Crisis looms in finance department
Staff shortage risks `a breakdown in services,' city committee says
With numerous job vacancies and several retirements on the horizon, the city of Montreal's finance department is facing “an imminent risk of a lack of expertise for ongoing business management and a breakdown in services,” according to a report tabled at the last city council meeting.
The city's audit committee, a monitoring body that tracks the findings and recommendations of Montreal's auditor general, comptroller general and external auditors, makes the observation in its latest annual report.
“This situation worsened in 2023,” says the report, which was tabled in council in March. It notes that numerous finance department employees are planning to retire in the next two years and that the department's employee retention rate “is very low.”
While it doesn't provide reasons for the department's low retention rate and difficulty with recruitment, the report says understaffing has an impact on performance.
“The difficulty of recruiting and the period of adaptation to the city's context have a direct impact on the completion of the work, particularly that (work) related to the financial statements,” it says.
City executive committee chairperson Luc Rabouin, Mayor Valérie Plante's second-in-command, told the March council meeting that the finance department's hiring troubles are in the past.
“We had a cyclical situation in the finance department and today, I must say, there is a new generation in the finance department and we have a truly competent, exceptional management team, committed to the Montreal finance department and that has our complete confidence,” Rabouin said.
Still, as of last week, the finance department had 29 job vacancies out of 466 positions, city spokesperson Hugo Bourgoin wrote in an email response to the Gazette. The staff turnover rate in the finance department was six per cent as of Dec. 31, including retirements and resignations, he said.
However, the department presented a succession plan to the audit committee on March 1, which the committee found satisfactory, Bourgoin added.
While Plante's Projet Montréal administration describes the situation as under control, the opposition at city hall says the administration doesn't appear to be taking the audit committee's warning of a possible deterioration in service due to understaffing seriously enough.
“It could have an impact on the ability of the city to fulfil its role in terms of being able to demonstrate to council that everything is above board, including its ability to meet its financial targets and budgets,” said Alan Desousa, opposition finance critic for Ensemble Montréal.
The staffing shortage was responsible for the city filing its 2022 audited financial statements after its legal deadline last year, he noted. The city required permission from the province to file the statements late. The audit committee also noted in last year's annual report that the city was late in filing the 2021 and 2020 audited financial statements, which it attributed to a lack of staff and work overload.
The audit committee wrote in last year's annual report that it's “concerned about the lack of a sufficiently experienced succession within the finance department's teams.”
Desousa contends the shortage of personnel led the city to “wake up” in mid- October to an imminent risk of a year-end deficit in 2023, which led to the city giving an order “at the last possible minute” to all its departments to cut spending before the end of the year. Normally, the budget situation is tracked earlier in the year and the departments get earlier warning to start belt-tightening, he said.
“To come to that realization so late in the game, to try to squeeze out savings in the last quarter, when most of the money is spent, and giving the different departments little time ... is quite significant,” Desousa said.
Montreal's 2023 audited financial statements, which are supposed to be tabled in council sometime this spring, will show whether the city was able to stave off a deficit.
The late financial statements also contributed to cost overruns in the city's contract with its external auditors, Desousa said.
As well, during the council finance committee's public hearings on Montreal's 2024 $7-billion operating budget, certain financial documents arrived late, were incomplete or contained outdated figures, Ensemble Montréal interim leader Aref Salem told council in March.
In fact, some documents incorrectly referred to St-laurent, one of the boroughs of Montreal, as an independent suburb.
The city has launched various initiatives since 2020 to groom future replacements in the finance department, Bourgoin said.
They include an “inclusive talent strategy” to accelerate training for employees for future management and executive positions and a program that launched recently to identify employees' professional interests to help tap future replacements for key positions. Finance personnel will also participate in a new “leader in evolution” leadership program, he added.
The finance department also matches a departing employee with a replacement to transfer knowledge and ensure organizational memory, Bourgoin said. He added that a more structured transfer process for key positions will be launched soon.
Rabouin, meanwhile, told the March council meeting that the city takes the audit committee's recommendations seriously.
“We have safeguards at the city to ensure that we have rigorous management of expenses, public resources,” he said, “and there are several recommendations that are issued by the audit committee which are followed, that we will implement.”