Auditor warns PCs over COVID-19 spending

Expenditures weren’t tracked adequately early in pandemic, report finds

Premier Doug Ford’s Progressive Conservative government did not always adequately track health and long-term-care spending early in the pandemic, a new report has found.

Auditor general Bonnie Lysyk said the Tories were pouring COVID-19 cash out the door last year, sometimes without enough checks and balances.

“Unanticipated emergencies often require unanticipated expenditures of significant public funds,” Lysyk wrote in a 109page special report to the legislature released Wednesday.

“It has been particularly challenging for those in governance and management to ensure that proper internal controls are in place to authorize initiatives and manage the related distribution of funds to only those eligible to receive the funds,” she wrote.

“This requires proper tracking, monitoring and reporting of expenditures to decisionmakers and to the public.”

Lysyk’s latest in a series of pandemic-response audits only applied to Ministry of Health and Ministry of Long-Term Care initiatives.

That meant the alleged theft of $11 million from Support for Families, a Ministry of Education program, was beyond the scope of this report.

“This report focused on the authorization, management and timely payments related to early health-related COVID-19 expenditures,” the auditor’s spokesperson said.

“Our office is in contact with the Ministry of Education and their work on the alleged fraud. If there is anything more to report, it would be part of our annual report,” the aide said.

The auditor’s annual report is traditionally released in early December.

In Ontario Superior Court of Justice documents, the province alleges last spring, “some or all of” Sanjay Madan and Shalini Madan, their adult sons, Chinmaya and Ujjawal, all of whom worked as government computer specialists, and associate Vidhan Singh perpetrated “a massive fraud” to funnel Support for Families payments to numerous bank accounts at branches of TD, Bank of Montreal, Royal Bank of Canada, Tangerine and India’s ICICI Bank.

That civil proceeding is continuing and there is an ongoing Ontario Provincial Police investigation, but no criminal charges have been laid. The government’s claims have not been proven in court.

While Lysyk’s health and longterm-care audits did not uncover anything as sensational, she did find the ministries “do not have a system in place to track actual COVID-19-related expenditures by initiative.”

As well, the ministries “did not consistently report actual spending” to the Treasury Board when required.

“Instead, these ministries reported both the amounts spent and the amounts committed for future spending in a combined total,” the independent watchdog said.

“Amounts committed for future spending and amounts spent should be reported separately for clarity,” she wrote.

“Failure to distinguish between these two amounts can adversely affect decision-making, as a combined total does not give an accurate picture of the actual progress of the initiative.”

However, Lysyk conceded that the overall government oversight of spending was not lacking.

“Based on our work, we found that in most instances, the province had sufficient authorizations and proper approvals in place for the initiatives we reviewed,” she wrote.

“We also found that in the majority of cases, internal controls were designed effectively to prevent payments to individuals and organizations that were not eligible under the terms of the initiative, or to prevent overpayments.”

The Support for Families program, which was excluded from this audit, gave Ontario parents $200 per child ages 12 and under — and $250 per child with special needs up to age 21 — to offset online educational expenses early in the pandemic.

In the March budget, Finance Minister Peter Bethlenfalvy renamed it the Ontario COVID-19 Child Benefit and expanded the program to pay $400 per child up to Grade 12 and $500 per child 21 and under with special needs.

New security provisions have been put in place to ensure no money is misdirected.