A lack of oversight by the Ontario government allowed consultants to run amok as
the province spent $1 billion in the past decade trying to create electronic
health records, a goal that is still years away, Auditor General Jim McCarter
said Wednesday.
McCarter's damning report into
eHealth Ontario and its predecessor, Smart Systems for Health, also linked the
awarding of millions of dollars in untendered contracts to Premier Dalton
McGuinty's role in the hiring of eHealth Ontario's chief executive.
The board of directors at eHealth
felt CEO Sarah Kramer had carte blanche to operate because she had been hired by
chairman Alan Hudson "with the support of the premier," McCarter wrote in the
50-page special report.
"The board may have felt it had
little power to oversee matters relating to the CEO."
However, the board still should have
shown more oversight and the government - specifically the health minister who
resigned Tuesday - should have had a much closer eye on the provincial agency,
McCarter said after the report was released.
"When you have a lack of oversight
that's a lack of appropriate management," he said.
"When you get a lack of oversight you
get broken rules. It goes together like a horse and carriage."
Kramer herself felt justified in
giving out hundreds of millions of dollars in untendered contracts to
consultants, said McCarter, because of the urgency the government placed on the
project.
"The CEO basically had almost
complete authority, complete autonomy to make those decisions," he said.
"To a large extent it was, 'I've been
given the mandate to get this thing done and I think that what I'm doing meets
the exception criteria under the procurement policies and therefore I'm
basically going to sole-source almost everything to people that I know and
worked with in the past."'
McGuinty, responding to the report,
said "it's no secret that I'm impatient for an up-and-running electronic
heath-record system, just as I am impatient for better test scores, higher
graduation rates, lower carbon emissions, (closing) down our coal-fired
generation."
"I'm impatient for all of that stuff.
I never said anything about breaking the rules."
In the legislature, Progressive
Conservative Leader Tim Hudak blamed the wasted money and untendered contracts
directly on McGuinty's leadership.
McGuinty said he would implement all
of the auditor general's recommendations.
Ontario taxpayers did not get value
for the billion dollars spent so far on the massive project to create electronic
health records, but there was no evidence of fraud or criminal activity, said
McCarter.
"We noticed examples where there was
so many consultants that you had consultants basically approving other
consultants being hired, often from their own firms," he said.
"We felt that was clearly
inappropriate."
Allegations of favouritism in
awarding of the untendered consulting contracts were "largely true," and when
they were tendered, favourite firms were allowed to bid twice to win, said
McCarter.
Executives at eHealth Ontario weren't
the only ones giving out untendered contracts - the auditor general said the
Ministry of Health was guilty of doing the same thing, only on an even larger
scale and with cabinet's approval.
"There was a heavy, and in some cases
almost total reliance on consultants," wrote McCarter.
"To a large extent the consultants
were running the show."
By 2008, the ministry's eHealth
program branch - not eHealth Ontario - had 27 full-time employees, but also had
more than 300 consultants, a number of whom were in senior management roles.
Health Minister David Caplan resigned
Tuesday in advance of the auditor's report and was replaced by Deb Matthews, who
in turn was replaced at Children's Services by backbencher Laurel Broten.
Read the full report here