Costly consulting job needs investigation by MLAs, taxpayers group says
A taxpayers group is calling on New Brunswick MLAs to investigate how the province could spend millions of dollars on a consulting contract aimed at saving money and get so little in return.
Earlier this week, Auditor General Kim MacPherson said the firm Ernst & Young was paid $13 million for work intended to identify cost savings in the Department of Social Development.
The resulting savings were not nearly as much as promised, she said.
"These are big salaries when you consider we're dropping teachers, we're having issues within health care," Kevin Lacey, the Atlantic Canada director of the Canadian Taxpayers Federation, said Wednesday. "And then you see these types of expenses to consultants."
Ernst & Young started working on the Social Development job under the former Progressive Conservative government but continued to bill taxpayers after the Liberals took over in 2014.
The original contract was only for two years, but MacPherson found the consultants were still working with the department in February this year.
Her audit revealed that Social Development used an emergency exemption to award Ernst & Young the first two phases of the contract in the first half of 2013.
However, the exemption, granted by Service New Brunswick, was created to allow fast action in situations such as floods or the failure of a heating system in a school during the winter, MacPherson says, not "to achieve aggressive budget reduction targets."
"The deputy ministers of these two departments should be hauled before a legislative committee and tell exactly what happened and who was involved and what action will be taken to correct it," said Lacey.
"It's only by getting to the answers will we ever be able to get to the solution in order to prevent this from happening again."
MacPherson said the department also reported savings in the range of $10 million but she wasn't able to confirm those numbers.
In an interview with Information Morning Fredericton this week, MacPherson said the consultants were paid regardless of whether the government implemented their ideas or achieved the savings identified.
"They were actually compensated for ideas that were never implemented," she said.
Taxpayers deserve better
Lacey said taxpayers deserve to know what happened with the deal, why it happened in the first place and what the government is doing about it.
"We have now the government involved in a property tax scandal, where they've proven they can't manage taxing New Brunswickers properly," he said. "We have the issue now that government can't even spend or reduce spending properly."
Lacey said the auditor general has laid out what happened, but answers are still needed.
"The expenses often tell you a real story about how the government was managing it," he said. "Why wasn't anyone protecting the taxpayer's interest with these types of expenses that were being billed to them?"
Sending the wrong message
Lacey said issues like this keep cropping up, partly because government isn't sending the right message. The only way to get true accountability is for those responsible for an error of this magnitude to be fired, he said.
He said this would resolve the "culture of complacency" MacPherson describes that sends the wrong message.
"It sends the message to government that, 'Hey, these types of things are OK," he said. "If you waste money or mismanage, it's OK because nothing is going to happen to you.'"
Even when different people are in power, the same thing can happen, he said, citing the 2009 Atcon fiasco that cost taxpayers more than $70 million through loan guarantees approved by the Shawn Graham government..
"We simply sweep these things under the rug, hoping they won't happen again," he said. "And yet, they come back time and time again."
