An external audit of procurement policies and actual contracts by the Western Quebec School Board has stunned the English-language school board’s commissioners. Paul Lamoureux, Director General of the Board considers the 23-page audit an “excellent” one, since it raised a lot of red flags. “It demonstrated certain flaws with public contracts, but we are introducing corrective measures and procedures for our bidding process to ensure better control,” he added.
The school board mandated FMC Professionals in October, 2013, to comb through a bunch of contracts following a Radio-Canada report suggesting an apparent but unproven conflict of interest involving Colin O’Shea, the Board’s Senior Director of Buildings and Transpor-tation, and certain suppliers.
FMC Professionals analyzed 35 contracts, 33 which fall under the Act Respecting Contracting by Public Bodies and conducted interviews with staff. FMC uncovered 15 major problem areas with the board’s procurement activities: Absence of estimated contract value; Insufficient evidence of statement of work for service contracts; Non-compliant solicitation processes; Insufficient solicitation response time / Invitations; Insufficient evidence of evaluation; Opportunity for price negotiation; Insufficient evidence of signed contract document; Lack of approval by Council of Commissioners; Appearance of contract splitting; Appearance of retroactive contracting; Non-compliance with publishing requirements; Potentially undocumented contract amendments; Insufficient evidence of verification of delivery of goods or services; Lack of a consistent contracting database and filing system; and an Absence of a functional authority with regards to procurement.
FMC Professionals concluded that “current procurement practices in place at WQSB exhibit a number of areas for potential improvement.”
“Overall, contract files were incomplete from beginning to end of the procurement process, limiting significantly any control over the procurement function,” indicated the audit. “It also affected the level to which a third-party can ascertain a clear audit trail. For instance, in many cases tendering documentation, contracts or purchase orders and amendments were not in the files reviewed.”
FMC Professionals also noted the WQSB was unable to detect instances of non-competitive bidding, contract splitting, retroactive contract and improper approval of contracts because of insufficient documentation in the procurement files to provide an audit trail.
“Many of the non-compliance and documentation weaknesses identified in this report result from a lack of functional direction which, in our opinion, resulted from not having a staff functionally responsible for procurement,” indicated the audit. As the audit noted, a WQSB employee could have easily taken advantage of the situation. “Staff involved in contracting are pretty much left on their own with little directives and guidelines and there are very few procurement tools and checklists available for staff.”
The audit also discovered cases of non-compliance in the solicitation processes. Provincial contracting regulations stipulate that every public call for tenders is made by publishing a notice on the electronic tendering system, but FMC were unable to find evidence for public tenders. Additionally, two of the 17 contracts analyzed were non-compliant with provincial regulations and four lacked evidence of a written invitation to at least three suppliers. “Meaning we were unable to conclude whether or not the contracts were awarded competitively,” the audit stated. The WQSB also awarded two of the non-compliant contracts to the same vendors annually. These companies are still active with the WQSB, according to FMC. “The absence of competitive contract awards, or evidence thereof, may create the perception of preferential treatment of particular vendors and does not provide the assurance that the WQSB is getting the best value,” indicated the audit.
While examining their contract samples, FMC Professionals also discovered that the Council of Commissioners approved 15 contracts above $100,000, but one $401,000 cleaning contract was not approved by the commissioners.
Furthermore, a list of contracts obtained by the Journal du Pontiac illustrates just how much prices fluctuated in the past decade for cleaning services at WQSB buildings. For example, for the 2001-2002 school year, the cleaning contact for South Hull Elementary School was $40,131 and in 2012-2013 it reached $83,665, but for 2013-2014 the contract dropped to $37,098.
For Eardley Elementary, the cleaning contract was $20,713 for the 2001-2002 school year. In 2010-2011 it jumped to $156,563 from $36,432 in 2009-2010. In 2011-2012 it reached a staggering $173,668. For the 2013-2014 school year the school board changed service providers and the price dropped to $23,144.
The audit also addressed a shortcoming in price negotiation. “Of the 13 publicly tendered contracts sampled, four contracts had a single bidder, but only one contract appeared to have undergone a price negotiation or verification. While this is not a required process, it does present an opportunity for WQSB to obtain better value for their money.”
On top of uncovering that commissioners did not approve a $401,000 contract, the audit also came across unsigned contracts. “In 13 of the 23 construction or service contracts reviewed, we were unable to identify evidence of a signed contract on file,” stated the audit.
Lamoureux told the Journal du Pontiac, “Now we are looking ahead, not back. Our intention is to restore trust between us and the population.” He said the WQSB has introduced more than half of the reports’ 16 recommendations, noting the report’s conclusion that “it is imperative to reinforce internal control.”