Alberta auditor flags faulty management of $1B Supernet contracts

Service Alberta did not properly manage and monitor the $1 billion in contracts the government signed with private companies to build the Supernet, Alberta's auditor general has found in his latest report.

November 2018 report was the first under new auditor general Doug Wylie

Alberta Auditor General Doug Wylie says his office has been paying close attention to the provincial government's response to the COVID-19 pandemic, and has received numerous inquiries from the public and MLAs. (CBC)

Service Alberta did not properly manage and monitor the $1 billion in contracts the government signed with private companies to build the Supernet, Alberta's auditor general has found in his latest report. 

Problems with the contracts extended over 17 years, from when the initial agreements were signed in 2001 to when a new contract was finally signed in 2018. 

The findings were included in the November 2018 report by Auditor General Doug Wylie, who was appointed after Merwan Saher retired earlier this year. 

Instead of building the Supernet itself, the Alberta government opted to put the work out to third parties in 2001. Construction was completed in 2005.

Service Alberta is responsible for managing the contract. Wylie said the department lacked the systems to properly measure performance and enforce compliance of the contracts to build and run the system, which provides high-speed telecommunications to government offices, schools, libraries and health centres across Alberta. 

"There is a lot of service delivery that Albertans rely on, from health care services provided in rural Alberta to libraries receiving services, so a network shutdown would be significant to rural Alberta," Wylie said.

For example, the government received monthly reports on service outages but the information did not say where they were occurring.

"Determining if there were specific areas in the province that were receiving more outages than others, they weren't getting that kind of real-time information to be able to make some of those adjustments," said assistant auditor general Rob Driesen.

The investigation found the contract, which was set to expire in 2015, was extended another three years in 2013 to give the government more time to fix outstanding problems before a new contract was signed.

But the report notes the extension meant Albertans were stuck with a bad deal for another three years.

A contract was signed with new provider Bell this year

Service Alberta Minister Brian Malkinson said the government learned from problems with the previous contracts and has taken the auditor general's recommendations into account. 

He said the government plans to post the contract online once the assets are transferred from Axia to Bell.

"We're proud of that contract and Albertans will see that they're getting good value out of that," Malkinson said. 

Other issues cited in the auditor's report include: 

  • Keyano College in Fort McMurray still needs to improve its financial processes. Management didn't prepare a proper financial statement for last year, the auditor general found. The college needs to train its staff on accounting standards for the Canadian public sector and ensure its financial reporting is accurate. In 2017, the college didn't follow Alberta legislation when it obtained a loan.
  • Environment and Parks hasn't yet implemented an earlier recommendation to improved public reporting of Oil Sands Monitoring Program. The auditor general found last year's annual report had incorrect information on costs and insufficient information on environmental targets and status of projects. It was also released nine months after the end of the fiscal year and is hard to find online.
  • The auditor general found that Alberta Agriculture and Forestry needs to do a better job at telling the public about what it is doing under the FireSmart program. That includes listing approved and completed projects, and how much is being spent and where.