City of Charlottetown to conduct financial review more than 3 years after concerns raised

Three-and-a-half years after the City of Charlottetown's former deputy CAO said he was fired in retaliation for raising financial and administrative concerns, city hall is embarking on a review.

The city's interim CAO Donna Waddell said a financial review was one of the first tasks she was given by council when she took over her position on May 11.

The review is to be conducted by Waddell and city finance staff, working with the city's accounting firm, MRSB. An independent auditor, yet to be named, is to be brought in later on to oversee the process.

In a memo to councillors, Waddell wrote "where necessary, appropriate changes will be recommended" regarding city policies, bylaws and adherence to provincial legislation, including the Municipal Government Act.

"It is certainly the intent to allay any concerns about the way the city does its business," Waddell wrote.

Council has been presented with two sets of concerns brought forward by the two people who served as deputy CAO under the city's former chief administrative officer, Peter Kelly. Kelly's employment was terminated without cause by council after a closed-door debate May 11.

Concerns kept under wraps for 3 years

Former deputy CAO Scott Messervey presented council members with a detailed list outlining 18 concerns after he was fired by Kelly in January 2019, but many of those concerns were only made public this year after they were reported by CBC.

Among Messervey's concerns:

• That millions of dollars in cost overruns on capital projects had been approved by the CAO, without necessary council approval.

• That some contracts had been issued without following the city's tendering process.

• That per diems were being claimed at events where meals were already included in the cost, and that some council members had expensed alcohol and meals for their spouses at a dinner that was billed as a finance meeting.

Messervey's successor as deputy, Tina Lococo — hired nearly three years after Messervey was fired, and herself fired by Kelly six months later — also provided council members with a number of concerns regarding the city's administration, according to an email obtained by CBC. Those concerns have not been made public.

Besides the financial review, the city is also planning an organizational review to look at its governance, staffing model and decision-making process, with particular attention to the job description for the chief administrative officer.

But some council members say the financial review lacks the independence required to properly address the concerns raised.

"We must have a person or business that is totally independent from any ties to the city," councillor Bob Doiron told CBC. 

Doiron said the process shouldn't involve senior city management or the city's accounting firm.

"The process has to be able to give total freedom to the person that is chosen to do this investigation. Then and only then will these concerns be put to rest," said Doiron.

Messervey provided a statement to CBC, saying that in his tenure with the city, he had "raised several financial, human resource, governance and other issues with the former CAO, council, and the city's auditors. 

Messervey said that in his view, any "reasonable and reliable audit" of the city would have to be conducted "free from actual or perceived conflicts of interest and be independent of any and all city influence or oversight including that of current or former city senior management, staff, councillors, and contractors."

Messervey suggested the provincial government launch its own review. So far, P.E.I.'s Minister of Communities Jamie Fox has refused to do that.

Review will have independent oversight, city says

Both Waddell and the city's mayor say the process will be independent because the city plans to put an outside accountant into an oversight role.

According to the proposal drawn up by Waddell, that accountant "will be engaged to review the action plan and to confirm that it is viable and to monitor same to ensure that the CAO and the auditors are doing what is expected in the timelines stated."

While work on the financial review was set to begin Wednesday, the city said it had not yet finalized its terms of reference. 

At a meeting on June 27, councillor Terry Bernard said some of the allegations have been "sensationalized" in media coverage, and that the review "will be based on facts, and then the facts will come out and I look forward to that."

Councillor Alanna Jankov said the review will "hopefully regain some confidence with our residents, as well as determine fact versus story."

But councillor Mitchell Tweel questioned the independence of the process.

"Staff here at city hall cannot be involved," he said. "The community wants a third-party, independent, truly independent review."

Council had initially voted to take no further action regarding Messervey's concerns, in a vote held after a closed-door meeting in February 2019, only days after those concerns were delivered.

As to why council is now conducting a review years after the fact, Waddell said "I think [the concerns] came to a boiling point here in the past few weeks, or the past few months."

When asked the same question, Brown said, "Better now than never."