A former board member of the Hamilton Waterfront trust says she never saw an audited financial statement in the three years she served on the trust. Jeanine Stachow, who was on the board from 2004 to 2006, says she repeatedly asked to see financial information without much success. She told the Bay Observer, “Chad Collins (Chair of HWT from 2002 to 2010) appeared to support her requests for information, but in the end she did not get the data she was entitled to see. “I did get a staff-produced profit and loss statement once, but it lacked a balance sheet,” said Stachow who has a background in business. An examination of HWT financial statements indicates that auditors did indeed issue financial statements to the HWT in July 2004 and in September of 2005—times when Stachow was on the board, but she saw neither; even though both sets of statements contained the customary audit report addressed to “trustees of the Hamilton Waterfront Trust.” Said Jeanine Stachow, “I always felt certain board members were getting more information than others.” The audited financial statement for the year 2005, was delayed until May of 2007, after Stachow had been replaced as trustee by current HWT chair Bob Charters. It was this statement that contained an ‘adverse opinion’ –accounting language that essentially means the auditors can’t determine whether the numbers presented are accurate or not.—along with a five page letter critical of some loose financial controls and a possible conflict of interest. Stachow believes she was not reappointed because her demands for information ruffled feathers. “If the minutes of our meetings were kept accurately, you will see numerous references to me asking for information”, she said. She was unaware that the HWT was being sued while she was a board member over a 2002 construction accident for which the trust apparently was either under-insured or uninsured. The City of Hamilton ended picking up the tab for $127,000 and was only reimbursed by the HWT in 2011.
Faye Booker is a Hamilton consultant who specializes in board governance issues. She says not only should board members see financial statements, but that have a legal responsibility to do so. “Auditors should develop a direct reporting relationship with boards, “ to prevent the release of financial information from being confined to management and maybe one or two board members,” she said; adding “there is a higher duty of care when you are in receipt of public funds or donations.” She suggested the City, which already has “established strong (financial) controls, should ensure that every agency, board and commission that it creates is subject to the same financial controls.”
Meanwhile it appears the Hamilton Waterfront Trust in adding $400,000 to the cost of the washroom on the Beach trail project, effectively overcharged the provincial government who financed the bulk of the project. The largest share of the $2.13 Million project was paid for by the Waterfront Regeneration Trust—the provincial body responsible for creating trails all along Lake Ontario, who contributed over $1Million. The other funding partners were Superbuild—a federal-provincial infrastructure fund who contributed $639,000 and the City of Hamilton who paid $454,000. To qualify for the provincial money the City, as proponent of the project, signed a contract that stipulated, with regard to projects that come in under budget, “Where actual costs are lower… than the total eligible expenditures identified in the Budget, the Recipient shall immediately notify the Ministry and the Ministry may, in its sole discretion, adjust the financial assistance”. The contract also stipulated that the “construction component of the Project (including materials and equipment) shall be competitively and openly tendered, as deemed by the Ministry, to competent contractors capable of completing the construction component of the Project, and the contract will be awarded to the lowest qualified bidder or, where the bid price is not the sole specified selection criterion, the highest ranked bidder.” Instead the city named the Waterfront Trust as the contractor without calling tenders.