Nalcor employees bought booze, cigars on public dime, auditor general finds
CBC
An audit of the Crown corporation formerly responsible for Newfoundland and Labrador's overbudget Muskrat Falls hydroelectricity project has found management consistently overspent on employee perks and contractors in a five-year sample period.
Nalcor, which was formed in 2007 and was folded into N.L. Hydro last year, "did not always ensure the best possible use of public money," found Thursday's report from Newfoundland and Labrador's auditor general, Denise Hanrahan.
"This was a long and complex audit," she said to reporters at a news conference Thursday.
Hanrahan found lavish employee expenses, such as alcohol and tobacco, had been billed to taxpayers. She found staff spent $8,000 on booze and accumulated 272 bottles of various beverages at a convention centre in Churchill Falls.
In 2017, staff also overspent on Christmas dinner, exceeding the $10,000 budget once over.
Between 2013 and 2018, Nalcor management also spent some $240,000 per year on average on cash gifts, parties and golf fees for employees.
Nalcor also regularly hired contractors to fill long-term positions at inflated costs, without rationale or any evidence of weighing the costs and benefits of doing so, the audit found.
Hanrahan's report found more than 500 of 778 employees were contracted for over two years and embedded in management, rather than offered temporary employee positions "at a significantly lesser cost."
Nalcor was exempted by an order in council in 2010 from having to adhere to government spending policy and was allowed to craft its own. Hanrahan said that policy didn't exist in some cases — for instance, there was no spending limit on relocation fees.
She found no conflict of interest involving former Nalcor CEO Stan Marshall, but did find some conflict of interest involving some of the contractors.
Hanrahan's report includes recommendations to create a clear policy on discretionary expenses and a more robust policy on hiring contractors.
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