The city spent more than $9,000 on a residential washer-dryer set — just one of multiple instances of overbilling and lack of oversight revealed in a report to city council Wednesday.
Auditor General Beverly Romeo-Beehler did a detailed review of 250 invoices received by the city's corporate real estate management (CREM) division between 2013 and 2020.
She found dozens of instances where a lack of oversight was evident in work commissioned by CREM, some of which cost the city thousands of dollars, although the report doesn't offer a total amount lost due to the lack of oversight.
"People should be upset ... They're entitled to be," Coun. Stephen Holyday, who chairs the audit committee, told CBC Toronto.
"At the end of the day, this is public money and it should be treated as equally careful as you would treat your own money when you're dealing with these bills."
'Inaccurate or inflated invoices'
CREM is the city division that's responsible for the upkeep of city-owned properties.
Sean MacIntosh, a director of forensics in the auditor general's office, said the review of CREM was triggered when his office "received an allegation that the Toronto Corporate Real Estate Management (CREM) Division (formerly Facilities Management) was paying inaccurate or inflated invoices."
In the case of the washer-dryer, Romeo-Beehler said the Whirlpool washer-dryer set could have been picked up for a fraction of the cost. Retail prices for such sets "are in the range of $2,200," her report states.
"The vendor also charged an additional $1,125 for installation, which included labour hours for three technicians and $110 for two four feet long and 3/4" in diameter braided hoses."
One manager of a city-owned building told the auditor general it was routine for the city to rubber stamp invoices for some supplies and subcontractor work without checking to see whether the city was actually getting value for money.
"The City rarely asked for such things," the report quotes the unidentified manager as saying. "We are going to start asking for more ...There is an element of trust with the vendors since we have worked with them for years."
In the case of the inflated washer-dryer invoice, the report says the vendor has agreed to refund some of the money it charged the city.
Romeo-Beehler's office wouldn't confirm when or in which city-owned building the work was done.
No indication overbilling intentional, report says
She also said in the report many of the problems she found are already being addressed by CREM executives. And she said there's no indication any overbilling was intentional.
Among other findings in the 43-page report include:
The city was sometimes charged journeyman pay rates for work done by apprentices.
No one appears to have been checking to see that contractors' work was done properly.
No oversight appears to have been done on whether the city was being charged appropriate prices for various supplies.
"I'm very concerned, very upset, especially in a time of limited resources like we have now coming out of COVID," Holyday said.
"Every penny always counted, but more so than ever it does now. So I want to make sure that the management team has the tools in place to hold the staff accountable.
"And having a report where all of this stuff is brought out into the light, where the mistakes are brought into the light and having a path to correct it and having a standard to hold people up to is critical."
Needless overtime charges
The auditor-general also found incidents in which contractors billed the city overtime on jobs that didn't necessarily require after-hours work.
"We sampled 75 invoices from a vendor and found 22 out of the 75 invoices involved overtime hours," the report states.
"Only nine out of the 22 were either emergency work or pre-approval for after-hours billings. Thirteen invoices did not have a documented rationale that overtime was warranted."
The motion passed by councillors Wednesday calls for more thorough oversight of contracts, contractors, and the quality of the work they do for the city.
City spokesperson Brad Ross said the overcharge in the washer-dryer incident was "a billing error and the City is recouping the amount that was overcharged from the vendor."