The Selinger government ignored its own rules when it signed a deal with the Shock Trauma Air Rescue Society (STARS) helicopter air ambulance, auditor general Carol Bellringer says in a scathing report.
What's worse, the untendered, 10-year contract with STARS -- Bellinger says it will cost taxpayers almost $160 million during that period -- is the tip of the iceberg in a government procurement program in which many contracts are awarded without a bidding process.
"It wasn't as though contracts were awarded with no thought to it," Bellringer said Wednesday. "It's just that it didn't comply with the way it's been set out."
The 443-page report is the largest single auditor general's report submitted to the legislature and Bellringer's last, as she retires at the end of the month. The province has yet to find her replacement.
The report covers more than a dozen areas in which the government and its various operations -- at least those audited -- were found wanting in how money is spent and in accountability.
However, the most damning criticism focused on how the STARS air ambulance became a full-time service during the October 2011 election campaign. It comes two weeks after STARS was allowed to fly in emergency cases following a three-week suspension. The province grounded the service because of concerns over patient safety following the death of a woman after a flight.
The report found besides not complying with public tendering principles, contract information was not initially made available to the public as set out in legislation. It also found the province's value-for-money analysis for STARS was weak in that costs per mission were likely to be 231 per cent to 618 per cent higher than other EMS programs.
"(Manitoba) Health did not conduct a detailed needs assessment to determine all the requirements," Bellringer said in the report. "Instead, it relied on STARS as the main source to define program-delivery needs."
The report also found in five cases, flight manifests were incomplete, four in which STARS ignored stand-down directions, four instances in which a STARS referral emergency physician could not be reached to consult on a patient-care matter and an unspecified number of cases in which the helicopter landed when it was not authorized.
Health Minister Erin Selby said the government accepts each of Bellinger's recommendations and it will be the work of a new clinical oversight committee, under University of Manitoba dean of medicine Dr. Brian Postl, to address the concerns highlighted by the auditor general and in an independent review into patient care and air medical crew training.
"A helicopter service is just part of a modern EMS service," Selby said. "It's saved the lives of many Manitobans."
Opposition health critic Myrna Driedger said Bellinger's report on STARS is a "scathing indictment of gross mismanagement by the NDP government."
Driedger said most loathsome was how the NDP used STARS to curry votes in the 2011 election. "I think the NDP were in such a rush to get this helicopter before the election that they didn't do proper scrutiny, they didn't do proper due diligence," Driedger said.
What else Bellringer audited:
Office of the Fire Commissioner
An Office of the Fire Commissioner employee who retired in April 2010 purchased two OFC vehicles for a grand total of $700. The two vehicles had a combined Manitoba Public Insurance estimated value of $15,000. The vehicles were sold outside the normal process of a public auction. One of the vehicles, a 1995 Ford 350 crew cab pickup, was sold in 2009 to an employee for $200. After the sale, the OFC paid $7,472 to supply and install a rear deck on the vehicle despite the bill of sale indicating the unit was to be sold as is. The OFC also paid $5,468 for a safety inspection and repairs after the sale date. Both invoices were approved by the fire commissioner. The auditor general has provided its findings to the Department of Finance for potential legal action.
Untendered government contracts
Bellringer examined 50 untendered contracts awarded by government departments and found that in 26 cases, the lack of tendering was not justified. In 11 cases, departments failed to obtain required approvals (usually from Treasury Board) to award the contract. In 12 cases involving contracts to vendors, competitors "may have been unnecessarily denied access to government contracts," the auditor concluded.
The auditor general also found eight of 30 contracts examined involving special operating agencies of government "did not show an acceptable circumstance to justify waiving competitive bids."
Five government departments and three special operating agencies were examined in the audit. "We concluded that fair access to the contracts was not always assured and there were significant gaps in the public information on untendered contracts over ($1,000)," Bellringer said.
She said her office conducted the audit to see if the untendered STARS contract was an isolated incident or whether it was a problem across government. "We are finding that further attention does have to be paid to the rules and regulations that are in place to make sure that the competitive bidding process is being followed," Bellringer told reporters.
A clerk and a manager in the province's Northern Airports office in Thompson used government purchasing cards for more than $80,000 in questionable expenses. Most of the financial irregularities involved a female clerk. The auditor general found the clerk used the card for personal expenses totalling $37,314, and the manager $248 in personal expenses. The report also found missing receipts for $22,000 in expenses, prohibited expenses totalling nearly $8,000 and unsupported expenses totalling $13,949.
The auditor general's audit of the office covered the period between April 2007 and May 2012. The government asked for a forensic audit of Northern Airports in August 2012. Both employees have since resigned. The clerk also used the manager's card to incur some $2,234 in personal expenses. Bellringer has recommended changes to the government's purchasing-card guidelines. She has also forwarded more detailed findings to the province's civil legal services for potential court action.
The auditor general's office conducted an online survey of 5,000 government employees in 18 government departments. It found a third of respondents are "personally aware of ethical misconduct or fraudulent activity within their workplace, yet only half of these instances have been reported to management."
Bellringer said she was "concerned" with the survey results and recommended several improvements. She noted there is currently no formal process in place for employees to anonymously report concerns of ethical misconduct or fraudulent activity. She said there is limited use of existing whistleblower legislation by employees, and many workers do not know who their designated officer is under the legislation. Less than a third of employees felt that they would be protected from reprisals if they did make reports under the whistleblower law.
The auditor found the Justice Department's management of jail capacity is "inadequate for its long-term needs." While the province has increased jail capacity for adult offenders by 52 per cent since 2008, overcrowding remains an ongoing concern. The AG said the department's prisoner-population forecasts are not always reliable, and it lacks a comprehensive long-term capital plan to address forecast bed shortfalls and the deterioration of aging centres.
More concerning is that 76 per cent of the approximate 10,000 adult offenders are under some type of community supervision order -- only 24 per cent are locked up. Bellringer said the audit found community supervision was not consistent.
"All of this, in our view, affects the department's contribution to public safety," she said.
Should the province call an inquiry into the STARS air ambulance service given all the concerns about it, including both safety and financial? Join the conversation in the comments below.