A much-anticipated audit of House of Commons and Senate expenses has found weaknesses in contracting procedures in both chambers.
Auditor General Michael Ferguson's new report on the administration of the House of Commons found "weaknesses" in contracting practices and a "widespread lack of compliance" with procedures for procurement. Approximately $60 million was spent on procurement in the 2010-11 fiscal year and 41 of the 59 procurements tested did not follow the rules.
"Errors included missing documentation, unsigned contracts and one case where a contract was awarded to a bidder that did not meet a mandatory requirement," Ferguson said at a news conference after tabling both reports in their respective chambers.
He did not give specifics about the contracts, but his report said they ranged in price from under $10 to millions of dollars. The case where a mandatory requirement wasn't met related to a contract valued at $600,000. It should not have been evaluated, according to the rules, but it was considered, and the vendor ended up winning the contract.
The contract has since been cancelled and retendered as a result of Ferguson's probe.
Ferguson said in his report that the procurement policy manual is confusing and has led to inconsistent practices.
Some of the problems identified included cases where a contract was signed retroactively, or documentation to explain why a contract was awarded without a competition was missing. Forms relating to conflict of interest were also missing from some files.
"In our opinion, these deficiencies were due to a lack of guidance, inconsistent application of controls, and high turnover in senior positions," the report said.
In other areas of financial transactions that were looked at, Ferguson said the House of Commons administration has appropriate controls to oversee expenditures by MPs and that for the transactions that were tested, there were no major issues of non-compliance.
The audit did not examine spending by individual MPs, but tested a sampling of spending and checked whether the proper rules were followed.
The spending tested was in areas such as travel, hospitality, secondary residences, MPs' offices and salary for their staff. The audit tested whether the administration of the House of Commons properly authorized, reviewed and recorded the expenses and Ferguson found no significant problems.
Ferguson's office also found no major issues with the information services that are provided to MPs, and it found that the House of Commons administration's human resources plan is working well. It also found that security operations on and around Parliament Hill are generally integrated properly among three different providers — the RCMP, the House of Commons Security Services and Senate Protective Service.
No security force responsible for Parliament's roof
It did note, however, that there are still some jurisdictional issues that need to be sorted out. After an incident in 2009 when Greenpeace demonstrators scaled the wall of Parliament's West Block and hung banners from the roof, an analysis determined that none of the three security forces has jurisdiction over the roofs of buildings in the parliamentary precinct.
Ferguson found that the security partners have now agreed on a plan for responding to future incidents, but "the jurisdictional issue has not been resolved."
"Although the security partners have agreed that the partner nearest to an incident would respond, there is no security force that has accepted primary responsibility for the roofs of buildings in the precinct," the report said.
The procurement problem was what stood out for Ferguson, and his report found similar problems with the Upper Chamber.
His report on the Senate noted quarterly reports to a secretive administrative committee of senators, known as the internal economy committee, were incomplete.
"In addition, the reports on contracts over $10,000 provided limited information on sole source contracting activity," the report said.
In 2010-11, sole source contracts were worth about $6 million and represented approximately 80 per cent of all contracts issued, with an average value of less than $3,000, the report said, falling under the threshold for reports on contracts. The reports also didn't cover sole source personnel contracts.
"As a result, the internal economy committee does not have the information needed to provide oversight of the administration’s procurement activities," it said.
More proof of expenses needed
The report also found Senate administration should require documentation on more expense claims. While 99.4 per cent of those claims are reviewed, not all claims for senator travel and living expenses had the correct supporting receipts or explanations.
Senators from 100 kilometres or more outside the National Capital Region with a second residence in the Ottawa area are reimbursed a flat rate for each day the residence is available to them. They must provide annual proof they own the residence, the report said, but in two of the seven cases sampled by the auditor general, Senate administration didn't have the correct documents to support the expense claims.
In another case, the audit team found a living-expense claim that had no purpose stated. Some travel or expense claims had limited information to support the purpose of transaction.
"For example, one travel claim for a trip to Washington, D.C., provided no details beyond stating that it was for parliamentary business," the report said.
The reports result from a probe started by Ferguson's predecessor, Sheila Fraser, who asked in June 2009 to conduct a "performance audit" on $533 million of annual spending by both the House of Commons and Senate.
Parliament's books had not been audited since 1991, when only a sample of the expenditures was examined.
At first, the House of Commons' secretive all-party Board of Internal Economy said the proposed audit "would go beyond the scope of the auditor general's mandate" and turned Fraser down 10 months after receiving her request.
A public outcry ensued and the board eventually relented, with two board members — Conservative Jay Hill and Liberal Marcel Proulx, neither of whom are still MPs — appearing with Fraser at a news conference in June 2010 to announce the audit.
The Senate's Board of Internal Economy accepted Fraser's request to do an audit Nov. 2, 2010.