Compliance Audit Committee
The full agenda, as filed
All 3 items in the clerk’s order. Each carries the city’s own words: the staff recommendation, what the body decided, and its status. Nothing below is written by us.
EA4.1amended
Procurement Process for the Appointment of an External Auditor by the Compliance Audit Committee
The Municipal Elections Act, 1996 requires the Compliance Audit Committee to appoint an auditor if it grants a compliance audit application. To date, the Committee has granted applications for an audit of the campaign finances of two candidates in the 2018 Municipal Election. To comply with statutory requirements, the Committee must now appoint an external auditor to conduct compliance audits of the campaign finances of these candidates and any other candidates and registered third party advertisers that it may grant during the 2018-2022 term of office. The Committee authorized the City Clerk to manage the procurement process to hire an external auditor when it adopted its Purchasing Policy. Accordingly, during the months of June and July 2019, the City Clerk issued two competitive Request for Services tenders to auditing firms, which resulted in no proponent submissions for either tenders. Given the urgent requirement for the Committee to appoint an external Auditor, the City Clerk is in the process of procuring an auditor through a sole source contract. The City Clerk will submit a supplementary report to the Committee to recommend one or more Auditors with whom the Committee should appoint.
The Compliance Audit Committee: 1. Appointed auditor William Molson to conduct a compliance audit of candidate Faith Goldy's 2018 municipal election campaign finances for which the Compliance Audit Committee granted an application on April 29, 2019, and, at the discretion of the Compliance Audit Committee, any future applications for audit that the Committee may grant during the 2018-2022 term of office. 2. Appointed the auditing firm MNP LLP to conduct a compliance audit of the 2018 municipal election campaign finances for candidate Jim Karygiannis, for which the Committee granted an application on July 2, 2019, and, at the discretion of the Committee, MNP LLP may also be used for any future applications for audit that the Compliance Audit Committee may grant during the 2018-2022 term of office. 3. Authorized the appropriate City Officials to take the necessary action to give effect to the decision of the Compliance Audit Committee.
Staff recommendation as filed
The City Clerk recommends that: 1. The Compliance Audit Committee receive this report for information.
EA4.2amended
Compliance Audit Application by Roland Lin for the Election Campaign Finances of Jim Karygiannis
Application for a Compliance Audit received June 25, 2019, from applicant Roland Lin for candidate Jim Karygiannis for City Councillor Ward 22 Scarborough-Agincourt.
The Compliance Audit Committee: Granted the application for a compliance audit. 1. The Compliance Audit Committee met on July 24, 2019 to hear Item EA4.2, the Compliance Audit Application of Roland Lin for a compliance audit of the Election Campaign Finances of the Respondent, Jim Karygiannis. 2. The Applicant appeared before the Committee and provided submissions related to the Application. 3. The Applicant provided information to the Committee to support the Applicant's belief that the Respondent contravened provisions of the Municipal Elections Act, 1996 relating to election campaign finances. 4. The Applicant raised several concerns relating to the Respondent's compliance with the Act, including the following: a. honoraria paid to the Respondent's supporters in the amount of $81,000.00, particularly since the Respondent acknowledged in the media that the payments were associated with the transition from 44 to 25 wards; b. the Respondent misclassified a voter appreciation event as a fundraising event; c. the Respondent received a discount of $375.00 on entertainment provided by Sammy Cheng pursuant to an invoice dated September 9, 2018, which was not reported as an in-kind contribution; and d. the Respondent paid $5,000.00 to Living Stone Assembly Church and classified same as a Voter Appreciation Expense but did not file supporting documentation, and accordingly it is uncertain whether the expense is properly classified as a Voter Appreciation Expense or whether it should be subject to the General Spending Limit. 5. The Committee then provided the Respondent's counsel with the opportunity to respond. The Respondent's counsel did not address the substantive arguments put forward by the Applicant. The Respondent's counsel submitted that the application should be denied for the reasons stated in his letter dated July 24, 2019 and filed with the Committee. The Respondent's counsel made brief submissions thereon. 6. The Committee concluded that there are reasonable grounds that: a. The Respondent misclassified honorarium payments in his audited financial statement, which if properly classified would have exceeded the General Spending Limit; b. The Respondent misclassified a voter appreciation event as a fundraising event, which if properly classified would have exceeded the Voter Appreciation Spending Limit; and c. The Respondent failed to report a discount received on services from Sammy Cheng as an in-kind contribution; and d. The Respondent did not provide supporting documentation in order to ascertain whether an expense paid to Living Stone Assembly Church was properly classified as a Voter Appreciation Expense as opposed to being subject to the General Spending Limit. 7. For the reasons stated above, the Committee shall appoint an auditor to conduct a compliance audit of the election campaign finances of Jim Karygiannis, in accordance with s. 88.33(10) of the Act. The Compliance Audit Committee appointed MNP LLP to conduct the audit of the election campaign finances of Jim Karygiannis.
EA4.3amended
Compliance Audit Application by Roland Lin for the Election Campaign Finances of Norm Kelly
Application for a Compliance Audit received June 25, 2019 from Applicant Roland Lin for candidate Norm Kelly for City Councillor Ward 22 Scarborough-Agincourt.
The Compliance Audit Committee: Denied the application for a compliance audit. 1. The Compliance Audit Committee met on July 24, 2019 to hear Item EA4.3 the Compliance Audit Application of Roland Lin for a compliance audit of the Election Campaign Finances of the Respondent, Norm Kelly. 2. Roland Lin, the Applicant, appeared before the Committee and provided submissions related to the Application. 3. The Applicant provided information to the Committee to support the Applicant's belief that the Respondent contravened provisions of the Municipal Elections Act, 1996 (the "Act") relating to election campaign finances. 4. The Applicant raised concerns relating to the Respondent's compliance with the Act. These include matters relating to the cost of holding a fund-raising function and a campaign reception. The Applicant raised concerns that receipts were not filed along with the financial statements. The Applicant also raised concerns that some contributors were not appropriately recorded but conceded that he had made errors and included the names of contributors to other candidates in his submissions. 5. The Committee then provided the Respondent's counsel with the opportunity to respond on behalf of the Respondent. The Respondent's counsel spoke to the issues raised in the Application. 6. The Respondent's counsel conceded that some minor errors resulted in some receipts being inadvertently included in the Respondent's financial statement. The Respondent conceded that these errors resulted in breaches of the Act. The Respondent has made efforts to remedy these issues upon becoming aware of the errors, including disclosure of the corrections and payment to the City Clerk in the amount of the surplus of $884.29 that would have existed if the improper receipts had not been included. In the submission of the Respondent's counsel, while this may be a contravention of the Act, the error was minor. The Committee is satisfied with the submissions made by the Respondent's counsel on this issue. 7. The Respondent's counsel explained to the Committee how the Act does not include the cost of the Respondent's fund-raising function as part of a candidate's General Spending Limit. The Respondent's counsel confirmed for the Committee that the General Spending Limit was not exceeded by the Respondent. 8. Additionally, the Respondent's counsel provided further clarification that the Applicant's concerns relating to the failure to file receipts is not a requirement of the Act and cannot be considered a breach of the Respondent's obligations as a candidate. 9. The Respondent's counsel confirmed based on his knowledge that the $123,500.00 recorded as total contributions in the Financial Statement included the contributions received at the fund-raising event that was raised by the Applicant. 10. The Committee has discretion to determine whether to grant or reject an application. Due to the minor nature of the breaches and the Respondent's actions to try to correct the breaches a compliance audit is not warranted. The Respondent's counsel provided satisfactory information to respond to the other issues raised by the Applicant. 11. For the reasons stated above and in accordance with s. 88.33(7) of the Act the Committee shall reject the Compliance Audit Application of Roland Lin for a compliance audit of the Election Campaign Finances of the Respondent, Norm Kelly.