Audit slams Rideau Canal managers for shoddy contracting

Managers responsible for signing $10 million worth of contracts each year for maintaining Rideau Canal have been caught in auditors' snare.

Sampling of Parks Canada contract files reveals serious problems with more than half; managers disciplined

The Rideau Canal locks beside Parliament Hill are seen on Victoria Day weekend, 2017. The bridges and walls of the historic Rideau Canal are getting much-needed repairs worth $100 million - but a new audit criticizes the shoddy way some of the work is contracted out. (Patrick Morrell/CBC)

Parks Canada has disciplined managers responsible for the Rideau Canal, and stripped them of the authority to sign large contracts, after they broke numerous rules on spending public money.

"The consequences — mandatory retraining, loss of signing authority, disciplinary action — of failing to comply with contracting policies has been communicated to cost managers," says an auditors' report into the shoddy contracting practices.

Managers working for Parks Canada's Ontario Waterways Field Unit have been disciplined for breaking contracting rules. (Parks Canada)
The report, approved in January, examined the Ontario Waterways Field Unit, which manages the historic Rideau Canal as well as the Trent-Severn Waterway, connecting Lake Ontario to Georgian Bay. 

The unit has a budget this year of $26.3 million, including $14 million for the paycheques of 118 full-time employees and more than 500 seasonal workers and students.

Deficiencies found by Parks Canada during a 2013 review prompted the full audit. The auditors focused on the 24 managers responsible for signing a range of contracts for the upkeep and operation of the waterways, reviewing how well they spent taxpayer dollars in 2014-2015. 

Raft of problems

The field unit signed about $10 million worth of contracts that year. Most were small, worth less than $5,000, but 16 were each worth more than $100,000 — one of them at $1 million.

A sampling of 68 contract files revealed a raft of problems. The unit managers couldn't even locate three of the files; seven files showed evidence of contract-splitting, the forbidden practice of chopping up one large contract into smaller ones to avoid competitive bidding or close scrutiny.

The documentation is not sufficient to prove that contracts are awarded in an open, fair and transparent manner...- Audit report findings for Parks Canada 

Other files showed no evidence they had been competitively tendered, as claimed. And other contracts showed no justification as to why they had been sole-sourced, issued without competitive bidding. Still other contracts were awarded after work had begun.

In all, 35 contracts in the sample — more than half — had problems serious enough to raise red flags, and prompt disciplinary action.

"The lack of due diligence, rigour and oversight in the management of contracts does not allow us to conclude with confidence that procurement activities are carried out effectively," the report concludes.

"In addition, the documentation is not sufficient to prove that contracts are awarded in an open, fair and transparent manner in accordance with the established laws, policies, directives and procedures."

As a result of the findings, the managers on June 6, 2016, were stripped of their authority to sign contracts worth more than $5,000 without review and signoff by senior executives — a restriction that remains in place today.

Immediate action

Managers also had to undergo mandatory retraining, and faced other unspecified disciplinary measures.

"The actions taken with individual employees varied depending on the nature of their respective contracting errors," said Parks Canada spokesperson Valerie de Winter, declining to provide details.

The Rideau Canal is getting urgent repairs this summer, but a new audit report raises questions about value for money, as supervisors break contracting rules. (Ottawa Public Health)
"Once informed of the results of the audit, immediate action was taken to ensure strict adherence to Treasury Board policy," she added. "Parks Canada has addressed every single issue and is committed to complying and fulfilling each of the recommendations."

The adverse audit comes as Parks Canada has been handed more than $103 million over five years for long-overdue repairs to the Rideau Canal.

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About the Author

Dean Beeby

Senior reporter, Parliamentary Bureau

Dean Beeby is a CBC journalist, author and specialist in freedom-of-information laws. Follow him on Twitter: @DeanBeeby


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