How much would you pay to do your job? That’s the real question at play in the recent hoopla over expenses at TO2015 – Toronto’s Pan-Am Games organizing committee. As Sue-Ann Levy reported exclusively in the Toronto Sun on Sunday,
Toronto’s mayor is predictably outraged. TO2015 CEO Ian Troop is predictably forthright, engaged, concerned and nonplussed by the whole thing. All, at the same time. That, alone, may be worth the $477,000 plus salary he’s reportedly drawing. But, I digress.
Levy singles out some examples of “Gold-medal spending”:
- Trips to Guadalajara to see the 2012 Pan-Am Games and participate in the handover ceremonies as well as to the London Olympics to observe their organization and operations.
- $27,000 to move an executive from Vancouver to Toronto when he was hired.
- Meal expenses while travelling, including $1.89 for “Starbucks tea” and similar amounts for coffees.
- A $560.58 team dinner for six TO2015 managers observing the London Games, expensed by the CFO.
- Hosted dinners for visiting Pan-Am Sporting Organization (PASO) dignitaries in Toronto and with Commonwealth Games hosts in Glasgow.
- A number of one-on-one lunches and dinners where new recruits were “interviewed” by a vice president or where CEO Ian Troop would “on board” new senior managers and “check in” with them regularly.
Should we be concerned about this profligate spending? Shouldn’t executives, earning stacks of cash per year be expected to pay for their own tea?
Employees shouldn’t get rich on expense accounts, nor should they dip into their pockets to cover business expenses.
We should absolutely, positively always be concerned about spending. We should be concerned that employees aren’t wasting money, or living high on the hog at taxpayer expense. But, we also shouldn’t expect them to dig into their own pockets to subsidize the Crown, either.
The first five bullets on my list above don’t concern me. They should be checked, double-checked and triple-justified. But, barring something more to the story, they seem like reasonable expenses. The last one, however, I do take issue with.
It is never normal for public-sector anything to pay for staff meals on normal office days. It just isn’t. Even in the private sector, businesses can’t normally write off these types of meals for tax purposes. There has to be a customer or a potential client involved.
It is not OK for TO2015 executives to treat themselves, or their staff, to fancy lunches on the taxpayers’ dime during the normal course of business. Interviews, on-boarding and “check ins” can and should be done in the office, not at a restaurant. If you really think it’s worthwhile to take your new hire to a restaurant, prove it by paying the tab yourself. According to Levy, TO2015 stopped this practice in 2011. It should never have happened to begin with.
As for the other expenses, maybe there’s some hidden extravagance, but I’m just not seeing it yet.
I certainly hope the TO2015 crew have been travelling to every major sporting competition in the world as they plan for Toronto’s games. To do anything less would be negligent. It’s all well and good to sit around a table and think up ideas for how we’ll run an event in Toronto – but it’s invaluable to go and see how things happen in the real world. The military has a truism: “Time spent on reconnaissance is seldom wasted.” There is no plan that can’t be improved by experience.
Anywhere I’ve ever worked – as a soldier, in a bank, for my own company, for international organizations or, most recently, at the City of Toronto – I’ve been paid for my expertise, my labour, my contribution, my output, my results. With the possible exception of my last job, where I bought my own paper clips, I was never expected to pay to do my job.
When I was hired by the Army in Victoria, B.C. for a job that began in Gagetown, N.B. – they paid to move me there. Later, as a soldier, I moved regularly – about 12 times in 14 years – and never paid for my own moves. If my employer wanted me in a different city, my employer paid all reasonable costs of moving me there. I thought that was fair. Same deal with the UN or World Bank Group when I was hired to work in Tajikistan, Afghanistan, Pakistan or Egypt.
I think it’s entirely reasonable to pay to move an executive from Vancouver to Toronto if he or she’s the best person for the job. That’s the cost of doing business in the real world. The fact it’s taxpayer money paying the bill doesn’t change what’s right – but it does mean we better be damned sure we’re hiring the best candidate.
Except for some days in the Army, or when I was working in the ‘stans, I normally eat every day. So, I normally expect to pay for my own breakfast, lunch and supper. But, I generally do this at home, with my family at an affordable cost. When I travel for work, it is regular practice for organizations to defray the extra costs of eating away from home. After all, I’m still paying essentially the same cost to feed my family at home, while I stay in a hotel out of town. And, hotel food is typically quite expensive.
There are, of course, different ways to defray meal expenses for work travel. In the military, we had a flat-rate allowance for meals. No need to keep receipts, you got (when I was in) about $30 a day to feed yourself. I hope it’s more now. If you spent $40, too bad for you. If you skipped a meal and spent less than $30, bonus – you pocketed the difference. On average, it balanced out.
The fact it’s taxpayer money paying the bill doesn’t change what’s right.
The other way to defray meal costs is to ask people to keep their receipts and reimburse them for actual expenses, as the World Bank Group and many companies do. This prevents people from pocketing a few coins when they don’t eat, but requires a great deal more accounting effort. If the $1.89 receipt for tea was buried in a larger expense report, it doesn’t bother me. Because, after all, how much should this employee pay to work for TO2015? Her salary is for her labour. Asking her to pay out of pocket for the privilege of working there is a bit rich. Who else would do that? Other than the Sopranos, I mean?
As for the “team dinner” for six in London, I have no information you don’t have, but would point out $560 divided six ways is $93 per person or about £55. That’s a lot of money for dinner, but my experience in London is that £1 there buys about what $1 would buy here. So, it’s not crazy extravagant. Having one person expense the whole bill rather than dividing it up for each person to file separately, also makes sense and would save accounting time and money back in the office.
Finally, hosting dinners for visiting dignitaries is, frankly, the cost of doing business in the real world. I have absolutely no doubt that any Canadian-hosted $8,600 reception in Mexico is likely to have been the dullest, squarest, cheapest reception PASO executives will ever go to. There probably weren’t even any hookers.