The Office of the Auditor General (OAG) has found that late invoicing and uncollected rent has resulted in significant losses. Pictured: City Manager Marnie Cluckie. Photo Credit: City of Hamilton.
An audit of the City of Hamilton’s leases and licensing agreements has found that the municipality is a somewhat ineffective landlord, with $1.2 million in accumulated arrears and rental losses due to mismanagement.
The city leases out space to various organizations, but the Office of the Auditor General (OAG) has found that late invoicing and uncollected rent has resulted in these significant losses for the city that are unlikely to be fully recovered.
The audit says, “From a systems perspective, the applications used for leases/licence administration do not offer the complete functionality of a fully integrated solution. They are vulnerable to untraceable changes to the information and do not integrate with the financial systems used corporately, which affects the efficiency, accuracy, and timeliness respecting the tracking of invoicing, receipt of payment, and account status.”
“In reviewing how leases/licence administration is organized, we found the administration to be inefficient, prone to error, and there are missed opportunities.”
“We found the processes for collection of rents and fees for leases and licences, including overdue or unpaid amounts, to be inherently weak, and inadequate to ensure full collection and restoration of arrears on a timely basis,” the OAG concludes.
Examples included an agreement that “was forgotten for about four years,” six instances of tenants who were not invoiced for “multiple years,” and delays in invoicing over multiple months.
The audit also included 35 recommendations for the city to improve their processes.
Those recommendations include appointing lead oversight to ensure governance and accountability, implementing enhanced systems for data tracking and financial reporting, streamlining and enhancing processes to improve effectiveness, and training staff on updated processes and technology.
The City of Hamilton has committed to all 35 recommendations and staff will be reporting back to Council on their progress implementing the changes.
“The City is committed to safeguarding its assets, ensuring the best value for money, and ensuring compliance with City policies and legislative requirements,” said City Manager Marnie Cluckie. “The recommendations in the Auditor General’s report are crucial steps toward strengthening financial controls and overall management of leases and licenses.”
Steve Robichaud, Acting General Manager of Planning and Economic Development for the city added, “We aim to create a more efficient and sustainable system for managing City-owned properties. Transparency and accountability are critical as we move forward, and we will ensure that the public remains informed of our progress.”
Councillor Brad Clark (Ward 9 – Upper Stoney Creek) called the OAG report “disconcerting,” noting that councillors have been “increasing taxes because we don’t have the revenue,” while at the same time the city is failing to properly collect the $1.2 million that is owed.
Based in Hamilton, he reaches hundreds of thousands of people monthly on Facebook, Instagram, TikTok, and Twitter. He has been published in The Hamilton Spectator, Stoney Creek News, and Bay Observer. He has also been a segment host with Cable 14 Hamilton. In 2017, he received the Chancellor Full Tuition Scholarship from the University of Ottawa (BA, 2022). He has also received the Governor General’s Academic Medal. He formerly worked in a non-partisan role on Parliament Hill in Ottawa.