A new report from the Halifax Regional Municipality’s (HRM) auditor general has found that the procurement process in the municipality is in need of “significant improvement,” with some issues indicating that the HRM hasn’t been complying with provincial law.
The report, released on Wednesday and presented to the municipality’s audit and finance committee by auditor general Evangeline Colman-Sadd, found that employees have access to municipality’s financial system, even when they don’t need them for their jobs.
“This one is frustrating because there’s a lot of things in here where the auditor general has pointed out stuff that I would consider to be fairly basic,” Halifax Mayor Mike Savage told reporters. “We have a problem here and we gotta bloody well get it fixed.”
Colman-Sadd said that employees had the potential to access many parts of a transaction — even when they were on leave or were no longer employed by the HRM — potentially presenting a “fraud risk.”
The report lists 28 recommendations for the HRM to implement.
The report found that 20 per cent of the 94 procurements audited were missing required approvals at some stage of the process, while monitoring to address non-compliance within the city’s own procurement policy were “weak.”
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A $2.5 million purchase order approved by a business unit director was also mentioned in the report.
“Procurement staff told us that they understood a director can approve anything from a standing offer. I don’t think that is in keeping with the spirit of the procurement policy,” Colman-Sadd told reporters following her presentation.
According to the report, procurement files lacked support to demonstrate that procurements were fair and evaluations were comprehensive.
Colman-Sadd says her team found that Halifax procurement staff didn’t sign conflict of interest forms — which are required under the Nova Scotia Public Procurement Act.
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“Evaluators are supposed to sign a conflict of interest form … this is a good practice to help ensure the evaluators are independent and able to fairly evaluate the bids,” the report reads.
But that doesn’t appear to have happened in 56 per cent of the cases that auditors examined, with 18 of the 32 request for proposal files not having signed conflict of interest forms for all evaluators.
According to the report, in 10 of the 32 files the auditor general looked at, the procurement department could not demonstrate that they had awarded the bid to the highest-scoring bidder.
Staff typically score each bid and then a staff member calculates the average score, but in those ten files all scores were missing.
“We found errors in the average score for six of 22 request for proposals we examined with evaluator scores on file,” the reports reads.
“These errors would not change the successful bidder but they highlight the risk of awarding something to the wrong vendor due to manual errors.”
Halifax’s chief administrative officer Jacques Dubé says the recommendations are an “immediate priority” for the municipality, while the audit and finance committee has voted for an information report on the subject to be delivered in September.
“In terms of confidence in what will get done, I’ll hold off until 18 months when we come back and follow up,” Colman-Sadd said.
With files from Global’s Steve Silva