Investigation Report – Manitoba Municipalities and the Department of Municipal and Northern Relations

This report was initiated following a request from the Minister of Finance under Section 16 of The Auditor General Act, prompted by a cybersecurity incident involving the Municipality of Westlake-Gladstone. Shtykalo also examined:

· Allegations of wrongdoing at six other municipalities.

· The Department of Municipal and Northern Relations’ oversight of municipalities.

Cybersecurity incident:

Between December 19, 2019, and January 5, 2020, unauthorized withdrawals totaling more than $472,000 were made from an account held by the Municipality of Westlake-Gladstone.

The Auditor General found the municipality failed to investigate the cybersecurity incident for root cause, missing a critical opportunity to understand how the incident occurred and how to prevent future breaches.

Municipal allegations:

The report examined allegations of wrongdoing at six municipalities, stemming from public tips and information provided by the Department of Municipal and Northern Relations (the Department). The Auditor General found three of the allegations were at least partially substantiated.

Department oversight:

The Auditor General found the Department lacks comprehensive oversight process to follow up on complaints about municipalities, monitor how provincial government grants are used, and review financial submissions.