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Wednesday, May 4, 2011

Auditor general Larry Munroe says HRM is wasting $800,000 a year

Most recent report slams bureaucratic inefficiencies and unneeded costs for grants to community organizations.

Posted by Tim Bousquet on Wed, May 4, 2011 at 1:20 PM

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City auditor general Larry Munroe

The city is wasting $800,000 a year administering grants to community organizations, says auditor general Larry Munroe, who is so alarmed that he wants council’s audit and finance committees to “immediately” find ways to cut the waste out of the annual budget council approved just last week.

The $800,000 figure is Munroe's back-of-the-envelope calculation of what a 15 percent reduction in the city's total grants allocation would represent. "We didn't have any trouble at all to support a 15 percent reduction," he says.

Munroe detailed the problems in a report released last week and in an interview with The Coast. The report lays out a bureaucratic system that is inefficient, confused and fails to measure outcomes. While the report is damning, it is written in neutral language that has caused some to miss its significance.

“I leave the sensationalizing to you journalists,” jokes Munroe, who nonetheless agrees that the report underscores “really big issues.”

Last year, the city gave about $11 million to various groups in the forms of grants, contributions, tax breaks and sponsorships. But the gifts are not sensibly regulated, says Munroe. There’s no coherent understanding of how the gifts meet the rules laid out in the city charter or how they meet council’s focus areas. The charter requires that the city gives a public accounting of all donations, but such an accounting has never been published in the history of HRM.

Munroe says a report detailing all donations to organizations should be published annually, probably at the same time the overall city budget is debated and adopted. "It's a big expenditure, and I think it needs to be right there while people are having a look at the budget."

Administration of the donations is utterly confusing, with 57 different ways for groups to access money. (Literally "57 access points," no exaggeration or sensationalization involved.) It’s also costly---Munroe estimates that it cost about $300,000 to administer 8,257 grants, “not an insignificant value, although likely a conservative estimate,” says the report. It costs the city $25.87 simply to cut a single cheque to an organization.

The auditor general stresses that he has no indication that money is being misappropriated to community groups or misspent. "It's not that. What we believe is, that there are not the appropriate controls that we want to see in place," he says.

Munroe took particular aim at the $65,000 “Discretionary Fund” controlled by each councillor---those expenditures are completely unregulated and there is no way to measure the effectiveness of the payments. Councillors should find a way to rotate the money among various groups, he says; “conversely, HRM could choose to discontinue the practice entirely.”

"It’s not to suggest that the councillors are doing anything wrong, or that it’s not money that is appropriately spent or any of those kinds of things," Munroe tells The Coast. "What we would like to see is for council to revisit that and say, ‘Is it still serving the purpose for which we thought it should and, given these economic times, are we obtaining the benefit that we want, or should we look at trying to standardize this?'"

Tags: Larry Munroe, City Budget

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Comments (5)

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When it comes in the form of treating special interest groups to expensive dinners at fancy restaurants, no?

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Posted by Cranky on 05/18/2011 at 5:55 PM

How is money spent on community organizations a waste of money? I don't get it.

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Posted by halguy on 05/13/2011 at 12:18 AM

$65,000 “Discretionary Fund” controlled by each councillor ?

Nice.

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Posted by Cranky on 05/10/2011 at 5:42 PM

Talk about low ballin' a number!
How about how much money is wasted on make work projects like roadwork: "And the award goes to the lowest bidder to do the shoddiest job so that it can be patched next year".
The Washmill lake overpass going 80% over budget; the reason, rock that has been there since time started is now bad for the environment??
Commissioning reports/consultations and shelving the results since it did not favor their view.
Every snow plow out when 1 snowflake falls or when it rains
And the list goes on...