Executive summary

Allegation information 

A complaint was received by the Auditor General which lead to an investigation of the following three allegations by Internal Audit under the direction of the Auditor General:

Allegation #1 Lancaster Bomber stabilizers were loaned to British entity per City Council and were due to be returned but do not appear to be returned (complainant alleged value in excess of $750,000).
Allegation #2 City is providing rental space to Canadian Historical Aircraft Association (CHAA) who is restoring the Lancaster Bomber on behalf of the City but restoration is not done, not sure when it will be done and may be missing parts.
Allegation #3 When lease came due on CHAA space were the lease provisions followed? - i.e. other proponents tried to get space but were denied; however, the incumbent did not follow process.

Background

The City of Windsor owns a Lancaster Bomber ("Lancaster'') owned which is currently being restored by CHAA under a stewardship agreement between CHAA and the City. The Stewardship Agreement includes provision for CHAA to seek funds up to a set limit related to lease, utilities, etc costs incurred. Under the Stewardship Agreement, CHAA is responsible for the fundraising and expenditures involved in restoring the Lancaster. CHAA is involved in other historical aviation activities and leases land from, and remits leaase payments to YQG. The Lancaster is located on the CHAA lands leased from YQG. Below is a table summarizing the Stewardship Limits, Payments to CHAA and YQG Lease Funds received.

Year City Reimbursement Maximum (for Years Noted) CHAA Claim/City Funds Paid (for Years Noted) CHAA Lease Payments to YQG (for Years Noted)
2007-2016 $ 347,500 $324,154 $170,524
2017-2019 $150,000 $156,919 $60,889
2020 - 2026 (Projected) $350,000 <=$350,000* $206,997**
Total (Actual and Projected) $ 847,500 <=$831,073 $438,410

* Calculated assuming all expected funds are dispersed - historical amounts have proven to be lower than the upset limit.

** The Auditor General used the current lease rates to project the future lease payments as there is a lease renewal in progress

The net cash outflow to the City has been $249,660 and is projected to be $392,663 in total.

Further, the costs to restore the Lancaster to date, as reported by CHAA, are $700,000 excluding the cost of materials which CHAA1 received from various sponsors. Forecasted cost to complete are $5 to 15 Million . These forecasted restoration costs are if the2 stewardship agreement is not in force. The stewardship agreement limits the City funding contributions to the restoration to a much lower level by leveraging the volunteer/training labour, bartering mechanisms and fundraising capacities provided by CHAA.

Investigation approach

For each allegation we developed investigative procedures. Details of our activities may be found in the Summary of procedures and results section later in this report