Update, 3pm Friday: Munroe’s office now says the report will be released Monday.
Later today, city auditor general Larry Munroe will release a scathing report detailing problems with the councillors’ District Capital Funds. I’ll post that report here as soon as I get it, but it’s worth previewing the issue.
Officially titled the District Capital and Building Communities Fund, commonly referred to as “district funds” and, often, by individual councillors as “my money,” the district funds are the $65,000 that each councillor has discretionary spending authority over. As Munroe explained in a January reort:
…staff in the Councillors’ Support Office and Finance Business Unit assist in the administration of two separate funding streams – Councillor’s District Activity Fund and District Capital & Building Communities Fund. As noted previously, the primary focus of these two programs is to provide small one-time only “donations” at the individual or community level and to augment capital related purchases undertaken by HRM through the Capital Budget. Each electoral district is allotted an annual fixed amount of $68,000 between the two programs. The particulars of these two programs are the subject of a separate review being undertaken by the Office of the Auditor General. For the purposes of this particular review, our focus was on confirming best value rather than compliance to policies and business practices.
Today’s report from Munroe is that promised above.
The District Activity Fund is $3,000 for each councillor, which is to be used “for supporting local recreational and educational activities. Donations are made to not-for-profit groups, not individuals.” The District Capital & Building Communities Fund is $65,000 each and “provides partial or full funding to HRM capital projects or community non-profit groups at the discretion of the District Councillor and in accordance with Council Policy. This fund is for physical amenities including but not limited to playgrounds, parks and community beautification.”
Although Munroe was mainly focused on other city grant programs in January, he broadly hinted he had misgivings about the district funds:
In keeping with the requirements of the District Activity Fund Policy, Section (8.1), HRM Administration should conduct and report on the results of a review of the policy to “evaluate its scope, relevance, and effectiveness.”
[…]
HRM Regional Council through Administration should develop and adopt a defined practice – including measurable outcomes – in choosing a charitable organization(s) to receive corporate funds, in-kind services or staff involvement in keeping with corporate strategic direction. Rotating eligible recipients would provide equitable access to the opportunity. Conversely, HRM could choose to discontinue the practice entirely and formally adopt the current charity as the only charitable organization HRM would support.
As I understand it, today’s report will reveal that there is shoddy—almost non-existant—record keeping in the district funds program. Practically none of the community organizations provide receipts or paperwork showing that the money was spent for the purpose it was given, and there’s no process for checking back or evaluating how effectively the money was spent.
Councillors say that they are personally best placed for quickly reacting to needs in their districts, and can provide needed money in a targeted way for projects without going through a lengthy bureaucratic evaluation, but the district fund program is problematic on its face: the donations can be given in response to political pressure or, worse, to curry political favour. And some groups providing needed services might get locked out of the donation queue because of a personality or political conflict with the councillor.
Readers might be interested in how councillors have spent the money in the past. A detailed accounting of last year’s district funds can be found here.
This article appears in Aug 18-24, 2011.