Auditor general's report says savings to city were overstated by nearly $100 million

A new report says Toronto's city manager claimed savings resulting from KPMG’s recommendations were around $110.5 million. The auditor general says they were closer to $16 million.

 

Thestar.com
Feb. 19, 2015
By Katrina Clarke

The savings to Toronto as a result of hiring independent consultants was overstated by almost $100 million, according to a new report from the city’s auditor general.

The auditor general’s 2014 Audit Work Plan looked at the use of “service efficiency consultants” to determine if the city received value for money from implementing service-efficiency study recommendations. The city spent approximately $3.5 million conducting the KMPG-led studies between 2011 and 2013.

Toronto’s city manager, Joe Pennachetti - who is not named in the report - estimated savings to the city were around $110.5 million, according to the report.

Actual savings were closer to $16 million, the report states.

“We agree that there was likely some value for money from the use of the consultants on the Service Efficiency Studies, but not to the extent or value as indicated by the City Manager,” read the report, signed by auditor general Beverly Romeo-Beehler.

The report says around $60 million of the city manager’s estimated savings referred to a one-time fund transfer of previously committed funds. Another $34.4 million came from savings that were “previously identified by staff.”

City councillor Gord Perks said he wasn’t surprised by the report’s findings, saying the city already spends money efficiently.

“There’s been a poisonous thought in Toronto’s politics that our government is wasteful. It’s never been true,” he said. “There’s no gravy. There never was gravy.”

Perks wouldn’t weigh in on whether the efficiency studies are necessary or not, but said bringing in KMPG was “a painful, frustrating and ultimately, not very useful process.”

Perks said the report shows “mythical efficiencies” can’t replace raising taxes to improve services.

The KPMG reviews were introduced by the Rob Ford administration in an attempt to cut spending, which in turn triggered public hearings.