TORONTO - A lack of oversight by the Ontario government allowed consultants to run amok as the province spent $1 billion in the past decade trying to create electronic health records, a goal that is still years away, Auditor General Jim McCarter said Wednesday.
McCarter's damning report into eHealth Ontario and its predecessor, Smart Systems for Health, also linked the awarding of millions of dollars in untendered contracts to Premier Dalton McGuinty's role in the hiring of eHealth Ontario's chief executive.
The board of directors at eHealth felt CEO Sarah Kramer had carte blanche to operate because she had been hired by chairman Alan Hudson "with the support of the premier," McCarter wrote in the 50-page special report.
"The board may have felt it had little power to oversee matters relating to the CEO."
However, the board still should have shown more oversight and the government -- specifically the health minister who resigned Tuesday -- should have had a much closer eye on the provincial agency, McCarter said after the report was released.
"When you have a lack of oversight that's a lack of appropriate management," he said.
"When you get a lack of oversight you get broken rules. It goes together like a horse and carriage."
Kramer herself felt justified in giving out hundreds of millions of dollars in untendered contracts to consultants, said McCarter, because of the urgency the government placed on the project.
"The CEO basically had almost complete authority, complete autonomy to make those decisions," he said.
"To a large extent it was, 'I've been given the mandate to get this thing done and I think that what I'm doing meets the exception criteria under the procurement policies and therefore I'm basically going to sole-source almost everything to people that I know and worked with in the past."'
McGuinty, responding to the report, said "it's no secret that I'm impatient for an up-and-running electronic heath-record system, just as I am impatient for better test scores, higher graduation rates, lower carbon emissions, (closing) down our coal-fired generation."
"I'm impatient for all of that stuff. I never said anything about breaking the rules."
In the legislature, Progressive Conservative Leader Tim Hudak blamed the wasted money and untendered contracts directly on McGuinty's leadership.
McGuinty said he would implement all of the auditor general's recommendations.
Ontario taxpayers did not get value for the billion dollars spent so far on the massive project to create electronic health records, but there was no evidence of fraud or criminal activity, said McCarter.
"We noticed examples where there was so many consultants that you had consultants basically approving other consultants being hired, often from their own firms," he said.
"We felt that was clearly inappropriate."
Allegations of favouritism in awarding of the untendered consulting contracts were "largely true," and when they were tendered, favourite firms were allowed to bid twice to win, said McCarter.
Executives at eHealth Ontario weren't the only ones giving out untendered contracts -- the auditor general said the Ministry of Health was guilty of doing the same thing, only on an even larger scale and with cabinet's approval.
"There was a heavy, and in some cases almost total reliance on consultants," wrote McCarter.
"To a large extent the consultants were running the show."
By 2008, the ministry's eHealth program branch -- not eHealth Ontario -- had 27 full-time employees, but also had more than 300 consultants, a number of whom were in senior management roles.
Health Minister David Caplan resigned Tuesday in advance of the auditor's report and was replaced by Deb Matthews, who in turn was replaced at Children's Services by backbencher Laurel Broten.
