In her 25-year career in accounting, Auditor General Karen Hogan has found herself dissecting multiple public administration failures. That that of the ArriveCAN application has risen to “among the worst financial record keeping” that the accountant has had to analyze over the years reveals the full gravity of this monumental fiasco. A “blatant non-compliance with basic management practices”, blames the Auditor General (AG), in a damning report which raises even more questions and suspicions.
The awarding of this successful contract to a small two-person firm, GC Strategies, not carrying out any IT work but rather redistributing the task to subcontractors in exchange for a commission of 15 to 30%, was from the start doubtful to say the least. The VG now admits that it is unable to quantify the final invoice, due to lack of adequate documentation, which it estimates as best it can at $59.5 million for a customs declaration computer application whose design had cost 80,000 internally. $. The deployment of such software would inevitably exceed this sum. But the fact that it exploded by more than 700% is indecent.
Nearly 20% of the invoices reviewed by the Auditor General’s office were not accompanied by supporting documents. The same goes for timesheets. Suppliers were paid without their qualifications justifying their salary having been validated. Contracts have been extended without new tasks being added. The VG reports repeated administrative negligence.
But there is even more damning: not only did GC Strategies win its first contracts without competition, the firm eventually took part in the development of the criteria for a subsequent call for tenders, which it obviously won. Officials from the Canada Border Services Agency (CBSA), which was responsible for developing the application, were also invited by certain suppliers to receptions. A clear risk of conflicts of interest. Or even worse.
What for months has looked like a huge mismanagement is starting to look even more worrying. The Office of the Procurement Ombudsman expressed “serious concerns” last month. The CBSA is also conducting an internal investigation. A preliminary report, seen by members of a parliamentary committee, has been described as “troubling”. Allegations regarding the contractual practices of GC Strategies were also referred to the Royal Canadian Mounted Police.
Two public servants, who were with the CBSA at the time these contracts were awarded, were suspended without pay. That such a (possibly malicious) squandering of public funds was the responsibility of only two men would be surprising to say the least. What happened to the administrative burden and its usually too many levels of approval? Are we really to believe that, in this case, none of these monitoring steps were respected? And this for more than two years? The retirement of the former president of the CBSA in July 2022 came, for himself, at a good time.
IT expertise is sorely lacking within our public services. From this too frequent recourse by governments to external consultants, a research team from Carleton University has estimated that a third of cases aim to fill this lack of networking skills ($4.6 billion in IT contracts , out of $15 billion spent in 2021).
The migration of customs declarations to digital was justified in spring 2020. The temporary hiring of this “ghost civil service”, which systematically costs more ($1,090 per day on average, in the case of ArriveCAN, compared to $675 for a civil servant occupying an equivalent position) cannot, however, avoid good procurement practices. And this, even in times of pandemic crisis, notes the Auditor General, as a reminder which should nevertheless be obvious.
Karen Hogan did not blame elected government officials. This did not prevent the opposition parties from directly accusing them of shameless waste. Or downright “corruption”, in the case of the Conservatives, although the Auditor General did not use this word once, in her report or at a press conference.
However, the AG had previously noted that the federal government may have overpaid 15% of the $211 billion in direct aid distributed during the pandemic to businesses and individuals. A “lack of rigor” similarly criticized in the civil service.
This devastating new report, on the development of a single ArriveCAN application, is not reassuring about the sound management of the rest of these record pandemic expenses. Doubts that Justin Trudeau’s government, although spared by the VG, could have done without.