Both NDP MP Pat Martin (Winnipeg Centre, Man.) and Liberal Public Works critic John McCallum (Markham-Unionville, Ont.) said for them, the department’s decision to seek an audit suggests something is wrong.
“The government of Canada and Public Works has ample auditing services internally, obviously right up to and including the ultimate independent auditor, the auditor general. So I’m suspicious and apprehensive why they would seek an outside private-sector auditor unless it was some kind of pre-emptive damage control,” said Mr. Martin.
“As soon as you get into the private sector conducting audits, to me, it’s suspect because there’s an inevitable self-interest associated with that. They want to win the job, and you win the job by saying what they want to hear, and that’s why the auditor general was set up with such robust protections to ensure absolute independence.”
Mr. McCallum also questioned the department’s decision to not approach the auditor general to conduct the audit, and said “the answer may be that if you use the auditor general than the results are public whereas it’s not clear if the results will be public from this private audit.”
In response to a question from The Hill Times, Public Works said “the document” will be posted on the PWGSC website once completed.
“PWGSC is committed to providing its services in a manner that meets the highest ethical standards. Part of this commitment is ensuring that its processes are open, fair and transparent,” said the department in an email.
Public Works has made reductions to the government’s internal auditing capacity as part of Parliament’s recent strategic and operating review cuts. In June 2011, Public Works revealed it would be cutting a total of $172.2-million from its budget, affecting 687 jobs over three years. Among the jobs affected were 92 auditor positions, spread across Canada, which the department said would be phased out through “attrition,” as a result of the elimination of Audit Services Canada, a revenue-independent organization that departments and agencies from all levels of government could engage.
A 2010 evaluation report of Audit Services Canada (ASC) noted that between the 2008 and 2009 fiscal years, contracts for private sector auditing services had more than doubled, while auditing contracts with ASC remained stable. Audit Services Canada stopped providing audit services March 2012, according to the report.
“In identifying ASC for elimination, it [Public Works department] noted that professional audit services are readily available in the private sector, and that the organization has not achieved its objective of cost-recovery. The review also noted that the introduction of new contracting tools has streamlined and accelerated the process to secure private sector audit services,” reads the report.
Mr. McCallum said whether it’s an internal or private-sector audit, the most important point is that the results be made public, “because we’re talking about hundreds of millions of taxpayer dollars, and I think the public has the right to know.”
Said Mr. Martin: “It could be that we end up paying more for the outside private sector auditor than we used to pay with the in-house service that we once enjoyed.”
But Mr. Martin said no amount of auditing by the government will get to the “root of the problem of why everything costs 10 times as much and takes 10 times as long on Parliament Hill. And the root of the problem is there’re too many damn chefs spoiling the broth. It’s a dog’s breakfast of overlapping, conflicting jurisdictions.”
The department of Public Works is currently accepting bids to conduct a financial audit on the construction management projects of three buildings, totaling approximately $1.4-billion, which are part of the Parliamentary precinct’s massive rehabilitation project, but the department said work on the projects would not be delayed as a result.
Notice of the government’s intent to conduct a financial audit of the construction management projects for the West Block, Wellington Building, located at 180 Wellington St., and the Sir John A. MacDonald building, formerly the Old Bank of Montreal building, was posted on the electronic tendering site Merx on Aug. 13 and prospective pre-qualified suppliers have until Aug. 29 to submit their bids.
“As part of the contract management and oversight of these major contracts, PWGSC is voluntarily seeking third party assurance in the verification of contract payments, over and above the due diligence applied in its day-to-day contract financial management. This is part of a continual improvement process in contract management,” wrote Public Works and Government Services Canada’s media department in an email to The Hill Times.
Asked why they wished to conduct such an audit, Public Works replied that the contracts of all three construction projects included clauses to allow the department to review payments “as well as compliance with the tendering procedures specified in the terms and conditions of the contracts.”
The notice posted on Merx reveals little about the audit to be conducted; for example, under the “evaluation process and selection methodology” it simply says “mandatory and rated criteria.”
“The purpose of the work is to get an audit opinion and a professional compliance and assurance audit services related to contractual payments and compliance with specified tendering procedures for three large construction management contracts for the Parliamentary precinct,” reads the posting on Merx.
According to the posting, the contract will last from the day it is awarded to March 31, 2013 “inclusive,” with the option of extending the contract by up to five additional one-year periods. In an email to The Hill Times, PWGSC said the contract is
“expected to be awarded between late September and the beginning of October.”
“PWGSC does not have any concerns regarding the contract work being carried out on three buildings. PWGSC has a strong corporate oversight regime and is proactively working to strengthen contract monitoring activities and controls through audits and evaluations. Work for all three major contracts is progressing well and the projects are tracking on time and on budget,” said the department in an email.
Work on the West Block building first kicked off February 2011 and is currently scheduled to end in 2017. The Ellis Don Corporation was awarded the contract to conduct demolition work on West Block, the work currently underway on the building, and PCL Constructors was awarded the building’s subsequent construction contracts. Currently, the West Block renovation project is estimated at a total cost of $863-million, which includes a $115-million glass-dome infill for the building’s courtyard.
The Wellington Building, a 1920s beaux arts building at the corner of Bank Street and Wellington Street, has been under construction since April 2010 and faced extensive demolition work, which is still ongoing. The demolition phase is currently expected to wrap up at the end of the year, but construction work, including interior fit-up, already began on February 2012, overlapping with demolition to speed up work. Work on the Wellington building is currently estimated at a total cost of $425.2-million with the first of two contracts having been awarded to PCL Constructors and the second to EllisDon.
Newly renamed last January, construction work on the Sir John A. MacDonald building officially began last April and is expected to continue until sometime in 2015. The EllisDon Corporation was awarded the contract for the building’s full rehabilitation, estimated at a full cost of $99-million.
Combining the estimated cost of all three construction management projects, the financial audit Public Works is seeking will examine approximately $1.4-billion worth of work. In former auditor general Sheila Fraser’s spring 2010 report, which included a section on the rehabilitation of the Parliament buildings, it noted Public Works had hired an independent cost consultant in 2006 to estimate the total cost of work on the Parliamentary precinct, termed the Long-Term Vision and Plan, and at the time work was expected to total approximately $5-billion over 25 years.
In an email to The Hill Times, Public Works said that as their request for proposal is still being “evaluated and costed,” the department was unable to comment on the estimated cost of conducting a private-sector financial audit.
“The RFP will be awarded to the lowest cost, technically compliant proposal and evaluated based on the cost of the audit work required in the first year of the contract. The contract also contains provisions for optional audit work which would allow the crown to carry out audits in future years as deemed necessary,” wrote Public Works in the email. “Audit costs will be allocated from the project budgets.”
West Block is currently still in its demolition phase, which includes the rehabilitation of courtyard masonry to prep the space ahead of construction of a glass-dome infill which is intended to serve as the interim House of Commons Chamber when Centre Block takes its turn under the hammer sometime around 2018, the last major step in the precinct’s renovation. A major landmark in the LTVP, once complete, West Block will serve as interim space for House of Commons functions currently housed in the Centre Block when renovation of that building begins. Once all work is done, the West Block will return to its function of providing office space and committee rooms and its courtyard infill will be used as additional space for committee rooms.
More than two years in and the Wellington Building has been stripped to its bare bones. Work currently underway includes wall stabilization, work on the building’s windows, as well as work on a full seismic upgrade of the building. When Centre Block goes under construction, the Wellington Building will serve as interim office space for Senate and House of Commons functions, and once all construction work on the precinct is complete the building will be home to House of Commons administration.
The Sir John A. MacDonald building is currently being demolished, including the abatement of hazardous material. Once complete, the former Bank of Montreal will replace West Block’s Confederation Room, room 200, to accommodate special Parliamentary events.
Original Article
Source: hill times
Author: LAURA RYCKEWAERT
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