April 1st, 2016.

Introduction – Michael Edwards.

Commentary – Blair MacDonald, Rothesay Councillor and Chair of Rothesay’s Finance Committee

Blair MacDonald is Chair of Rothesay Council’s Finance Committee. His professional accounting knowledge has been put to effective use during his time on Council.  A key concern of his has been the need for more accountability and transparency in the Town’s financial decisionmaking. His commitment to Rothesay, his judgement and his expertise will be missed on Council and by the people of Rothesay as he has decided not to reoffer.

A controversy arose several weeks ago when at Council, Blair was publically blindsided by a memo from Town staff and subsequently ambushed by several councillors, including the Deputy Mayor, as he reported on  a unanimous decision at an earlier meeting of the finance Committee to seek proposals from independent consultants to review the Town’s financial and procurement practises.

Several councillors sided with the Town Manager’s proposal to push off the review, suggesting it be looked at after the municipal election in May. Deputy Mayor Dr. Grant actually did a flip flop, reversing her earlier finance Committee vote supporting the review.

The problem for Dr. Grant is that public reaction, in the form of letters to the editor and an editorial in the local paper overwhelmingly sided with Councillor MacDonald who was holding the high ground of advocating for more transparency in the town’s financial dealings.

In the days that followed, a former Mayor sided with Grant, writing a commentary that, if meant to quell the controversy for Dr. Grant, did exactly the opposite.

The issue of open government is always on the minds of voters at election time. It will be a ballot box question in May and the Deputy Mayor has started her campaign for Mayor off with a position that is out of sync with the expectations of many taxpayers. That is governments must be more accountable and open, not less.

Councillor MacDonald’s comprehensive response to the former Mayor that recently appeared in the Telegraph Journal is reprinted here ⬇︎

Rothesay Review of Controls and Processes

Blair R MacDonald Commentary

I read with interest the March 24th commentary of former Rothesay Mayor and Councillor Bill Artiss and his expert opinion on the work of Auditors and Accountants.

He raised the question as to why I would raise this issue at this time given that I do not plan to reoffer in the coming election-as if one only addresses these issues if one is seeking reelection and trying to rouse the voters.

As to the timing, this study was first approved in the 2015 budget, didn’t happen, was put into and approved in the 2016 budget. As Chair of the Finance Committee for the Town, I undertook to actually make this happen before my term on Council is up. Having been a Chartered Accountant for 40 years and a Partner of a national accounting firm, I have a fair idea of what accountants and auditors duties and responsibilities are.

A municipal Council is similar to a corporate board of directors and as such is ultimately responsible for the operations of the Town of Rothesay. One of the roles of the Finance Committee is to get assurance on behalf of Council that appropriate systems and controls are in place to ensure Town assets are safeguarded and that resources(i.e. taxpayer funds) are expended in an effective and efficient manner consistent with best practices. These systems and controls are the responsibility of Town staff to design and ensure compliance with same.

This review was never proposed because of any lack of confidence in either Town staff or the Town Auditors. Many large organizations have internal departments which monitor systems, controls and compliance by internal professionals on a full time basis and reporting to the Audit or Finance Committee. This would be the first time such a review will have carried out in Rothesay during my 8 years on Council.

There seems to be some misunderstanding of  the annual external audit process for the Town’s financial statements and the extent to which the auditor’s examine the systems, processes and controls in place. The following excerpt taken from an auditor’s letter of audit findings sets out the limited review of those matters:

” To identify and assess the risks of material misstatements in the financial statements, we are required to obtain an UNDERSTANDING of internal controls relevant to the audit. This understanding is used for the limited purpose of designing auditing procedures. It is NOT used for the purpose of expressing an opinion on the effectiveness of internal controls and as a result we DO NOT EXPRESS ANY SUCH OPINION. The LIMITED purpose also means that there can be NO ASSURANCE that all significant deficiencies in internal control or any other deficiencies will be identified during the audit.”

I have pressed for this review because firstly, I believe it assists Council in fulfilling part of their responsibilities and secondly it may highlight areas where the Town can be more effective and efficient in the use of taxpayer funds.

As for whether cost of this review would be well spent, there are many expenditures made by the Town where this question could be asked including $750,000 spent for the design of a rink that was never built during Mr. Artiss’ last term on Rothesay Council.

To  fully and transparently participate in the affairs of the Town of Rothesay, perhaps Mr. Artiss should run for Council again-I know of at least one vacancy.

Blair R MacDonald FCPA,FCA

Councillor and Chair of the Finance Committee