Auditor slams Bestwick committee for governance failures in expenses scandal

‘Poor tone at the top’ enabled top managers to override expense controls, cover up and punish whistleblowers
Bill Bestwick chairs the city’s finance and audit committee that KPMG says failed in its governance duties
A committee chaired by Bill Bestwick and actions by the city’s top two managers have been singled out in a damning auditor’s report that exposes new details on the expenses scandal at the city.

Municipal auditor KPMG said governance failures by the finance and audit committee that Mr. Bestwick chairs created a “poor tone at the top” by failing to give proper oversight and not understanding its role and “fiduciary duties.”

This provided opportunities for chief administrative officer (CAO) Tracy Samra and chief financial officer (CFO) Victor Mema to override expense controls, retaliate against whistleblowers, block staff complaints and bypass hiring processes, the report said without naming the two managers.

It is the first official word on the scandal involving a high level cover-up of personal spending on corporate credit cards by Nanaimo’s top two municipal managers.

As reported by News Nanaimo on Sunday, Mr. Mema incurred at least 64 personal charges on his city-issued purchase card, was unable to repay, and he and Ms. Samra took steps to cover up the details and use taxpayer resources to repay the money.

Tracy Samra and Victor Mema
Tracy Samra and Victor Mema

Whistleblowers punished

KPMG’s report reveals that finance staff who tried to blow the whistle on Mr. Mema’s personal spending were punished. It says “disciplinary letters were placed in the complainants’ employee files.”

It also confirms that unilateral changes were made to internal policies to redirect staff complaints about Ms. Samra to individuals she had influence over. This ensured complaints did not reach the mayor or council.

The report, which will be presented to Mr. Bestwick’s committee on May 9, reveals that there were three revisions to the individuals designated to manage complaints between Jan. 2017 and Jan. 2018.

KPMG said whistleblowers must be protected and it recommends that only council should have authority to approve or make changes to internal complaints policies.

The mayor or rotating council members should be designated to receive complaints about the city manager and review complaints made against other senior managers, it says.

Opportunity for collusion

Ms. Samra and Mr. Mema’s practice of approving each other’s expenses “provides for the opportunity of collusion between the two parties,” the report says.

The CAO’s expenses should be reviewed by the mayor or a revolving designate of council.

“We also recommend that those who approve expense reports and city credit card statements are provided with guidance with respect to the duty and care required to approve an expense.

“Timely action must be taken in the event of non-compliance with city policies,” says KPMG.

The report notes that critical steps were bypassed in the hiring process for certain positions.

Mr. Mema is known to have tried to restructure the finance department by hiring two people he knew from a previous job in Alberta, appointing them above long-term managers in the department. Those appointments have now been cancelled.

Governance failure

But the report reserves some of its harshest judgment for council’s failure to provide proper oversight of Ms. Samra, a trained lawyer who was originally hired by Mr. Bestwick and four other councillors: Bill Yoachim, Jim Kipp, Jerry Hong, and Gord Fuller.

Supported and encouraged by Mr. Bestwick’s majority, Ms. Samra was given free reign to run the city as she saw fit and use city resources to attack their opponents, principally mayor Bill McKay and councillor Diane Brennan.

KPMG found that “the responsibilities of council compared to the CAO are not well understood, along with other fiduciary duties.”

“Having a strong tone at the top is important as it helps to foster an environment where fraud is deterred,” says the report.

Nanaimo council majority
Council majority: Bill Bestwick, Jim Kipp, Bill Yoachim, Gord Fuller and Jerry Hong

It recommends that committee chairs and council members receive training on their responsibilities.

“The education session should also cover the confidentiality protocols, freedom of information procedures, and the escalation process when roles and responsibilities are not fulfilled,” says the report.

News Nanaimo has previously reported that Ms. Samra and Mr. Mema pressured staff to withhold their credit card statements from freedom of information requests against legal advice.

Mr. Bestwick did not respond to a request for comment by publication time, but he has previously said of his role:

“I get the agenda the same time as all councillors and mayor.  I show up to the meetings and chair them.  Speakers list cop. Call the meeting to order.  Approve the agenda.  Amend. Adopt.  Approve the minutes.  Then introduce the agenda items for discussion, motion, next.  Adjourn.”

Ms. Samra and Mr. Mema are both suspended from their duties and have been given required opportunities to be heard at upcoming closed door meetings. It is understood that meeting dates have been set for May 9 and 11 but Ms. Samra is attempting to delay her hearing.

She is currently barred by an RCMP order from attending city hall and is slated to appear in court for a peace bond application on May 15.


Click here to post a comment

  • Bestwick and his supporters should also be investigated to see if they benefitted from the $1.5 million wasted on the hockey arena proposal and the Hockeyville promotion.

  • Bestwick is a despicable individual. He is an object lesson in the problems that arise when someone is in office too long. I agree with Garth Rustand, he and his majority should be investigated for corruption. They have obstructed progress for the last four years and they have besmirched the city. I hope a new council in 2019 will be able to move forward, but that will depend on the people getting out to vote. Thoughts and prayers don’t cut it..

  • Whew ! It is even worse than we figured. Citizens who have commented about their fears and suspicions along the way have been laughed at and called “bitter” by the majority of this city council, and even verbally attacked. Our chief investigative reporter, Dominic Jones, has repeatedly been called a liar in public, and even been denied the title of journalist. Holding back on our suspicions, trying to be nice, has not worked well, in this case.

    Stronger words should have been applied to this bunch, like SOCIOPATHIC, EGOTISTS, GANG, and RUTHLESS.

    A common tactic has been to deflect and attack, to point attention away from themselves and onto colleagues that stood in their way. The victims are Mayor Bill McKay, Diane Brennen, and most especially former city councillor Wendy Pratt who has paid an awful price for 35 seconds of a film that was probably taken RIGHT OUT OF CONTEXT. I would love to know what went on prior to that mean little film that Tracy Samra made public, and others made political hay with. …….Even now I am holding back. God calls for us to be merciful.

  • Clearly my support of the CAO was misplaced. As for the bumbling of this council, sadly I don’t think they are any worse than the past two I watched. Just less adept at their PR image than the last bunch, but no more harmful or wasteful when it comes to burning tax dollars..

    • Worse or not, they have to go! We don’t have to tolerate any of this lack of good governance and incompetence.

      • No dispute there ………. just can’t wait to see what the next new batch can do. I’m sure the next batch of candidates will all seem like the answer …………….

    • Agreed. The sins are different but the administrative malaise is much the same: follow the rules and by-laws when convenient, ignore or find ways around them when not. We need many new councillors with appropriate experience, solid reputations, suitable educational backgrounds and a keen interest in determining what the community wants and values. And above all, we need civil behaviour from all who hold responsible positions. We certainly don’t need the status quo ante.

    • You’ve got to be kidding, Jim. This is the most corrupt council I’ve seen in 20 yesrs. No respect for policy and procedures.
      What is it about your willingness to blindly follow Bill Bestwick and his four henchmen?

      • If you didn’t notice the failings of the last two councils, I presume you weren’t watching……. oh yeah, you weren’t. I don’t remember seeing you at council or committee meetings……… You really don’t think the conference centre and colliery dams are enough to condemn the last two councils?? Like I said, you just weren’t paying attention. Not giving this bunch a pass at all, just saying the Nanaimo taxpayer has been poorly served by the last three councils. They have also been poorly served by the local media including the Daily Free Mess. Presume the $10K per month coming from ads had much to do with the editorial policy at the local ‘papers’.

  • A lot of time and energy can be spent in response to this. And some time and energy – and money – needs to be spent to call Bestwick and his co-conspirators to account in the proper sphere, whether the courts, the media, the political arena or all three.
    But for the Nanaimo citizen, only one action matters: Vote.
    The failure and collapse of right wing, conservative ideology, from the Fab 5 to Trump, is upon us.
    Time to vote in people capable of fixing this mess and moving forward on the basis of justice for all, not profit for some as this reprehensible ideology (disguised in this instance under things like the core review) would have us embrace.

    • Actually Louis, Trump would have drained the swamp of Bestwick and the four bozos his first day on the job.

  • Cat’s finally crawling out of the bag!! Hope the truth is properly presented, the players finally revealed an appropriate actions be taken….

  • Bestwick’s description of his committee chair duties clearly indicates he only goes through the motions like an atomaton. It reflects a lack of diligence and responsibilty for the people he represents and demonstrates his due date has past.

  • Nanaimo Taxpayer dollars should never be used to form a Council that has an organized majority on ANY issue that comes before them. If this last embarrassing internal fiasco is symptomatic of our Council’s predilection to form “power groups” to conduct City business, then it’s time for a complete change of Council ASAP!! Without question or favour!!

  • I don’t think too many Nanaimoites are aware of your excellent journalism and all the info coming to light. How do we get the word out there? As more and more information is coming out I think Wendy Pratt deserves a HUGE apology, written and public!!

    • Thanks to people like you sharing them on social media, emailing them to friends and talking about them across the garden wall, it’s apparent that more people are becoming informed.