HALIFAX: HRM’s Auditor General, Andrew Atherton, released two audit reports today, June 22, 2026, one concerning HRM’s capital budgeting process, and another relating to expenses incurred by the Office of the Mayor.
HRM’s capital budgeting process needs improvement to support evidence-based decision making.
The audit found gaps related to its oversight structure, project prioritization, and cost estimation processes used during the development of the 2025-26 capital budget.
The governance structure for capital budgeting did not function as designed. There was a lack of evidence showing how key senior leaders in the organization were meaningfully involved in considering overall organizational needs prior to projects being recommended to Regional Council.
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In addition, project evaluation processes lacked clarity around roles and responsibilities, and any relationship between project evaluation and their ultimate prioritization was not readily apparent.
“We found limited evidence of corporate-level discussions on priorities, and we could not determine how information from staff was used in final capital project prioritization decisions” the auditor general said.
The audit also found many project cost estimates from the approved capital budget were not well supported. For half of the projects examined, auditors could not reperform the calculations of cost in the 2025-26 capital budget.
In addition, there was limited evidence of quality review on these estimates before inclusion in the budget.
The auditor general’s report includes nine recommendations which HRM management agreed to implement.
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An audit report on Office of the Mayor’s expenses was also released today.
Based on a request from HRM management, four specific transactions were examined for compliance with HRM’s procurement policy.
Two invoices for legal services were submitted and paid despite not having municipal solicitor authorization, as required by the procurement policy. The mayor paid these back, once notified to do so by the CAO.
Two procurements for consulting services for the mayor’s office did not follow competitive processes, as required by policy. One procurement was for HR services for office reorganization and recruitment, valuing approximately $90,000. The second was for speech writing services for over $14,000.
While none of the four transactions were compliant with HRM’s procurement policy, all were found to be for services received.
Both reports are available on the auditor general’s website at https://hrmauditorgeneral.ca/published-reports.
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Mayor Andy Fillmore is providing the below statement in response to the AG’s review of capital budgeting.
“The Auditor General’s report makes one thing clear: as Halifax grows, we need a stronger and more disciplined approach to capital planning.
Over the coming years, Regional Council will be making decisions involving hundreds of millions of public dollars. Residents should have confidence that those decisions are being supported by accurate information, clear priorities, and a consistent approach across the organization.
I strongly believe we need to review capital decisions through a region-wide lens — understanding trade-offs, improving cost certainty, and making sure projects are being prioritized based on long-term value and outcomes.
This is not an argument for building less. It’s an argument for building smarter.
Our region is growing quickly. We will need continued investment in housing-enabling infrastructure, mobility, public assets, and the systems that support economic growth.
And as Canada’s Defence City, the opportunities ahead will require us to think bigger — and to make decisions with greater discipline, stronger evidence, and more confidence that public dollars are being directed where they create the greatest value for residents.”
