Questions hang over audit of key Brampton department linked to controversial municipal development corporation

Confusion and contradictory messages continue to plague plans to audit a key Brampton department two years after internal investigators were meant to begin asking questions.

The City of Brampton’s realty department was supposed to be audited at the end of 2020. The work would have probed the department’s governance, budgeting and compliance with internal and external rules. But the forensic work did not take place—it was delayed until the latter half of 2021 because of the COVID-19 pandemic.

Then things got complicated, with a January report stating the audit would be delayed even further. 

At its January 26 meeting, council received a report entitled “Deferral of Realty Services Audit”. It stated: “Internal Audit and Realty Services have agree (sic) that the audit will be deferred to Q3 2022, when Realty Services will be in a better position to accommodate this engagement.”

Members of Brampton’s Audit Committee, which is made up of seven council members including Martin Medeiros, Michael Palleschi and Rowena Santos alongside three citizen members, discussed in December moving the audit forward and referred the report to council to make a final decision. When the report came to councillors in January, it passed in the consent motion. The consent motion automatically accepts or approves the recommendations within a staff document. In the words of Brampton’s procedural bylaw: it is “a single motion to approve the recommendations arising out of a number of items of business on the agenda of a meeting which items are considered to be routine and non-controversial.” 

When the deferral was passed under the consent motion, council effectively accepted the audit would be delayed until at least the summer.

Speaking in January, Councillor Medeiros, chair of the audit committee, told The Pointer he did not want to see the audit delayed and said it should be completed before council loses many of its powers in the run-up to the election. “I hope to raise this issue again at our next audit committee meeting and I am hoping that audit committee members will determine the necessity to complete the audit before we enter lame duck period,” Medeiros said.

Councillor Martin Medeiros previously pushed back against a deferral of the realty audit.  

(Image from The Pointer files)

The Municipal Act severely restricts the actions of lame duck councils in the weeks leading up to, and the weeks after, an election.

A lame duck council cannot hire or dismiss any municipal employee, sell any property worth more than $50,000 or make any new expenditures that exceed $50,000. If the audit of the realty department unearthed any concerning evidence, a lame duck council might not be able to take action to rectify the situation, including appointing someone new to lead the department or tapping an external consultant to get it back on track.

“What is a credible reason for holding up an audit for two years? To me, there isn't one,” Councillor Jeff Bowman, who chairs legislative services which includes internal audit, told The Pointer. “The audit should be going ahead”.

And then, despite the report accepted by council that deferred the audit until at least August 2022, it now appears to be going ahead. The flip-flop, without council approval, is yet another sign of the ongoing turmoil inside City Hall. 

A spokesperson for the City of Brampton insisted the audit would take place in the first quarter of 2022, contrary to the decision council made when it passed the consent agenda on January 26. 

“Although it was deferred last meeting, this audit committee supported not deferring it and having it come forward,” Councillor Palleschi said to staff at the February 8 audit committee meeting. “From my understanding, the staff recognized what (the) audit (department) was saying and have started the process of the audit of realty services. Is that correct?”

Staff agreed his interpretation was correct. But no one can explain why. 

“The Audit was moved up to Q1 2022 at the request of Council on January 26, 2022. At the January 26 meeting, it was added to the Consent Motion and received without debate,” a spokesperson for the City of Brampton said, despite the report’s recommendation stating the exact opposite. After a protracted exchange in attempts to get clarification between January 27 and February 7, the spokesperson stopped replying to The Pointer. The City did not provide any documents to show where the decision to move the audit to the first quarter of 2022 came from. 

Municipal bureaucrats take their instructions from council largely through motions. Staff are not asked to synthesize discussions and infer what actions might be necessary, but instead are meant to follow the text of motions from elected councillors and approved reports. When Brampton council accepted the realty audit deferral report in January, staff accepted the delay it suggested. No motion to the contrary or decision of council has been made since.

The purpose of an internal audit of the realty department is to ensure it is operating as it should, following external laws and internal rules as well as dealing with taxpayer money correctly and transparently in the management of the City of Brampton’s real estate portfolio. Regular audits of municipal departments are a key to ensuring good governance and operation. 

“Broadly, these audits are intended to provide reliable information about what’s working well within an organization or whether the organization is meeting statutory or regulatory requirements,” Lesley Burns, the vice president of oversight with the Canadian Audit and Accountability Foundation, explains.

The Brampton staff report asking for the delay states an audit would not be effective because the realty department is still hamstrung by COVID-19, two years into the global pandemic.

The realty department continues to struggle with staffing, challenges working from home and a backlog brought on by the pandemic, the report states. Staff in the realty and audit departments agreed at a meeting in August 2021 that these issues would stop auditors from gaining valuable insights into the department’s strengths and weaknesses. 

Brampton’s realty department manages a vast portfolio, including Springdale Library.

(Image from Joel Wittnebel/The Pointer files)

“It was determined that conducting an audit would not provide an accurate depiction of Realty Services’ controls and processes, and would place an additional burden on staff, and any audit findings would not necessarily add value to the division,” the report states. 

The realty services department is operating at 50 percent of its target staff, with seven vacancies. Its employees are “working additional hours in order to maintain business continuity”. A copy of the City of Brampton’s organizational chart obtained by The Pointer shows seven of 16 positions in the department vacant, including the role of senior manager (department head) as of January 1.

The staff report states that remote work is impacting the department's ability to create new realty files and recruitment is currently underway to fill vacancies and that staff are “working towards file completion”. 

It is unclear how long the department has been short-staffed, nor is it clear when active recruitment began to fill vacancies. No indication is given for how short staffing is impacting City budgets through potential overtime requests. 

“The City of Brampton’s Realty team is in the process of filling vacant roles,” the Brampton spokesperson said. “Realty staff have continued to maintain the City’s service levels.”

Councillor Jeff Bowman says there is no excuse to delay the audit of realty services.

(Image from The Pointer files)

Both the audit and realty departments have been at the center of a multi-year controversy that surrounds former Brampton CAO David Barrick. His recent departure, to be replaced by interim CAO Paul Morrison, has made the situation even less clear. 

In January 2021, councillors put the brakes on a plan to create an arms length body to manage Brampton’s real estate portfolio after it was revealed the company leading consultations on the project had undeclared ties to Mayor Patrick Brown. The organization, known as a municipal development corporation, would have taken over much of the work done by Brampton’s realty department, including the management, sale and purchase of City property.

A business plan for the organization, including its management structure, was presented to Brampton City Council in August 2020 by a consultant, Menes Company. Brett Bell, the company’s director, confirmed to The Pointer he had known Mayor Brown “for many years through our mutual involvement in [Conservative] party politics” but said he hadn’t spoken to the mayor in two years. 

“To my knowledge, he had no involvement in the awarding of the project, nor did I speak to anyone in the Mayor's office,” Bell said. “If we had a conflict we would certainly disclose it, but I don't believe there was one here.”

The timing of the project and Bell’s links to Brown alarmed some councillors. WhatsApp messages shared with The Pointer in April showed Barrick instructing municipal staff to offer Bell the work.

He was approached by the City of Brampton to bid on the plan to create a municipal development corporation despite not having direct experience. Two days after Bell was contacted by Brampton, he incorporated his company, Menes Corporation.  

N. Barry Lyon Consultants, a company that has operated for five decades, had previously worked on Brampton’s plans for a municipal development corporation. It did not win a contract to continue the work. 

Barrick further angered some councillors a month later by reducing the independence of the City’s internal audit department. He changed the department’s charter to increase his oversight over a part of City Hall that relies on being able to investigate independently. 

Under Barrick, two directors of internal audit have left their positions; the department has been led by Richard Gervais since the beginning of 2021.

Brampton CAO David Barrick left his position earlier this month.

(Screenshot from the City of Brampton)

The decision to move the audit forward to the beginning of 2022, taken without clear direction from council, could shed some light on where the city’s plan for a municipal development corporation currently stands and how initial consultations were conducted. The result of the audit may allow councillors to act before a lame duck period begins. But it also suggests council has already lost some control, with staff making decisions that do not appear to follow the proper process.

Medeiros says the chaos around the audit department over the last year has made oversight harder.

“There is capacity issues in our audit [department], there’s been a turnover of internal auditors to my displeasure,” he said. “COVID has an impact on probably some of it because of the constant change of management. It’s not an excuse, but I do accept that as an impact.” 

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