OC Transpo lost & found contract had conflict of interest, AG says

Ottawa's auditor general has found that OC Transpo's sole-sourced contract for lost and found items, in place from 2001 to 2014, was inappropriately handled by a city staff member who had "an actual or potential conflict of interest" in the matter, among other issues.

• City accepts auditor general's report recommendations

The contract with Heartwood House, a not-for-profit agency that provides affordable space for other non-profits and their clients, began in 2001 as a way for the city to save money, according to the report tabled Thursday by Ken Hughes.

Until then, the city had been running its own, more costly lost and found program for items found on OC Transpo vehicles and property.

In 2004, Heartwood House requested a $19,000 increase from the city to hire a full-time lost and found program manager, and an unnamed city employee advocated on Heartwood House's behalf for the increase to be approved.

The report found that theemployee"had an actual or potential conflict of interest ...of a personal/familial nature," but the report did not specify exactly what the conflict was.

It went on to say thatthe employee "was directly or indirectly involved in negotiating the agreements" and managing them, and that while the employee did disclose the conflict to managers, the employee did not then avoid involvement in the matter, as required by the city's code of conduct.

The report also found thatthat there is no record that any legal review was sought for the 2009 sole-sourced contract renewal agreement with Heartwood House.

It also found thatno evidence that OC Transpo management had requested, received or reviewed any annual audited financial statements from Heartwood House, among other things.

Report makes 6 recommendations

The six recommendations from the auditor general, all of which have been accepted by the city, include:

• That the city analyze and document the lost and found planning process to determine requirements, develop a business case with service delivery options considering the costs and benefits, and issue a request for proposals if the program continues.
• That the city ensure agreements authorized under delegated authority are reported to the commission, committee and council.
• That the city ensure agreements are reviewed by legal services to contain appropriate clauses, including the required proof of review prior to execution, in compliance with council direction, and that the city ensure as part of the ongoing management of the contract that there is proof of appropriate documentation being requested and reviewed.
• That the city discontinue the practice which permits OC Transpo employees to keep unclaimed items.
• That the city ensure disclosures of conflicts of interest (actual or potential) are declared to management in writing as soon as they become known in order that they can be addressed by management in a timely manner ensuring that appropriate action has been taken in accordance with the code of conduct.
• That the city ensure appropriate controls and tracking are in place over the lost and found process.