In Mike Macdonell’s own words, he is not the bogeyman.
“My job isn’t to make people look bad,” he said. “I’m not out to get people. I don’t do ambush auditing.”
Macdonell, a chartered accountant and certified fraud examiner, is Vancouver’s first-ever independent auditor general, a job he began in September 2021.
Since then, he and his staff of 10 have highlighted deficiencies in various city departments and systems that have resulted in city council adopting a series of recommendations to improve how the City of Vancouver functions.
“If I can help make the city operate better, more efficiently, achieve better results for Vancouver taxpayers, then I’m happy to do so,” he said last week, after presenting two reports to council.
One of those reports was big news: An investigation uncovered that a city building inspector had an “ongoing undocumented and unmitigated” conflict of interest that involved preferential treatment of his ownership in a private business.
The investigation also partially substantiated the allegation that some contractors were given preferential treatment by the employee, including “favourable inspections.”
The employee no longer works for the city.
Another finding was employees telling investigators in interviews that “bribes and hospitality are routinely offered” to inspectors, although Macdonell and his staff did not obtain evidence that any bribes were accepted.
The information collected in the investigation will be turned over to the Vancouver Police Department for further consideration — all of it because of a complainant who brought the allegations to the-then general manager of the city’s development, building and licensing department.
The complaint was forwarded to Macdonell’s office in May 2024.
“Without the whistleblower pointing us to this issue, it would have been a needle in a haystack,” he said. “But because we had [the information], we were able to establish patterns that suggested that there were some irregularities.”
Council heard July 3 from Hamish Flanagan, who is the auditor general office’s audit principal and responsible for investigations.
Flanagan described the investigation as “major” and noted city management didn’t document the employee’s conflict or mitigate it when they were alerted to it.
“Which meant that it was ongoing over many years,” he said. “That was a function of both not disclosing it — obviously on the part of employee — but also management at the time not addressing it properly when it arose.”
Whistleblower complaints now reported
Macdonell’s office took over whistleblower investigations from City management in January 2024.
Up until that time, management had not produced a public report on the number of whistleblower complaints received, the nature of them or status of investigations.
Macdonell told council in May 2022 that the city received 113 whistleblower complaints in 2021. But whether any were substantiated or led to action were not details provided to city council, which was supposed to receive a report on outcomes of the complaints.
“I was informed that no such report has been prepared or presented,” said Macdonell at the time.
“Because no summary report was produced, and I didn’t review the supporting files, I can’t tell you how many complaints were investigated or substantiated, or the outcomes of those investigations that were in fact conducted.”
Taxpayers can now review an annual report produced by Macdonell’s office on whistleblower complaints.
The first one was published in February and indicated the auditor general’s office received 173 reports under the whistleblower policy, with 191 distinct allegations.
“The [auditor general’s office] provided timely responses to reports in 2024, with 163 of 173 reports received in 2024 closed by the year end, with the remainder under active assessment or investigation,” the report said.
One of those ongoing investigations relates to the sale of city lands.
Macdonell told BIV in a previous interview that his office received a half-dozen complaints from “outside the city” regarding the transactions. He said the complainants were concerned the city wasn’t obtaining best value for the lands.
A report is expected in September.
Fixed deficiencies to create $78 million in savings
Macdonell’s office has conducted audits of the city’s child care, cultural and social non-profit leases, building permit fees, park board revenue management, office furniture purchases, and did a risk management audit of the Vancouver Police Department.
An audit on cyber security was presented in camera because of the sensitivity of the topic.
He estimated the work his staff has already done to highlight deficiencies in city departments will mean “a total economic benefit” to the City of Vancouver of $78 million by 2029.
The $78 million benefit will either be through cost savings, cost avoidance or enhanced revenue, according to Macdonell, who said he has hadn’t had any pushback from city staff when pursuing files.
“[City] staff are required to support my office, staff are required to answer questions when I ask them, provide information, and I never have to bring that up,” he said. “I’ve had nothing but excellent cooperation from city management since day one.”
Macdonell was appointed by the previous city hall administration of former mayor Kennedy Stewart after then-councillor Colleen Hardwick made the case for the position.
Hardwick argued at the time that Vancouver was the only major city in Canada that didn’t have an auditor independent of city management.
Reached recently via email, Hardwick described Macdonell as “a rock.”
“Providing independent oversight over city staff has proven essential,” she said, adding that council giving Macdonell’s office the responsibility for whistleblower investigations “has forced the city’s hand” after staff’s failure to produce a report to council in 15 years.
“The return of investment for the auditor general’s office has already saved Vancouver taxpayers many millions of dollars as demonstrated in the annual report,” Hardwick said.
“Bottom line: The addition of the auditor general to the City of Vancouver was an important step in restoring trust in our local government.”
Council agreed that an auditor general was needed, despite reservations from then-city manager Sadhu Johnston, whose concerns included number of employees needed for the office, size of budget and dependence on senior staff “who are already stretched very thin” for information.
Macdonell’s office is operating this year with a $2.5 million budget.
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