http://www.ottawacitizen.com/editorials/001018/4705226.html

Wednesday 18 October 2000

Serious and widespread
The Ottawa Citizen

The Chretien government wants you to believe it has cleaned up the Shovelgate mess that rocked Jane Stewart's Department of Human Resources Development Canada earlier this year, and they're using the latest report of the federal auditor general to support their claim.

But don't be fooled. While Denis Desautels' report does acknowledge HRDC's extraordinary efforts to start cleaning up its act, it also confirms everyone's worst fears about the extent of inappropriate practices and entrenched mismanagement that have plagued HRDC and its predecessor departments for most of the past decade. Even more worrying, Mr. Desautels warns the old bad habits will return if Ms. Stewart and her officials let up in their attempt to fix the myriad systemic problems.

The auditor general also takes aim at former HRDC ministers and senior officials who allowed the widespread mismanagement to continue unabated despite two internal audits, the first in 1991 and the second in 1994, that revealed serious control weaknesses. Senior managers -- including presumably HRDC's former deputy minister Mel Cappe who, as Clerk of the Privy Council, is now Canada's top bureaucrat -- consistently failed to correct the problems and allowed the inappropriate practices to become routine and eventually entrenched.

It was only after the 1999 internal audit sparked such controversy in the House of Commons that the federal government started to treat the matter with the seriousness it deserved. Even then, Ms. Stewart and Prime Minister Jean Chretien tried to hide the full extent of the scandal from Canadians, claiming there were only 37 "problem" files out of a random sampling of 459 projects. The auditor general gives this the short shrift it deserves, noting that even such an unrepresentative sampling provided strong evidence of "serious and widespread" problems.

A more detailed audit by Mr. Desautels' office revealed several unacceptable practices at HRDC. These included the inadequate assessment of nearly one-third of all applications under the Canada Jobs Fund (CJF) and the incredible finding that fully three-quarters of all projects probably would have gone ahead even without HRDC funding. Grants were promoted and publicized inconsistently in various ridings, resulting in some people having unfair access to monies that were not available to other equally deserving Canadians.

The auditor general also dismisses the Chretien government's attempts to play down the magnitude of overpayments by the CJF. Ms. Stewart first insisted the amount was just $3,229, but eventually admitted the total was closer to $226,000. Mr. Desautels says the real figure is likely to be much higher, since the government's figures only include its review of still-active files. Even higher overpayments will be found in now-closed files.

But that's not all. The auditor general also notes that an "overpayment" only exists if fund recipients breach the terms of their agreements with HRDC. Excessive payments made under arrangements agreed to by HRDC, even if they violate government guidelines, can't be recovered and so don't count as "overpayments."

Mr. Desautels gives HRDC appropriate credit for taking steps to start correcting the problems, but admonishes it "to make today's extraordinary efforts tomorrow's routine," to ensure the problems don't return.

The Chretien government will now use the auditor general's report to try to claim it has dealt with the HRDC scandal so voters should entrust it with a third mandate in the upcoming election. But such a tactic could backfire, particularly if voters read the report's chapter on values and ethics in the federal public service (www.oag-bvg.gc.ca). Specifically, Mr. Desautels states that the prime minister and his cabinet set the moral and ethical tone for the entire government.

Judging by its handling of Shovelgate, it seems the Chretien government thinks it's all right to mislead Parliament, hide the truth and grossly mismanage public funds.

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http://www.ottawacitizen.com/national/000929/4601835.html

Ottawa Citizen
Friday 29 September 2000

HRDC writes off $300M 'blunder'

Government forgives $1.5B in bad debts, obligations

Mike Trickey and James Baxter
The Ottawa Citizen

The Chretien government is trying to hide its "billion-dollar boondoggle" by writing off nearly $300 million owed to the Human Resources Development Department, opposition critics charged yesterday.

"That billion-dollar boondoggle is true at HRDC," said John Williams, chairman of the Commons committee on public accounts. "They wrote off $296 million."

Mr. Williams was commenting on the auditor general's annual publication of the country's public accounts, a dollar-by-dollar accounting of government spending for the past year. Including the HRDC writedowns, the government and its various agencies wrote off or forgave $1.5 billion in debts and obligations, including $911 million in taxes.

Mr. Williams said the government tried to bury the HRDC scandal last year by referring to clerical mishandling of files, including incomplete forms and missing applications. However, by writing off $296 million, the government must now admit to a monumental blunder, the Canadian Alliance MP said.

Mr. Williams said he is also outraged by the amounts the Chretien government directed to Atlantic Canada through HRDC in questionable programs.

"Atlantic Opportunities had $44 million worth of write-offs for money that they poured in through grants and contributions," Mr. Williams said. "Now we have �(Employment Insurance) preparing to spend so much more money. My goodness, the cost of buying votes for the Liberal government in Atlantic Canada is more than the rest of Canada can afford."

National Defence lost $131,743 in combat clothing and another $78,250 in personal kit. Even army bath towels were popular, with at least 20 incidents of their being lost or stolen.

Not so popular were $20,768 worth of rations that had either gone bad or were past their expiry dates. DND also wrote off $111,477 in the crash of a Labrador helicopter.

Inmate rioting cost the solicitor general's office $440,656 in prison repairs, while 78 prison fires cost another $133,899. A further $137,430 was pilfered from prison stockrooms.

Again last year, federal departments had a terrible time keeping tabs on computers and computer equipment.

Theft and loss of laptops, desktops, monitors and miscellaneous equipment amounted to $1.14 million with Human Resources Development responsible for 20 per cent of the total. HRDC also had software, valued at $136,111, stolen. Public Works, National Defence, Industry and Canada Customs lost more than $100,000 worth of computer equipment.

Officials were at a loss to explain how so many computers could disappear, but a clue might be found by examining loss and theft at Health Canada. Tucked in among the stolen cars, computers and phones was the theft of $120 in office equipment, including the keys.

Other drains on the government coffers are more mysterious. The RCMP paid out $100,000 in two witness protection disputes. "Inaccurate advice" cost the Human Resources Department $20,000. A defamation suit prompted a $35,000 settlement from the Canada Customs and Revenue Agency.

Damaged shoes set the Canadian Radio-television and Telecommunications Commission back $109. Foreign Affairs shelled out $196 to reimburse someone for opera tickets. At the Transport Department, compensation for the nuisance caused by erroneous calls amounted to $245. And the accidental breakage of 25 sea urchin cages resulted in $1,818 in damages for Fisheries and Oceans.

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