Message from the Inspector General
Mayor Denis Coderre, Members of the Montréal City Council and the Montréal Agglomeration Council, and citizens of Montréal,
It is an honour and a privilege for me to present the Annual Report of the Inspector General of Montréal for the year ended December 31, 2016, pursuant to section 57.1.23 of Montréal’s City Charter.
The mandate entrusted to me unanimously by the Montréal City Council is to oversee contracting processes and the carrying out of contracts by the City or by a legal person related to the City, so as to prevent breaches of integrity and foster compliance with applicable legal provisions and with the City’s
requirements regarding contracting and the carrying out of contracts.
The present report highlights, for the year 2016, the achievements of the Office of Inspector General of Montréal, which I began building immediately following my appointment as Inspector General on February 24, 2014, as well as my priorities for the year 2017. My primary aim will always be to conduct administrative investigations with the same rigour which has driven me since my first day in office.
I take great pride in the Office’s success as an institution serving to rebuild the public’s trust in municipal democracy. The number of complaints we receive each year is tangible proof that the job of the Inspector General is, and will always remain, highly relevant. The independence of the Inspector General’s position, the high standards guiding the Office in its day-to-day operations, and the protection of whistleblowers makes the Office of Inspector General of Montréal the veritable watchdog of the integrity of the City’s contracting processes.
The Office of Inspector General is entering its fourth year in existence. I benefit from the expertise of a solid team of professionals in various fields of practice, which is a tremendous asset given the nature of my mandate. In my capacity as Inspector General, I can also count on the invaluable assistance of other control and monitoring bodies, as well as a vast network of remarkably courageous whistleblowers. These individuals who, day after day and of their own volition, report irregularities with contracts, show us that there is a genuine desire to clean up practices, improve transparency and prevent the kinds of situations we saw in the media around the time of the Charbonneau Commission from recurring.
In my last annual report, I announced that I would make the accountability of the City’s managers and employees a priority in 2016. I can now confirm that I have seen changes happening. Many stakeholders of the City as well as numerous partners intervened in files before the Office was even called upon, and informed the Office of the irregularities and the corrective measures they took. I would like to take this opportunity to praise their initiative and encourage them to continue in this vein. That said, much work remains to be done on the accountability front, and I pledge to continue to advocate for its importance through my actions.
In fact, several files that were made public since my last annual report demonstrate the importance of keeping an eye out for attempts to violate the law or rules governing contract awards and management, the requirements of call for tenders documents, as well as measures implemented following an intervention by the Office.
The Office continually follows up on investigated files in which it has been involved. As a result of this monitoring effort, in 2016 it was revealed that contractors in the snow removal and towing businesses were continuing to enter into collusive or fraudulent contracts, despite the publication of reports condemning such practices, and that they were attempting to circumvent the measures that had been put in place. My team and I were quick to intervene once again with these contractors in order to send them the clear message that their activities were being scrutinized. Snow removal and tow-truck rental contracts were rescinded, contractors were excluded from the possibility of signing contracts with the City for a period of five (5) years, and one contractor even lost his authorization from the Financial Markets Authority (Autorité des marchés financiers) to enter into contracts with public bodies. The respect of our decisions will always remain our priority and we will not hesitate to take action against those who attempt to come up with new schemes to undermine it.
On another matter, it was brought to my attention in 2016 that the City was delayed in issuing many of its payments to its suppliers of goods and services. If allowed to continue, this situation could lead to a closure in this market and price hikes, and thus impede healthy competition. In fact, it is the small businesses that are impacted by these payment delays, as they have less cash flow. Some contractors explained to the Office that they charged an additional 15% to offset the effects of these delays.
While some suppliers expect to be paid over extended periods, the City will occasionally grant substantial advances without performing any verifications, so as to prevent a supplier from being negatively impacted by a payment delay. In the public report concerning contracts awarded to Montréal en histoires, some boroughs even consented to the non-profit organization benefiting from extremely advantageous payment schedules, which deviated from the basic rules of prudence. In fact, 90% of the total value of the contract was paid out sixty (60) days after the contract signing, leaving only 10% of the budget envelope for the end of the mandate. What’s more, the payments included sums allocated for contingencies, whereas these should have been disbursed only in the event of unexpected cost overruns.
In the course of the investigations carried out in 2016, I noted a number of risky practices on the part of the City in its role as manager of public funds. I therefore intend to address the issue of payment delays in 2017 and conduct enquiries and analyses to evaluate the impact these practices are having on the market.
In closing, I would like to wish a happy birthday to Montréal, which will be marking its 375th anniversary on May 18.
Denis Gallant, Ad. E