For more than four years retired City of Hamilton accountant Shekar Chandrashekar has tried to get more information on the finances of the Hamilton Police Services. What originally triggered his interest was a number of cash reserves the Police Service was carrying that didn’t appear to be used for the purposes for which they were established. The largest of these is a $5.7 million reserve for sick leave. The account has accumulated interest over the past five years but hasn’t been tapped since 2007 when $125,000 was withdrawn. Instead the Service’s cost of covering sick leave is apparently absorbed out of the service’s annual budget. The sick leave reserve has earned nearly $950,000 in interest since 2007. Another reserve which hasn’t been tapped since 2007 is a vacation reserve—again the vacation payouts apparently being met through the annual police budget.
Given that the Police budget accounts for 20 percent of the Hamilton tax bill, Mr. Chandrashekar attempted to get the police services board to order an independent audit of police finances. This was voted down after Police accounting staff said such an audit would cost more than $250,000—a number that was quickly refuted when it was revealed that the Niagara Police Services which does have a separate audit was paying less than $10,000 per year for an independent audit. Police accounting staff then said the $250,000 included the cost of hiring outside staff to prepare the paperwork for the auditors . Hamilton Auditor Ann Pekaruk in a report to Hamilton City Council, that appeared to have as its goal a line-by-line refutation of Chandrashekar’s concerns, wrote: “Hamilton Police Services explained that existing finance employees do not have the CAPACITY (our emphasis) to assist the external auditor by preparing financial statements, reconciliations, schedules and audit working papers.” The Bay Observer contacted local auditing firms who said that none of their clients have to resort to outside assistance for audit purposes. Mr. Chandashekar told the Bay Observer that the present practice of having Police Services audited as part of the city’s audit, ( which costs $225,000 per year for a Billion dollar organization) is that the number of transactions related to Police that auditors would investigate is too small a sample to provide comfort to the taxpayers that the finances are being run as efficiently as possible.
The controversy over whether to order a separate audit of Hamilton Police Services is really a microcosm of the deep divisions on the Police Services Board. Up until recently there was a split along city-province fault lines. The three provincial appointees largely vote as a bloc, and with the support of Chairs Bob Bratina, later succeeded by Lloyd Ferguson, repeatedly outvoted an opposition group led by Terry Whitehead, who had clashed with Police Chief Glenn DeCaire and fellow board members on more than one occasion. As a result the members of the police board filed a complaint to the Ontario Civilian Police Commission (OCPC) who took unspecified action against Whitehead.
At issue is the degree of civilian oversight that should be applied to Police Services. In the past in Ontario there has been an almost sycophantic relationship between police service boards and the Chiefs in Ontario. The OCPC is supposed to provide oversight of policing, but it is an opaque body, showing no inclination to get involved in oversight policy issues. Most observers agree that police services boards should not be involved in operational matters, except in extreme cases such as the G20 fiasco in Toronto. But in areas like budgets and auditing, the basic rules of good governance apply to a police services board just as it would apply to a private company. Audits are fundamentally a board’s prerogative, not police staff’s. There are other instances where it appears the Hamilton Police Board has restrained itself beyond the requirements of legislation. In the matter of communication with the media, the Hamilton police Board’s bylaws say that no member may “criticize any decision of the Board except for the purpose of moving the question be reconsidered” – a clause that would arguably not survive a constitutional challenge; but the Niagara Board’s by laws allow open dissent, requiring only that the dissenters indicate that they are speaking for themselves—not the Board. Hamilton police board chair Lloyd Ferguson on his reappointment to the Board seemed to agree that some open debate on Board policies ought to be permissible, stating “(the Board) has been perceived as a dysfunctional board and I’m trying desperately to change that” He said the board should ensure, “that we welcome critics and we don’t alienate them…don’t attack them.”
Mainly through Mr. Chandrashekar’s efforts Hamilton City Council has agreed to study the independent audit issue and a staff report is expected later this summer. Whatever the staff recommendation it will be a hot potato.