An audit of the Edmonton Economic Development Corporation suggests more role clarity is needed for the organization, and better accounting practices are needed.
The report makes seven recommendations on four areas of EEDC: questioning if its governing documents are up-to-date and clear, how effective its risk management process is, if its innovation system is effective in reaching its objectives and if the state of its Vendor Master File has proper controls.
The report said the innovation system needs improvement after “its objectives have changed multiple times over the past 18 months.”
The audit also said role clarity is needed for the organization, and better accounting practices are needed.
Councillor Mike Nickel after reading the audit said the city’s economic development authority needs to prove it is doing its job well.
“If you don’t have the system in place, when is going to be in place and what does it look like?
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“Budgets are tight. Every dollar counts. With this (city) budget, this is our opportunity to talk about doing things differently.”
Nickel said that’s especially true since EEDC has a budget of $70.8 million, with $20 million of that coming from property taxes.
He hopes the outcome of council’s Audit Committee meeting on Friday will see a more defined role for EEDC and the other economic development agency that represents the metro region, Edmonton Global. “That could very well be the question that comes out of it,” Nickel said said in an interview.
“(What is) the value proposition for Economic Development Edmonton? There is a value proposition there, it ties into the technology guys and so on, but we need much more clarity here,” Nickel said.
The audit lists management’s response as agreeing to update EEDC’s governing documents, to “create clear and understandable descriptions of the objectives and services provided.” EEDC also said it will improve the data used to measure its work with innovation reporting starting in 2020.
The audit found in a review of the master list of vendors, that some 2,000 of them are still listed, even though EEDC hasn’t dealt with them in 3 years. There’s also duplication which Nickel says can lead to fraud.
An unrelated earlier audit also found in December of 2018, a phishing scam defrauded EEDC of $375,000.
“Since January 2019, we have implemented new effective, preventative, detective and corrective internal controls to authenticate vendor banking information prior to releasing payments,” the management response said. “In addition, we have already begun the process of developing standards and practices relating to all aspects of vendor setup.”
Nickel said he’s heard plenty from the Edmonton business community about the value of EEDC which he said he’ll pursue in Friday’s meeting.
“I think it starts with, what are you doing? Why are you doing it? Should you be doing it at all? These are very simple questions. Sometimes they’re not simple answers but they’re very simple questions. Then just go back to measure what you do so we can demonstrate that we’re actually getting value for our taxes.”
EEDC operates the Edmonton Convention Centre and Expo Centre while other revenue comes from membership fees, lease agreements and other external sources like contributions from the Edmonton Destination Marketing Hotels group.
Tax levy support of $20 million made up 28 per cent of EEDC’s revenues.
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