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Audit finds Edmonton’s $8.5M IT infrastructure project entangled in waste and possible conflict of interest

Audit finds Edmonton’s IT infrastructure project entangled in waste and possible conflict of interest
WATCH ABOVE: Mayor Don Iveson is calling the results of a city audit that concluded $8.5-million spent on an information technology project was both wasteful and potentially in conflict of interest with the contracted project management staff "absolutely unacceptable."

Mayor Don Iveson is calling the results of a city audit that concluded $8.5-million spent on an information technology project was both wasteful and potentially in conflict of interest with the contracted project management staff “absolutely unacceptable.”

Between 2012 and 2015, the eServices project saw investments made in process redesign, software, hardware and training in an effort to improve IT infrastructure at the city’s current planning branch.

The improvements were meant to address service timeline issues raised by the Canadian Home Builders Association.

“This was intended to augment the branch’s productivity, accountability and communication,” the report said. “Due to poor project management, this eServices project produced limited benefits.

“The fluctuating service levels for permits and engineering drawing reviews indicate that increased spending on personnel and internal services have not resulted in systematic service improvements in these areas. However, we have not conducted additional analysis to assess the impacts additional public consultation requirements, legislative changes or changes to the complexity of applications or requirements. Administration has indicated that these are all factors that can impact service levels.”

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But the audit found more issues with the IT endeavour than just a lack of cost-effectiveness.

“When we disclosed this audit finding to the current deputy city managers, they pursued additional information related to this project within the departments. They identified that in April 2015, current planning branch management was concerned with progress on the project and had found perceived conflict of interest issues with the contracted project management staff,” the current planning reserve audit says. “Contracts were terminated; however, neither corporate security nor the office of the city auditor were notified at the time and no external investigation into the conflict of interest allegations took place.”

Iveson called it “very concerning to see that $8.5 million was spent on an IT product that didn’t produce good results.”

“I think that in and of itself is concerning, but where it says that there may have been a conflict of interest and some other challenges around the contract there, that raises alarm bells for me,” he added.

“I’ll have lots of questions about that at audit committee next week.

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“Also, the fact that it took three years for that to be reported, I’m now confident… that city administration is taking this very seriously today, but the fact that it wasn’t taken seriously and may have been swept under the rug three years ago is absolutely unacceptable.”

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The report notes that the current city manager and deputy city managers became aware of the lack of external investigation two months ago and reported it to the office of the city auditor. An external investigation is now underway.

“If you see something, say something,” Iveson said.

“If you work for the City of Edmonton and you see that something is happening that doesn’t smell right, report it.”

The audit says the $5.3 million that has been spent on implementing online services since 2015 has been “functional” and generated benefits for both public users and “internal service provision.”

The city auditor’s office recommends that the deputy city manager, Urban Form and corporate strategic development review and assesses expenses related to service levels and “adopt strategies to increase the value for money provided by the city.”

“It’s clear to me that the planning reserve was managed very loosely several years ago,” Iveson said. “I’m confident that it’s being managed much more tightly now and council’s going to have to make some moves to manage it even more tightly on our side and I totally agree with the auditor’s recommendations there.”