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HomeMy WebLinkAboutFCS-14-085 - Municipal Election Compliance Audit CommitteeStaff Report rTC.�r R finance and Corporate Services Department www.kitchener.ca REPORT TO: Committee of the Whole DATE OF MEETING: May 26, 2014 SUBMITTED BY: C. Tarling, Director of Legislated Services /City Clerk, 519 -741- 2200, extension 7809 PREPARED BY: C. Tarling, Director of Legislated Services /City Clerk, 519 -741- 2200, extension 7809 WARD(S) INVOLVED: All DATE OF REPORT: May 9, 2014 REPORT NO.: FCS -14 -085 SUBJECT: Municipal Election Compliance Audit Committee (MECAC) RECOMMENDATION: That participation on the Municipal Election Compliance Audit Committee and the Terms of Reference attached as Appendix "A" to Finance and Corporate Services Department report FCS -14 -085, be approved; and That the City Clerk be delegated the authority to appoint members of the Municipal Election Compliance Audit Committee, in consultation with the Clerks of the other participating municipalities; and further, That remuneration of $150 per diem plus the applicable mileage rate be approved for members of the Municipal Election Compliance Audit Committee. BACKGROUND: Section 81.1 of the Municipal Elections Act (the Act) requires every municipality to appoint a compliance audit committee no later than October 1 of an election year for a 4 -year term. The committee's mandate is to determine if an allegation made by an elector of non - compliance with the Act regarding a candidate's financial statement warrants an audit by a certified auditor. In 2003, 2006 and 2010, with the exception of the City of Cambridge which formed its own committee, the councils from the Cities of Kitchener and Waterloo, the Townships of North Dumfries, Wellesley, Wilmot and Woolwich, and the Region of Waterloo appointed a joint Municipal Election Compliance Audit Committee (the MECAC). It was acknowledged a joint committee would better serve the municipalities in this region because it would be difficult to find sufficient individuals with the right qualifications willing to serve on seven different committees. As well, the participating councils delegated approval of the appointments to the MECAC to each of their Clerks since this streamlined the process of establishing the MECAC and eliminated a potential or perceived conflict of a sitting member of council. 2- 1 REPORT: MECAC Process Under Section 81 of the Act, an elector, who is entitled to vote in an election and believes on reasonable grounds that a candidate has contravened a provision of the Act relating to election campaign finances, may apply for a compliance audit of the candidate's campaign finances. The elector would submit an application in writing to the municipality's Clerk setting out the reason(s) for the elector's belief there has been a contravention of the Act. The Clerk would forward the application to the MECAC and within 10 days, the MECAC would decide whether it should be granted or rejected. If granted, the MECAC would appoint a qualified auditor to conduct a compliance audit. The auditor would submit his /her report to the MECAC, the candidate involved, the Council and Clerk of the relevant municipality, and the applicant. If the auditor's report concludes the candidate appears to have contravened the Act, the MECAC may commence a legal proceeding against the candidate for the apparent contravention. If the report concludes there was no contravention and the MECAC determines there were no reasonable grounds for the application, Council is entitled to recover the auditor's costs from the applicant. When an application is received, the municipality in which the candidate ran for office is responsible for administering the meetings of the committee and paying all costs for the MECAC members as well as the expenses of the auditor. Composition of the MECAC In past years, the MECAC was comprised of seven (7) members from across the region with skills, knowledge, expertise and experience in one or more of the areas of accounting and audit practices, political science or local government administration, municipal /election law, and Municipal Elections Act campaign finance rules. The members of the MECAC were selected based on criteria such as: • demonstrated knowledge and understanding of municipal election finance rules; • analytical and decision - making skills; • availability for meetings during the day or evening; and • previous committee experience, etc. Finding seven members within our region with the necessary qualifications to sit on the MECAC remains a challenge, especially when eight (8) municipalities require their services. Thus, it is recommended to approve the appointment of a joint MECAC, which will now include the City of Cambridge. The MECAC will conduct business, if required, under the attached amended Terms of Reference and conflict of interest policy (based on the Region's policy for its advisory committees). It is also recommended to continue to delegate approval to appoint members to the MECAC to the Clerks (or designates) from the participating municipalities. The Clerks will review the applications, appoint the members by a majority vote, and provide the approved names to each council for information. ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: Citizen engagement is served by community members participating on the MECAC while efficient and effective government is achieved by citizens performing the administrative functions associated with election compliance audits. 2— 2 FINANCIAL IMPLICATIONS: None at this time, however, costs will be incurred if a request for a compliance audit is received. COMMUNITY ENGAGEMENT: Membership for the MECAC will be solicited across the region by advertising, posting on the respective municipal websites, via various social media channels, and by approaching previous MECAC members. ACKNOWLEDGED BY: D. Chapman, DCAO, Finance & Corporate Services Department 2- 3 Terms of Reference Municipal Election Compliance Audit Committee (MECAC) Refer to Section 81 of the "Municipal Elections Act" 1. Name of Committee Municipal Election Compliance Audit Committee (MECAC). The participating municipalities within the Region of Waterloo. 2. Purpose /Mandate /Scope The MECAC will operate within the provisions of the "Municipal Elections Act ", as amended. The MECAC will consider an application for a compliance audit of a candidate's election campaign finances received under Section 81 of the "Municipal Elections Act" from an elector to determine if the application should be granted or rejected. If granted, the MECAC will appoint an auditor, receive and consider the auditor's report and decide whether legal proceedings should commence or if there were reasonable grounds for the application. The auditor's report is also submitted to the host Council and they are entitled to recover the auditor's costs if there was no apparent contravention and the MECAC finds no reasonable grounds for the application. Definition "Host Municipality" is the municipality where the application for a compliance audit is received. A host municipality can only receive applications for candidates registered in its municipality. 3. Committee Membership The MECAC will consist of seven (7) members. The Chair of the Committee will be determined at each meeting by selection of the members present. Membership for the MECAC will be derived from the following groups: a) Accounting and audit; b) Academic with expertise in political science or local government administration; c) Legal; d) Other individuals with knowledge of the campaign finance rules contained in the "Municipal Elections Act" 2- 4 Members shall not include: a) Members of any municipal Council represented; b) Employees or officers of the municipalities represented; c) Any persons who are candidates in the election for which the committee is established 4. Selection of Members Advertisements, including postings on the respective municipal websites, will be placed to solicit membership for the MECAC. Previous Compliance Audit Committee members will be contacted, along with direct contacts by municipal staff. The Clerks (or designate) from the participating municipalities within the Region of Waterloo will meet to review the applications. Approval of the appointments will be delegated to each of the afore - mentioned Clerks by their respective Councils and the approved names will be put forward to each Council for their information. Appointments will be approved by a majority vote of the Clerks. Criteria used to determine membership may include: demonstrated knowledge and understanding of municipal election finance rules; analytical and decision - making skills, availability for meetings during the day or evening; previous committee experience, etc. 5. Term of Office The term of office of the MECAC is the same as the term of Council, December 1St of an election year to November 30th of the subsequent election year. 6. Meetings Meetings will be held as required when an application for compliance audit is received under the provisions of the "Municipal Elections Act ". The time frames for receiving applications and holding meetings shall be as established by the "Municipal Elections Act ". Meeting locations will be determined by the host municipality. 7. Agenda and Minute Preparation for the Meeting The Clerk of the municipality where the request for compliance audit is received (host municipality) will be responsible for scheduling the meeting, preparing the agenda and taking minutes for the meeting. All expenses will be paid by the host municipality. 8. Closed Meetings of Committees Closed sessions will be held in accordance with the provisions of Section 239 of the "Municipal Act" and will follow the procedures of the host municipality. The Clerk of the host municipality is responsible for conducting the closed meetings. 2- 5 9. Meeting Procedures Quorum will consist of at least four (4) members of the MECAC. Voting by consensus will be used for decisions of the Committee or a majority vote by members, usually performed by the show of hands. The Chair is also entitled to a vote on MECAC. Meetings will be governed by the Procedural By -law of the host municipality and Roberts Rules of Order as required. 10. Remuneration Members of the MECAC shall be paid a per diem rate of $150 plus the applicable mileage rate from the host municipality. Expenses will be paid by the host municipality. 11. Conflict of Interest Policy Members of the MECAC will conform to the conflict of interest policy, attached as Schedule "A" to these terms of reference. 12. Expulsion of Members The MECAC and /or the represented Clerks group may recommend to the host Council where the application was filed for the expulsion of a member for reasons as listed, but not limited to: • the member being in contravention of the "Municipal Act ", the "Municipal Freedom of Information and Protection of Privacy Act ", the "Provincial Offences Act ", the "Municipal Conflict of Interest Act" and /or the "Municipal Elections Act "; • the member disrupting the work of the Committee; or • other legal issues 13. Errors /Omissions The accidental omission to give notice of any meeting of the MECAC to its members, or the non - receipt of any notice by any of the members, or any error in any notice that does not affect its substance, does not invalidate any resolution passed or any proceedings taken at the meeting. Any members of the MECAC may at any time waive notice of the meeting. 2- 6 Schedule "A" — Conflict of Interest Policy Policy Application This policy applies to the Municipal Elections Compliance Audit Committee (MECAC) for the participating municipalities within the Region of Waterloo. Operating Principles: Members of the MECAC have a duty to conduct themselves in an impartial and objective manner. It is recognized that appointees have a broad range of interests and, from time to time, actual or potential conflicts of pecuniary interest or the appearance of such conflicts may arise. The purpose of this policy is to enable the MECAC to deal with such conflicts in as open and appropriate a way as possible. It is understood that members of MECAC will perform their duties in such a way as to promote public confidence and trust in the integrity, objectivity and impartiality of the Committee. No member shall directly or indirectly receive any profit from his /her position, provided that an honorarium, as established in the Terms of Reference and reasonable expenses may be paid in the performance of their duties. Definitions "Affected Party" means any individual, partnership, corporation, organization or other legal entity which has an interest in property, objects or other assets which are the subject matter of consideration by the Committee; "Business associate" means an individual in a formal partnership or in a shared ownership of a company or enterprise with a Member; "Committee" is the Municipal Elections Act Compliance Audit Committee (MECAC); "Immediate family" means a parent, child, spouse or common -law spouse of a Member; "Member" is an individual formally appointed to the MECAC in accordance with the Terms of Reference. Conflicts Conflicts of pecuniary interest arise when Members may financially benefit, directly or indirectly, from their membership on a Committee. Such involvements include, but are not limited to, the following: • Members being the Affected Party or employed by or doing business with the Affected Party • Members' immediate family being the Affected Party or employed by or doing business with the Affected Party • Members' business associates being the Affected Party or employed by or doing business with the Affected Party 2- A conflict of interest may be actual, potential or apparent. The same duty to disclose applies to each. The pecuniary interests of a Member's immediate family or business associate are considered to also be the pecuniary interests of the Member. Full disclosure in itself does not remove a conflict of interest. Principles and procedures It is important that Members be sensitive to appearance and perception and err on the side of transparency. In case of conflicts, whether actual, potential or apparent, Members are expected to fully disclose the conflict as soon as it arises and before the Committee makes any decisions in the matter where the conflict exists. Once such a disclosure has been made, the Member involved shall abstain from voting and shall not participate in the discussion of the matter which gave rise to the conflict. The affected Member must not in any way, whether before, during or after the meeting, attempt to influence the outcome of any discussion or voting on the matter. If the meeting at which the matter is discussed is not open to the public, in addition to the above, the Member must leave the meeting room for the duration of any discussion and voting on the matter. In cases where one or more of the Committee's Members has abstained from voting as a result of conflict, such Members shall be identified in the minutes of the meeting. Individual Members are encouraged to seek independent advice on conflicts or potential conflicts. Quorum Where the number of Members who, by reason of conflict, are disabled from participating in a meeting such that the remaining Members no longer constitute a quorum as set out in the Committee's Terms of Reference, then remaining Members shall be deemed to constitute a quorum provided there are not less than two Members present. Solicitation No Member may in any way, either overtly or otherwise, use the fact of their membership on the Committee to solicit business for their own benefit or the benefit of their immediate family or business associates. 2- 8