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Q&A: Vancouver’s new auditor general on his role as ‘independent set of eyes’

Mike Macdonell begins his job Sept. 7
Mike Macdonell has been appointed the city’s first-ever auditor general. He begins his job Sept. 7. Photo courtesy City of Vancouver
The name Mike Macdonell is one that Vancouver taxpayers will undoubtedly become familiar with in the years ahead as the 58-year-old audit expert begins his job as the city’s first-ever independent auditor general.

The city announced his appointment Monday.

In a telephone interview Tuesday from Victoria, where he currently resides, Macdonell provided some insight into what the public can expect from the long-time bureaucrat, whose role is to investigate the city’s spending and determine whether it provides value for dollars spent.

To the question of what his appointment means for taxpayers’ wallets, he took a moment to respond before saying the public should take comfort in the fact that Mayor Kennedy Stewart and the 10 councillors take very seriously the expenditure of public funds.

“And they’re doing their best through the appointment of an auditor general as exemplification of that — and to ensure the city is achieving the very best economy, efficiency and effectiveness with dollars spent,” he said.

Macdonell, a chartered accountant and certified fraud examiner, spent 23 years in the provincial office of the auditor general. He also worked on contract for the office of the Auditor General for Local Government, which permanently closed in March.

More recently, he has worked as a consultant.

Macdonell officially begins his job with the city Sept. 7 and has signed on for seven years.

He doesn’t have an office yet, or staff and the city has yet to finalize the office’s budget, although previous staff reports have suggested it could be in the $1.5 million to $2 million per year range.

Macdonell’s salary, which is believed to be in the $200,000 per year range, is expected to be made public once he’s on the job.

In the meantime, Macdonell spent 30 minutes on the phone with Glacier Media to respond to questions about his new role — while he sweated profusely. It was not, he assured, because of the line of questioning, but because he had just returned from a training run for a half-marathon.

The interview has been edited and condensed for clarity.

Why did you want the job in Vancouver?

I've been an auditor most of my professional career. So I have a lot of familiarity with how this role works and should work. To be honest, that's what made this an attractive position. I've been semi-retired now for over two years. It took an opportunity like this to make me think that it would be interesting to come back — that this is a once in a lifetime career opportunity to set up a legislative audit office and make sure that it's set up properly and runs well. I've spent seven or eight years working in the local government sector, auditing local governments across the province. I certainly believe in the value of accountability and what an objective set of eyes can bring to various aspects of local governance and administration. So I really see a great opportunity here to add value for the electors of Vancouver.

You’re coming into a role where there is no template or predecessor to draw any historical context or institutional knowledge from. So where do you start in getting the office up and running?

While there may not have been an auditor general in Vancouver before, we did have the Auditor General for Local Government. That was a very well-run office and external reviews proved that time and again. They had a really good structure and things that I helped put together actually, and that I intend to put together and apply in Vancouver. That should speed the process up quite a bit. You'll appreciate that starting something from scratch could look like quite an onerous undertaking. I don't have the luxury of time. It has to be done quickly. In fact, I have to have an audit plan before city council in January 2021. Rather than reinvent the wheel, I’ll work off of somebody else's successes. There’s an old saying that imitation is the most sincere form of flattery. That's what I intend to do.

In the council discussion about the need for an auditor general, politicians stressed the importance of such an office to be set up as independent from the city. How do you plan to establish that independence?

Well, it's really not me setting it up, or establishing that. It's what council has done — and what they've done is they set up a governance structure where I report to a subcommittee of council, which will have external advisors. I will be setting my own audit program. I don't take it to them for approval, I take it to them for information. I will certainly be seeking their input — I will be seeking input from a lot of people. But at the end of the day, I need to put together an audit program that I feel will yield success on the short term and long-term value for the electors of Vancouver. But at no time, has [council] indicated and nor would I accept any interference in putting that plan together. I have discretion as to staff hiring. And quite frankly, that's going to be the greatest challenge — finding people quickly with the right background skills and abilities to be able to jump into the roles that we'll be creating. And to be honest, I've not started work, but I've already started recruiting.

How big is your staff going to be?

I don't have an exact answer because I don't have an exact budget yet. That's going to be a matter for discussion with council. I'm expecting a staff of approximately eight to 10. But I don't know exactly. It's a matter of what the budget is, and what compensation is going to be both appropriate within the city's context and appropriate to be attractive to recruit people.

So I just want to be clear on how you will conduct investigations. Will you be deciding which areas, programs or departments to examine? Or will you be taking your orders from city council?

Definitely not. I decide. Me and me alone. Every audit will result in a public report. I will report what I find. And the auditor general recruitment committee [of councillors] has made it entirely clear that that's their expectation — that they want to hear what I have to say as an independent auditor, and that there will be no interference whatsoever.

What about the public, though? Because Vancouver, as you are probably aware, is a hotbed for local politics and issues. Many different groups rally around city hall on different issues. So are they going to have a say in any way in terms of what gets looked at by your office?

I'm very interested in what public interest groups have to say in terms of where their priorities are. And, quite frankly, I'd be rather foolish to not listen to that input or certainly seek it. Ultimately, the decision will be mine as to what the appropriate audit program will be. But absolutely — yes, I intend to engage broadly and seek input. I have a lot to learn about the City of Vancouver, and I'm looking forward to that.

I wrote a story last month pointing out that the City of Vancouver's expenses were growing faster than revenues, and that it was a trend the city's finance team expected to continue over the next five years if action isn't taken to reduce costs. Is that an area that you would plan to examine?

Not in the macro sense unless the budget process itself was subject to examination. What this kind of work is focused on is trying to ensure that the best value is obtained for every public dollar that's spent. What we have found — and I think you've seen this in the background work that you've done — is that other auditors general of local governments have in fact found great opportunities for either cost savings or inefficiencies that staff and management didn't know about. And that just frees up more funds to do good things as opposed to being perhaps not spent as wisely as one might want.

Last year, the city lost $89 million in revenues last year and is predicted to lose another $90 million this year. Staff have pointed to the pandemic to explain the revenue loss. When you see and hear those numbers, do you see an opportunity for your office to better explain to the public why such big losses?

I would see the opportunity to add value, whether those numbers were there or not. The city's historic financial performance isn't the driver for me on this. It's the opportunity to have that independent set of eyes come in and look at how work is being done and how things can be done better.

Over the last year, the Vancouver Police Department’s operating budget has been a big topic of discussion in the community, at city council and at the police board. As you’re probably aware, the police board recently appealed a council decision not to increase its budget this year. No ruling has been made yet. The VPD is the largest tax-funded department in the city. Do you envision taking a closer look at the VPD’s spending?

That is one area where I believe the [auditor general] bylaw spells out that I need to have a discussion with council before going forth and look at boards. I will know more about this when I'm actually in the role and have had a chance for further understanding and investigation. If you have a look at the bylaw, you'll see that I may need council's approval to go there.

Your office will be doing a lot of investigating and analysis of departments and programs. So I’m curious who will be doing the same for your office and how often will that happen?

It is spelled out in the bylaw that my office will be subject to an external assessment I believe that is going to be focused on compliance with city policies. I'm not sure who's going to do that at this point. That's something that will need to be worked out. I should also back up and say it's really important that auditors are accountable. We're not above accountability. I’d be quite a hypocrite if I said anything else. The other thing is, I'm intending to set this up as a public practice office with the Chartered Professional Accountants of British Columbia. As a result, the office will be subject to periodic external review, just like the Auditor General of British Columbia's office is and just like the Auditor General for Local Government’s office was. Lastly, local government auditors general do peer reviews. So we'll be doing that as well. That's to ensure that the work meets the standards and determine if there were any opportunities for us to do our work better.

What challenges do you see in carrying out your work during a pandemic?

I'm sitting in a home office here in Victoria right now. And I've had meetings with people across the country from this from this very office. So in some respects, it's actually a little easier to meet with people because all you need to do is set up a time you don't have any travel time involved or anything along those lines. On the other hand, you don't have the same social interaction. So I anticipate that we're going to have some kind of a hybrid model. If you're looking at evidence, if you're looking at documentation, that sort of thing, you need to be physically present. So I think we're going to be doing a bit of both going forward. Work is mostly being done remotely with documents being uploaded into secure websites and people doing their work from wherever they happen to be working, whether it's in an office or whether it's in home office. So I don’t necessarily see this as being an impediment. It's just a different way of doing business. And welcome to 2021.