Head of Pandemic Loan Program Pushes Back Against Scathing Auditor General Report

Head of Pandemic Loan Program Pushes Back Against Scathing Auditor General Report
A sign on a shop window indicates the store is closed in Ottawa, on March 23, 2020. Adrian Wyld/The Canadian Press
Matthew Horwood
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The president of Export Development Canada (EDC) is defending its pandemic business loans program, saying the agency did the best it could to deliver aid quickly, after an auditor general report said $3.5 billion in loans were given to ineligible recipients.

“We worked to deliver pandemic relief as quickly and as efficiently as possible, and we succeeded at a reasonable cost of approximately $300 per loan,” EDC President Mairead Lavery told the public accounts committee on Dec. 4.

“Still, there is always an opportunity to improve our practices, especially with a first-of-kind program launched in an unprecedented time.”

Auditor General Karen Hogan released a report on Dec. 2 that found EDC’s Canada Emergency Business Account (CEBA) program did not have the proper oversight to ensure “value for money,” and that it gave out $3.5 billion in loans to ineligible recipients. While Hogan lauded the EDC for acting “quickly” to establish the program, giving out $49.1 billion in loans to almost 900,000 small businesses during pandemic closures, she said the program was improperly managed.

In her opening statement, Lavery said the organization had to “essentially build a bank” and develop complex infrastructure from scratch in order to provide loans to businesses impacted by the COVID-19 pandemic. She said when CEBA was announced, EDC was already at capacity supporting customers and delivering other relief programs, and thus they were forced to work as “quickly and efficiently as possible.”

Lavery added that the EDC worked collaboratively with the auditor general and accepted the recommendations of the audit.

“We are focused on improving our controls and reporting, and we’ve established a clear process to collect on all loans, including amounts owing from ineligible recipients,” she said.

Accenture

The auditor general’s report was critical of EDC’s decision to rely on a sole-source contract with a company called Accenture, saying this company was given “too much control over key aspects of the contracts.” Accenture was responsible for developing the technology to receive applications from 233 Canadian financial institutions involved in CEBA, processing millions of documents, and developing a call centre for the program.

The auditor general’s report said Accenture was given hourly contracts instead of fixed price contracts, which eliminated an incentive for the company to finish tasks quicker, and was also not given penalties for cases where work was not performed to appropriate standards.

Lavery said EDC went with a sole-source contract in order to “ensure this program was delivered at speed.” While Lavery said EDC would’ve liked to initiate a request for proposal, giving other contractors the ability to bid for the project, the “number of program changes and the asks of us did not allow that to happen.”

“We went with someone that we felt could deliver that in a timely manner, as well as had significant financial service experience working with Canadian financial institutions,” Lavery said.

Accenture did not respond to The Epoch Times’ request for comment before publication time.

Conservative MP Brad Vis criticized EDC during the committee meeting for giving out $3.5 billion in loans to ineligible recipients, asking “who should be fired for making such a big mistake.” Lavery responded that the program was built in an “unprecedented time.”

“Over 900,000 businesses were supported at the time when they were struggling, when they were facing bankruptcy, when they were challenged, and in fact, very challenged to support not only their employees and meet their costs, but also to support their families,” she said.