spending rules must be shored up

Federal auditor Sheila Fraser’s latest audit of the Yukon’s books is profoundly disturbing.

Federal auditor Sheila Fraser’s latest audit of the Yukon’s books is profoundly disturbing.

It sheds light on how this tiny cash-flush jurisdiction doles out lavish federal transfer payments with, apparently, little care about how the money is being spent or whether it is getting value for money.

It shows how little thought is put into maintaining safe roads and bridges.

It shows how little planning is done running the day-to-day business of government.

And this deals substantial damage to Yukon. More on that in a minute.

Fraser recently probed the books of Highways and Public Works, a department that spends $149 million every year.

Fraser discovered a department out of control.

Projects begin before contracts are signed, placing government at risk.

Not surprisingly, many projects go over budget.

“Most were not completed on time,” said Fraser.

And it isn’t clear why things in the department go awry.

Why?

Well, it might be because spending estimates or timelines are wonky, or because officials fail to properly supervise projects once they begin.

The problems aren’t clear because there’s rarely a review once a project is completed.

 “We would have expected the department to follow its own procedures to do the review after completion,” she said. “That hasn’t been done.”

The department doesn’t conduct safety reviews of the roads and bridges it is responsible for.

And it lacks plans to maintain and repair its bridges and roads.

The government owns 129 bridges.

Of those, more than 40 are 40 years old. And 29 of the Yukon’s bridges are in need of repair, according to a report from 2003. (A followup report scheduled to be done in 2004 was never finished.)

More than 60 Yukon bridges have not been properly earthquake proofed.

A review of 100 construction projects overseen by the department were found lacking.

Of 12 construction projects examined, eight went over budget. In seven cases, the cost overruns were so severe that the management board had to review them.

Similar problems crop up in Fraser’s review of the government’s rental practices.

Most of the government leases are issued on a short-term basis and through sole-sourced contracts — again, there’s no long-term plan.

And there has been little thought given about how leasing, building or buying could save the government money, said Fraser.

Of 48 government buildings, 31 are leased. Of 10 leases listed in Fraser’s report, nine have been sole-sourced.

“The only way to test a market is to go out for competitive bids.”

And most leases are for three years, though the majority of the offices have been occupied by government for more than 15 years.

A three-year lease is often the most expensive way to acquire office space, noted Fraser.

Curiously, there’s a government policy that states there is no requirement for a competitive bid process if the lease is for three years or less. The government can simply choose who gets it.

“The government’s frequent use of this provision does not ensure the government … is achieving value for money.”

In total, the government doles out $52 million maintaining, operating and leasing its office space.

But it barely has a handle on what it has, or needs.

The department lacks plans for acquiring office space.

And, most disturbingly, its property management branch doesn’t have a complete list of government offices, or who occupies them.

So some departments have too little space, others have too much.

Fraser’s report focused on Highways and Public Works. We doubt the problem ends there.

But it clearly shows how that department is squandering money.

It should be very embarrassing to the wider civil service and the elected members of all parties — they are ultimately responsible for spending.

The waste Fraser uncovered should undermine public confidence in government — it should effect change.

But that’s unlikely.

The Yukon’s budget is covered by people who don’t live here.

And its citizens are getting wealthy on those transfers, so there’s little desire to rock the boat.

Of course, given the territory’s precarious financial situation — the budget for 30,000 people is a staggering $800 million, of which federal transfers make up $560 million  — there is arguably more responsibility to watch its spending.

Failure to do so could draw unwanted attention — as we’ve seen from Fraser this week.

The bureaucracy’s loose spending practices and lack of political supervision is damaging the territory.

It’s high time things were tightened up. (RM)

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