Ontario’s health system is sick, according to a special report from Auditor General Jim McCarter detailing the controversial role of consultants in healthcare.
The special report highlighted instances at by the Ministry of Health and Long-Term Care, three LHINs, and 16 Ontario hospitals where bids by consultants were awarded under questionable processes, bids were excessive and unaccountability was pervasive. There was an alarming rate of undocumented consulting activity and poor oversight.
“We acknowledge that consultants can play an important role in the health-care sector,” McCarter said after his Report was tabled.
“But we found far too many examples where consultants were engaged on a sole-sourced basis, where significant increases in the initial fee estimate and follow-on work were repeat¬edly awarded, where there was inadequate oversight to ensure consultants delivered on time and on budget, and where billings for fees and expenses were not properly monitored and supported.”
The report did indicate that the Ministry of Health and Long-Term Care did follow most directives and the LHINs were in the process on implementing newly mandated procedures. However, hospitals faced the most scrutiny as their procedural guidelines are supposed to be created and enforced internally.
Among the report highlights:
• One hospital single-sourced the engagement of a consultant between June 2007 and June 2008 to speed its development and adoption of electronic health records. However, we found no documentation or justification to indicate why an external consultant was necessary, or outlining the preliminary scope or budget of the project prior to the engagement. In addition, when a contract was finally established, the key deliverables and expectations were not specified and, consequently, the contract was based only on a per diem rate of $1,100 instead of on the key deliverables for the project. Also, the contract was never signed by the consultant, and it was signed by a hospital employee who did not have signing authority for a contract over $100,000. The hospital’s records indicated that payments to the consulting firm were more than $58,000 higher than the contract ceiling price of $264,000, but there was no evidence that the additional billing was questioned or properly approved.
• At one hospital, the Ministry appointed a provincial supervisory team that issued a report in June 2008 including recommendations for “renewal” of board governance. To help implement these recommendations, in August 2008 the hospital engaged on a single-source basis a consultant who had been a member of the provincial supervisory team. The consultant was paid $60,000 as a member of the provincial supervisory team and approximately $120,000 in fees and expenses for this assignment. No contract was established specifying the deliverables or specific services to be provided, or the cost of the work.
• A LHIN engaged a consulting firm to develop a hospital Emergency Department human-resources project, which resulted in two contracts totalling $184,000 between November 2008 and May 2009. The Directive required that a minimum of three vendors be invited. However, both contracts were single-sourced without documented justification or proper approvals. This LHIN had a policy that required board approval for these contracts because their total value exceeded $100,000, but the approvals had not been obtained.
• A case in which the amount paid for a single-sourced contract was not properly justified. In May 2009, the Ministry awarded a single-sourced contract for $749,000 to a consultant to undertake a review of the pharmaceutical sector. The consultant’s statement of work, signed by the Ministry, listed project deliverables but had no breakdown of how the contract price had been arrived at, the hours assigned to individual tasks, or per diem rates. Instead, the contract price was a lump sum, which in our view did not provide the Ministry with sufficient information to assess whether the amount was reasonable; nor could the Ministry justify the project’s cost, because by single-sourcing the procurement it obtained no competing bids for comparison.
• Before issuing a request for services in July 2009 to consultants on the vendor-of-record list, the Ministry had estimated through an approved business case that “change management services” would cost $200,000. Four pre-qualified firms were invited to provide proposals and were given only four days to develop a submission, contrary to the Directive’s mandatory minimum requirement of 15 days.
Source: Office of the Auditor General of Ontario
The special report highlighted instances at by the Ministry of Health and Long-Term Care, three LHINs, and 16 Ontario hospitals where bids by consultants were awarded under questionable processes, bids were excessive and unaccountability was pervasive. There was an alarming rate of undocumented consulting activity and poor oversight.
“We acknowledge that consultants can play an important role in the health-care sector,” McCarter said after his Report was tabled.
“But we found far too many examples where consultants were engaged on a sole-sourced basis, where significant increases in the initial fee estimate and follow-on work were repeat¬edly awarded, where there was inadequate oversight to ensure consultants delivered on time and on budget, and where billings for fees and expenses were not properly monitored and supported.”
The report did indicate that the Ministry of Health and Long-Term Care did follow most directives and the LHINs were in the process on implementing newly mandated procedures. However, hospitals faced the most scrutiny as their procedural guidelines are supposed to be created and enforced internally.
Among the report highlights:
• One hospital single-sourced the engagement of a consultant between June 2007 and June 2008 to speed its development and adoption of electronic health records. However, we found no documentation or justification to indicate why an external consultant was necessary, or outlining the preliminary scope or budget of the project prior to the engagement. In addition, when a contract was finally established, the key deliverables and expectations were not specified and, consequently, the contract was based only on a per diem rate of $1,100 instead of on the key deliverables for the project. Also, the contract was never signed by the consultant, and it was signed by a hospital employee who did not have signing authority for a contract over $100,000. The hospital’s records indicated that payments to the consulting firm were more than $58,000 higher than the contract ceiling price of $264,000, but there was no evidence that the additional billing was questioned or properly approved.
• At one hospital, the Ministry appointed a provincial supervisory team that issued a report in June 2008 including recommendations for “renewal” of board governance. To help implement these recommendations, in August 2008 the hospital engaged on a single-source basis a consultant who had been a member of the provincial supervisory team. The consultant was paid $60,000 as a member of the provincial supervisory team and approximately $120,000 in fees and expenses for this assignment. No contract was established specifying the deliverables or specific services to be provided, or the cost of the work.
• A LHIN engaged a consulting firm to develop a hospital Emergency Department human-resources project, which resulted in two contracts totalling $184,000 between November 2008 and May 2009. The Directive required that a minimum of three vendors be invited. However, both contracts were single-sourced without documented justification or proper approvals. This LHIN had a policy that required board approval for these contracts because their total value exceeded $100,000, but the approvals had not been obtained.
• A case in which the amount paid for a single-sourced contract was not properly justified. In May 2009, the Ministry awarded a single-sourced contract for $749,000 to a consultant to undertake a review of the pharmaceutical sector. The consultant’s statement of work, signed by the Ministry, listed project deliverables but had no breakdown of how the contract price had been arrived at, the hours assigned to individual tasks, or per diem rates. Instead, the contract price was a lump sum, which in our view did not provide the Ministry with sufficient information to assess whether the amount was reasonable; nor could the Ministry justify the project’s cost, because by single-sourcing the procurement it obtained no competing bids for comparison.
• Before issuing a request for services in July 2009 to consultants on the vendor-of-record list, the Ministry had estimated through an approved business case that “change management services” would cost $200,000. Four pre-qualified firms were invited to provide proposals and were given only four days to develop a submission, contrary to the Directive’s mandatory minimum requirement of 15 days.
Source: Office of the Auditor General of Ontario
