Auditor general to investigate

Auditor general Carol Bellringer said investigators will go into WRHA offices and begin reviewing electronic financial statements, documents and other records starting next week. She said it's too early to say how long the audit will take to complete and would not comment on the scope of the probe.

Bellringer said a Free Press investigation into the WRHA's value-added policy triggered a lot of questions, and that she wants to find out how exactly the practice works and what's going on with tenders.

Last week, the Free Press revealed the WRHA accepted more than $20 million in money, equipment and gifts handed over in brown envelopes from medical suppliers who won contracts in the region since 2000. "There's no question it's an unusual practice compared to almost every other tendering activity I've ever seen in the public sector," Bellringer said Thursday.

"As soon as something becomes a public story we do look at saying, we have a role to play in getting the clarity of information into the discussion as soon as we possibly can because we do have the ability to access everything."

Bellringer said she still has to officially inform Health Minister Theresa Oswald and WRHA that the audit will commence next week.

She said the government will get the first chance to see the draft report when it's complete and the final report will be made public and turned over to the legislative public accounts committee.

Bellringer said the WRHA audit will be somewhat contained, but that she wants to investigate public-sector tenders across Manitoba next year.

"We want to look at tendering right across the board in the future. The public-sector tendering around everything, from roads to bridges, to floodways, you name it," she said.

"There's a lot of spending going on with all of the construction work going on."

Since the brown-envelope policy surfaced, WRHA officials haven't disclosed a detailed breakdown of which medical supply companies gave funds or other grants once it was awarded a contract, or how the money was spent. The WRHA said that no employee or board members have pocketed any of the money.

While most organizations require that any extras suppliers offer are outlined in the bid proposal, WRHA officials defended their policy as a way to limit the influence of medical suppliers. CEO Dr. Brian Postl told the Free Press keeping any extras a supplier offers separate from the main bid prevents them from influencing who wins a contract.

He maintained that the amount of grants they've accepted in brown envelopes has dried up since they stopped accepting restricted grants. Suppliers dictate how restricted grants are spent, and unrestricted funds can be used at the WRHA's discretion.

Documents show several restricted and unrestricted grants from medical suppliers put toward operating and equipment costs of various departments extend until 2011.

In the last eight years, WRHA received more than $2.2 million in unrestricted funds from suppliers that was allocated to other accounts as an extra source of funding -- including the corporate department, which accepted more than $1.1 million.

Another $17.9 million in other funds was put towards research, education, and other hospital programs.

McFadyen said he's pleased the auditor general is going to undertake the review and that it will begin so swiftly.

"Obviously there's a need to identify what's happened in the past and that practices going forward are based only on how we deliver the best health care to Manitobans at the most reasonable costs to taxpayers," he said. "This audit, we hope, will help produce the information and recommendations that will lead to needed change."

jen.skerritt@freepress.mb.ca

Timeline of the brown envelope controversy:

Saturday, Jan. 31, 2009

The Free Press publishes its investigation of the WRHA's value-added policy, which reveals the health authority accepted more than $20 million in money, equipment and other gifts handed over in brown envelopes from medical suppliers awarded contracts since 2000. Officials say no employees or board members have personally benefitted from the value-added policy.

Monday, Feb. 2, 2009

Tory leader Hugh McFadyen slams the policy's potential for corrupting the tender process and says he will ask the province's auditor general to investigate.

Tuesday, Feb. 3, 2009

Pharmaceutical watchdogs call the policy a failure and say accepting money in brown envelopes is not an appropriate way to crack down on influential gifts from medical suppliers.

Thursday, Feb. 5, 2009

Manitoba's auditor general Carol Bellringer confirms she will launch an immediate audit of the WRHA's value-added policy.

Republished from the Winnipeg Free Press print edition February 6, 2009 A3