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U.S. Pentagon fails fourth audit but sees steady progress

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The U.S. Pentagon racked up its fourth comprehensive audit failure, reflecting problems in systems and accounting as the vast bureaucracy makes “steady progress” towards a passing grade, the department’s chief financial officer said on Tuesday.

The legally required audit has helped sharpen the Pentagon’s systems and controls and has regularly helped the Department of Defense find misplaced inventory helping save money.

About 1,200 auditors tested the systems and record-keeping processes on weapons systems, military personnel and property around the world with 278 site visits and 1,069 virtual visits.

The process led to 26 standalone audits that comprised the overall exercise.

Eight units were expected to receive clean opinions from the auditors, the same as last year, said Mike McCord, the Pentagon’s CFO.

“The department continues to make steady progress toward achieving a favorable audit opinion,” McCord told reporters as he released the results of the audit of more than $3.2 trillion in assets and $3 trillion in liabilities.

The Pentagon added, “As the audits mature and testing expands, Department of Defense leaders expect findings to increase in number and complexity,” since successive sweeps could expose more profound problems.

The U.S. Department of Homeland Security took a decade to pass a comprehensive audit, and Pentagon officials have said the DoD could take just as long, making 2027 the possible date for its first clean audit.

Travel curbs over the coronavirus hampered auditing in situations that required in-person access, the Pentagon said, but virtual site visits yielded some efficiencies in the due diligence effort.

This year’s audit fees of $207 million were nearly flat with the previous year.

 

(Reporting by Mike Stone in Washington; Editing by Jane Wardell and Clarence Fernandez)

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B.C. municipal leaders gather to talk infrastructure, addiction, emergency management

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VANCOUVER – The president of the Union of B.C. Municipalities says communities have billions of dollars worth of infrastructure that will need replacing in the next decade and the province needs to step in with new funding to help.

Trish Mandewo says a call for $650 million in additional infrastructure money each year is one of a series of requests the organization is making to provincial leaders days before B.C.’s provincial election will be called.

They’re also asking for a percentage of the provincial property transfer tax to support housing projects, and a share of the growth in the carbon tax to help pay for responding to extreme weather.

Local politicians are gathering for their annual convention in Vancouver this week and are expected to cover a range of topics including housing, the toxic drug crisis, growing financial pressures, and a host of other issues.

Mandewo, who is on Coquitlam City Council, says the municipalities are looking for a new, flexible revenue stream to help fund an estimated $24 billion in infrastructure replacement that’s expected to be needed in the next 10 years.

She says without the additional money, municipalities won’t be able to build “complete communities” without raising taxes.

“So it’s the individual taxpayers that are going to be paying for that, because local governments have no other way of raising funding,” she said.

Mandewo says municipalities are facing rising costs due to extreme weather events like fires, floods, droughts and heat domes and the scale of what’s required for mitigation and adaptation exceeds their tax base.

“We are asking for a new dedicated revenue source so that we can support emergency planning and risk assessments, which have been asked of us,” she said.

Municipal leaders are going to spend the week discussing more than 200 pages worth of resolutions at the conference. Mandewo says issues surrounding addiction and toxic drugs are front and centre in members’ minds.

Resolutions include calls for more overdose prevention sites, more complex care beds for people struggling with addiction, and more money directed at community safety.

“Local governments have been trying to deal with it as much as we can, because we are the ones that are closest to the communities,” she said.

“That issue is not selective, whether you’re a small community or a large community.”

Premier David Eby is scheduled to address the conference Thursday. B.C. Conservative Leader John Rustad and Green Leader Sonia Furstenau will speak Friday.

A series of “cabinet town halls” are also scheduled where municipal leaders will get a chance to question cabinet ministers on housing, public service and emergency preparedness.

This report by The Canadian Press was first published Sept. 16, 2024.

The Canadian Press. All rights reserved.



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Feds wary of back-to-work legislation despite employer demands: labour experts

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In an era of increased strike activity and union power, labour experts say it’s not surprising to see more calls for government intervention in certain sectors like transportation.

What’s new, experts say, is the fact that the government isn’t jumping to enact back-to-work legislation.

Brock University labour professor Larry Savage says for decades, companies in federally regulated sectors, like airlines, railways and ports essentially relied on government intervention through back-to-work legislation to end or avoid work stoppages.

“While this helped to avert protracted strikes, it also undermined free and fair collective bargaining. It eroded trust between management and the union over the long term, and it created deep-seated resentment in the workplace,” he said.

Barry Eidlin calls it a “Canadian tradition.”

“Canadian governments, both federal and provincial, have been amongst the most trigger-happy governments … when it comes to back-to-work legislation,” said Eidlin, an associate professor of sociology at McGill University.

Savage said the use of back-to-work legislation peaked in the 1980s, but its decline was mainly to do with the fact strikes were becoming less common as unions’ bargaining power softened.

But since the right to strike was enshrined in the Canadian Charter of Rights and Freedom in 2015, Savage says the government appears more reluctant to use back-to-work legislation.

Eidlin agrees.

“The bar for infringing on the right to strike by adopting back-to-work legislation got a lot higher,” he said.

However, the experts say the federal government appears to have found a workaround.

In August, Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. locked out more than 9,000 workers — but federal labour minister Steve MacKinnon soon stepped in, asking the Canada Industrial Relations Board to order them to return and order binding arbitration, which it did.

The move by the government — using section 107 of the Canada Labour Code— is “highly controversial,” said Savage.

Section 107 of the code says the minister “may do such things as to the minister seem likely to maintain or secure industrial peace and to promote conditions favourable to the settlement of industrial disputes or differences and to those ends the minister may refer any question to the board or direct the board to do such things as the minister deems necessary.”

“The reason why it’s a concerning workaround is because there’s no Parliamentary debate. There’s no vote in the House of Commons,” Savage said.

Eidlin is concerned that the government’s use of section 107 could set a precedent similar to what decades of back-to-work legislation did: removing the employer’s incentive to reach a deal in bargaining.

“This has a corrosive effect on collective bargaining,” he said.

But Eidlin noted that the Teamsters union representing railworkers is challenging the government’s move.

The breadth of the government’s power under section 107 is “something that the courts are going to have to decide,” he said.

If the courts rule in the government’s favour, the status quo could essentially return to the way it was before 2015, said Eidlin.

The rail stoppage isn’t the first time in recent memory that the federal government used section 107 to intervene in a labour dispute.

When workers at B.C. ports went on strike last summer, then-federal labour minister Seamus O’Regan used the section to direct the board to determine whether a negotiated resolution was possible, and if not, to either impose a new agreement or impose final binding arbitration.

More recently, the government declined a request by Air Canada to intervene in its negotiations with its pilots before the two sides reached a deal at the bargaining table over the weekend.

The last few years have really been a litmus test for that 2015 change, Eidlin said, as workers are increasingly unwilling to settle for sub-par collective agreements and employers “still have that back-to-work reflex.”

With a recent uptick in strike activity, “of course, there will be more interest in government intervention in labour disputes as a result,” said Savage.

This report by The Canadian Press was first published Sept. 16, 2024.

Companies in this story: (TSX:AC, TSX:CNR, TSX:CP)



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National housing market in ‘holding pattern’ as buyers patient for lower rates: CREA

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OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.

The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.

On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.

CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”

The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.

The number of newly listed properties was up 1.1 per cent month-over-month.

This report by The Canadian Press was first published Sept. 16, 2024.

The Canadian Press. All rights reserved.



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