Fraud not ruled out in city audit

Calgary's city auditor revealed areport finding systemicproblems in the way the city awards contracts for projects and suppliers.

"We have a number of allegations about the cities procurement practices and they are in various stages of investigation," said city auditorTracy McTaggart, who spoke to a council committee Thursday.

McTaggart's report, which was released last week,revealed that rules weren't followed when a city official unilaterally gave a design contract for the Peace Bridge to a Spanish architect.

'Some of the current policies that are in place were not followed,' Ald. Ric McIver

Some city council members said the project should have gone to a design competition instead of being handed to SantiagoCalatrava.

Calgary's $25 million Peace Bridge is one of hundreds of contracts awarded without competition.

McTaggard said she found there are too many single-source contracts and massive cost overruns on contracts that are awarded to the lowest bidders.

Rules broken

Ald. Ric McIver conceded that rules were broken.

"Some of the current policies that are in place were not followed," said McIver.

McTaggart said there are a number of contracts missing documentation and proper approval and that she is not ruling out fraud allegations.

If there's evidence of any criminal activity, it will be referred to Calgary Police, said McTaggart.

'This is serious business and there is a lot of taxpayer money at stake,' Scott Hennig, Canadian Taxpayer Federation

The audit found that all the city's 740 jobs went over budget, many by as much as 200 per cent.

The excessive spending is costing taxpayers nearly three-quarters of a billion dollars extra.

"This is serious business and there is a lot of taxpayer money at stake," said Scott Hennig, spokesman for the Canadian Taxpayer Federation. "People need to feel confident that their money is being spent wisely."

Hennig said someone other than taxpayers should be paying for the overruns.

Accountability

McTaggart also said there is too much concentration of power in the hands of city managers and not enough checks and balances.

"It is about accountability and transparency and cost control and they are all lacking to some degree," said McIver."We need policies put in place to deal with that." City administrators said they are taking steps to tighten up city processes for awarding contracts.

But the politicians on the audit committee said they want reports back from the auditor later this year, ensuring she's satisfied with the changes that are being made.

Ald. John Mar called it the most disturbing report he's ever seen.