Government agencies frequently ignore federal contracting and procurement rules when awarding contracts to consulting firms McKinsey The auditor general concluded in a report released on Tuesday.
Auditor-General Karen Hogan investigated 97 contracts awarded to McKinsey between 2011 and 2023, with a total value of $209 million, at the request of the House of Commons.
The federal government’s contracts with McKinsey came under scrutiny last year after media reports on the rapid growth of its business under Prime Minister Justin Trudeau’s Liberal government.
The audit found that 90% of departments and agencies and 80% of Crown corporations failed to fully comply with their procurement policies and guidelines in at least one contract.
Auditors found that of the 19 contracts awarded directly to consulting firms, 18 were awarded without a competitive process, and the organization did not explain why.
Auditors said the government may not be getting value for money, noting that 30 out of a sample of 33 contracts had no cost estimates in advance.
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She made a recommendation to strengthen conflict of interest rules, but beyond that she said agencies should adopt her previous recommendation to strengthen procurement practices, which the federal government accepted.
“While this audit focused on the contract awarded to McKinsey & Company, it highlights the basic requirements and good practices that all federal organizations should follow when procuring professional services on behalf of the Government of Canada,” Horgan said in the news release.
Auditors said federal funds going to McKinsey accounted for just 0.27% of total consulting fees for similar services.
In a statement, Procurement Minister Jean-Yves Duclos highlighted some of the steps the government has taken to strengthen the contracting process, including increased scrutiny of contracts awarded in non-competitive procedures.
The Treasury Committee published a report last year examining the contract awarded to McKinsey.
The Treasury Committee's final report last year said departmental audits found no evidence of political interference or that the integrity of the procurement process was not maintained.
But they did find that some administrative requirements and procedures were not consistently followed.
© 2024 The Canadian Press
