HALIFAX—A municipal employee used taxpayer money to buy a pair of Apple AirPod earbuds, two Bose Bluetooth speakers and three leather Fossil bags, among thousands of dollars worth of other “inappropriate” items, according to the latest report from Halifax’s auditor general.

Auditor general Evangeline Colman-Sadd’s office presented two audits to council’s audit and finance committee on Wednesday: one looking into payroll management and another into the city’s purchasing card program.

The purchasing card program audit looked at municipal credit cards used by employees and found that, “Procurement is not effectively managing HRM’s purchasing card program.”

There were 585 active cardholders in the municipal workforce as of September 2018, and purchasing cards were used to spend $5 million in fiscal 2017-2018.

In a sample of card statements, the audit found that one card assigned to an employee in the transportation and public works department “was used without appropriate regard for value-for-money.”

That employee’s card was used to purchase two Bose Bluetooth speakers for a total cost of $476; one Apple HomePod speaker for $418; a pair of Apple AirPod earbuds for $220; three Fossil bags for a total of $846; a Google Chromecast video streaming device for $91; and 23 cellphone cases for a total of $2,677.

Read more:

Halifax slacking on auditor general recommendations, half of which haven’t been implemented

AG report finding slow and inefficient Halifax development approval processes ‘disappointing but not shocking’

With a tax hike looming, Halifax councillors vote to use surplus cash to add $21 million in projects to budget

Those items were allowed under the municipality’s procurement policy, but the auditor general’s office determined they were an inappropriate use of a municipal credit card.

“I don’t think that cellphones cases that are costly, Bose speakers or Fossil bags are a reasonable use of taxpayer money,” Colman-Sadd told reporters after Wednesday’s meeting.

“I think a reasonable outsider would say that those items probably weren’t the greatest use of taxpayer money and that’s what I look at when I try to make a decision about those things.”

Colman-Sadd said the employee and their manager justified the purchase of each of the items.

“We were told, for example, that the Apple AirPod was for somebody who uses their phone in their vehicle a fair bit … so that you can take phone calls. We were told that the speakers were sometimes used for conference calls,” she said.

“There’s a couple of leather Fossil computer bags that were purchased, and basically for use in travelling to meetings and that sort of thing, is what we were told for those items.”

The audit also lists about $30,000 worth of items that were not allowed under the municipality’s procurement policy.

Those include $13,900 worth of cables, adapters and chargers; $7,536 worth of computer monitors; $1,541 worth of prepaid cellphone cards; and $5,721 worth of other computer accessories.

“The policy has a fairly long list of items that are disallowed by policy,” Colman-Sadd explained.

Loading... Loading... Loading... Loading... Loading... Loading...

“For example, there were a few monitors purchased. Monitors it specifically speaks to as something that should go through the IT department, presumably for issues of compatibility with equipment and those sorts of things and warranties.”

Colman-Sadd said the employee’s manager was aware of the purchases — “and in fact some of them were for the manager” — but didn’t properly review and approve them.

“I really think it’s an instance where those oversight controls that are in place need to be followed, and we’ve found that in other audits too,” she said.

Colman-Sadd said the audit found no evidence of fraud, but that’s not what her team was looking for, either.

“I came to the conclusion that there was no need to go to police,” she told reporters.

“I just can’t say definitively, ‘There is no fraud here,’ because we didn’t set out to do an audit that was designed to find fraud.”

The municipality conducted its own investigation into the spending, and municipal chief financial officer Jane Fraser said the employee and their manager, neither of whom are named in the report, have not been fired.

“The individuals are still employed and there has been disciplinary action taken against them,” Fraser said in an interview.

Fraser would not elaborate on the discipline, calling it a personnel matter.

The audit made eight recommendations, all accepted by management, including that managers should review the purchasing card policy, update the policy if required and enforce it.

During the meeting, councillors asked Fraser to come back to the committee within six months for an update on management’s response to the audit’s recommendations.

Fraser said she’ll have an update on the steps taken to address the recommendations and a plan for changes that can’t be made within six months.

Colman-Sadd’s office also tabled a report looking into payroll management, which found that, “Overall, some of HRM’s payroll activities are effectively managed but many areas require improvement.”

That report made nine recommendations, all accepted by management, mostly around better documentation and time sheet approval processes.

Read more about: