City of Edmonton spent more than $600M on consultants over 5 years
Audit finds that $245M of consultation fees were not properly reported by city staff
The City of Edmonton has spent an average of $123 million per year on consultants over the last five years, according to the city auditor.
"What really shocked me was the size of the number," said Coun. Mike Nickel, referring to $616M spent between 2013 and 2017.
Nickel wondered if the growth in middle management at the city was linked to what he believes is an increase in consultations.
"Are you really transferring your accountability and your responsibility to the consultants?" Nickel asked. "That's what it looks like to me at the end of the day, but administration might have another answer."
The audit doesn't provide a complete picture, said the city's chief financial officer, Todd Burge.
"The consulting audit is better than it appears," Burge said. "I think we've made considerable progress in reducing our use of consulting services and improving our accountability."
Contracting consultants is more cost-efficient than hiring staff to do the consulting in-house, since each project requires different expertise, he added.
"We supplement our resources to support us through different bits of work where we don't need that skill set all the time."
The audit released Thursday also revealed that $245 million of the consulting services were inaccurately unaccounted for in financial reporting by city staff.
That led Nickel to question the accuracy of the city's budget, as most of the consultation fees had been racked up through capital projects.
"You have to wonder, are we seeing the real numbers at the end of the day? Because we're not tracking it," Nickel said.
The audit found that $165 million of the total was spent on change orders, where the scope of a consultation changes after it had been ordered.
City staff needs to improve its procurement practice to avoid cost overruns, Burge said.
"That's continual work that we've always done."
The audit recommended the city train staff better in tracking consultant costs and that administration improves how it plans for consultations in order to reduce the amount of unplanned change orders.