Evidence of meeting #31 for Public Accounts in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was contract.
A recording is available from Parliament.
Auditor General of Canada, Office of the Auditor General of Canada
What I think members have to realize is that the information came from the specific departments--so National Defence, the RCMP, and I guess Treasury Board Secretariat--and we don't know where that incorrect information came from.
It was also present in the first bid. So the first bid also contained that incorrect information. It would appear that it was simply carried over into the second bid.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
That even concerns me more, because it was in the first bid, and that was found to be flawed. So then it was in the second bid, and whoever was refereeing this still allowed Royal LePage to bid more accurately. I mean, that should have been something that stood out like a sore thumb.
Auditor General of Canada, Office of the Auditor General of Canada
That's what we think, too, especially when potential bidders questioned it, and then when there was a zero bid that came in. Anyway, the department will have their explanation for why they feel they shouldn't have compared those bids, but there were a lot of red flags there that should have raised questions in someone's mind.
We've also been told that it was actually very easy for the department to obtain the correct business volumes, that it was a very simple process to do that.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
There are a couple of other things that concern me. One of the reasons for weighting--weighting the technical aspects of the contract at 75% versus 25% for financial--they said was for the idealistic reason that they cared about the lifestyle issues of those involved in the moves.
Then it looks like you investigated whether there was any quality assurance, and section 5.70 says there is no independent inquiry by any of the departments about how the moves go.
Auditor General of Canada, Office of the Auditor General of Canada
That's right. We recommended that there needs to be a real evaluation of this program done independently.
The department will tell you, though, that the weighting of 75% on the technical content and 25% on price was to enable other competitors to come in, to open it up to other potential bidders. An incumbent has an advantage on the price, so that by weighting it more to the service, this would hopefully encourage other bidders to come into the process.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
There was a team of people who looked at the technical aspects, but it appears to me that there was only one person who signed off on the financial.
Auditor General of Canada, Office of the Auditor General of Canada
That's correct.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
Again for the record, because we want to go after more questions on this, particularly since the other contract was cancelled for reasons of inappropriate bidding, doesn't that seem strange?
Auditor General of Canada, Office of the Auditor General of Canada
Well, one would expect that there should be a review as well of the financial aspect, especially given the size of these contracts, and that should be standard practice. It shouldn't be only when there is a re-bidding, but you would expect the department to be particularly rigorous when they're going out for a second bid.
December 5th, 2006 / 4:50 p.m.
Conservative
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
My final concern with that is the comments you made for not being able to substantiate any cost effectiveness for the departments, and also the fact that we've investigated PWGSC before and they have quite a robust property management department, etc. Do you think it would be good value to have an investigation on how we do this--I mean, 100,000 moves is nothing small--and whether we actually get value from an outside source?
Auditor General of Canada, Office of the Auditor General of Canada
Absolutely. We believe there should be an evaluation done by the Treasury Board Secretariat, which is the program authority for this, and they have agreed with that recommendation.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
I'm curious, Madam Fraser. Are there any investigations on this matter that you're aware of?
Auditor General of Canada, Office of the Auditor General of Canada
I'm sorry, investigations in what sense?
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
With what went on here, such as RCMP investigations or anything along that line. With all the red flags we have here--
Auditor General of Canada, Office of the Auditor General of Canada
No. We saw no indication of or had any suspicions of wrongdoing like that. I think this was truly wrong in.... Anyway, we saw no indication of wilful wrongdoing.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
But it seems astonishing to me that in making that type of request, somebody could actually make a mistake like this. I mean, it's so grossly out of whack with reality. It almost seems to me that you'd have to be almost deliberate to make an error like that in a request.
Auditor General of Canada, Office of the Auditor General of Canada
We saw no indication of that.
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
Is it simply a plain case of carelessness and neglect by the department?
Auditor General of Canada, Office of the Auditor General of Canada
I guess the department will have to answer to that, won't they?
Conservative
Brian Fitzpatrick Conservative Prince Albert, SK
Well, I hope that's not a standard we can expect with the way government administers things. If it is, we have lots of problems.
Liberal
The Chair Liberal Shawn Murphy
Thank you, Mr. Fitzpatrick.
Before we go to round two, I have one issue I want to talk about briefly, Mrs. Fraser, and that is chapter 11, “Protection of Public Assets--Office of the Correctional Investigator”.
I will not focus my questions on the actions of Mr. Stewart specifically, but on the systems. This went on for 14 years, and there was a whole host of different breaches of what I would consider the Financial Administration Act, Treasury Board guidelines, the use of the car, his cashing of his so-called vacation pay, expenses. You name it, it went on and on and on. It went deeper than Mr. Stewart, apparently, according to your report.
At the end of the year, if there was money left over in the budget, they divided it among the employees and called it overtime pay. To me, that really borders on fraud, if it's not fraud. If you didn't do overtime and somebody gave you a cheque and said it was overtime and you went and cashed it, certainly if it's not fraud, it's clearly unethical behaviour, and it shows a breach of organizational values and personal ethics.
My question is, where were four people here? The executive director or the financial officer, obviously, was not doing his job. Was Treasury Board not providing any oversight at all to this particular department? Were there any instances where the internal audit went into this department? If so, were they asleep? What role did the deputy minister have in this particular department, because it was the deputy minister who was responsible for the management and administration of that particular department?
We live in a society in which one would expect that this could not happen, and if it happened it would be an isolated instance. But this went on for 14 years. Where were these groups of people? Was there anyone behind the cash register? I guess that's my question.