MPs to probe Global Affairs contracts after internal audit finds one-quarter broke the rules

Deputy ministers at Global Affairs Canada are being called to testify before a parliamentary committee following an internal audit that revealed 26 per cent of the department's contracts did not comply with the Financial Administration Act. The House Government Operations and Estimates Committee (OGGO) adopted the Conservative MP Kelly Block's (Carlton Trail–Eagle Creek, Sask.) motion on May 6 calling deputy ministers to appear, as well as the auditors responsible for the internal report. The Conservative-led committee has been investigating the Liberal government's contracting practices, including the emergency procurement of the ArriveCan application and the multimillion-dollar contracts awarded to consulting firm McKinsey and Company. The House Government Operations Committee is chaired by Conservative MP Kelly McCauley. The Hill Times photograph by Andrew Meade The internal audit that prompted the move looked at consulting service contracts signed by Global Affairs—including headquarters and missions. The audit covers the period between April 2018 to June 2023. “In the statistical random sample, 72 contracts fully complied with the requirements of the FAA while 19 contracts did not,” reads the report. The department signed more than 8,000 consulting service contracts totalling $567-million in the last five fiscal years to support the delivery of its programs, the records show. The audit highlighted that in one case, a person who held certification authority benefited from the transaction, but did not provide further details on this contract. Certification authority occurs before a department pays the contractor and certifies that goods or services have been provided. In seven cases, individuals approving transactions or certifications did not have the required authority to do so, according to the internal audit. While some did not have authority over the funds used, others approved contracts with amounts that exceeded their authority limit. In six cases, the same people exercised both transaction and certification authority, which is against the Treasury Board’s directives, according to the report. In another six instances, the signed contracts were not provided and, therefore, it was not possible for the auditors to determine whether they complied with the requirements. In three contracts —which were recently signed— the certification authority could not be verified as services had not been yet rendered, the report said. Conservative MP Garnett Genuis says there are many examples of 'outrageous contracting irregularities' overseen by the Liberal government. The Hill Times photograph by Andrew Meade The Hill Times reached out to Global Affairs for comment on the findings of the internal report, but did not hear back by publishing deadline. Conservative MP Garnett Genuis (Sherwood Park-Fort Saskatchewan, Alta.) criticized the government for its approach to contracts. “We have seen across this NDP-Liberal government so many examples of outrageous contracting irregularities, and taxpayers are now coming to see the pattern through which their money is wasted,” Genuis said. “There is so much in the way of savings to be realized and value to be created by improving the system." Liberal MP and committee vice-chair Majid Jowhari (Richmond Hill, Ont.) supported the motion calling on deputy ministers to answer questions in response to the internal report. Jowhari also highlighted that the audit looked into "low-dollar value contracts," which he said are not overseen by ministers responsible for Global Affairs, but by senior officials. MPs have decided that ministers tied to the department may be invited to appear before the committee if deemed necessary. The motion was also amended to name three ministers, rather than just Foreign Affairs Minister Mélanie Joly, who was singled out in the initial proposal. Liberal MP Majid Jowhari says ministers are not responsible for the 'low-dollar value contracts' analyzed in the internal audit. The Hill Times photograph by Sam Garcia Joly (Ahuntsic-Cartierville, Que.), International Trade Minister Mary Ng (Markham-Thornhill, Ont.), and International Development Minister Ahmed Hussen (York South—Weston, Ont.) all oversee Global Affairs Canada. According to the report, the department generally complied with applicable authorities and “maintains the integrity of the process,” but “improvement is required regarding compliance with the Financial Administration Act”. The FAA establishes the general financial management framework for the government, and defines commitment, transaction, and certification authorities. "Significant improvement is needed," the report states, to ensure compliance and promote fair, open, transparent procurement processes. The audit also concluded that for 1,486 contracts, the department complied with the proactive disclosure requirements that kick in for contracts valued at over $10,000. The report made two recommendations for Global Affairs. First, it called on the relevant public servants to review processes to ensure compliance with the FAA. An official with Global Affairs told The Hill Times that this review has been completed. Second, it urged the department to establish procedures to ensure contract information is readily accessible, preserved, and maintained to comply with regulations, and to promote fair and transparent procurement practices. The federal government's contracting process has been under heightened scrutiny since the unfolding scandal surrounding the $59.5-million ArriveCan application procurement, which the RCMP is investigating due to misconduct allegations. Another contracting controversy surfaced when Procurement Ombud Alexander Jeglic's April 15 report found that federal departments altered procurement strategies to enable McKinsey and Company, a multinational management consulting firm, to secure millions of dollars worth of contracts, which the ombud said created a "strong perception of favouritism" towards the firm. Ottawa has long pledged to rein in spending on consulting and professional services, which total a record $21.6-billion, according to the Parliamentary Budget Officer’s estimates for 2023-24. ikoca@hilltimes.com The Hill Times

MPs to probe Global Affairs contracts after internal audit finds one-quarter broke the rules

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MPs to probe Global Affairs contracts after internal audit finds one-quarter broke the rules

The department signed more than 8,000 consulting service contracts totaling $567-million in the last five fiscal years to support the delivery of its programs, the records show.

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