Halifax needs to improve how it monitors contracts, auditor general says

A newly released report from Halifax's auditor general says the city must do a better job of monitoring the work done by companies hired through contracts, which were worth more than $120 million last year.

Evangeline Colman-Sadd, who began her seven-year term in October 2016, delivered her first report to the audit and finance committee on Wednesday.

"There were some positives but there is definitely room for improvement," she said.

• Read the full report from Halifax's auditor general

Evaluations, reviews not consistently done

In the 2016-2017 fiscal year, the total amount of contracts in the Halifax region was estimated to be $128 million.

The auditor general's office took a close look at 30 contracts overseen by four departments: parks and recreation; transportation and public works; finance, communication and technology; and operational support. They selected contracts varied in size and type of services.

The report found evaluations and performance reviews on the contracts were not consistently done.

"That's why the same grass cutting companies were getting rehired in my area even though there were problems," said Coun. Matt Whitman.

"The situation seems to have fixed itself despite the lack of internal controls."

Missing penalty provisions

According to Colman-Sadd, 11 of the 30 contracts her office examined did not include provisions for penalties if the work was not done on time.

"Payment penalty clauses are important," said Colman-Sadd. "There should be some onus to get things done in a timely manner."

One of the 30 contracts studied was extended two years past the end of the contract. Colman-Sadd said that contract was in the operational support department, but declined to name the company.

She said the practice of extending contracts is less likely to happen now, because policies have recently changed to limit the number of people who are authorized to extend them.

Most important changes first

At 14 pages, Colman-Sadd's first report was shorter than many of the ones done by her predecessor — which were often at least double that length. It included five recommendations that were all supported by the municipality's management:

• The operations support department should review contracts to ensure staff have enough time to properly monitor the contracts.
• Departments should confirm both the municipality and the contractor comply with all contract terms.
• Departments should evaluate a contractor's performance at the end or during a contract.
• The procurement department should establish a process to ensure that those evaluations are completed and can be used when awarding future contracts.
• All external contracts should require a payment penalty clause.

"We wanted to focus on the most significant recommendations where change is needed," said Colman-Sadd. "By doing so we believe this will help management."

The auditor general plans to bundle the next two or three reports and present them all to the audit and finance committee later this year.