Home Canadian News Feds creating office, updating guidelines to combat billing fraud

Feds creating office, updating guidelines to combat billing fraud

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Feds creating office, updating guidelines to combat billing fraud

The fraudulent billing spanned 36 federal departments, agencies and Crown corporations between 2018 and 2022 with an estimated total of almost $5 million.

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As three cases of fraud by subcontractors have come to light, the federal government says it’s taking new action to improve oversight and better detect fraudulent activities.

Public Services and Procurement Canada announced Wednesday it had detected “several fraudulent billing schemes” by three subcontractors working on federal contracts.

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The fraudulent billing spanned 36 federal departments, agencies and Crown corporations between 2018 and 2022, government officials said, with PSPC estimating the total value at almost $5 million.

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PSPC said it had suspended the security status of the three subcontractors and referred the cases to the RCMP for investigation.

The government said it could not release publicly names the individuals or companies while the investigations were ongoing, but added PSPC was working to recover funds. Officials confirmed, however, that the three subcontractors were not connected to the ArriveCan app.

When asked at a news conference if anyone within government had been held accountable for the incidents, Jean-Yves Duclos, the minister of public services and procurement, said there hadn’t been any signs it was due to mismanagement.

Describing this as the “first wave” of fraudulent billing cases, the government said it had received a tip to its tip line and had used data analytics.

“These individuals submitted timesheets and billed multiple departments under separate contracts,” a PSPC statement said.

The government said it expected more cases would be announced in the coming months, with officials confirming they were aware of between five and 10 such cases.

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In light of the first three cases of fraud, uncovered through separate investigations, officials said PSPC would establish a new Office of Supplier Integrity and Compliance to replace the integrity regime that came into effect in 2015.

With the new office expected to begin operations in May, officials said the government planned to hire staff to work under PSPC’s oversight branch.

PSPC said the department would also “refine and expand” the use of its tools, including data analytics.

Duclos said the government was also broadening the scope of offences and triggers that could lead to debarment and suspension, including offences like fraud, corruption, offering and accepting bribes and illegal political financing. He said PSPC would also be able to take action against any supplier that had been debarred by another jurisdiction.

Duclos emphasized that, until recently, information about government contracts was precariously compiled on paper, making it difficult for difficult to “co-ordinate and share that information.”

“Given the recent fast and strong advances in the electronic procurement system, we are now able to collect that information across the government and find out whether there are instances of fraudulent billing, so that’s how it happened,” Duclos said, noting that 98 per cent of procurement contracts now came with electronic data. “That’s a clear warning to anyone who would like to do such things in 2024.”

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Treasury Board President Anita Anand, also at the announcement, said recent reports regarding government contracting and the actions of some individuals were concerning.

“As the Auditor General has confirmed, there are rules in place to ensure sound procurement and management processes across government, but some of these rules were broken,” Anand said.

To “strengthen oversight” and “streamline management across government,” Anand said TBS was implementing a new “risk and compliance process” to assess government trends, risks and departmental performance. She said the process would be informed by an audit by the comptroller general, beginning in April across several departments. TBS indicated that audit results were expected by December.

Anand also shared that TBS had updated its guide for managers on procuring contracting work, released in October.

Created to help managers determine when to outsource professional services and when to leave the work to public servants, Anand said the document would soon outline certain requirements for managers, including ensuring that contracting was the best choice for operations.

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Anand said the government also planned to publish more information about contracts on its Open Data portal as well as to review its directive on conflict of interest to ensure requirements around employees’ engagement in outside employment, including Government of Canada contracts, would be clear and effective.

Guidance provided to deputy heads about the directive will also be reviewed.

David Yeo, CEO of Dalian Enterprises, one of the companies tied to the ArriveCan border app scandal, was previously reported to have also been a Department of National Defence employee.

While Yeo told the federal House committee on Tuesday that the Department of National Defence said he was not in a conflict of interest, the government rebuked that claim.

PSPC previously announced that Dalian Enterprises, Coradix Technology Consulting and GC Strategies Inc. — all tied to ArriveCan — had been suspended from federal contracts.

With Postmedia files

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