City auditor's report confirms millions spent on inadequate eService project

A review of the city's eServices project has found the manager of the $11.6-million project hired business partners to do the work.

The review found the manager of the project hired business partners, and some were paid at inflated rates

City councillors will discuss the report from the city's auditor at a meeting Thursday. (CBC)

The manager of an eServices project that cost the city $11.6-million hired business partners to do much of the work, an auditor's review has confirmed.

The contractors who were hired had personal relationships with the project manager, and some were given payments above the city's normal rate, auditor David Wiun said in the report released Thursday.

There were weaknesses in the hiring and time-approval processes used for the project, he said.

"That put the city at risk of mismanagement, error and potential fraud," Wiun wrote.

The project manager hired business partners to do the work for the city's eServices project that ran from 2010 to 2015, said a city auditor's report released Thursday. (City of Edmonton)

There is no evidence that fraud was committed, since those involved were following the information technology hiring rules of the time, he said.

Thirty-five contractors were paid $7.1 million for work on the project between 2010 and 2015.

Five contractors received 45 per cent of that money, and four of them had professional relationships with the project manager, Wiun said.

The city's human resources department was not aware of those relationships, because the contractors were hired under a secondary hiring contract, he said.

Previous findings confirmed

The latest report echoes what was found in 2015, when an external consulting company was hired to find out what was wrong with the project.

That report found "the project had overspent its budget, under-delivered on its deliverables, and missed its delivery deadlines."

Wiun said he discovered nothing to contradict those findings.

The original budget for the eServices project was $6.2 million, while the total spent was $11.6 million.

Through the project, some city services were supposed to move online, including pet licence applications and business licence renewals.

By the end of the contract, only three of the six services that were supposed to be offered online actually were. 


The project manager's contract was terminated on April 1, 2015. The contractors involved were also let go.

The auditors' report includes two recommendations: to provide fraud awareness presentations to educate staff; and to update and strengthen management practices related to the IT contract.

Both recommendations have been accepted by city management.

The eServices project was restructured and relaunched in April 2015.

In the report, Wiun applauded increased accountability at the city.

In recent years, senior organizational leaders are contacting the auditor with concerns, which in the past would have been dealt with internally, he said.

"This shift toward transparency and openness as a way to systematically investigate and address issues in the organization is a positive move toward a culture of continuous improvement," Wiun wrote.

The auditor's report is scheduled to go before city council's audit committee on Thursday.