Metro Vancouver councillors call for better oversight after alleged misspending and fraud

A Surrey, B.C., councillor is calling for more oversight of city finances in light of allegations that a finance clerk defrauded the city of more than $2.5 million. 

Coun. Linda Annis said she wants the city to hire an independent auditor general.

"It's very critical," Annis said. "The expertise that comes with an auditor general will go a long way to ensuring our taxpayers can have confidence in how city hall is managing and protecting their tax dollars."

Annis first put forward the idea of an auditor general in 2021 and is revisiting it in light of a police investigation into  allegations that a former City of Surrey finance clerk defrauded the city of more than $2.5 million by cutting hundreds of cheques to accounts associated with herself and her boutique cake baking business.



According to a search warrant obtained by CBC News, the woman — who the CBC is not naming as she has not been charged — quit her job in the finance department in January 2024 after she was questioned about what appeared to be a forged signature on some paperwork.

That irregularity allegedly led to the discovery of 183 fraudulent cheques written out to the woman's former legal name, her mother and her side business — drawing on funds kept in accounts that had been dormant for years.

A warrant issued in March to search the woman's work computer claims Kam Grewal, the City of Surrey's chief financial officer, told police the woman "had been committing fraud since 2017, by exploiting her position and had defrauded the city of more than $2 million."

Annis said cities that have an auditor general, like Vancouver and Toronto, "generally do find significant savings and waste through the processes."

"I want to make sure we have the best policies and procedures in place now and going forward," Annis said. 

Coun. Pardeep Kooner, who chairs the audit committee, dismissed Annis's call for an independent auditor general, saying Surrey already has its finances scrutinized by an internal audit and compliance manager.

"I'm not sure why we would spend close to $300,000 when we have two positions —  one filled, one open —  for internal audit," Kooner said. 

Metro Vancouver area councillors call for more provincial oversight 

Other city councillors in the Metro Vancouver area say they want the province to boost oversight of municipal spending following revelations of a police investigation into alleged misuse of a city hall gift card program in Richmond, B.C. 

Richmond's Kash Heed, New Westminster's Daniel Fontaine and Paul Minhas, and Burnaby's Richard Lee co-signed an open letter to Premier David Eby urging the province to either reinstate an office to oversee municipal spending or expand the mandate of B.C.'s auditor general to include municipal and regional government expenditures.

B.C.'s Office of the Auditor General for Local Government stopped operations in 2021. 

Municipal Affairs Minister Ravi Kahlon said the province has no plans to revive the office.  

"At this point we're not bringing in additional measures," he said. 

Kahlon said that in the cases of Surrey and Richmond "the system is what caught the issue and brought it to light."

Heed disputes that, saying Richmond's gift card controversy only came to light after reporting by Global News. 

"The minister might want to check his facts," Heed said.  

"We would be investing multimillion dollars to set up a system — that would cost a lot of money to the province — in the case of Richmond, to identify where $300,000 went," Kahlon said.  

Heed says it's much larger than $300,000, pointing to cost overruns at the Metro Vancouver waste water treatment plant, with a price tag that has ballooned to $4 billion. 

"This is the taxpayers' money," Heed said. "They want some confidence it's being handled with some accountability." 

Kahlon said "we know there's oversight needed," which is why the province requires local governments to make public their audited financials every year. 

Michael Favere-Marchesi, an associate professor of accounting and auditing at Simon Fraser University's Beedie School of Business, said a provincial auditor general for local governments must be notified of any financial irregularities, which is why a robust internal audit system is preferable. 

"My preference is always to have a city auditor because they get very familiar with all of the operations of the city," he said.

Favere-Marchesi said a provincial auditor, by contrast, is brought in on a case-by-case basis and lacks the expertise about each municipality. 

"For the big cities like Vancouver and Surrey, I think they deserve their own auditor general," he said.