Auditor general's office fires 2 workers for undeclared contracts with government

Third worker still under investigation by OAG

Auditor general's office fires 2 workers for undeclared contracts with government

Canada’s Office of the Auditor General (OAG) – the government arm tasked to audit and report on the use and management of public resources by public entities – has fired two workers for having undisclosed contracts with the federal government itself, according to reports.

The OAG first discovered the two fired employees had government contracts in June 2023 from Public Services and Procurement Canada (PSPC), reported the National Post.

For one of the workers, the PSPC asked the OAG if the employee of a company it was investigating still worked for the auditor general.

PSPC did not transfer the second individual’s security clearance because it had been suspended. That worker was a newly hired employee at OAG.

“The OAG conducted its own investigations in both cases. The investigations began in June 2023 and concluded in September in one case and December in the other. Based on the results of the investigations, the OAG revoked the individual’s security clearance and terminated employment,” said Natasha Leduc, OAG spokesperson, in the National Post report.

The OAG also referred both cases to the Ottawa Police Service in early February because government directives dictate that “security events that could potentially be related to criminal activity be referred to law enforcement,” Leduc said in the report.

The firings – which occurred between September and December last year – came to focus after a federal public servant’s company was able to obtain a nearly $8-million contract to work on the ArriveCan app.

Here’s how to respond when an employer suspects and confirms employee fraud.

DND employee’s company earns $7.9 million in ArriveCan contract

Last month, Karen Hogan, auditor general, delivered a report on the costs of developing the ArriveCAN app, concluding that spending on the app increased dramatically because of the government’s over-reliance on outside contractors, reported CBC.

By March 31, 2023, the federal government had delivered about $59.9 million to the main contractors on the application.

GC Strategies had received the highest amount at $19.1 million. Meanwhile, both Amazon Web Services and Dalian Enterprises had received $7.9 million each, according to the auditor’s report.

It later emerged that Dalian's president and founder, David Yeo, is also an employee of the Department of National Defence (DND)

The company said Yeo only became a public servant after the project was completed, according to CBC.

The company has received more than $200 million in government contracts since 2015, according to a CBC News analysis of documents tabled in the House of Commons in January.

Neither of the two fired workers were auditors, said Leduc.

The OAG is also investigating a third worker in relation to outside work.

Previously, the estate of a woman – who previously worked as an administrator for both the University of British Columbia (UBC) and the Vancouver Coastal Health Authority (VCHA) and died in 2012 – was ordered to pay over $650,000 years after her death because she engaged in wage fraud and wage theft activities.

Additional controls to verify outside employment contracts

With the cases in the spotlight, the OAG is implementing additional controls to verify outside employment or contracts, said Leduc in the National Post report. The OAG will also be rolling out additional values and ethics training to all its employees.

One way to go for the OAG is for each department and agency to have a team whose job is to randomly pick certain public servants to be “audited,” said Ian Stedman, a York University assistant professor specializing in ethics in government, in the same report. The audit could also include a review of their expense reports and verify that they don’t have undeclared secondary sources of income.

“I think this is a smoke signal that the system might need to adjust how it works in order to better detect” such conflicts of interest, he said in the National Post report.

“I don’t think it’s a sign that the system is failed or broken. I think it’s a sign that the waters in which the ship is sailing are shifting and they need to put up a different sail.”

The number of cases of employee fraud among city workers in Toronto has skyrocketed. In 2023, Toronto’s Fraud and Waste Hotline received 1,054 complaints made up of roughly 1,450 allegations, according to the city government.

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