Audit reveals weaknesses in Wood Buffalo's contracting procedures

Independent auditors have slapped Wood Buffalo municipal administrators on the wrist with a critical report that concludes taxpayer money may have been spent inappropriately on multi-million dollar projects that were tendered.

The audit was started in December, two months after the arrival of a newlyelected council. It was requested by the new council and the new chief administrative officer,AnnetteAntoniak.

Auditing firm MNPlooked at 40 competitive tendered projectsfrom 2012 to 2017 with a total value of $235 million. The auditors also reviewed nine single-source procurements from 2016 and 2017.

The results, made public this week at a Regional Municipality of Wood Buffalo council meeting,found questionable practices among the reviewed files:

• Employees in charge of procurement do not consistently follow their own procedures.
• Documentation supporting key decisionswas absent.
• Evaluators scoring tenders weren't required to declare if they were in a conflict of interest.
• Bid winners were permitted cash allowances and contingency budgetsfor vague and unspecified reasons.
• Change orders or additional work werebilled and extra costs approved after projects were completed.

'Lowball their bid' then 'jack up' prices

At the council meeting, Coun. Keith McGrathripped into administration's management of public money, saying he's been raising these concerns for years.

"I've been very vocal about fixing our issues in procurement," McGrath told themeeting. "People come in. They lowball their bid then they jack up their change orders. They leave, they're laughing."

"Hopefully as we go forward we can fix some of this and return some of the taxpayers dollars in some form."

The report recommends updating procedures, offering formal training to employees and ceasingmiscellaneous cash allowances for unspecified reasons. It also calls for conflict-of-interest disclosureand preventing the use ofchange orders for projects already completed.

Chief financialofficer Elsie Hutton said the municipality has accepted the audit's recommendations and has adopted measures to implement the recommendations by July 2019.

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Antoniaktold the council meeting the hard truth needed to emerge.

"It is not always easy to hear about deficiencies in your organization," she said. "I andthe team at the Regional Municipality of Wood Buffalo welcome the opportunity to learn from the findings and to move forward in a positive direction working with all our stakeholders."

Connect with David Thurton, CBC'sFort McMurraycorrespondent, onFacebook,Twitter,LinkedInor email him atdavid.thurton@cbc.ca