In a 14 page ruling Hamilton Integrity Commissioner Earl Basse ruled that Coun. Chad Collins did not contravene the City’s code of conduct as chair of the Hamilton Waterfront Trust. The report came after a citizen complaint was filed alleging that Collins concealed an adverse auditor’s opinion on the HWT from members of council, and that the HWT under Collins’ chairmanship failed to provide annual financial statements to the city as it is required to do.
In his ruling Basse acknowledged that the HWT had received an auditor’s letter in 2007 that detailed a number of serious accounting deficiencies. However, he said, the HWT board had instructed staff to correct the problems, and that there was no requirement for Collins to raise the issue with his council colleagues. With regard to the HWT failure to provide Council with financial statements for 6 years, the commissioner ruled “There was no evidence to suggest that the failure to provide the City and the Commissioners with an annual report and audited financial statements for the fiscal years ending December 31, 2002 – 2007 inclusive was a deliberate act to conceal deficiencies.”
The Basse narrative is not clear on the circumstances around an adverse accounting opinion that was issued in 2007–something that is rare and considered very serious in the accounting community. The Basse report says that the HWT avoided an adverse opinion by correcting deficiencies, when in fact, as the Bay Observer learned, the HWT had already received an adverse audit opinion from an initial auditor, and then sought out new auditors who eventually produced an unqualified report using exactly the same numbers. The Basse report leaves the impression that there was only one auditor involved. The report reads; “the auditor provided recommendations to rectify the deficiencies …The Board instructed the Executive Director to implement the auditor’s recommendations. This was completed with the assistance of the auditors. As a result, the financial operations were revised to comply with the recommendations of the auditors and to meet auditing standards.” Under corporate law it requires a resolution of the HWT trustees, which would include Collins, to change auditors. Basse’s report is silent on whether he was aware there were two auditors and two reports.
Overall the report deflects most of the blame for accounting deficiencies and failure to file timely reports to HWT Executive Director Werner Plessl, noting “ In the normal course of business, forwarding financial statements to the City and the Commissioners is an administrative function. The Trustees do not perform the day to day administrative functions for the HWT. That is delegated to the Executive Director.