Yes Victoria: Counterpoint Q8

Counterpoint: Question #8
The Lindsay Post is running a weekly series of questions, with answers by both the "Yes" and "No" sides of the issues.

Question #8:How would your system ensure accurate financial accounting for the benefit of citizens, staff and councillors?

Basic accounting principles ignored

Accounting, the language of business, may seem complicated, but it is based on simple concepts that have been in use since Luca Pacioli, an Italian monk, wrote the first book on double-entry bookkeeping in 1494. His system described the same principles familiar to financial people today: debits and credits, journals and ledgers, trial balances, and his warning that the ledger clerk should not go to sleep at night until the debits equaled the credits.

Today we have the advantage over Brother Luca of access to computers and computer software to simplify the process of keeping track of the taxpayers' money. So we have to ask why it took until December of 2002 to prepare the audited financial statements for 2001 in the City of Kawartha Lakes. Why did it take until March of this year for councillors to learn that City taxpayers were facing whopping deficits in the 2002 books? Why, four full months into 2003, do we not have audited financial statements for 2002? Why do we still not have a budget for 2003? And why can we not find out the number of full time equivalent employees on City staff? These questions become even more relevant when we realize that the City's finance department has 46 employees earning on average 45 thousand dollars each.

Just last week, a letter from a former township clerk-treasurer in the pages of this newspaper said "I was able to tell any councillor who asked, any working day, how much of the township's budgeted funds remained unspent; not only the total budget, but the individual departments: roads, fire, capital, parks and rec., you name it. In ten seconds flat. Without a computer." Size shouldn't matter. Accounting and bookkeeping principles are the same, whether they are being applied to the largest municipal corporation, or the smallest lemonade stand. For some reason best explained by the "no" side, however, our mega-city has resulted in a financial mega-mess.

After a "yes" vote to de-amalgamate, our expensive City computer system would presumably stay at the County level of government (The former clerk-treasurer might be willing to share his insights on how to use it more effectively.) The lower-tier municipalities will, as they previously did, keep track of accounting, inventory, billing and customer data just like any other business with approximately 5000 customers. People with this expertise, now working for the City at positions beneath their capabilities, will step back into their roles as clerk-treasurers.

But it takes more than machines and computer programs to look after the public purse. Before amalgamation, every agenda at every local Council meeting included an item "Accounts." Bills were reviewed by Council, and staff didn't pay bills until an elected Council had approved them, unless, in some cases, a discount was available for payment before a Council was able to meet.

Since amalgamation, financial accountability is severely lacking in the mega-city. You won't find an "Accounts" item on any mega-city Council agenda. There is no finance committee to review accounts. Also, elected officials are told only about proposed expenditures larger than $35,000.

In place of public scrutiny, we have policy manuals. What percentage of the total City of Kawartha Lakes expenditures is made up of items under $35,000? Quite probably a huge chunk of our more than hundred million dollar budget.

A "yes" vote to return local democracy will restore accountability. By getting rid of the mega-city we will return to the 500 year old principle not to go to sleep at night until the debits equal the credits. It worked for Brother Luca. It can work for us again.