Only 17 per cent of doctors have electronic medical records, after hundreds of millions of dollars were spent on computerizing Canadians' health files, Auditor General Sheila Fraser says in her report to Parliament.

Canada Health Infoway, the national eHealth project, escaped the scathing attacks heaped on its cousins in Ontario and British Columbia.

But Fraser's report to Parliament on Tuesday nevertheless found a raft of contracting and reporting problems that have become endemic to the ambitious plan to ensure everyone in Canada eventually has an electronic health record rather than a paper one.

'Infoway officials told us that having EHRs [electronic health records] "available" does not necessarily mean that they are being used or that they are compatible across the country.'— Auditor general's report

Canada Health Infoway Inc. has already received $1.6 billion in federal money since 2001. Another $500 million promised by the Conservative government last January has been put on hold while Health Canada carries out "due diligence" on whether the money will be spent wisely.

Fraser lauds the non-profit corporation for progress in the last eight years, including the difficult job of co-ordinating work with provinces and territories, each with disparate medical systems.

Infoway has said it will ensure half the population has an electronic record by the end of 2010, and everyone will have one by 2016.

But Fraser pokes some holes in those promises, noting that just because an electronic record has been created does not necessarily mean it will be used.

"Infoway officials told us that having EHRs [electronic health records] 'available' does not necessarily mean that they are being used or that they are compatible across the country," says her report, which cites the corporation for failure to be transparent.

Fraser also says Infoway touted its success in creating electronic health records for 17 per cent of Canadians by March this year — without also acknowledging this was 11 percentage points short of its goal.

The report finds fault with the way Infoway hands out contracts. Contracts worth $50,000 or more must be awarded only after a competition, but there have been no restrictions on contract amendments.

Fraser cites the example of a $144,000 competitive contract that was amended five times, raising the total value to $726,000, with no competition for the amended amounts.

"This practice is not conducive to the fair and transparent awarding of contracts and it raises questions about the appropriateness of Infoway's contracting policy."

The report also found that in a sample of 35 contracts, 13 were signed only after the work had begun.

Infoway says it accepts all of Fraser's recommendations about improving contracting and transparency, and says new rules will be in place by March next year.

Infoway head accepts recommendations

"We're exercising due regard in managing taxpayers' money," Infoway's president and CEO, Richard Alvarez, said in an interview from the corporation's Toronto headquarters.

"We've embraced those recommendations. We've put several of them in place already and we will basically have the rest done by the end of the fiscal year."

A spokeswoman for Health Minister Leona Aglukkaq said Tuesday the department welcomes the generally positive findings, but suggested the promised $500 million in additional funds will not be released soon.

"We need to ensure that money spent delivers value to taxpayers," said press secretary Josée Bellemare.

"That's why we will not release the Economic Action Plan investment in Infoway until we are satisfied that the money will be spent prudently and deliver results."

In previous reports to Parliament, Fraser complained she had not been given access to Infoway's books, but the legislation was changed in 2005 to allow her investigators through the door.

Recently, Ontario's auditor general reported that eHealth Ontario had mismanaged $1 billion of taxpayer money, with little oversight. The RCMP is investigating the British Columbia counterpart.