Edmonton

Audit calls on Edmonton's economic agency to clarify what it does

One year after city councillors called for more accountability from the Edmonton Economic Development Corporation, it’s still not clear what the organization does, a city audit shows. 

Edmonton Economic Development Corporation gets $20M a year from city coffers

The Edmonton Economic Development Corporation manages the Edmonton Convention Centre, formerly the Shaw Conference Centre. (Codie McLachlan/CBC)

One year after city councillors called for more accountability from the Edmonton Economic Development Corporation, it's still not clear what the agency does, a city audit shows. 

The city auditor analyzed the EEDC's operations from January 2014 to June 30, 2019, and concluded that the organization needs to clarify, in a consistent way, its roles and responsibilities. 

"Issues of clarity around EEDC's overall role and purpose in Edmonton's economic development industry mandate also exist," the auditor wrote.

That means the agency should revise its mandate, last updated in 2007 from the original constitution that was developed in 1992. 

On its website, the EEDC describes itself as "a multi-divisional, multi-location conglomerate agency of the City of Edmonton, aligned through unified purpose, vision, and values."

The auditor surveyed 400 people or groups that work with the EEDC and received just over 100 answers, including the following comments from respondents: 

"It would be nice to know what they are actually doing!"

"Our general meetings and events community does not understand the role EEDC plays in our
Industry." 

Coun. Mike Nickel called for the audit and says he wasn't surprised by the results.

"Role clarity for these kinds of organizations is what's got to be had — who's responsible for what and where?"

Coun. Mike Nickel said he wants to see what value the city gets from the EEDC for the $20 million a year investment. (Sam Martin/CBC)

Without a clearer mandate and responsibilities, there will be overlap, duplication and wasted money, Nickel said in an interview Wednesday. 

The audit shows that the EEDC used nearly 4,000 vendors — businesses contracted for goods and services. 

That would include anything from purchasing stationery supplies to renting venues for marketing and sales events. 

The findings show EEDC employed about 3,600 vendors with no GST numbers and more than 3,300 vendors with no legal name. 

More than 2,000 vendors hadn't been paid since 2016, showing the books contain contracts that have gone dormant but still listed. 

"That obviously needs to be cleaned up," Nickel said. 

Coun. Sarah Hamilton supported the audit and expressed concerns about the multi-layered organization that's still not clearly defined.

"That's been one of my criticisms of EEDC,"  Hamilton said Wednesday. "When you're that big, the accountability for your performance is really high."

The audit did not include an analysis of the group's finances. 

The EEDC received $20 million from the city's tax levy in 2018 and $50.8 million from other sources.

It generates revenue from convention centre rentals, membership fees, lease agreements and other external sources, such as contributions from the Edmonton Destination Marketing Hotels. 

Missing money

Another reason to do the audit was to look into a phishing scheme that defrauded EEDC of $375,000 in December 2018. 

No information on this was included in the report.

The police said they're still investigating the matter and that no charges have been laid. 

The EEDC told CBC News Wednesday that they have "identified where the funds are" and anticipate recovering about 90 per cent of the funds but can't elaborate until legal actions are resolved. 

Enterprise, Innovate, Tourism, Expo

The EEDC is the umbrella organization for several groups. Innovate Edmonton is among them, under which lies four others: Startup Edmonton, Edmonton Made, The Advanced Technology Centre and InnovateYEG. 

These are classified as the EEDC's "innovation system," which the auditor said needs to be clearer, more understandable and more distinct from other city-funded organizations, such as TEC Edmonton, Health City, and Edmonton Global. 

"I'm not sure what all these guys do," Nickel said. "We have no performance metrics that I can hang my hat on." 

City council is also expecting a report by the end of the year outlining the difference in mandates between the EEDC and Edmonton Global — a relatively new organization represented by 15 municipalities in the metropolitan region, including Sturgeon County, the City of Leduc and Strathcona County. 

When Derek Hudson took over the position of EEDC CEO in January, he promised a new approach for the organization. 

Because the organization is arms-length from the city, the board had to agree to have the audit done. It accepted each recommendation outlined in the report, noting that clarity of its mandate is "key to EEDC's future success."

The EEDC plans to suggest changes next spring at its annual general meeting.

Nickel said in light of a tight budget, the city's economic agency needs to work on attracting business and tourism events. 

"If there was ever a time for this arm to be functioning at its peak capacity it should be right now," he said. "Because we have got to talk about growing the pie not just cutting it up all the time." 

@natashariebe

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