Calgary aldermen read through the city manager's report last week responding to the finding's of the procurement audit. (CBC)

The city's auditor said she never claimed fraud was involved in how the city awards contracts in defending criticism of her audit.

"The audit report does not raise allegations of fraud, I did not say that we had found fraud," Tracy McTaggart told the audit committee on Thursday, her first opportunity to respond to criticism.

McTaggart tabled an audit of the city's procurement practices last month, which found problems — such as missing documentation — in how the city awarded contracts for projects and suppliers between 2005 and 2009.

Some projects awarded without any competition resulted in major cost overruns, the audit found.

At an audit committee meeting on May 20, McTaggart said she could "pretty much guarantee there is some procurement fraud going on."

On Thursday, she clarified that from a statistical perspective and given that the city spends more than $1 billion annually, "it's very likely that it would occur at some point in time." But she underlined that her audit found no evidence of fraud.

McTaggart rejected criticisms of her audit leveled at her by the city manager, saying they hurt her professional reputation.

He said, she said

Last week, Owen Tobert discredited McTaggart's report in front of city council, saying the audit was incomplete and contained several key errors. He said the audit hurt the city's reputation and staff morale.

'Quite frankly, I'm at a loss to kind of reconcile the whole thing.'—Ald. Diane Colley-Urquhart

Tobert said McTaggart's staff didn't examine electronic records, which led to her finding that supporting documents were missing. But McTaggart countered on Thursday that her staff found all paper and electronic documentation.

Regardless of the contradictions, McTaggart said she's encouraged that the problems she found are being fixed.

"On the key and important issues, there is no disagreement. The city's procurement practices needed to be improved. We made 13 recommendations to improve them. Management accepted all 13 recommendations and has put in place an action plan to improve its practices," she said.

Aldermen scratching heads

Aldermen said they're confused about which report by two top city officials is correct.

"We may never know but I think what's more important is what's in the public interest and what's in the public interest is dealing with the internal control issues that both sides have agreed upon and to, on a go-forward basis, make sure that those internal control issues are managed and handled," said Ald. Ric McIver.

"Quite frankly, I'm at a loss to kind of reconcile the whole thing and the more questions you ask, the more questions you have," added Ald. Diane Colley-Urquhart.

More clarity may come early next year when an independent audit ordered by city council is scheduled to be finished.

With files from the CBC's Scott Dippel