Forensic accounting expert defends work at inquiry into police HQ project

A forensic accounting expert’s ability to fully assess 1.7 million documents related to the Winnipeg Police Service headquarters project was put under the microscope Tuesday, a day after he estimated up to $50 million in excess claims were filed.

Expert witness Victor Neufeld told a public inquiry Monday that he found “multiple material financial misrepresentations” in claims filed by Caspian Projects, the main police HQ contractor. Neufeld alleged some claims had inflated amounts, some invoices had unpaid amounts and non-project costs were included in claims, among other issues.

On Tuesday, lawyers for companies involved in the project asked how certain he could be about the excess claim finding, given the challenge of reviewing such a vast amount of information.

“The costs are all based on your review of a limited number of documents out of a total database, which supports only the claim that you cannot find ($45 million) or $50 million worth of costs that the city paid for?” asked George Orle, the lawyer for Caspian Projects.

“I wouldn’t characterize it as limited because they were exhaustive within that scope… It’s the most comprehensive, exhaustive pool of information that I’ve ever seen,” answered Neufeld.

His team of investigators tagged 14,000 documents of interest to focus on, before narrowing the number to 7,700 for further study. That process included removing many duplicates, he said.

Problems with the headquarters project at 245 Smith St. have plagued city council for years. An external audit found it had been severely mismanaged. Initially expected to cost $135 million, its price soared to $214 million when flood damage and some late security upgrades are included.

Lawyer Kevin Williams, who represents subcontractor FABCA Construction, suggested Neufeld’s review largely relied on third-party documents, which the witness confirmed.

“I wouldn’t characterize it as limited because they were exhaustive within that scope… It’s the most comprehensive, exhaustive pool of information that I’ve ever seen.”

Neufeld was also asked many questions about his working relationship with the city. He confirmed he was paid about $865,000 for several years of work for the municipal government.

Neufeld testified that “a majority” of his work on the file was completed on the city’s behalf.

Orle suggested Monday that the working relationship with the city could be viewed as a potential bias for an expert witness.

Neufeld spent most of Tuesday afternoon delving into specific details that contributed to his estimate of excess costs.

For example, he estimated work on doors, hardware and some drywall triggered $9.9 million in claims, including $3.2 million of identified paid costs and $6.7 million deemed excess claims.

For another category, which covered the primary drywall work for the project, his review found there were $9.7 million in claims, including $6 million of identified paid costs and $3.7 million in estimated excess claims.

“All the work that we did all ties in to real transactions behind literally thousands of invoices,” said Neufeld.

“All the work that we did all ties in to real transactions behind literally thousands of invoices.”

Some work on unrelated projects, such as a police canine unit building, also appeared to be added to the HQ project tab, he said.

“Sometimes we deducted amounts because they were non-project, it appeared. Sometimes we deducted them because they did not appear to be paid,” said Neufeld.

He said multiple costs incurred in 2012 also appeared to be linked to invoices issued in 2014, which raised further questions.

“We’re talking millions of dollars were being claimed by Caspian only in March of 2014… This was just a big flag. Why are so many of these invoices being claimed at one time?” said Neufeld.

The inquiry will resume Wednesday.

joyanne.pursaga@freepress.mb.ca

X: @joyanne_pursaga

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Joyanne Pursaga
Reporter

Joyanne is city hall reporter for the Winnipeg Free Press. A reporter since 2004, she began covering politics exclusively in 2012, writing on city hall and the Manitoba Legislature for the Winnipeg Sun before joining the Free Press in early 2020. Read more about Joyanne.

Every piece of reporting Joyanne produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.