Brampton’s internal audit function hijacked by CAO, fraud hotline taken over by his hires, committee says
Brampton’s beleaguered CAO, David Barrick, was on the hot seat again Tuesday, as audit committee members demanded to know why 28 staff complaints to the corporate fraud hotline, under the committee’s jurisdiction, were shut down by managers without even telling elected officials.
Barrick was accused of stripping away the internal audit function’s independence and taking control over the crucial oversight department, which is supposed to be the key tool used by elected officials to hold him accountable.
Councillor Martin Medeiros, who chairs the committee, led the charge along with his colleague Jeff Bowman, who again expressed frustration with the embattled CAO over his disturbing conduct.
Councillor Martin Medeiros chairs the audit committee and confronted the CAO for stripping the function of its independence
Citizen members of the committee also expressed their view that Barrick has completely upended the role of internal audit.
Councillor Gurpreet Dhillon was the first to raise concern about the agenda item around the handling of 28 staff complaints into the “Corporate Fraud Hotline” that were received by the City through its anonymous whistleblower line.
Committee members learned they were handed to a third-party “assessor” to review, before management, including some that might have been the subject of the complaints, closed the files without launching even one investigation.
Despite the expectation that councillors and the other citizen members of the audit committee are to have oversight of the complaint function, they had no knowledge about the calls into the fraud hotline, how they were handled or what staff outside the audit department did to ensure any issues of misconduct were properly investigated.
Dhillon asked who completed the investigations into each of the 28 complaints by staff, when this was done and where the reports for each are. “I don’t believe the audit committee was informed about the investigations.”
Richard Gervais, the acting head of internal audit, revealed that no investigations were launched and said, “All the relevant information was sent to the assessor.”
He said the third-party vendor sent reports back to the City’s Human Resources department with their assessments.
It’s unclear why these were sent to HR and not the audit committee. It’s possible that some of the complaints might have involved conduct in the HR department.
Recent publicly levelled allegations of misconduct by a now former senior director in Barrick’s office, Gurdeep (Nikki) Kaur, included damning accusations against Barrick and the head of HR, Sandeep Aujla, who was hired by the CAO and works directly under him. Both deny all the allegations against them.
Gervais said no investigations into the 28 staff complaints were conducted because they did not warrant a probe and that none of the information around the complaints handled by HR was made public.
Dhillon continued his questioning, highlighting his concern that all the reports on the staff complaints are now closed.
“That wording is probably not clear,” Gervais responded, stating the third party advised there were no grounds to proceed with an investigation into any of the 28 complaints.
Kaur provided evidence of improper procurement practices by Barrick and misuse of City resources by Mayor Patrick Brown, among other allegations of improper hiring, contracts handed to associates of the mayor and staff, bullying and racism. She worked under Barrick and told The Pointer the reason why she didn’t bother with the complaint hotline was because, “The CAO controlled the entire process – they say whistleblowers will be protected but look what they did to me.” She was fired by Barrick hours after she sent out an email last week to City staff, councillors and some media, detailing her allegations of widespread corruption under Barrick.
The City denies all the allegations and a spokesperson told The Pointer none of the misconduct alleged by Kaur took place.
Dhillon replied to Gervais, expressing his concern once again that the closing of the complaint reports was kept from the public and elected officials. “Should not have audit committee been informed of this?”
“The process doesn’t indicate that this would go to audit committee,” Gervais responded. It’s unclear what process he was referring to and who established this “process”.
There was no explanation around the third party hired to handle the staff complaints, why this oversight role was being handled by an outside party, who selected the vendor and how the entire process was approved.
Councillors told The Pointer they are frustrated with the handling of the staff complaints into the hotline, which is supposed to be part of the internal audit function.
Councillor Jeff Bowman wants the internal audit charter returned to the version prior to changes made by CAO David Barrick
Between late November and late February, a total of 29 staff complaints were received through the hotline in just three months, under Barrick’s leadership. Aujla said later during Tuesday’s meeting that another approximately 25 complaints came in from around the time Barrick was hired in late 2019 to the fall of 2020, and these are among the 28 that were closed with no investigation. She said the allegations “were not clear enough”.
It’s unclear why she was speaking to the matter, as she is not part of the internal audit team, and it was suggested that her office was the subject of many of the complaints, which raises the concern she was in a conflict of interest, as Medeiros had suggested, when he raised the issue of management dealing with complaints about management.
She said the City does have the full reports on the complaints, contrary to what Gervais said, creating more confusion as to why the head of HR would know this and have access to the full reports, while the acting head of internal audit did not.
It raised even more doubts about the current independence of the internal audit department and how the reporting lines under Barrick have been set up.
Since the whistleblower function was launched in 2016 a total of 77 complaints had been received on the corporate fraud hotline as of late February. That means about 70 percent of all complaints into the line over almost five years were received over a period of just over one year after Barrick was hired, as concern over his conduct has mounted.
“In essence, what we're talking about is that internal audit is now a member of staff rather than an independent body, and there is absolutely no independence here,” Abid Zaman, a citizen member of the audit committee, said. “I don't think there's any comparable municipality out there where the CAO has such control over their internal audit function as is currently allowed here at the City of Brampton.”
He said the way Barrick has set up the internal audit function “makes no sense to me”, adding “independence is the cornerstone of any audit function”, but the CAO now “unilaterally” controls the main oversight tool that is supposed to hold him accountable.
Zaman wanted to know who the third-party “assessor” is and how the committee is supposed to have confidence in their independence.
Gervais said the vendor is an “independent employment legal firm”. He did not provide the name or explain how the company was chosen.
Then it was the committee chair’s turn to ask questions.
“As the Chair of Audit, I was never notified about this process and you had just stated that the process means you don’t share this [information] with the audit committee. Who approved this process?” Medeiros asked.
Gervais did not answer the question, but said the “process has been in place since 2019, I believe.”
“The complaints were against management, and then management, they receive information from the lawyer… and then management decides to close it and none of this is brought forward to the audit committee.”
Gervais remained silent, on the video screen, searching for words while he looked up at the ceiling above him. “You know, this is what’s described in the process,” he finally said.
Medeiros asked again, “But who implemented the process? As far as I’ve been on the audit committee as the chair, I’ve never had once that a process be approved that fraud, an investigation is undertaken and then management take it upon themselves to not go forward with the investigation, based on what some lawyer who’s a third party [says].”
He asked for a copy of all the reports on the staff complaints that came into the corporate fraud hotline. “Is there an actual report for us to look at?”
“I didn’t ask for the full report,” Gervais responded.
Aujla later said two third-party law firms handled the staff complaints, JMJ Workplace Investigation Law LLP and Bernardi Human Resource Law LLP.
She told Medeiros that no investigations were launched partly because the allegations were unclear and partly because none of the staff complainants came forward, which was again confusing, as whistleblower functions are generally anonymous.
She said management conducted general sessions with staff to address some of the issues raised in the anonymous complaints but she did not provide details of what senior staff did, specifically.
“And they made the determination not to share this with audit?” Medeiros asked her.
She said she could not comment on that.
“This speaks, again, to the independence of the audit committee and how management are making determinations and decisions on an investigation that is investigating, essentially, themselves,” Medeiros said. “I still do feel that people made decisions without authorization, without coming to the audit committee.”
Councillor Bowman, clearly frustrated, pointed out that prior to Barrick changing the internal audit charter in mid-2020, the head of audit reported directly to Council.
“So I don’t understand why these reports did not come to Committee of Council, because we were still working under the old audit charter and that audit charter clearly says that all reports go directly to the audit committee… I just don’t understand why we were going against the internal audit charter by just not bringing these forward to this committee. Does anyone have an answer?”
Barrick eventually responded, claiming the reporting was being done to the committee, through the item on Tuesday’s agenda, which included no reports and no details of the staff complaints or how they were resolved.
Councillors have shot down David Barrick's claim that internal audit always reported to the CAO
“So David, it’s being reported to us eight months after it happened, after they were closed, after there was no action taken, by a legal firm that the audit committee didn’t even know was involved? Is that what you’re saying?”
Barrick made little sense in his response, lumping all 28 complaints together and claiming “this particular instance” was not fraud related.
“We’re talking about 28 complaints,” Bowman replied, the frustration in his voice evident.
He reeled off some of the descriptions of the complaints that came in through the corporate fraud hotline since Barrick became CAO: conflict of interest; embezzlement; unethical conduct; manipulation of data; workplace harassment; non-compliance with policy; hiring unqualified personnel. “These are a whole different level of complaint.”
He pointed out that staff are also lodging these alarming allegations in emails to council members.
Barrick, who is facing an independent investigation into the allegations of misconduct made by Kaur which have also been sent to the police, has consistently denied any involvement in changing the internal audit charter, instead pointing a finger at audit committee members as the ones who voted to approve the changes.
Bowman confronted Barrick’s claim for the second time in the last two weeks, saying handing him authority for hiring and firing the audit head and having all reporting go directly to the CAO and other managers was not something council members were told of.
Several councillors believe Barrick misled them by failing to highlight the new charter allowed audit reports to be shared with the CAO and department heads before they were presented to council through the audit committee. Barrick has also consistently claimed the internal audit department always operated directly within the CAO’s office.
This is not true.
“The CAO claimed today that Council requested the changes to the audit charter,” Medeiros told The Pointer. “In fact, the changes to the charter were requested by the CAO to give him hiring and firing power over the head of audit and other reporting powers to him. That authority was previously with Council through the audit committee, but the CAO then tried to mislead the audit committee, claiming Council requested the changes. But Councillor Bowman had to confront him and repeat the fact that at no time did the audit committee request the audit charter be changed the way the CAO altered it.”
Bowman again sounded angry when confronting Barrick Tuesday, after shooting down his claims last week.
“There seems to be something wrong with our system when we encourage people to anonymously report these things and every single one of these has been closed,” Bowman said during Tuesday’s meeting, suggesting staff have lost faith in the so-called anonymous whistleblower function.
Medeiros echoed the comment and said staff sitting at their desks likely do not trust the current system.
Bowman pointed out that fraud reports currently go to Barrick, not the audit committee. This is a direct contradiction of guidelines in Ontario that state internal audit functions and reporting are supposed to be completely independent of a CAO.
The audit committee voted to have the full reports on the staff complaints, including all work by third parties, be brought forward for the next meeting.
“With the function reporting to the CAO I feel the independence has been compromised,” Iqbal Ali, one of the citizen members, said. He said because reports now go to the CAO for approval, “therefore, I feel that overall internal audit functions have been compromised, and the independence has also been compromised. That’s my statement that I want to put it on record.”
Ali suggested he would like to see Council remove Barrick’s authority over the internal audit function, which Medeiros made clear he intends to push with his colleagues.
The grilling was the latest black political cloud surrounding Barrick, who was fired from his previous job at a Niagara conservation authority after being implicated in the “Inside Job” CAO hiring scandal at Niagara Region.
He was hired in Brampton by a committee led by Mayor Brown, and Barrick quickly implemented numerous controversial changes since becoming CAO, including illegally moving the independent freedom of information function under his authority and assigning hundreds of thousands of dollars worth of contracts to close associates of Brown and himself.
“I was always assured there was no change to the independence of internal audit,” Medeiros said after the meeting. “After today it’s clear the CAO misled us.”
He plans to correct what Barrick did to remove the internal audit department’s independence.
“As Chair, I will be bringing forward a motion to restore the audit charter to give back the independence of internal audit, which the CAO took away when he took control of the function.”
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