New scandal rocks department despite beefed up financial controls
Kathryn May The Ottawa Citizen
Sunday, September 14, 2003
More than half a dozen bureaucrats at Human Resources Development Canada have been "removed" from their jobs -- some fired, some suspended -- following a police investigation into projects funded under one of the department's grants and contributions programs. Those programs were at the centre of a scandal that still haunts the Chrétien government.
Sources say a police investigation into another matter led to a Toronto-area HRDC office where the bureaucrats were employed, setting off the biggest crisis within the department since it was at the centre of a firestorm over mismanagement of the $3 billion a year it doles out in grants and contributions.
The police investigation is still underway and no employees have been charged.
It appears the department's beefed-up tracking and audit system, introduced to fix the shoddy record-keeping and mismanagement uncovered in the HRDC fiasco, didn't find the problem. But rather it was the police who tipped off senior officials several months ago.
Senior officials immediately began to work with the police probe, launched their own internal reviews and then called in the RCMP. Those internal reviews have led to "disciplinary action" against a number of employees, said Douglas Rimmer, HRDC's assistant deputy minister of communications.
He refused to say whether the employees, some of whom were said to be fired, others suspended, were all from the same office in case it jeopardizes the police investigation.
The police probe is still underway and no employees have been charged.
"HRDC is aware of an investigation and we are working with the police and we have been ... for several months," said Mr. Rimmer. "Anytime there is a police investigation we have to be careful not to jeopardize it in any way."
"Following internal investigations, disciplinary action has been taken, but we can't comment on individual employees," he said.
Revelations of the investigation come at a bad time for the government, on the heels of charges being laid in the Public Works sponsorship scandal, the probe at the Toronto-area office will reopen the wounds of the HRDC scandal, leaving the government open to a full assault by opposition parties when MPs return from summer recess tomorrow. And the first question will be just what has the department done with the millions of dollars it received to clean up the grants and contributions program and clampdown on financial controls.
It also comes at a time when the government is trying to push through its public service reform bill and is facing unprecedented pressure for whistleblowing laws to protect bureaucrats who expose wrongdoing and corruption.
But HRDC officials, who refused to elaborate on the investigation, stressed it focuses on the "wrongdoing of individuals" not on the management of the department's 60 grants and contributions programs.
Grants are unconditional payments, while contributions are conditional and subject to audit.
It's unclear whether the problems uncovered by police pre-date the department's clampdown on the management of these programs, or whether they have surfaced since a new tougher regime was implemented over the past two years.
The department has undergone some major changes and restructuring since the HRDC fiasco and the implementation of its much-lauded "six-point action plan" that was put in place to fix the litany of problems uncovered in the damning 2000 internal audit that ignited the scandal and put the department and HRDC Minister Jane Stewart in the hot seat for months. The various grants and contributions programs are largely managed -- and the money distributed -- by the front-line workers at many of of its 320 offices across the country.
The investigation is also rattling the senior bureaucracy, which has been putting out fires for months over a string of scandals, allegations and blunders. The image of the public service has taken a beating and "this is another blow that we don't need right now," said one senior managers.
It also came under the spotlight with the HRDC, sponsorship and gun registry fiascos and more recently faced a corruption scandal at the Immigration and Refugee Board; the high-profile investigation into the conduct of former Privacy Commissioner George Radwanski and charges against former Health Canada assistant deputy minister Paul Cochrane for breach of trust, fraud and accepting bribes.
The HRDC fiasco -- dubbed the $1-billion boondoggle by the opposition -- led to a massive tightening up of rules at all departments, which hand out more than $18 billion a year in grants and contributions. HRDC alone redirected about $50 million from its other programs to beef up its financial management and controls. It trained several thousands of its workers in financial controls and hundreds were trained in program delivery and "modern comptrollership."
The department also has a new slate of senior executives since the HRDC affair, but has the same fractured reporting structure between the regional offices and headquarters that was criticized at the time of the HRDC scandal as blurring the lines of accountability.
But former Auditor General Denis Desautels' audit of the HRDC fiasco and its action plan warned the problems extended far beyond "a breakdown in controls" and were rooted in the behaviour and working culture of the department -- a culture that can take years to change. He warned the department needed to build a "strong base of ethics and values" among its employees who dole out money and run the programs because spending decisions are based on "judgment calls."
Since then, the government has been working a new code of conduct, which officially came into force Sept. 1. Privy Council Clerk Alex Himelfarb, Canada's top bureaucrat, made ethics and accountability his top priority, which he even tied to executives' pay. Last week, Treasury Board President Lucienne Robillard said instilling "ethics and values" is one her key priorities in reforming the public service. She said the government has a "detailed plan" to explain the code to bureaucrats and copies will given to all new employees and made a condition of employment. Anyone who breaches the code will disciplined, including dismissal and employees will be encouraged to blow the whistle on colleagues or bosses who do.
"It's difficult because in recent times there have been too many troubling stories about the conduct of a few. Too many troubling stories that can overshadow the everyday reality of honesty and integrity that I know ... guides the work of those who choose to serve this country," Ms. Robillard said.
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