Confused

An audit committee is meant to serve as a protective layer. Ideally, it is a stoic, ever-watchful guardian over an organization’s finances. It is supposed to be the early warning detector that signals when the ship strays off course. Lists to one side. Or is heading toward an iceberg. The audit committee is there to sound the alarm.

Without these folks standing guard, asking questions, or peering toward the horizon, any organization can find itself a long way from home and without the means to get back on course.

But what happens when the audit committee thinks its job is public relations rather than scrutiny? Or it confuses serious inquiry for message marketing? Is it really an audit committee? Is it performing the function intended? The role ratepayers need?

It may seem an internal matter—but eventually, the passengers on this ship begin to ask themselves: Where in the hell are we? And where are we going? And what is that big white tower looming on the horizon?

For it is the audit committee that is supposed to be sounding the alarm on Shire Hall spending, Shire Hall’s debt and Shire Hall’s decision-making. But so far, it has been strangely quiet. Some—the chair at least—fail to understand the job. Rather than scrutiny, the audit committee chair sees the audit committee’s role as an explainer of Shire Hall’s decisions to increasingly nervous passengers on this ship. It raises the question: If the audit committee isn’t guarding spending, misunderstands its responsibilities, or isn’t keeping an eye peeled for ship-sinking icebergs…who is?

After 12 firms declined to review the assumptions that form the foundation of the County’s $200 million of waterworks spending, Council last month turned to the audit committee to do this work.

Big questions have been raised about the massive Wellington waterworks project and now the proposed extension of water to Picton via a 20-kilometre pipeline from Wellington. The plans rely upon the village of Wellington growing from 2,000 to 14,500 and Picton/Bloomfield growing from 6,000 to 32,600. Such growth projections are at odds with the County’s consultant’s projections produced last year, which show much more modest growth.

What happens if that growth never happens? Or it comes 20, 30 or 50 years from now? The debt-carrying cost will fall—directly and exclusively—to existing ratepayers through much higher water bills.

The current spending plan relies upon a million square feet of commercial development in Wellington alone. That is six Costcos in this village. Who pays when this fantasy flops?

These are some of the questions the audit committee might have asked last week. And it may yet. But it was not a promising start. It is unlikely to inspire confidence among nervous residents. Especially since the chair of the committee is far more interested in preparing a persuasive message than getting answers to questions.

“We need to find a way to portray the numbers so they understand and see that it is affordable even with the inevitable cost increases,” said Councillor John Hirsch as chair of the audit committee meeting last week.

Hirsch said he is certain the growth projections are real—though he admits he doesn’t understand how they were arrived at. Hirsch is certain that the County’s debt is “not out of whack. Because it has to be.” Hirsch is certain that agreements with developers will produce the revenue needed to fund the infrastructure growth—despite caution by a legal expert on development charges that Shire Hall’s agreement puts no timeline or requirement for developers to do so.

“It is irresponsible to place this financial burden upon the existing ratepayers of the County,” Andrew Biggart advised council in January.

But Hirsch is certain he knows better. He just doesn’t know why. Only that he has been assured by senior leadership at Shire Hall. And that is enough.

What is the purpose of an audit committee when you already know the answers? To questions you haven’t yet posed? When you think your role is to persuade rather than ask tough questions? When you confuse PR for scrutiny?

“Somehow, we need to explain it in a way that the naysayers will understand,” said Hirsch to his audit committee peers, entirely misunderstanding his responsibility as chair of this committee.

If the audit committee is to be credible, Hirsch must step aside. He has fatally compromised its role.

This project has been mired in fog at every turn, and the audit committee chair has made it worse.

rick@wellingtontimes.ca