Auditor General Karen Hogan has sounded the alarm on a potential widespread disregard for rules in federal contracting, following an audit of sole-sourced contracts awarded to McKinsey & Company. Blacklock's Reporter says while the audit focused on McKinsey, Hogan believes the irregularities uncovered are likely just the tip of the iceberg.Hogan told the Commons government operations committee that her team found frequent disregard for the rules in the awarding of contracts to McKinsey, which totaled $200 million over 12 years. “That’s why when we see there was a frequent disregard for the rules for McKinsey we don’t believe it is reasonable to assume it was limited just to them,” said Hogan. “It is likely it is time to remind all public servants involved in procurement what the rules are and why they are there so they can be followed.”This amount represents just 0.27% of the $68 billion spent on professional services during that period.The audit revealed 97 contracts awarded to McKinsey, most of which were sole-sourced, and found strategies that made it easier for McKinsey to secure contracts. Hogan noted that 58% of the contracts examined showed gaps, including a lack of explanation for why the contract was needed, making it impossible to determine if there was value for money.Hogan's warnings were echoed by Bloc Québécois MP Julie Vignola, who questioned whether the McKinsey irregularities were representative of broader issues in contracting. Hogan confirmed that the sample of 33 contracts examined was statistically significant, allowing for extrapolation to the entire public service.The audit also revealed that federal employees were too afraid to disclose what they knew about misconduct in contracting, highlighting a culture of fear and silence. Hogan assured that her team takes such concerns seriously and will consider the information shared.As Hogan stated, "It's pretty important... to determine whether there was value for money in those contracts."
Auditor General Karen Hogan has sounded the alarm on a potential widespread disregard for rules in federal contracting, following an audit of sole-sourced contracts awarded to McKinsey & Company. Blacklock's Reporter says while the audit focused on McKinsey, Hogan believes the irregularities uncovered are likely just the tip of the iceberg.Hogan told the Commons government operations committee that her team found frequent disregard for the rules in the awarding of contracts to McKinsey, which totaled $200 million over 12 years. “That’s why when we see there was a frequent disregard for the rules for McKinsey we don’t believe it is reasonable to assume it was limited just to them,” said Hogan. “It is likely it is time to remind all public servants involved in procurement what the rules are and why they are there so they can be followed.”This amount represents just 0.27% of the $68 billion spent on professional services during that period.The audit revealed 97 contracts awarded to McKinsey, most of which were sole-sourced, and found strategies that made it easier for McKinsey to secure contracts. Hogan noted that 58% of the contracts examined showed gaps, including a lack of explanation for why the contract was needed, making it impossible to determine if there was value for money.Hogan's warnings were echoed by Bloc Québécois MP Julie Vignola, who questioned whether the McKinsey irregularities were representative of broader issues in contracting. Hogan confirmed that the sample of 33 contracts examined was statistically significant, allowing for extrapolation to the entire public service.The audit also revealed that federal employees were too afraid to disclose what they knew about misconduct in contracting, highlighting a culture of fear and silence. Hogan assured that her team takes such concerns seriously and will consider the information shared.As Hogan stated, "It's pretty important... to determine whether there was value for money in those contracts."
