Alberta auditor general issues scathing report on body transportation contract

The office of the chief medical examiner of Alberta failed to conduct even the most basic due diligence to justify a new contract for the transport of bodies in rural Alberta, a review by Alberta's auditor general has found.

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The review found that for a contract of this size, the chief medical examiner`s office should have prepared a proper business case that clearly documented why the contract was needed, including any preliminary discussions with vendors.

The report said the contract represented a fundamental change to a long-standing informal business relationship and, under the new contract, businesses would have to incur significant up-front costs just to qualify.

"We would expect, at a minimum, the department would want to know what the service providers' expected reactions would be to the proposed contract before finalizing and improving it," the report states.

Even now, two years after the government decided rural transporters needed to be under contract, nearly a third of all companies transporting bodies have not been vetted to determine if they can meet the terms of the contract.

The auditor general found the stated reasons for needing the new contract had not been documented and there had been no financial analysis.

Documents obtained by CBC News in 2015 showed the Alberta Justice ministry had received complaints, including companies overcharging for body transportation, misrepresenting themselves as being from the office of the chief medical examiner (OCME), employees taking photos of crime scenes for personal collections, and employees with criminal records transporting bodies.

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"The OCME did not document any details of these alleged complaints or what remedial action it had taken with specific transporters," the report says.

"It also had no documented examples of invoices where it and the transporter disagreed about the billing, or any financial analysis to show how these practices were impacting its budget."

When a person dies in rural Alberta, for whatever reason, and the OCME needs to examine the body, it must be transported to Calgary or Edmonton.

For years, this work - which often required removing a body or bodies from the scene of an accident - was conducted mostly by local funeral homes on an as-needed basis without any formal contract.

Contract to control costs

In 2012, after years of complaints about poor service and overcharging, then-chief medical examiner Dr. Anny Sauvageau decided Alberta Justice needed a formal contract to control costs and set standards for these companies, which are mostly funeral homes.

Internal documents obtained by CBC News show the Alberta Funeral Service Association (AFSA) which represents most, but not all, funeral homes in rural Alberta rejected the contract, mainly due to the issue of fees.

The association then mounted a pressure campaign to try to force Justice to revise the contract. The contract had been approved by the ministry`s deputy minister and assistant deputy minister.

The association`s campaign was successful.

In July 2015, CBC News revealed Justice officials reopened the public procurement process during an active bid process even though doing so went against the initial advice of a department lawyer and a procurement director.

Documents show that after the funeral service association met personally with then-Justice minister Jonathan Denis, the department allowed the association to effectively negotiate some of the terms of the revised body transportation contract.

It also allowed the association to vet and sign off on the contract before it was released for public tender.

The result was a revised contract that formalized additional potential costs worth hundreds of thousands of dollars each year of the three-year contract, and ignored some of the initial problems the first contract had sought to rectify.

The auditor general's report makes no reference to the fact that the ministry allowed the funeral service association to negotiate its own contract terms and vet the contract in secret before it was publicly re-tendered.

The report also doesn't mention that a ministry lawyer and the head of procurement warned against this because it would set a bad precedent and would put the ministry and the government at risk. A recently released report by Alberta's Public Interest Commissioner confirmed the ministry's reopening and revision of the contract had set a bad precedent and put the ministry and the government at risk.

But in a news conference, Auditor General Merwan Saher said that while he was not taking issue with the report by the Public Interest Commission, he viewed the ministry's actions as "reasonable."

"The evidence that we saw was that the department went about that in a reasonable way and put themselves in a position where they could come out with the revised contract in November of 2014," Saher said.

New contract unnecessary

The report says a new contract was not needed because the ministry could have amended a regulation under the Fatality Inquiries Act to require transporters to meet the standards sought by the chief medical examiner`s office.

"However, we found no evidence the OCME or department considered this or other alternatives," the report says.

The auditor general also found that the ministry did not conduct any consultation with the stakeholders before it launched the new contract, nor did it have a backup plan in the event the contract was widely rejected, which is what happened.

"The department did not determine a minimum number of contracted rural transporters the OCME would need to effectively meet its day-to-day regular operational needs, nor how long it would take to achieve such a minimum," the report states.

Sauvageau alleged the department inappropriately capitulated to the funeral services association`s political demands.

She claimed her employment contract was not renewed, in part, because of her opposition to the revision of the contract. She is suing Alberta Justice for wrongful dismissal.

In a report released last month, Alberta public interest commissioner Peter Hourihan dismissed Sauvageau's allegation that the department's handling of the contract amounted to gross mismanagement of public funds.

But Hourihan said Justice's handling of the contract procurement process was "poor" and gave the funeral services association an "inappropriate" level of influence.

"Negotiating and collaboratively revising the terms and conditions of a standing offer with potential vendors during an active solicitation is inappropriate," Hourihan's report stated.

"Moreover, external entities (the AFSA in this case) should not be part of the approval process for a public procurement by the government."

Hourihan also concluded there was no direct link between Sauvageau's opposition to the revised procurement process and the non-renewal of her employment contract.

In an emailed statement, Alberta Justice spokesperson Dan Laville said the department has accepted Saher's recommendations and will develop guidelines for business cases. He said the department is working to get contracts in place with all companies transporting bodies for the OCME.

Laville said although there will be some exceptional circumstances in which non-contracted companies need to be used, "clarification will be provided in the current pre-qualified request by the end of this month to ensure all parties are aware of the circumstances under which non-contract vendors may be used."

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