Canada’s auditor general has found that those involved in the procurement, development and implementation of the controversial Arrivecan app showed a “blatant disregard” for basic management practices.
Ultimately, Canadians “paid too much for this request,” according to Auditor General Karen Hogan.
In a new performance audit presented on MondayAuditor General Karen Hogan points out failings by the Canada Border Services Agency (CBSA), the Public Health Agency of Canada (PHAC) and Public Services and Procurement Canada (PSPC) in relation to their work on the era traveler COVID-19. contact application.
The report pegs the cost of the app at $59.5 million (up from the previously estimated $54 million), but warns that the actual cost was “impossible” to calculate due to the agency’s “poor financial record-keeping.” CBSA.
Hogan told the House Public Accounts Committee that while evaluating the request, he came across the worst accounting he had seen in years.
“I am deeply concerned about what this audit did not find,” Hogan testified. “We found no records that show precisely how much was spent on what, who did the work, or how and why hiring decisions were made. And that paper trail should have existed.”
Hogan issued eight broad recommendations for reform, including one that urges involved federal departments and agencies to improve their fiscal management, fully document interactions with contractors, and attach clear results to awarded contracts.
“The lack of information to support ArriveCan’s spending and decisions has compromised accountability,” Hogan said. “Public servants must always be transparent and accountable to Canadians for their use of public funds… Many questions that parliamentarians and Canadians ask cannot be answered.”
The deep dive into the Canadian border enforcement comes amid years of scrutiny by MPs and a series of news stories about the cost of the enforcement and the contracts awarded to build and maintain it.
“As a result of the many gaps and weaknesses we found in the project’s design, oversight and accountability, it did not provide the best value for money spent by taxpayers,” the 30-page report reads.
Hogan’s office confirmed it would embark on this audit last March, after opposition parties came together in late 2022 to pass a motion calling for an investigation into all aspects of the app, including payments, contracts and subcontracts.
Examining documentation related to border enforcement, Hogan’s team of investigators found that CBSA relied heavily on outside help, driving up costs.
The agency also mismanaged contracts and left out “essential information” such as results and qualifications. This extended to the border agency paying invoices that contained few, if any, details about the work completed.
Other findings about the government’s mismanaged border enforcement, according to the auditor general, include:
- Of the contractors examined, 18 percent of invoices submitted did not provide enough information to determine whether their expenses were related to ArriveCan or another IT project.
- Between April 2020 and October 2022, CBSA released 177 versions of ArriveCan “often with little or no testing documentation,” including the June 2022 update in which 10,000 travelers were incorrectly instructed to quarantine.
- The average daily cost of the application that third-party contractors worked on was $1,090, while the average daily cost for equivalent IT positions within the federal government was $675.
- Of the total estimated cost, $53.3 million went to the pandemic response health component of the app, while $6.2 million went to CBSA adding the digitized customs and immigration declaration form.
“Practices for managing ArriveCAN were lacking at the most basic levels,” the report reads.
Audit supports other reports
In January, after Canada’s procurement ombudsman Alexander Jeglic examined ArriveCan contracts, The alarm rang about irregular hiring, including subcontractors who never worked on the application.
Hogan’s report supports this and finds little documentation supporting “how and why” the small consulting firm “GC Strategies” was awarded the initial ArriveCAN contract. The audit also found evidence that the group “was involved in establishing the requirements” that CBSA used to bid for a competitive contract.
The audit could find no evidence that CBSA considered a proposal or any similar document from GC Strategies for its non-competitive contract and the agency’s IT department “supported the selection of GC Strategies with strong justification.”
It has been reported that GC Strategies then outsourced other companies to work on the app, keeping a commission. According to Hogan’s report, after reviewing all available records, his team was unable to determine which agency official made the final decision to select GC Strategies.
“We found that in May 2022, the agency replaced GC Strategies’ three non-competitive contracts, which had been issued quickly and urgently, with one competitive contract. This new contract, valued at $25 million, was also awarded to GC Strategies, as it was the only contractor to submit a proposal,” the report reads.
“In our view, failures in the competitive processes to award further ArriveCAN contracts raised significant concerns that the process did not result in the best value for money.”
Additionally, Hogan’s report found “no evidence” indicating that CBSA employees complied with the agency’s code of conduct by “disclosing that they had been invited to dinners and other activities by contractors.”
COVID era app evolved
Introduced during the COVID-19 pandemic, ArriveCan became mandatory as a way to screen incoming travelers to Canada for information related to their travel and health, including vaccination status.
After months of defending the app, sometimes flawed, and insisting it was a “critical tool” despite pressure from the travel industry and opposition MPs to remove it, the federal government made the use of ArriveCan was optional when it lifted a number of COVID-19 restrictions. 19 restrictions in October 2022.
Hogan’s report notes that the government’s decision to continue to rely on external resources to keep the app alive beyond the initial period of the pandemic “increased costs and calls into question the value achieved for the money spent.”
Other investigations continue
A study by the House of Commons Government Estimates and Operations Committee is being carried out in parallel with Hogan’s investigation. That panel of parliamentarians recently suspended its hearings on the application after reading a preliminary internal CBSA contracting conduct report.
Amid an uproar from Conservatives who called it a cover-up, Liberal, Bloc and NDP MPs said their pause was due to concerns that further public disclosure related to the secret report’s conclusions could compromise investigations into course.
A year ago, Prime Minister Justin Trudeau tasked the secretary of the Privy Council of Canada with investigating what he said appeared to be “highly illogical and inefficient” practices around app procurement.
Additionally, as previously reported and confirmed by Hogan’s report, matters involving “certain employees and contractors” have been referred to the RCMP.
According to the report, CBSA, PHAC and PSPC have agreed with all of Hogan’s calls for reform and have established a series of timelines for the completion of various action items.
Hogan will hold a press conference to further discuss his findings on Monday afternoon. The government and opposition parties are also expected to react to the report in the coming hours.
This is a developing story, check back for updates…