Planning “embryonic”, “incomplete” and causing “confusion”, “overestimated appreciation of reality”; the report of the Auditor General of the City of Lévis severely scratches the Municipality of Mayor Gilles Lehouillier for its financial management.
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The Auditor General (AG) of the City of Lévis, Yves Denis, released his last report on Monday, at the end of his seven-year term in office. He draws up “several worrying observations” about the City of Lévis.
The City, he says, tends to “misinterpret” certain indicators. For example, it uses ratios that allow it to compare favorably with other cities. This often has the effect of “overestimating the performance of the City”, particularly on taxation and the debt.
What allows the Lehouillier administration to say that it is among the least indebted is the use of the ratio of indebtedness per unit of assessment, which only one other large Quebec city uses. In fact, the AG points out, it would be fairer to use debt-to-income or budget ratio, and “based on 2020 results, that ratio comes out at 144% [à Lévis]is one of the highest of the ten largest cities.
On the other hand, despite the efforts and initiatives put in place in recent years to provide the City with long-term planning, it remains “embryonic” and “difficult” to align with the plans and policies of the city on a daily basis. Result: the city council and citizens have “a false sense of control” and this can lead to decisions that will be expensive. “This can create surprises, price shocks or shocks in services,” said Mr. Denis in an interview.
Moreover, he notes, “the information in the financial planning documents is incomplete and the approval of the various long-term financial plans generates confusion”.
The AG also points out that the City does not optimally manage the risks for which it is insured. It “does not monitor the number and cost of claims made to insurers or act systematically on the problems that gave rise to claims.”
The VG has been advising the City of these shortcomings for a long time. As early as 2007, red flags were raised. “Some important recommendations have still not been implemented to date.”
“The City has a major project ahead of it to put in place various processes to improve financial management,” says Mr. Denis. This is a major work of at least three to five years.
He is hopeful that his successor will follow up on his recommendations.
The only opposition councilor in Lévis, Serge Bonin, is delighted to note that the recommendations of the VG join his, issued during the tabling of the budget. “We have to take the exercise more seriously, and I intend to press for the whole of the next budget to be much more transparent, and more representative of the situation,” he said.
On the side of the Lehouillier administration, we “welcome the recommendations formulated which raise relevant avenues for improvement”. Mayor Gilles Lehouillier said he “completely agrees” with the VG’s recommendations. What has prevented the City from applying effective long-term management is, according to him, the absence until recently of an “integrated financial management computer system”.
As for the ratios criticized, he pleads that these have been used for “20-25 years” in Lévis. It now promises to also present the recommended ratios. The detailed budget document will also be provided to journalists, who until last December only had access to a summary document of a few pages.