Cellphone and BlackBerry use at a major federal department has been out of control, with costs skyrocketing in a chaotic atmosphere, says a new audit.

Natural Resources Canada failed to lay down any rules, lost track of the number of such devices, and let workers cut their own expensive service deals at a cost to taxpayers of up to $500,000 a year in wasted wireless spending.

"There are no policies, guidelines and procedures for voice telecommunications devices and service plans," says the newly released document, dated last November.

"Comprehensive corporate directives for the management and control of voice telecommunications do not exist."

Oversight was so weak that department managers could not provide auditors with even a basic inventory of its wireless devices.

Since the report was written, officials have determined that employees use 900 BlackBerries and 720 cellphones.

Investigators found that about one in every five of the devices was used by workers who had no clear job-related reason for carrying one.

Users were also allowed to make their own arrangements with Canada's main service providers — Telus Mobility, Rogers Wireless Inc., Bell Mobility Inc. — resulting in more than 1,500 individual contracts.

The proliferation of these individual deals, instead of a comprehensive contract for bulk use, saddled Natural Resources with an annual bill of at least $1.7 million in 2005-06, a third higher than it should have been.

The auditors compared the department's wireless usage with that of the Manitoba government, which had arranged its own cost-saving comprehensive deal. The analysis showed that Manitoba paid just $55 a month for BlackBerries, compared with $76 at Natural Resources, and $25 a month for cellphones, compared with $39 at the federal department.

The report also found that Natural Resources had no clear rules for recovering costs when workers used the devices for personal matters.

"Management and financial controls for voice telecommunications are inconsistent and there is limited monitoring of related activities," auditors concluded.

"NRCan is paying a premium for these services."

The department has since drafted a policy to lay down hard rules, although a final version is not expected until September after consultations, said spokeswoman Sonia Parent.

Comprehensive deal made with Telus

In the meantime, Natural Resources has switched over all but 20 of its devices to Telus and Rogers, under a Public Works initiative launched last May to bring all government wireless devices under comprehensive corporate agreements.

The two-year, $77.2-million Public Works deal is expected to wring annual wireless savings of up to 50 per cent for any department that signs on. Under the new arrangement, about 90 per cent of the devices will be serviced in North America by Telus.

In completing its switchover to the Public Works deal last December, Natural Resources had to pay Bell Mobility — which had been the department's main provider — about $85,000 to tear up existing contracts for 850 devices, Parent said.

Telus and Rogers, on the other hand, waived termination fees for the cellphones and BlackBerries that were transferred from individual contracts with their companies to the Public Works deal.

Parent noted that under the department's new guidelines, employees who spend between 20 per cent and 40 per cent of their time away from their normal office will be authorized to use cellphones or BlackBerries.

The devices will also be issued to "an employee [who] works in situations that have the potential to become threatening to their personal safety," she said.

The federal government spends about $40 million annually on wireless products and services.

The Natural Resources audit noted that, despite its poor performance, the department is among the few in the federal government to take steps to properly manage its wireless devices.

The report was obtained under the Access to Information Act.