The province has issued a statement about concerns in a few of the rural municipalities in Manitoba, and the Municipality of WestLake-Gladstone was specifically named. The municipality's chief administration office was coming under fire by "slanderous accusations" following a "cyber fraud" theft of about $450,000.
Association of Manitoba Municipalities president Kam Blight says it's not necessarily uncommon for the province to make investigations into municipalities upon occasion.
"We have seen the Auditor General come forward and conduct investigations into municipalities in the past," says Blight. "There's been some concerns brought forward by citizens to the provincial government, the Auditor General, and the Ombudsman's office. The Minister of Finance has signed off on an order on council for the Auditor General to do some investigations into various municipalities."
Blight explains it's a small sampling of municipalities across the province.
"By the same token, there are still some investigations that need to take place to determine the validity of these concerns," continues Blight. "The Association of Manitoba Municipalities is not privy to exactly what the concerns are. We just get to read what's in the order in council, and so we don't know any specifics whatsoever. All we can do is wait for the Auditor General's report to see what, if any, of the concerns have been validated, and then we'll see what the recommendations are from the Auditor General and review it and move on from there."
He says they cannot respond to any concerns until they see the report itself, noting some recommendations are positive, and would make a positive change with all their municipal governments.
"If there are some recommendations there that we feel are advantageous and a benefit to municipalities, then we will certainly be bringing those forward and encouraging municipalities to work on employing best practices," adds Blight.
The Municipality of WestLake-Gladstone's website displayed this update on the Cyber Fraud issue:
CYBER FRAUD UPDATE
NEWS RELEASE #3
July 11, 2022
DD West LLP, legal counsel for the Municipality, is providing an update to the residents of the Municipality on the cyber security breach which occurred and resulted in access to Municipal funds held in Stride Credit Union. Following this incident, the Municipality immediately engaged legal counsel, information technology services experts, and cybersecurity experts to assist in investigating the incident and recovering funds.
Litigation processes have been commenced against Stride Credit Union relating to its computer system and the loss of funds, and against Western Financial and Traveller’s Insurance relating to the insurance policies and denial of claims under those policies as they related to cyber insurance. These lawsuits are in the document discovery stage and will be proceeding to examinations for discovery once all documents have been exchanged. The collection of electronic data and e-discovery creates a much longer timeline because of the format of information being requested.
The Municipal Auditors are aware of the incident and have commented on them in their report. They have noted that to balance the financials for the year surplus funds were available.
We can advise the residents and ratepayers of WestLake-Gladstone that there is NO evidence the Chief Administrative Officer took or misappropriated the funds or was involved in any manner whatsoever with respect to the taking of the funds. In addition, given the very short time over which the money was removed from the account the Chief Administrative Officer handled the matters appropriately and followed office procedures and proper banking service reviews. We remind all individuals to refrain from any slanderous or libel allegations and request everyone refrain from making unacceptable remarks about or towards the CAO. Cyber crime is rampant and unfortunately, the Municipality and Stride Credit Union have been victims of it.
The legal team wants to thank you for your patience as we navigate through the litigation process and investigation of the facts surrounding the cyber security breach, in which significant money was electronically stolen from the Municipality’s operating bank account.
Council & CAO are working with the legal team and is committed to providing updates when provided. Once again thank you for your patience as we continue to recover the money for the Municipality.