Provincial auditor Jacques Lapointe says the projections Trade Centre Limited made to justify the construction of a new convention centre “lack appropriate analysis and doesn’t meet the standard of rigor required in such a significant proposal.” Lapointe had urged the government to obtain an independent second analysis of the convention centre projections, but the Dexter government outright rejected that recommendation.
Lapointe made his comments in a press briefing this morning before releasing the results of an audit of TCL this afternoon. The audit looked at TCL operations between April 1, 2011 and September 30,2011. See the complete audit here, starting on page 86.
“The Trade Centre’s market projections [for a new convention centre] include growth and market share assumptions that are not adequately supported. Some industry realities were ignored, including the over-supply of convention centre spaces in Canada, new competitors and the stagnant convention market,” says Lapointe.
In the audit report, Lapointe notes that the three levels of government have committed to spending $163 million for construction of the new convention centre, based on the projections provided by TCL.
Asked if the TCL projections were even consistent with the analysis provided by consultants hired by TCL, Lapointe is unequivocal: “No,” he says. “The figures that they put forward were not really consistent with much of anything. They were simply on their own. We asked to see what analysis went behind those, and a lot of it was based on what we were told was their professional judgement. The professional judgement of the people putting together the numbers seems to be where most of the numbers came from.”
Moreover, says LaPointe, Trade Centre Limited is an out of control organization, with “very poor” financial management practices that are in need of a “major overhaul.” The audit shows that TCL has failed to comply with provincial tendering and purchasing rules, and that TCL execs were flying around the world, wining and dining people, but making no record of what the entertainment purchases were, who was being entertained or why they were being entertained.
The audit looked at 11 travel expense claims submitted by TCL president Scott Ferguson, reflecting 98 purchases totaling $6,237. None of the claims had itemized receipts. “As well, all 11 claims had expenses with no indication of the names or number of individuals entertained,” reads the audit. “This relates to 51 individual expenses totaling $2,613. Additionally, all claims had expenses which did not indicate the purpose of the entertainment; this related to 78 individual expenses totaling $3,436.” These omissions are in violation of provincial policy, says Lapointe. None of Ferguson’s travel expenses were reviewed or approved by the TCL board of directors.
The audit further details that TCL was violating provincial per diem and mileage policies, that blank cheques were not safe-guarded, that there was almost non-existent performance reviews of TCL executives and many other problems with the organization.
It was the very lack of financial management in Trade Centre Limited that caused him to look at the convention centre projections, says Lapointe.
“The reason we looked at the projections was because we were in fact looking at all the financial management of the organization. We were looking at internal controls, we were looking at the revenues and expenses and how they’re managed. And these financial projections were really part and parcel of the finances. They were consistent with the rest of our findings, by the way, which were that the financial management of this organization was very poor. So the fact that the financial projections they put together would also be, in effect, poor, would at least be consistent.”
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This article appears in Nov 15-21, 2012.
Sounds about right. Dexter, eh? Who’d a thought.
Lousy governance at TCL, which means the provincial and HRM appointees were not fulfilling their legal obligations. Any directors now on the board of TCL, and who were on the board during the period of the audit should resign immediately.
Tim, the second last paragraph has a mistake – the word ‘mismanagement ‘ should be ‘management’.
Can we at least develop the land into a park or something until they figure out what they are going to do with that huge vacant downtown lot? It will be years until they start building anything. I like the way Argyle St looks without a huge building overshadowing it, too bad it’s a fenced off rat infested lot right now.
So… what are we going to do about it ? anything or just complain ?
We have a new Mayor in town and a proactive Premier(giggle), lets get a management team in place with the understanding that they need to perform, and make them accountable. Halifax/Nova Scotia is one of the most desirable places to visit in NA, we should have been getting more business over the last few years at TCL, and now my suspicions are being validated. Too many people in this city are in these positions just to collect a paycheque while doing as little as possible
i don’t really see this as “breaking news” lol
Isn’t this what a LOT of people said: …factors such as the abundance of convention centres in Canada, new competitors and a stagnant convention market were ignored.
That’s what happens when we’re run by yes-men and women. An independent second analysis of the convention centre projections should have been a “no-brainer” from the very beginning. But no, we’re gonna build that sucker.
Mr. Lapointe’s hair had no comment.
According to LaPointe,
” “The figures that they put forward were not really consistent with much of anything. They were simply on their own. We asked to see what analysis went behind those, and a lot of it was based on what we were told was their professional judgement. The professional judgement of the people putting together the numbers seems to be where most of the numbers came from.”
Unfortunately, this kind of “trust us” analysis is far too common when projects like the convention centre are brought up for discussion. It is also the basis for things like the failed (mercifully) Commonwealth Games bid and many other projects requiring the taxpayers to fork over money.
As the AG’s report shows, there is no reasonable business case for the convention centre. This was pointed out by many critics at the time, but such critics get dismissed by the local hucksters as “nay sayers” and “anti-development quacks”. The boosters and hucksters (and there are many) work inside their own “field of dreams” bubble where the idea seems to be “If we build it, ‘they’ will come, and even if they don’t, we’ll still collect big salaries and live off of nice fat expense accounts, at least until the gravy train ends.”
We’ll build the convention centre and, as per the contractual arrangement with the developer, we (the taxpayers) will cover the losses in perpetuity. How nice!
Well la dee da a project dreamed up by a gaggle of political has been’s who know about as much about business as I do about the urinary tract of a cat. Can you imagine what a fiasco this is gonna be. If you think that the half a billion short fall on the public snivelers pension fund was a burden just wait until the cost over runs and cash short falls and the sight of Mr. Rama heading for the provincial treasury building wheel barrow at the ready for his reimbursement’s as promised by the now departed Kelly, Dexter,and of course the head clown McKay you know the one with the mullah wife.