Halifax auditor general raises concerns about how major spending decisions being made

Halifax’s auditor general says the city needs to improve its capital budget process, after a recent report found staff did not explain the price tag for some projects, or why certain items were moved ahead.

On Monday, auditor general Andrew Atherton presented an audit on the municipality’s 2025-26 capital budget to the city’s audit and finance committee.

The audit found issues with the governance structure around the capital process, including that staff oversight roles not working as designed, and it was unclear how projects were evaluated and prioritized.

The report also found no minimum requirements for cost estimates. In half of the 12 projects tested, which spanned various departments, the report said there was not enough evidence to show how the final costs were calculated.

The capital budget totalled about $314 million dollars last year, and $316 million this year. It includes items the city must buy, build, or replace, ranging from everything from large-city building projects, to sidewalks and streetlights.

Halifax plans to ramp up capital spending to address growth and infrastructure needs, with $1.8 billion planned over the next four years.

“When we’re dealing with billions and billions of dollars in capital projects, that one really concerned me,” Atherton told reporters after the meeting Monday.

“We need to have good estimates. We need to know what we think these projects are going to cost.”

In three of the tested projects, the audit also found unexplained differences between the evidence and amounts reported in the capital plan. 

In one project, the supporting evidence showed a price $670,086 (38 per cent) higher than the amount reported, while in another, the documents showed a price $5.35 million (8 per cent) lower than the reported cost. No documentation was available to explain these differences, the report said.

On taking questions from councillors, Atherton said the audit found a lack of documentation around why certain projects were deferred to save money one year, or prioritized to move ahead to council approval.

‘Why are we doing these ones? What should be important?’

Atherton said it appeared that city departments were making those decisions in silos, rather than there being a city-wide strategy.

“I’m looking to see, have a good rationale of ‘OK, why are we doing these ones? What should be important? If we need to save $1 million, where can we do that and have the least impact?’” Atherton said during the meeting.

“We just could not see how those decisions were being made, and we’re looking to have it a little more clear.”

With little to no documentation for why many projects were prioritized, Atherton said his office also could not make links between how items fit into council’s four-year strategic plan, which lays out the city’s priorities and mission.

City staff have accepted the audit’s nine recommendations, which include minimum requirements for cost estimates, formal quality review policies to ensure cost estimates are accurate, and a better governance framework where staff in oversight roles know their responsibilities.

Atherton said he was encouraged to see that senior staff are already planning to take practices from the public works’ department, who are doing things well, to use across the municipality.

The auditor general’s office will return with an update on the city’s progress on the recommendations within 18 months.

MORE TOP STORIES