News release

P3 School Contracts, Members' Expenses Focus of Auditor General

Nova Scotia's education department has not met its duty to taxpayers or to students because of significant weaknesses in its management of P3 school contracts, Auditor General Jacques Lapointe said in his latest report.

The Auditor General's first report of the year, released to the legislature today, Feb. 3, also raises concerns about "irresponsible practices and questionable expenditures" involving MLAs' expense accounts.

Mr. Lapointe cited a range of problems with management of the 20-year agreements between the province and developers who built and own the 39 P3 schools. He made 21 recommendations to address those problems and urged the department to begin planning for the end of the contracts, now less than 10 years away.

The report says procedures to monitor whether the developers are meeting the terms of the contracts are inadequate. The department relies on principals and other school board employees to alert them to problems. But those officials were unaware of maintenance or other service levels called for in the agreements.

"If there are no complaints, the department assumes the contract is being fulfilled," said Mr. Lapointe.

The audit found a number of contractual requirements that were not met, including child abuse and criminal record checks, first aid training and fire safety inspections.

In two cases, developers subcontracted school maintenance back to school boards, in effect transferring responsibility for maintenance and operation of the buildings back to taxpayers -- an arrangement that seems to benefit developers but has questionable value for taxpayers.

The Auditor General audited the expenses filed by and paid to members of the legislature between July 2006 and June 2009, and found a "deficient" system that invites errors and misuse.

Mr. Lapointe said it is difficult to determine to what extent system weaknesses, processing errors, innocent mistakes or conscious decisions by members contributed to questionable expenses payments.

He pointed out that the government has already moved on his key recommendation and initiated a comprehensive examination of the expense system. In addition, some procedures have been tightened and some members have paid back money.

While his report cites a number of specific incidents of what he called excessive or inappropriate expenses, Mr. Lapointe decided not to identify individual members in his report, although "...the argument can be made that there is both a public interest and right to know (names of MLAs)."

"Ultimately, I decided to exclude members' names from the report, not for their protection but because I hope to focus attention on a broken system that requires fixing, rather than on individuals," said Mr. Lapointe.

The Auditor General provided information to the Speaker and the legislature's Internal Economy Board to enable the recovery of funds from individual members.

His report also focused on the development of electronic health records. While Mr. Lapointe's audit found good project management practices in the electronic health record initiative, he noted that the various initiatives underway in the Department of Health are not integrated and may not be compatible.

He recommended the development and implementation of an overall IT strategy for electronic health records.

Mr. Lapointe's 150-page report cites financial reporting issues across government including the excessive use of additional appropriations at year end and the continuing practice of paying universities in advance.

The report also includes information on various economic and financial indicators which are designed to assess government's ability to respond to changing economic conditions.

The complete report and related documents are available online at www.oag-ns.ca or by contacting the office at 902-424-5907.

FOR BROADCAST USE:

Nova Scotia's education department has not met its duty to taxpayers or to students because of significant weaknesses in its management of P3 school contracts, Auditor General Jacques Lapointe says in his latest report.

The Auditor General's first report of the year, released today (February 3rd), also raises concerns about "irresponsible practices and questionable expenditures" involving MLAs' expense accounts.

The complete report and related documents are available online at W-W-W dot O-A-G dash N-S dot C-A or by contacting the office at 902-424-5907.

-30-

Media Contact:

Jacques Lapointe
Auditor General 902-424-5907 E-mail: