Paradise council has big split over small bill

By Mark Squibb/February 24, 2023

After months of debating the matter behind closed doors, Paradise council has voted to approve a payment of $2,716, HST included, to BDO, though begrudgingly, and not unanimously.

Council was required to pay the fees as BDO claimed work was completed that was outside the scope of the original contract for 2021 auditing services.

“We discussed this at length over the past several months in committee, and we reviewed and discussed these additional fees, and we agreed to move forward and pay these additional fees,” said corporate services committee chairperson Elizabeth Laurie.

Councillor Larry Vaters was the first to speak to the motion.

“First of all, I want to note the level of effort gone into trying to get this particular invoice dealt with by staff,” said Vaters. “I appreciate it and want to commend them. Your Worship, this invoice, of course, was brought before the Administration and Corporate Service committee on three separate occasions, and on all three occasions I voiced some concerns with it.”

Vaters said as far as he knew, the additional fees were the result of time spent reviewing journal entries, making adjustments, drafting disclosures, presentations, and so on.

“As I understand, BDO considers these out of the scope of the contract, and while I understand and appreciate their viewpoint, I feel that this work is part of the normal audit process, and should not be considered out of scope and as such, I will be voting against this motion,” said Vaters.

Laurie admitted the committee had concerns.

“Staff have gone back and forth negotiating with BDO, and they’ve come down significantly with their invoice,” said Laurie, who noted the initial amount was over $5,000, not including HST. “There’s been significant compromise from both parties. Your Worship, we have a great working relationship with BDO, and we use them for various services besides this. They’ve been very helpful to us during the Lift Station 10 process. They met with staff and gave us some great advice, given the economic outlook, for prices in that tender. And they did that free of charge. They’re implementing our ERP system. There are implications that if we do not pay this invoice, they may withhold their services, which is in their complete right to do, and that will put us in a really compromising position for our 2022 audit, if we don’t have an auditor in place. I think staff have made significant negotiations and we did benefit from the work that they did, so for that reason I am in full favour of paying this invoice.”

Councillor Glen Carew, like Vaters, was not in favour.

“The additional required work as referenced in this memo, as councillor Vaters pointed out, in my opinion, should have been identified by either town staff or BDO, and included in the pricing,” said Carew. “Your Worship, if this were the case, my decision to award the contract to BDO might have changed seeing as there were other competent audit firms who also submitted bids on this work. And for that reason, I’ll be voting ‘No,’ on this.”

Deputy Mayor Kim Street spoke next.

“I will be voting in favour, mostly because if this doesn’t get passed, legal will get involved, and once it becomes a legal thing, it will cost the Town more than $2,716, so that’s important to note,” said Street. “There’s also the high probability that the services will be suspended if there’s legal action. So, I don’t believe we should have to pay more at the end of the day, but this could also put the Town in a serious predicament for 2022 audit services, and like councillor Laurie said, we could end up with no auditor in place. It’s an important relationship to have, and compromises were made on both sides in regard to the extra fees, so I will support this.”

Patrick Martin next added his two cents.

“I was a bit torn on the overcharges that were not in the scope of work, but after discussing it at the last Corporate Services meeting, I’m in favour of paying the bill,” said Martin. “It’s a very important service that BDO is providing to the Town, and the chance of not having an auditor would be significant to the Town. It’s something that we can’t let happen.”

Councillor Deborah Quilty, who attended the meeting via telephone, said she too would be voting in favour of the motion so as to avoid a statement of claim landing on the desk of Director of Corporate Services Terrilynn Smith.

“I think at the end of the day, we’re much better off right now to keep a good relationship with the company, let them carry on with their work, and pay this outstanding bill,” said Quilty.

The motion passed 5-2, with Carew and Vaters voting against the motion.