Happy Valley-Goose Bay lost $400K in provincial funding while lagging on audits

The Town of Happy Valley-Goose Bay lost a significant chunk of provincial funding after failing to complete years of audits on time.

The town didn't complete their audits between 2018 and 2021. Its subsequent audits for 2022 and 2024 were delayed to catch up on the previous years.

The price tag of delayed submissions totalled $400,000 in provincial grants and Derek Montague, former mayor of North West River, said much of the town didn't know about the issues.

He learned about the problem while watching the council meeting online.

"I had to rewind the footage and listen to it three times to make sure I was understanding what he was saying," Montague said. "Mayor [George] Andrews just said it so casually and in an off-handed manner. I thought he quite undersold how serious it was."

Montague's concerns come from personal experience. In 2018, financial audits from 2014 and 2015 showed $58,147 unaccounted for in North West River.

The problem was first noted on the public record in 2016.

"Cash is coming into the office, but not going into the bank," state minutes from a specially called council meeting on March 7, 2016.

The RCMP had to investigate the situation, and the cost of auditing surpassed the money lost.

For Happy Valley-Goose Bay, Montague said there needs to be an investigation into why the audits weren't completed by the deadline, and the public needs to be regularly informed.

"A lot of people who typically keep abreast of Happy Valley-Goose Bay municipal politics also seem to be in the dark about this issue," Montague said. "There should be regular press releases from the Town of Happy Valley-Goose Bay going forward on progress on this file."

But Happy Valley-Goose Bay Mayor George Andrewssaid the audit issues weren't a secret: the town has been working through the audits since they took office in 2021, he said.

Five audits have since been completed. The one that raised Montague's alarms was for 2022. All accepted audits were brought up in previous council meetings.

"The latest one that was released or accepted by council at Tuesday night's meeting was the 2022 audit," Andrews said. "We took immediate action and right now are pleased to say that we're working on the 2023 audit and hopefully that will be completed in short order."

Timeline in place

Unlike North West River's case, Andrews said there was no wrongdoing among Happy Valley-Goose Bay's council. It was a timing issue with the previous auditors.

"We removed them from the file, and we went through a process of replacing them with a company that could perform the required work," he said.

It took time to find a new auditor, he added. As a result, the town lost a portion of their municipal operating grant for 2020 and 2022, but Andrews said the province and the town's bank were fully aware of the situation.

"Going forward, do we want to lose money? Absolutely not," he said. "We've ensured that the schedule that our auditor is working on ensures that we don't and won't lose the municipal operating grants going forward."

According to Andrews, Montague's concerns about the cost of auditing aren't an issue.

"The cost is of a competitive nature, and these aren't forensic audits," he said. "They're regular, normal audits that would be completed and have been completed."

Andrew said their 2023 audit should be completed by the end of March, and all should be resolved by October 2025.

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