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Special audit to examine Hydro's risk management

By: Staff Writer

Posted: 10/21/2009 1:10 PM | Comments: 0 (including replies)

WINNIPEG - Provincial Finance Minister Rosann Wowchuk, the minister responsible for Manitoba Hydro, today asked the province’s auditor general to conduct a special audit of recent allegations made by an external consultant concerning Manitoba Hydro’s risk management.

Wowchuk said independent auditor general’s office was asked by the government to prioritize the special audit. The Selinger government has also offered to bring in out-of-province expertise to assist in the review.

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Wowchuk said in a statement the province also wants Auditor General Carol Bellringer to report her findings to the legislative assembly as soon as possible.

The auditor general’s office said in its last annual report, released in the summer, that it planned to review Manitoba Hydro’s risk-management practices.Wowchuk said with the special audit and additional resources, that review can be completed sooner.

The audit will also review the specifics of the external consultant’s work for Manitoba Hydro as well as Manitoba Hydro’s management of the consultant’s contract.

The consultant, who would only speak on condition of anonymity to protect her business interests, told the Free Press her findings were ignored and she was fired the day after presenting some of them to Hydro President Bob Brennan. She filed a complaint under the province’s new whistleblower protection law late last year, alleging gross mismanagement and threats to public safety.

She expressed concern that Hydro could face blackouts and bankruptcy and had mismanaged its affairs to the tune of $1.1 billion.
In the wake of that report, Manitoba Hydro hired ICF consultants to review its books. ICF concluded Hydro was doing a reasonable job of managing drought and export risks.

In 2007 and 2008, many of the issues raised about hydro’s financial risks were filed with watchdog the Crown Corporations Council.

Garry Hoffman, president and chief executive officer for the council, has said there was nothing to indicate that Hydro’s practices were any different that those used by other utilities to manage operational and financial risk.

Wowchuk also said Manitoba Hydro will engage the auditing firm KPMG to do a further in-depth and independent review of the corporation’s risk management practices. The Public Utilities Board, which oversees Manitoba Hydro, will be asked to assist with drafting the terms of reference for this external review.

Wowchuk added the next meeting of the legislature’s Standing Committee on Crown Corporations dealing with Manitoba Hydro will be called shortly. That meeting will address issues involving the consultant and concerns that have raised by the opposition Progressive Conservatives and Liberals.

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