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An internal audit of Cancer Care Ontario shows the provincial agency handed out consultant contracts in some of the same questionable ways as eHealth. ((CBC))

Amid a political flurry over the latest eHealth Ontario revelations, the Ontario government has released new documents revealing chronic missteps at another health agency.

An internal audit of Cancer Care Ontario shows the provincial agency handed out consultant contracts in some of the same questionable ways as eHealth.

It gave a consulting firm $18.7 million in deals over two years, some in the form of so-called "follow-on" agreements, a practice that allowed them to be added on to current contracts without being opened to bids. The audit found the number of follow-ons "excessive" — with at least 26 recorded.

Twenty-two of the follow-on agreements were approved by Sarah Kramer, who was then in the top information technology job, without proper CEO approval. Kramer became CEO of eHealth, and later resigned.

"The findings of this audit clearly indicate that the procurement processes, file organization and consistency of documentation require substantial improvement," the audit says.

"It is also apparent that required competitive tendering rules have not been consistently applied for all contracts of significant value."

CEO takes 'full responsibility'

Cancer Care CEO and president Terrence Sullivan declined a CBC News request for an interview. In a statement, however, he said he accepts the audit's findings and has already made changes to how the agency spends its money.

In an email on Tuesday to staff obtained by CBC News, Sullivan remarked on the media frenzy he expected in the coming days and stated, "I take full responsibility for the weaknesses identified in the report and the burden we now share."

In the two years examined by the audit, about 60 per cent of some $30-million in contracts examined were doled out to three big vendors.

Though the firms were unnamed, sources told CBC News they include Courtyard Group and Accenture, two companies who received untendered contracts while Kramer was at the helm of eHealth Ontario.

The Cancer Care Ontario documents were released Wednesday as part of a mountain of binders containing results from freedom-of-information requests by various media outlets submitted after the eHealth Ontario scandal first surfaced. Though Cancer Care is not currently subject to FOI requests, the province released the documents on Wednesday, and Premier Dalton McGuinty said it will apply to the provincial agency in the future.

Progressive Conservative Leader Tim Hudak criticized the government for dumping the documents on the same day as the release of a scathing auditor general's report on eHealth Ontario, accusing  Dalton McGuinty of being "the first premier to ever attempt to hide one scandal behind another scandal."

Ballooning contracts

The audit also noted that Cancer Care Ontario had no policy for buying radiation therapy equipment for hospitals, resulting in $3.5 million in orders that didn't follow proper tender procedures and in six-figure price jumps.

Contracts for a number of radiation treatment machines rose above the original ceiling price by $300,000 to $500,000. In one instance, a contract price rose by $1 million, because the machine had to be customized to fit into a room.

Another time, extra equipment plus user fees were tacked on, causing a $861,000 increase above the original agreement.

The agency also appeared to have a recurring problem with documenting consultant expenses, with only six per cent of $136,000 in out-of-expense claims accompanied by the necessary receipts.

Other revelations in the documents included:

  • Details of some contracts were ironed out after the deal was done.
  • One contract ballooned to almost six times its original maximum worth of $3.5 million — to $20.2 million — in a process that lacked proper approvals from the CEO.
  • Contracts without tender accounted for 49 per cent of examined contracts for non-capital goods and non-consulting expenses, such as computer equipment, software and equipment rental.
  • About $1.6-million worth was paid out over 14 invoices to a company with no written contract.
  • At one point, the director of finance had the authority to create, approve and review purchase orders.
  • Several employees recruited were offered between $17,000-23,000 over the maximum salary range.
  • CCO employee files were kept in an unlocked cabinet accessible to unauthorized employees.
  • Even though policy forbade paying for parties, Cancer Care paid for two staff picnics, a farewell function and gifts for staff, one holiday party and a baby shower.

Corrections

  • The consulting firm that received the contracts worth $18.7 million was not Accenture, as originally reported.
    Oct 08, 2009 11:58 AM ET