In reading over Ms Fraser’s response to Ms Chow, I notice that Ms Fraser makes the following points.

• “The port authority should have a special examination carried out every five years.”
• “A special examination is a form of performance audit that could touch upon matters raised in your letter.”
• “In the case of the Toronto Port Authority, special examinations are conducted by the private sector auditing firm of Deloitte.” 

Ms Fraser did not mention that Deloitte prepares the Toronto Port Authority’s annual financial statements and has done so for at least the last five years.  Deloitte (at that time Deloitte & Touche) carried out the Toronto Port Authority’s first special examination covering June 1999 to June 2004.

On June 1, 2004, Deloitte & Touche signed off on the special examination stating, “In our opinion, with respect to the criteria established there is reasonable assurance that there were no significant deficiencies in the systems and practices examined.”

During those five years the Toronto Port Authority:

• ran operational deficits for each year;

• had in place hospitality spending guidelines that the Board this year has deemed inadequate. 

For this year’s special examination Deloitte may wish to look at value for money for the following:

• $8 million on a fast ferry terminal that wants for a tenant;
• $10 million on two airport ferries.

Ms Fraser also wrote:

• “I note that some of the directors of the Board of the TPA share your concerns.”
• The Board as a whole or its audit committee are in the best position to raise these matters with the special examiner.”

As for Directors who shared Ms Chow’s concerns, Transport Minister John Baird did not re-appoint two of the directors when their appointments were up at the end of August.

TPA Chair Mark McQueen called them “disgruntled Directors” and said, “Their retirement present to the rest of us is to “burn down the house” on their way out the door, as they now recognize that they will not be reappointed to the Board for a second term.”  Mr. McQueen characterized their concern over Toronto Port Authority governance and accounting matters as “sour grapes” because they didn’t get a director’s fee increase.

Will the Board as a whole or its audit committee raise these matters with the special examiner?  Mr. McQueen’s response so far has been to take the highly publicized step of asking Ms Fraser to do something that she is not mandated to do.

If Mr. McQueen and the Board are serious, they could hire noted forensic auditors Rosen & Associates Limited, 21 King Street West, Suite 2200, Box 101, Toronto, Ontario M5H 3T9, Phone: (416) 363-4515, E-Mail: l.gallant@rosen-associates.com and pledge full disclosure.

Alternatively, Mr. McQueen can continue his spin.

Bob Kotyk