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HomeMy WebLinkAboutCLD-030-07w.cu •, . wu r.,.a:.....x. w . ,Clan-~gton Leading du Way Meeting: COUNCIL. Date: Monday, September 10, 2007 Report #: Report CLD-030-07 Flle #: Subject: COMPLIANCE AUDIT -MAYOR ABERNETHY RECOMMENDATIONS: It is respectfully recommended that Council approve the following: 1. THAT Report CLD-030-07 be received; and 2. THAT Council provide direction as per Item 3. of Report CLD-030-07. By-law #: Submitted by: PLB K ~U K 1 REPORT CLERK'S DEPARTIUIENT Reviewed b 's""'`"' "~-' ~- Franklin Wu, Chief Administrative Officer CORPORATION OF THE MUNICIAALITY OF CLARINGTON 40 TEMPERANCE STREET, BOW MANVILLE, ONTARIO LiC 3A6 T {905)623-3379 F (905)623-0830 REPORT NO.: CLD-030-07 2 At the Council meeting of April 30, 20D7, council considered and granted a request from Ron Webb for a compliance audit of the election financial returns of Mayor Jim Abernethy to be completed. The firm of Laing & Rohr Chartered Accountants was chosen for the audit and on August 3l, 2007, the audit report was received in the Municipal Clerk's office. A copy of the complete audit document'is attached hereto as Attachment No. 1. Section 81 {10) of the Municipal Elections Act, 1996, states: "The council or local board shall consider the report within 30 days after receiving it and. may. commence a legal proceeding against the candidate for any apparent contravention of a provision of this Act relating to election campaign finances.° Given that the auditor has indicated the electoral campaign of Mayor Abernethy to be in compliance with the Act, it is recommended that this report be received for information. 3. Mr. Rohr has submitted an invoice in the amount of $1,590.00 for the audit services ($1,500.00 fee + $90.00 GST). In accordance with Section 81(9) of the Act, this amount has been paid by the municipality.. Section 81{11) of the Act states: "If the report indicates that there was no apparent contravention and the council or local board finds that there were no reasonable grounds for the application, the council or local. board is entitled to recover the auditor's costs from the applicant." The interpretation of "reasonable grounds" is a matter to be determined by Council based on the information contained in the audit report. Here are two options for Council's consideration: REPORT NO.: CLD-030-07 Oatiori A PAGE 3 Council determines there are reasonable grounds for the audit request. In this case, Council would receive this report for information and the cost of the audit would be absorbed by-the municipality. Option B Council determines there are NO reasonable grounds for the audit request. In this case, Council would direct staff to recover the audit cost from the applicant. Attachment No. 1 To Report CLD-030-07 COMPLIANCE AUDIT OF THE ELECTION CAMPAIGN OF JAMES ABERNETHY MARCH 14, 2006 -JANUARY 2, 2007 LAING & ROHR CHARTERED ~ ACCOUNTANTS LA1NG & ROHR CHARTERED 1B ACCOUNTANTS AUDITOR'S REPORT To the Council of the Municipality of Clarington We have audited the Electoral Campaign of James Abemethy for compliance with the Ontario Municipal Elections Act, 1996 for the Office of Mayor of the Municipality of Clarington. Compliance with the Ontario Municipal Elections Act, 1996 is the responsibility of-the candidate. Our responsibility is to express an opinion on this compliance based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standazds require that we plan and perform an audit to obtain reasonable assurance whether the Electoral Campaign of James Abemethy has complied with the financial provisions of the Ontario Municipal Elections Act, 1996. Such an audit includes examining; on a test basis, evidence supporting compliance, evaluating the overall compliance'with these criteria, and where applicable, assessing the accounting principals used and significant estimates made by the candidate. In our opinion, the Electoral Campaign of James Abemethy is in compliance, in all significant respects, with the Ontario Municipal Elections Act, .1996. LAING & ROHR Chartered Accountants Licensed Public Accountants August 22, 2007 Oshawa, Ontario MICHAEL D. LAING, C.A JEFFREY L. ROHR, B.AGC., C.A. 282 KING STREET EAST, OSHAWA, ONTARIO L1H 1C8 TEL:905 579-6245 FAX:905 579-7fi67 Vli dA1V11~ ~ A13L' Kl~ll';111Y COMPLIANCE AUDIT OF THE ELECTION CAMPAIGN OF JAMES ABERNETHY STATEMENT OF CAMPAIGN PERIOD INCOME AND EXPENSES FROM MARCH 14, 2006 TO JANUARY 2, 2007 INCOME Contributions. $ 43,580 Fundraising functions 1.200 TOTAL CAMPAIGN PERIOD INCOME 44.780 EXPENSES Expenses Expenses Subject to Excluded From Limitaton Limitation Total Accounting & Audit (Note la) - 869 869 Advertising 12,223 - 12,223 Bank Chazges 58 - 58 Brochures 7,995 - 7,995 Nomination Filing Fee (Note lb) - 2pp Office Expenses 9,422 - 9,422 Signs 14,910 - 14,910 Voting Day Party (Note Ic) - .1.101 1.101 TOTAL CAMPAIGN PERIOD EXPENSES 44.608 2.170 46.778 (DEFICIENCY) OF INCOME OVER EXPENSES $ 9g LAING & ROHR CHARTERED u ACCOUNTANTS 1. NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2005 1. Restatement of Audited Amounts The Statement of Campaign Period Income And Expenses has been restated to reflect the. changes. required as a result of the compliance audit of the campaign. The following items have-been restated. (a) Accounting and Audit The Ontario Municipal Elections Act, 1496, requires that the financial statements report the audit fee at fair market value. The amount charged to audit the campaign was $869. The original audited statements did not include an amount for audit expense. The audit fee is not subject to expense limitation. (b) Nomination Filing Fee The Nomination Fee was paid in cash and was erroneously reported at $100. The actual amount paid was $200, and the Statement has been adjusted to reflect the actual amount paid. The Nomination Filing Fee is not subject to expense imitation. (c) Voting Day Party/Appreciation Notices The cost of the voting day party was listed in the audited statements at $100. The actual cost of the event amounted to $1,101. This includes the rental of the hall, and the cost of food and entertainnxent. The Statement has been adjusted to reflect the actual amount paid. The Voting Day Parry is not subject to expense limitation {d) -Tent Rental The campaign utilized a tent for display purposes at the Orono Fair. The tent is the personal property of Mr. Abernethy, and as such, it should have been lent to the campaign at fair market value. We have determined that the fair market -value of utilizing this tent is approximately $375. This has been added to the office expenses on the Statement. LAING & ROHR CHARTEREDafiACCOUNTANTS 2. U1+' dAMl6~ ABLKIVI{;'1'HY COMPLIANCE AUDIT OF THE ELECTION CAMPAIGN OF JAMES ABERNETHY ~~ ,: NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2005 2. Additional Information Our statutory requirement in this audit is to provide an opinion on whether or not the Campaign of James Abernethy has complied with the Ontario Municipal Elections Aci, 1996. We aze therefore not required to provide detailed responses to the concerns listed in the letter of complaint. However, in an effort to provide a level of transparency,. we would like to comment on the following: (a} Office Rental The campaign utilized .space at four locations in Bowmanville, Courtice, Orono & Newcastle. The space in Bowmanville was leased for a period of two months at a cost of $20.97 per square foot. The space was rented from Mazianna Developments, and was fully famished. The period of occupancy was September 1, 2006 to November 14, 2006. Thls space was utilized as the main campaign headquarters. The Courtice location was leased from July -October at cost of $27.27. per square foot. The space was rented from Courtice Physiotherapy, and included all utilities, pazking and the use of a telephone. The Orono location was donated by Wallace Auto Supply at a fair mazket value cost of $15 per squaze foot. The space in question was 200 square feet, and the period of occupancy was October 2006. This space was utilized for the distribution of campaign literature. The Newcastle location was donated by Mark Hendrikx at a fair mazket value cost of $18 per square foot. The space in question was approximately 100 square feet, and the period of occupancy was September 15, 2006 to November 15, 2006. This space was utilized for the distribution of campaign literature. It is our opinion that the space utilized by the campaign has been recorded at fair mazket value. Although the rental rates differ from location to location, there-are also significant differences between each location, including location and access outside of business hours. LAING & ROHR CkARTERED ~ ACCOUNTANTS 3. NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2005 (b) Orono Fair/Kinsmen Home Show There were questions raised regarding the exhibit space at the Orono Fair. and the Bowmanville Kinsmen Home Show. The campaign paid fair market value for the exhibit space. The campaign utilized a tent owned by James Abernethy, paid $1,086 for DVD's that were distributed at the fair, and $870 for the appearance of Cavan Cunningham (the Mayor of the television program "Corner Gas"). A11 of these expenses have been recorded as advertising. (c) Print Advertising The_ campaign paid $1,304 for advertising in the Orono Times- and $7,584 for advertising in the Metroland newspapers. These amounts are both included in advertising. (d) Signage & Brochures We aze able to confirm that the campaign paid for 3,850 two sided 18"x24" election signs and 350 32"x48" signs, for a total of 4,200 lawn signs. The letter of complaint made reference to "thousands of election signs". Given that this. audit is occurring after alI signs ,have been removed, there is no way to detemune whether any additional signs existed. However, we have not seen any evidence that would suggest that additional signage existed. The campaign also paid for 50,000 campaign flyers that were distributed at events and by Canada Post. The cost of postage has been'included in office expenses. (e) Billboard Sign at Courtice Comers The sign at Courtice Comers is the plaza directory sign advertising the location of the Courtice campaign office. This sign, once installed, belongs to the landlord of the Courtice Comers Plaza, and subsequent to the occupancy of the office, it is the responsibility of the landlord to remove the sign. This. sign bears no fair mazket value expense as it forms part of the rent expense. LAING & ROHR CHARTERED 3a ACCOUNTANTS 4.