5 takeaways from audit of complaints dating back to City of Charlottetown's Peter Kelly era

Charlottetown Mayor Philip Brown said he was concerned about legal liabilities arising from the report. (Steve Bruce/CBC - image credit)
Charlottetown Mayor Philip Brown said he was concerned about legal liabilities arising from the report. (Steve Bruce/CBC - image credit)

A redacted version has now been made public of a forensic audit looking into a whistleblower complaint over how City of Charlottetown finances were handled while Peter Kelly was chief administrative officer.

Kelly's one-time deputy CAO, Scott Messervey, outlined 18 areas of concern in a January 2019 letter to city council after Kelly fired him. At the time, councillors voted to take no further action regarding the letter,

Messervey went on to file a complaint under the city's whistleblower protection policy in December 2019. Three years later, in September 2022, councillors voted to hire outside firm BDO Canada to perform a forensic audit of matters raised in that complaint.

Kelly himself was fired without cause in May 2022, after other staff members past and present also complained about city operations and poor staff morale under his leadership.

The auditors' report was delivered to council early this month. Council voted to release a redacted version Monday evening. Here are five takeaways.

No evidence of fraud

The audit generally confirms the complaints made by Messervey, finding that at least some of the transactions he outlined appear to have breached procurement and expenditure policies.

However, the auditors did not find evidence of potential fraud. They report did note that failing to pay close attention to policies and good financial practices can result in a risk of fraud.

Key player names redacted

In early February, the city said it was delaying releasing the report pending a review by lawyers to determine the potential for legal liability. On Monday night, Mayor Philip Brown said names needed to be blacked out because of requirements in the Municipal Government Act and the Freedom of Information and Protection of Privacy Act.

BDO Canada report
BDO Canada report

Names of people and companies are redacted throughout the report, as are some dates and numbers. The names of Peter Kelly and Scott Messervey — plus those of other individuals, companies and even restaurants — do not appear in the redacted version.

Some redacted material already public?

The audit addresses each of the 18 separate complaints made by Messervey.

Complaint #17 relates to a naming rights agreement and revenue sharing with a private group. Names from this section have been redacted.

However, CBC News has previously reported a complaint regarding naming rights and revenue sharing in relation to the Charlottetown Islanders.

Parking lot questions remain

Complaint #8 involved the city providing parking spaces to a private company.

CBC News has previously reported this was the Rodd Charlottetown hotel.

The service was not contracted, Messervey said, and presented financial and reputational liabilities to the city.

BDO's review includes mention of an agreement with dates attached, but the names of the parties and the dates are redacted, leaving it unclear who was responsible for what and when.

Interviewee names withheld

While the report lists documents that were reviewed, the names of the 23 people interviewed for the audit are redacted.

This leaves open the question of whether any city councillors — or Kelly or Messervey themselves — were among those interviewed by the auditors.