The federal public works department has recently identified seven instances of fraud in federal contracting, with one official saying it would be “inconceivable” for more cases not to surface in the coming months.
“We do 400,000 procurement transactions a year,” Deputy Minister of Public Services and Procurement Arianne Reza testified at the House of Commons public accounts committee on Nov. 6.
“We have started to really analyze it using data analytics. We have, since 2022, now found a total of seven cases.”
All seven cases have been referred to the RCMP since 2022 she said, which was first covered by Blacklock’s Reporter.
“It would be inconceivable to me not to think we are going to continue to do this type of work and continue to uncover overbilling,” Reza said.
The cases usually involve subcontractors who falsified time sheets and inflated invoices, Reza said, adding that attempts are underway to recover the money. “We have made the commitment to the minister to look at how we can recover funds that were spent on the contracts,” she said.
Catherine Poulin, assistant deputy minister, also confirmed to the committee that three of the seven cases were referred to police in October 2023. “This represents the second wave of fraudulent billing cases,” said Poulin.
“Will there be further waves?” asked Conservative MP Larry Brock. “Are you still examining in fine detail, from top to bottom, any other potential criminality?”
Reza said the prime contractors are usually unaware that their subcontractors are billing other contractors for the same hours of work. Contractors are being encouraged to ensure they are actually receiving the appropriate work they pay for from subcontractors, they said.
Public Works Minister Jean-Yves Duclos announced in March that the procurement department had referred three cases of suspected fraudulent subcontractor invoicing to the RCMP, with the contractors billing 36 different government departments for various work contracts completed between 2018 and 2022. The agency said it would attempt to recover approximately $5 million in funds.
A fourth case was announced in July by the RCMP. The policing agency said a federal consultant submitted fraudulent timesheets that resulted in overbilling of an estimated $250,000 between Jan. 1, 2020 and June 30, 2021.When asked by reporters if he was concerned the fraudulent billing could be a widespread issue, Duclos said it was a “troubling outcome” that had impacted dozens of government departments.
“The overbilling was made in a manner that took advantage of the fact that until recently, when everything was done on paper, it was difficult for departments to coordinate and share that information,” he said.
