OCPM financial controls ‘deficient,’ lacks controls, Montreal auditor general finds

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Montreal’s publicly funded public consultation office lacked any formal management framework or oversight stemming from a questionable interpretation of its charter-entrenched independence throughout its 20-year history, and that brought about last fall’s expense scandal, the city’s auditor general has concluded following a six-month examination.

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“Financial controls within the OCPM are informal, insufficient and their application is not effective in ensuring rigorous management of the budget and expenses,” auditor general Andrée Cossette writes in her 2023 annual report, which was tabled at city council on Tuesday.

The auditor general’s main findings:

• The OCPM has an “insufficient” management framework lacking formal rules, where the president has full management control.
• Though the OCPM is a branch of the municipal apparatus that’s fully funded by the city, there are “significant gaps” between the management policies of the city and those of the OCPM.
• The OCPM woke up late to creating rules for management and travel expenses for its president and secretary-general and for contract awarding, and those tardy rules are insufficient.
• The audit found cases of non-compliance with the OCPM’s recent expense policy and found that the control mechanisms for processing travel and other management expenses are “deficient.”
• The audit found a “failure to comply” with regulatory requirements for contract awarding.

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“Although entirely financed by public funds, the OCPM has behaved since its creation like an organization that’s totally independent of the city,” Cossette writes in her report.

“This situation is the result of a common interpretation by the city and the OCPM of the Montreal city charter, which is contestable on the basis of elements that have not been considered so far.”

On top of an “absence of a clear and concerted governance framework” at the OCPM, Cossette notes the city, through its finance department, “discharged itself” from exercising external monitoring of the OCPM “to guarantee, among other things, sound management and prudent use of allocated public funds.”

The situation came to a head in November when Quebecor-owned media revealed costly equipment, trips and dinners that were expensed to the city by successive OCPM managers for years based on receipts obtained through an access-to-information request.

In the wake of the ensuing scandal, city council fired then-OCPM president Isabelle Beaulieu. Her predecessor, Dominique Ollivier, who had been elected to city council with Mayor Valérie Plante’s Projet Montréal party in 2021, defended her own travel expenses as OCPM president from 2014 to 2020, but nevertheless stepped down as city executive committee chairperson and Plante’s second-in-command.

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City council named an interim OCPM president, Philippe Bourke, whose six-month term ends next month. Bourke fired OCPM secretary-general Guy Grenier in January.

The OCPM was just one of the audits conducted by Cossette’s office during the past year. The report also notably takes aim at the $1-billion revamp of Île Ste-Hélène and Île Notre-Dame launched by Mayor Valérie Plante’s administration in her first term, which the auditor general concludes has been managed by the Société du parc Jean-Drapeau (SPJD) without proper accountability or good contract management practices and may not be delivered on time.

“We conclude that SPJD projects are carried out with an incomplete (and) undocumented governance framework, without respecting SPJD methodology or good practices,” the report says.

“Uncertainty exists regarding the completion of all of the plan’s projects by 2030.”

However, it’s the OCPM file that takes up the most space in Cossette’s 336-page annual report.

“The absence of regular, substantiated and convincing justification for expenses incurred by management, including in the context of international outreach activities, is also noted,” the report states.

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“By this fact, the necessity and relevance of these expenses could not be demonstrated by the OCPM, which resulted in a deterioration of the latter’s reputation in the fall of 2023.”

Expenses included. About 40 per cent of meal costs, worth $14,000, were between an OCPM manager and an external guest. Several of these expenses were on the weekend, including brunch, and were “self-approved” by the manager, sometimes almost two months after the meal.

The audit also found that 15 restaurant invoices were justified as vetting a “potential commissioner.” They included alcohol. Among the candidates met only one was appointed commissioner, five days later.

“In front of a such a low success rate in the search for commissioners, we question the reasons on the authorization and expense reimbursement forms,” the report says.

Among the auditor general’s recommendations for the OCPM:

• Have the city sign a service agreement with the OCPM that sets out the roles, responsibilities and accountability of the OCPM.
• Carry out internal audits on the OCPM to ensure compliance with directives and procedures.
• Adopt a governance framework, including an appropriate structure for the OCPM, a strategic plan with objectives, targets and indicators and transparent reporting to relevant stakeholders.
• Require adequate justification for additional funding requests from the city based on reliable data. This includes establishing a basis of measurement for the cost of a public consultation.
• Establish appropriate supervision and a monitoring mechanism for the selection of commissioners.
• Establish monitoring mechanisms to ensure respect of directives and the city’s administrative rules.

lgyulai@postmedia.com

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