Charlottetown council keeps red flags from audit under wraps, votes to 'move forward'

Charlottetown city council has voted to close its own investigation into nine allegations raised as part of a financial audit, without ever making details of those allegations public.

The allegations arose as part of an investigation by the accounting firm BDO.

Last fall, the city commissioned BDO to look into 18 financial concerns brought forward in Jan. 2019 by the city's former deputy CAO, Scott Messervey.

As part of its reporting, BDO told the city that 11 additional complaints were brought forward during the course of its investigation. The city told the firm those matters would be investigated internally.

Those internal investigations were discussed during a closed session of council on April 20. After the discussion, council voted 8-2 to "move forward" from those issues.

"That 9 of 11 additional allegations be considered investigated and the matter closed," the motion reads, and further that, "all issues raised are now considered addressed and the city move forward."

The motion included a last-minute, handwritten amendment, initialled by mover Coun. John McAleer and seconder Julie McCabe, in acknowledgement that the city was still waiting for further information on two matters so they couldn't consider all 11 issues closed.

Another motion specifically addressed a concern about $1 million in paving work that was done without going out to tender. Again, council voted 8-2 to take no further action.

By the same 8-2 margin, council also voted that any further matters raised from more than a 10-year time period, from Jan. 1, 2012 to Feb. 1, 2023, not be investigated if they "fall under the themes of recommendations in the BDO report."

'We should call in the RCMP'

Councillors Mitchell Tweel and Bob Doiron were the two voices opposing all the motions.

Speaking during an open session at the April 20 meeting, Tweel said he was not satisfied with council's handling of the issue, particularly with regard to the additional allegations raised during the investigation.

"These allegations were never discussed in a public forum. That's wrong," he said.

Tweel suggested the RCMP should be called in, leading to a small ruckus and a point-of-order from the floor.

"I don't believe that we should be investigating ourselves, or the city's corporation," Tweel said. "That should have been done by arm's-length, independent... people with credentials, proper qualifications, to ensure that it is truly independent, it is transparent, [and] there's no direct links to council."

Not a whistleblower

A redacted version of the BDO report was released in February. CBC News asked the city on Thursday for a list of the 11 additional concerns that were raised, but no information was provided.

In another motion on April 20, council voted 8-2 to remove the word "whistleblower" from the title of the audit report, arguing that because Messervey was no longer an employee of the city when he wrote a detailed letter to councillors outlining his concerns, he could not be considered a whistleblower.

In his communication with council, Messervey said he was fired by the city's former CAO Peter Kelly in retaliation for raising financial concerns with him.

Messervey's successor as deputy CAO for the city, Tina Lococo, was also fired by Kelly, and she also wrote to councillors afterward noting that she too was fired after raising concerns.

Her concerns have not been made public, but on Apr. 20 council also voted 8-2 to consider issues raised by Lococo "addressed and closed."

Council voted last May to fire Kelly without cause, meaning he was eligible for a severance settlement as outlined in his contract.

Mayor Philip Brown said with the issues raised in the BDO report largely addressed, it is time for the city to leave the past behind and get on with new business.

"It's time that we move on. We had a report with 18 allegations with recommendations going forward," said Brown.

But Doiron said the public has a right to know what the city is moving on from.

"Let's release all the findings of all the allegations so we can move on then. If we only do it partway, we're only doing a little bit of our job," he said.

New version of report coming

Council also voted to release a new version of the BDO report to the public, this time with less information blacked out.

The version released in February included more than 200 redactions, in some cases removing basic information that is a matter of public record.

For example, in the section of the report detailing BDO's investigation into the city's untendered spending on paving, the dates of public council meetings were blacked out, including the date the city passed its 2018 budget.

The name of the Eastlink Centre, a sports and entertainment venue that the city owns, was also redacted in a section dealing with concerns around accounting for revenue from the sale of naming rights.

Doiron said he asked the city for details on why specific information was redacted but the information was not provided.

"There's a lot of this redaction that you can go through and say, 'Oh, I know what that's about. I know what that's about,'" Brown told CBC. "So really open — like fully unredacted, or partially redacted — most of the information is known or common knowledge."

In a statement, the city told CBC that the city's legal counsel and BDO Canada were involved in the initial redactions, and that these were "done out of an abundance of caution in an effort to get the report out to the public as quickly as possible."

The public version of the report was released three weeks after BDO provided its findings to the city.

The city said a new version of the report, with fewer redactions, could be released as soon as May 10.

It has pegged the cost of the BDO report at $290,159, plus another $80,000 in related legal fees.