Edmonton

Councillors demand accountability for city's $600M consulting contracts

Two city councillors are demanding to know why administration spent more than $600 million to get advice from consulting firms work over five years and why some of the spending habits haven’t changed in 10 years. 

The City of Edmonton is late reporting progress in financial reporting

An audit from last November shows the city mislabelled $245 million worth of consulting contracts. (John Roberston/CBC)

Two city councillors are demanding to know why administration spent $616 million to get advice from consulting firms between 2013 and 2017 and why some of their spending habits haven't changed in 10 years. 

Aaron Paquette plans to raise a motion at the next council meeting Tuesday, calling for answers. 

"Frankly, $600 million in consulting fees over five years is dumbfounding," Paquette said earlier this week. 

In a report released last November, the city auditor dug up some major inaccuracies in financial reporting related to the city's consulting expenses. 

Nearly $250 million of consulting fees weren't recorded accurately — the amount was "miscoded" by the type of job or categorized as something other than consulting. 

There were two main recommendations, which administration was supposed to accomplish by June 30 this year and report back to council.

The auditor, David Wiun, advised the city to implement a training program for staff and do quality assurances reviews; and improve how it prepares for contracts.

The goal is to reduce the amount of unplanned change orders. 

Part of Paquette's motion calls for evidence that the city is working on those. 

"Those results were supposed to be back last month. They're not." 
Coun. Aaron Paquette, right, Coun. Mike Nickel, middle and Coun. Mo Banga, left, at an urban planning committee meeting earlier this year. (Scott Neufeld/CBC)

Paquette also wants to hear what the city has done about its use of change orders — when the scope of a contract changes, resulting in cost overruns.

"We're told that change orders are normal that this is standard," Paqeutte said. "But if that standard is costing us that much money, maybe we need a new standard."

The audit found that the city spent an extra $165 million to change the scope of contracts. 

The city uses consultants for a variety of professional services such as engineering, management, communications, information technology, legal and medical services. 

In one case, the city hired an engineering firm at an original cost of $1.7 million to make repairs to a city-owned public facility. Five change orders, related to unforeseen asbestos and relocating electrical services, increased the cost of the project to $5.4 million, the audit shows. 

Huge red flag

It's a case of déjà vu for Coun. Mike Nickel who told CBC News Thursday that several councillors have asked about the issue before. 

"Historically a number of us have tried to pass through the budget process to get these numbers to get an appreciation of what's going on," he said. "And trust me, I've never been able to get a satisfactory answer either."

Nickel strongly backs Paquette's quest.

"People just want to get a handle on who's getting paid for what and are we getting value for it."

"When $250 million worth of consulting contracts go mischecked or uncoded or misquoted in our accounting system, of course this is a huge red flag." 

Paquette's motion references an audit from 2009 that showed a high number of change orders and cost overruns. 

"We're seeing many of the same problems now that were flagged 10 years ago," his motion reads. 

The majority of spending on consulting is for projects under the capital budget. 

In a written response to a request for comment, the city said the financial and corporate services department asked for a revised due date to implement the recommendations and will present their progress at a meeting Aug. 31. 

@natashariebe

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