;
2. THAT the Rules of Order be suspended to allow for introduction of a motion to reconsider
Resolution #C-276-07 and to pass a motion to appoint a new auditor for the compliance
audit of the election financial returns of Mayor Jim Abernethy.
Reviewed bQ ~ Nk
Franklin Wu,
Chief Administrative Officer
PLB
CORPORATION OF THE MUNICIPALITY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1C 3A6 T (905)623-3379 F (905)623-0830
REPORT NO.: ADDENDUM TO REPORT CLD-020-07
PAGE 2
At the Council meeting of May 14, 2007, Council dealt with Report CLD-020-07 which advised
that Hobb and Company were unable to complete the compliance audit of Mayor Abernethy's
election financial returns. The request for the compliance audit was granted by Council at their
meeting held on April 30. In consideration of Report CLD-020-07, Council reconsidered their
earlier decision and appointed the firm of Deloitte and Touche to conduct the audit.
I have been advised by Bernie Chandler, Senior Manager, Audit and Insurance Services,
Deloitte and Touche, that their firm is also unable to conduct the audit as the Municipality of
Clarington is a client of the firm. Accordingly, it is recommended that Resolution #C-276-07
passed on May 14, 2007, which appointed Deloitte and Touche as the auditor, be reconsidered
and another auditor be appointed to conduct the compliance audit.
A copy of Report CLD-020-07 is attached as Attachment #1 for information.
,,'
,CJ!llpn
Attachment #1 to
Addendum to Report CLD-020-07
REPORT
CLERK'S DEPARTMENT
Meeting:
COUNCIL
Date:
Monday, May 14, 2007
Report #: CLD-020-07
File #:
By-law #:
:) '~7~ -
~ e.~li t.-< tP- c,7
Subject:
COMPLIANCE AUDIT
RECOMMENDATIONS:
It is respectfully recommended that Council approve the following:
1. THAT Report CLD-020-07 be received;
2. THAT Resolution #C-238-07 be reconfirmed;
OR
THAT the Rules of Order be suspended to allow for introduction of a motion to reconsider
Resolution #C-238-07 and to pass a motion to appoint a new auditor for the compliance
audit of the election financial returns of Mayor Jim Abernethy.
Submitted by:
~
ReviewedQ~ ~
Franklin Wu,
Chief Administrative Officer
PLB
CORPORATION OF THE MUNICIPALITY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L1C 3A6 T (905)623-3379 F (905)623-0830
REPORT NO.: CLD-020-07
PAGE 2
At the Council meeting of April 30, 2007, Council considered a request from Ron Webb to have
the Election Financial Returns of Mayor Jim Abernethy audited as per the Municpal Elections
Act. In consideration of this matter, Council passed the following Resolution #C-238-07:
"THAT the request for a Compliance Audit of the election financial returns of Mayor Jim
Abernethy, as requested by Mr. Ron Webb, be granted;
THAT Hobb and Company be appointed as the auditor to conduct the compliance audit; and
THAT Ron Webb and Hobb and Company be advised of Council's decision."
On May 1, 2007, correspondence was sent to Hobb and Company advising of Council's
resolution. By letter dated May 4, 2007, Peter Hobb has indicated that he was the Financial
Officer for Jim Schell's mayoralty campaign in the last municipal election and therefore would
have a conflict. He advises, however, that he would be able to do the audit if two conditions are
met:
1.
2.
He could not be involved in any aspect of the engagement; and
All parties be made aware of the situation.
A copy of Mr. Hobb's letter is attached to this report for information.
In considering this matter, the advice of the Solicitor was sought. He advises that if a court
challenge is made of the compliance audit or the Council's response to it, the decision to appoint
Hoob & Company as the auditor may be attacked since Mr. Hobb acted as the financial officer
for Mr. Schell. To minimize the risk of such a challenge being made, the Solicitor advises that it
would be prudent to obtain the consent of Mr. Abernethy and Mr. Webb to the appointment of
Hobb & Company before that firm is actually engaged to conduct the compliance audit.
Based on the Solicitor's advice, I am seeking the views of Mr. Webb and Mr. Abernethy and will
report further at the Council meeting.
"
H
HOSS & COMPANY
Attachment No. 1 to
Report CLD-020-07
CttART~RIED ACCOUNTANTS. TAll 5iPECIALI5TS
'07MAY04 PH 2:51:19
May 4, 2007
The Corporation of the Municipality of Clarington
40 Temperance Street
Bowmanville, ON
LIC 3A6
Attention: Ms. Patti L. Barrie, A.M.C.T. Municipal Clerk
Dear Ms. Barrie:
RE: Request to do Compliance Audit
Thank you for selecting Hobb & Company to do the Compliance Audit of the election financial returns of
Mayor Jim Abernethy. As discussed, I was the Financial Officer for Jim Schell's mayoralty campaign in
the last municipal election and therefore would have a conflict. As a result, some of the parties may have
concern that my firm would be unable to perform the Compliance Audit. According to an interpretation
of our profession's Rules of Professional Conduct, Hobb & Company would be able to do the audit if two
conditions are met. The first condition is that I could not be involved in any aspect of the engagement,
which I wouldn't be. The second condition is that all parties be made aware of this situation. Would you
kindly inform all the parties of my conflict and advise us of any objections? Denise Jones, a partner in
Hobb & Company, will be responsible for the engagement and the primary contact.
I look forward to your hearing from you.
Yours truly,
Peter A. Hobb, CA, CFP
Partner
PAH:jr
PETER A. HOBS. CA CFP IAN F. BERGIN. CA THOMAS F.G. HILL. CA DENISE A. JONES. CA
222 KING STREET EAST. SUITE 103 BOWMANVILLE. ON LIC IP6
TEL: 905 623-9461 TOLL FREE: 1-866-392-5675 FAX: 905623-9734 EMAIL: BOWMANVILLE'.'HOBB.CA WEB: WWW.HOBB.CA