The value-for-money audit has now been completed. You can read the results of it here.
The Ontario auditor general is conducting a value-for-money audit of Waterfront Toronto, The Logic has learned. A source familiar with the proceedings said the audit is looking closely at Waterfront Toronto’s operations related to its partnership with Sidewalk Labs, Google’s sister company.
In an email, the Office of the Auditor General of Ontario confirmed that it is conducting an audit of the Toronto Waterfront Revitalization Corporation, and that it was initiated by Ontario Auditor General Bonnie Lysyk during her annual selection process.
A value-for-money audit—which looks into the use of public funds—of an agency like Waterfront Toronto is a rare measure.
“It is neither routine, nor is it common,” said Donald J. Savoie, professor at the Université de Moncton and one of Canada’s most highly-regarded experts in public administration.
An analysis of every annual provincial audit conducted over the past two decades indicates that a value-for-money audit of an agency like Waterfront Toronto is a rare measure. The audit is expected to be included in the Ontario auditor general’s Annual Report tabled in December.
An analysis by The Logic of every provincial annual audit conducted over the past two decades shows that just 19 of 191 current agencies in Ontario have been audited. Of the 268 annual audits completed by the Office of the Auditor General of Ontario since 1997, only 30 have been value-for-money audits of government agencies; six agencies were audited more than once.
These value-for-money audits typically cover the delivery of front-line services. It is exceptionally rare for a full agency audit of non front-line agencies.
Waterfront Toronto said that the audit has been underway for nine months, and that the auditor general’s team has met on several occasions with Waterfront Toronto staff.
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“This is a routine audit and Waterfront Toronto looks forward to receiving the recommendations of Ontario’s Auditor General when she tables her Annual Report,” said Cameron MacKay, vice-president of strategic communications and engagement, in an email.
A spokesperson for Sidewalk Labs said none of their staff have engaged or met with anyone from the Ontario auditor general’s office during the audit so far, but otherwise declined to comment on the matter.
A value-for-money audit assesses whether government and broader public-sector activities operate “with due regard for economy and efficiency, and whether procedures to measure and report on the effectiveness of programs and organizations exist and function properly,” according to the auditor’s website.
Christine Pedias, communications manager at the Office of the Auditor General of Ontario, said in an email that “the Auditor hopes to issue a report on this as part of our Annual Report, which is usually tabled in December.”
By the numbers
Value-for-money annual audits since 1997
268 audits completed by the auditor general
30 agency audits
24 individual agencies audited
19 current agencies audited
2 full audits of non front-line service agencies
Source: The Logic, Office of the Auditor General of Ontario
Waterfront Toronto put out a request for proposals (RFP) in March 2017, seeking an innovation and funding partner in the development of a 12-acre region of Toronto’s eastern waterfront called the Quayside. The 12 acres—largely owned by Waterfront Toronto with small swaths of private- and city-owned land—are a prime piece of Toronto real estate that could be worth over half a billion dollars.
Sidewalk Labs answered the RFP and was declared the winning bid in an October 2017 announcement that saw Prime Minister Justin Trudeau, then-Ontario premier Kathleen Wynne and Toronto Mayor John Tory alongside then-Waterfront Toronto CEO Will Fleissig and Sidewalk Labs CEO Dan Doctoroff. By then, a framework agreement had been signed by both Waterfront Toronto and Sidewalk Labs. That agreement was not made public until July 2018, when the new Plan Development Agreement (PDA) was released, a contract which superseded the October agreement.
What gets audited
The Auditor General Act identifies the criteria to be considered in a value-for-money audit:
- Money should be spent with due regard for economy.
- Money should be spent with due regard for efficiency.
- Appropriate procedures should be in place to measure and report on the effectiveness of programs.
In selecting what program, activity or organization to audit each year, the auditor general considers how great the risk is that an auditee is not meeting the three value-for-money criteria, resulting in potential negative consequences for the public it serves.
The factors considered include:
- the impact of the program, activity or organization on the public;
- the total revenues or expenditures involved;
- the complexity and diversity of the auditee’s operations;
- the results of previous audits and related follow-ups;
- recent significant changes in the auditee’s operations;
- the significance of the potential issues an audit might identify; and
- whether the benefits of conducting the audit justify its costs.
Source: Office of the Auditor General of Ontario
The PDA has Sidewalk Labs paying $50 million throughout the initial planning stages of the development, which will conclude if the Master Innovation and Development Plan (MIDP) is approved by both companies’ boards.
According to the PDA, Waterfront Toronto can spend up to $5 million of its own money during the planning phase, for which it will be reimbursed by Sidewalk Labs. Waterfront Toronto has not confirmed what type of spending will be absorbed by the organization or paid back by Sidewalk Labs.
“As the PDA lays out, Sidewalk Labs will reimburse Waterfront Toronto ‘for its reasonable, documented, out of pocket expenses incurred in connection with the creation of the MIDP’ on a quarterly basis,” said Dan Levitan, a spokesperson for Sidewalk Labs.
With files from Hanna Lee
Reporter Amanda Roth can be reached at [email protected] or via Signal at (413) 418-0304.