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Integrated Relocation Program under fire from Auditor-General (2014 Edition)

McG

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Nice to see the AG getting after this for a failure of DND to measure posted member's satisfaction with IRP.  I also cannot help but imagine that a system better set-up to catch under and over payments would, more often than not, benefit members and families.
Auditor General: Tighter controls still needed on relocation programs
ottawacitizen.com
Kathryn May
25 Nov 2014

National Defence doesn't have the internal controls to ensure the $230 million it shells out every year to relocate thousands of military personnel to new postings is spent according to the rules.

Auditor-General Michael Ferguson's latest audit into the federal government's controversial relocation contract found the RCMP had procedures to properly monitor spending under the contact but the Canadian Forces lacked "adequate financial controls."

The government spends an estimated $300 million a year on various services and expenses to help settle the 18,000 or so employees uprooted for transfers across the country. The contract to manage the Integrated Relocation Program was last retendered in 2009 and won by Brookfield Global Relocation Services, which has held the contract since 1999.

This was the second audit Ferguson released this year into the relocation program, which has been under scrutiny for more than a decade in series of tribunals, hearings and a long legal battle over the 2002 and 2004 contract.

The audit focused only on three years of transactions under the 2009 contract handled by the military and RCMP, which account for most of the moves.

Last year, National Defence spent nearly $230 million to move 15,500 members of the Canadian Forces and the RCMP spent about $50 million to relocate 2,200 employees. Brookfield was paid an annual administration fee of $25 million to run the program.

Under the contract, Brookfield provides a range of services. It counsels and manages the moves for those being transferred, organizes out-of-town trips to hunt for and buy a new home, looking after the costs for such items as house appraisals and the fees to get out of mortgages or leases, money which is then reimbursed by the government. The cost of actually moving furniture and household goods is dealt with in separate contracts with moving companies.

The auditor-general last examined the relocation program in 2006 and found many deficiencies in the program's management, which the audit found have since been improved. The Canadian Forces, for example, set up a special 15-person unit to monitor and oversee the program.

But the audit found "weaknesses" in the way the Canadian Forces verified the transactions for the services provided under the contract, particularly when it came to confirming whether it received the services paid for.

The program was managed on a "zero-balance account" which every day paid Brookfield for the services and transactions handled. It reviewed 15 transactions every day to ensure payments were justified, which Ferguson found was not a large enough sample because of volume of transactions going through the account. Last year, 4,000 out of nearly 850,000 transactions were reviewed.

The audit also was also critical of the Canadian Forces for not sufficiently assessing the Brookfield's performance and whether military personnel were satisfied with the service. It found it failed to meet its target of not making errors exceeding two per cent of total dollar volume in overpayments or underpayments.

The audit found the National Defence had a plan in place to measure the program's performance but it didn't use the all the information it had to ensure members were getting the benefits to which they were entitled.

The auditor-general's 2006 report also uncovered irregularities in the bidding process that the Auditor-General Sheila Fraser concluded unfairly favoured Brookfield - then known as Royal LePage Relocation Services.

That audit was a catalyst for a lawsuit by losing bidder Envoy Relocation Services which was awarded an unprecedented $40 million in an Ontario Superior Court ruling that found the "misconduct" of bureaucrats during the bidding process stacked the deal in favour of Royal LePage Relocation Services.

The government has since settled that contract dispute out of court and the military and RCMP were forced to pay more than $32 million of the $35 million award. The rest was paid by Treasury Board, which uses the contract to move public servants.

The 2009 contract at the centre of Ferguson's probe was supposed to fix all the problems found in the earlier contracts but it also ended up shrouded in accusation of unfairness.

In May, Ferguson examined the awarding of the 2009 contract and found a series of missteps and delays during the 2009 contracting process that stopped suppliers - other than the incumbent - from bidding on the contract, but it found no evidence that it was done intentionally.
 

Tibbson

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Is the full report published yet because I'd be interested to read what our members may have been denied that they were entitled to.  Not that I think anyone is going to go back and correct the issues. 
 

The Bread Guy

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Schindler's Lift said:
Is the full report published yet because I'd be interested to read what our members may have been denied that they were entitled to.  Not that I think anyone is going to go back and correct the issues.
Ask and you shall receive - the latest from the Auditor General's Fall 2014 report released today - highlights mine from the AG's video transcript:
In this audit, we examined how the Royal Canadian Mounted Police and the Canadian Armed Forces have managed selected requirements of the government’s 2009 contract for integrated relocation services. Expenditures under this contract exceeded $300 million in 2012-2013.

Overall, we found that the RCMP has improved its financial and administrative controls for relocation files. For example, it has recently introduced national standard procedures that are intended to ensure that RCMP members receive the appropriate benefits, that the requirements of the Financial Administration Act are met, and that relocation files are handled consistently across the country. The Canadian Armed Forces has also taken steps to improve the management of the 2009 relocation services contract, but we noted weaknesses in the way it verifies relocation transactions. The Canadian Forces should improve their processes to ensure that members consistently receive relocation benefits that meet the requirements of the Financial Administration Act.

If you're interested in more, "Audit at a Glance" summary here, full report here.
 

McG

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Others picking up on the same concern that I noted.

Military under fire on relocation help
Times Colonist
26 Nov 2014

The RCMP gets a passing grade from the auditor general for the way it handles its multimillion-dollar relocation program, but National Defence is once again facing tough questions about how it moves members around the country.

Michael Ferguson's latest report, which looks at both departments, says defence officials don't provide enough assurance that payments under the program are in accordance with the contract.

Perhaps more importantly for those in the military, the audit finds that the department doesn't use the information at its fingertips to ensure that its members consistently receive all the moving benefits to which they are entitled.

The federal government forks out $303.4 million a year to move soldiers, sailors, aircrew and RCMP members to posts across the country using one contractor, Brookfield Global Relocation.

A previous audit questioned the RCMP's diligence in monitoring its portion of the contract, but Ferguson's new report say the Mounties have improved their controls.
 

DAA

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"Perhaps more importantly for those in the military, the audit finds that the department doesn't use the information at its fingertips to ensure that its members consistently receive all the moving benefits to which they are entitled."

Can't tell you the number of times I heard someone say "That's not our AOR, you need to deal with RLRS/Brookfield, it's out of our hands and there responsibility."

But I must say, my all time favourite.....was one Base in Canada, appointed a "2Lt" as the "DND/CF Relocation Coodinator".    :facepalm:
 

dapaterson

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DAA said:
But I must say, my all time favourite.....was one Base in Canada, appointed a "2Lt" as the "DND/CF Relocation Coodinator".    :facepalm:

To be fair, they were completely out of OCdts at the time...
 
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