Financial Report Exposes Years Of Accounting Errors

The 20 page report titled 2018 and 2019 Operating Capital Results is on the agenda for this Wednesday’s Council meeting. It is a complex read for most, including myself. What is clear is that Midland’s financial reporting and accounting has been plagued with errors that are now coming to light, on the heels of two retirements.

Former CFO Susan Turnbull and former CAO John Skorobohacz were at the helm of our finances and our organization for the years before and during these errors. Both have recently left their positions.

While I will not pretend to fully understand how they could have allowed this to happen, and to have it go un-noticed or un-reported to Council for the past two years (I cannot speak for previous Councils), the results are now being made abundantly clear by our new CFO Michael Jeremy.

To his credit, the report is quite transparent and blunt and offers some explanations on how bad this is, and offers options to try to claw ourselves out of the issues but the facts remain.

I will let you review the report on your own to draw your own conclusions. You can read it here:

Many of you have read it, and some of you have reached out to me in either anger or disbelief. I am as shocked and disappointed as you are.

Midland has had successive rounds of staff turn-over at both the executive and supervisor level over the past decade.

I have quite a few questions of Mr. Jeremy on Wednesday evening and have asked to have the report pulled from our consent agenda to get through these questions. As a courtesy, I have sent these questions to him in advance via email, as I would like him to come prepared.

To show you where my mind is at after reading this report, and since you will hear all these questions (and hopefully the answers) in a public forum, I will include my major questions here so you know what I am concerned about in this report – and some of my concerns revolve around what is not in this report.

Hi Michael,

I am fielding some inquiries ahead of Wednesday’s meeting about your financial report.  I thought I’d ask you some of these in advance so you can be ready to discuss.

  1. Have we received the $483,900 from the government (SRA COVID-19 support)?
    1. Where is it being used and where is it accounted for?
  2. Have we received the $535,200 from the OMPF?
    1. Where is it being used and where is it accounted for?
  3. Have we received the $70,781 destined for Mid-Pen Transit?
    1. Where is it being shown and used to offset our transit budget?
  4. How much of the Community Initiatives Reserve have we depleted for the King Street Project (we agreed to lend that money to ourselves pending the financing you are announcing)
    1. Will it all be repaid to the reserve once the financed monies are received?  We have other things to spend that money on and it should be topped back up to full value with the new finances?
    2. Where will this be shown to us and when?
  5. When are you presenting Council with the new OPP billing costs (under the new formula) for 2021?  Surely we have some estimates from the OPP by now?  We are supposed to achieve 1 million in savings over the MPS budgeted costs and have begun to spend those savings over the past 3 years despite not having accrued them.
  6. In attachment 1 you showed the 2018 budgeted costs for OPP to be $5,364,280 (and they came in at $5,064,398 which is good).  That is still higher than the MPS budget for 2018 which was under $5m.  What were the costs for OPP in 2019 and what will they likely end up at in 2020?  In two town documents in the past 2 months I have read about savings by going to the OPP. How is that possible? 

    3.8m (and climbing) was disbandment. The 2018 costs were higher than the MPS budget. If your predecessor applied customary historic increases to the MPS budget and compared it to the OPP costs (which we have yet to see) and then factored in the disbandment costs (known at the time) we would come up with a number that accurately represents whether or not we are or have saved any money.  Is my logic wrong?  I will be looking for you to show us the savings and then we can accurately compare the costs in 2021 under the new billing model.  If there are actual savings I would like to be able to see them and acknowledge them publicly.

These first two questions relate to substantial sums of money that should effectively zero-out our losses from COVD-19 and leave us in the black.  I don’t  get that impression from your report.  Where are they?

When will be weaning ourselves off of Mr Davis’s services now that we have you on our team?  Do you need him?  There are savings to be realized by pruning our contractor base, including the services of a former CAO.  I am looking for an update on the end-dates and an accounting of what we have spent for these two contractors.  I assume those line items will appear somewhere for us to review and discuss renewing where required.

Given our current fiscal outlook in your report and the many projects we have to fund, I need more information and although I appreciate the transparency in this report, it is clear to me that our past executives in charge of our finances and oversight have failed us in incalculable ways.  This report is worded far more kindly than it could be.

Feel free to add some colour to these questions before the meeting or I can just go through them with you then.  If I have simply missed the answers to any of these in your report, kindly let me know where to look.  I don’t believe in ambush politics and avoid that position whenever I can.  I am sure other councillors have questions for you about this report so please add these to the mix.



Please reach out to your councillors with your concerns before the meeting so that they can relay those comments and questions to the staff before we have to accept this report for information purposes.