ArriveCan app so poorly managed auditor general can only guess the cost – National Post

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OTTAWA – In a damning report released Monday, Canada’s auditor general found government departments kept weak records and had poor financial controls over the ArriveCan  app, allowing costs to spiral and leaving even auditors unsure how much developing the app had cost taxpayers.

Auditor General Karen Hogan estimated that the Canada Border Services Agency (CBSA) spent $59.5 million on the border customs app, but said she can’t be sure.

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“The Canada Border Services Agency’s documentation, financial records, and controls were so poor that we were unable to determine the precise cost of the ArriveCAN application. Using the information that was available, we estimated the cost at approximately $59.5 million,” she said in her report.

Speaking at a House of Commons committee Monday, Hogan said she was “deeply concerned” by what the audit didn’t find, such as records to accurately show how the funds were spent on what, who did the work and how or why contracting decisions were made.

“That paper trail should have existed,” she told MPs. “Overall, this audit shows a glaring disregard for basic management and contracting practices.”

ArriveCan was launched during the COVID-19 pandemic after Canada had imposed vaccine and quarantine rules for travellers entering Canada. It was meant to allow travellers to share information about their vaccination status as they crossed into Canada, speeding up border controls. Hogan found 18 per cent of the invoices connected to the project couldn’t be confirmed to be related to it.

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Ultimately, the Auditor General’s Office came to the conclusion that the federal government paid “too much” for this application and that the public service should have exercised due diligence for public funds even if it was trying to act quickly during a public health emergency.

Hogan’s report adds to one from the government’s procurement ombudsman, which found similar major problems with the contract. The CBSA is doing its own internal investigation and has already referred some issues relating to employees and contractors to the RCMP.

“An emergency was not an excuse to throw out the window the basic rules that the public service normally follows. I would expect better from the public service, and I have seen the public service do better,” said Hogan.

In addition to the sloppy financial controls, Hogan found the app was not tested properly, as 177 different versions of the app were rolled out between April 2020 and October 2022. Among those were 25 major updates and nearly half of those were released without any testing.

“We found little documentation showing that the Canada Border Services Agency completed testing prior to releasing new versions of ArriveCAN,” she said.

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The lack of tests led to one version of the app, released in late June 2022, wrongly sending more than 10,000 people into a 14-day quarantine.

Hogan said so much of the standard procedures a government should follow were not being followed in this case, that she can’t say with certainty what ministers were told about the project and the costs that kept rising.

“It is difficult for me to tell you whether or not ministers were made aware, because there is nothing kept on file and we would have expected that the public service would document all of that,” she said.

Hogan said she has looked at many other pandemic contracts, where public servants had to move quickly, but those contracts still managed to follow basic procedures.

“We’ve been doing a lot of work around pandemic spending and contracting and while we’ve seen opportunities for improvement, things that could have been done better, nothing as glaring as what we’re seeing here,” she said.

Hogan said she found that non-competitive contracts were extended over and over without any competitive bidding process. She found that GC Strategies was awarded the first contract to develop ArriveCan despite not having put in a proposal. MPs studying the issue at committee have heard that GC Strategies subsequently subcontracted out all the development of the app to other firms.

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“The Canada Border Services Agency informed us that GC Strategies was awarded the contract on the basis of a proposal that it submitted,” she wrote. “We found that the agency received a proposal from one of the three potential contractors, but this proposal was not from GC Strategies. There was no evidence that the agency considered a proposal or any similar document from GC Strategies for this non-competitive contract.”

Hogan found three contractors — GC Strategies, 49 Solutions, and KPMG — were given $4.5 million through non-competitive contracts related to ArriveCan that were extended over and over again.

“Multiple amendments were made to those non-competitive professional services contracts. Approximately half of the contract amendments extended the contract beyond the original period, which prevented or delayed opportunities for other contractors to compete for work. These amendments also resulted in additional costs,” she wrote.

Hogan also said she was concerned by evidence showing that GC Strategies was involved in the development of very specific and narrow requirements that were used when CBSA moved to a competitive process to award millions more in contracts to GC Strategies, the only bidder.

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“This gave GC Strategies an advantage that other potential bidders did not have,” she said.

Hogan said that while it was reasonable in her view to seek external resources at the start of the pandemic outside of the public service to deliver services, she would have expected that there would be a transition to internal resources to operate the application as time went on, but it did not happen.

Hogan also found that people involved in deciding who was awarded the contract were treated to dinners and other gifts that they did not disclose.

“We found situations where agency employees who were involved in the ArriveCAN project were invited by vendors to dinners and other activities,” she said. “The agency’s Code of Conduct requires employees to advise their supervisors of all offers of gifts or hospitality regardless of whether the offer or gift was accepted. We found no evidence that these employees informed their supervisors as required.”

Among Hogan’s recommendations in her report are greater oversight for third-party contracts and improving transparency in communications between governments and vendors. Current Public Safety Minister Dominic LeBlanc said the government will be implementing all of   Hogan’s recommendations.

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“We absolutely share her view …that this content contracting practice was unacceptable,” he said. “Under no circumstance would we pretend that because the whole world was facing this global pandemic, that the contracting rules that need to be robust to handle taxpayers money can somehow be disregarded.”

LeBlanc said he has complete confidence in the current head of the CBSA Erin O’Gorman to resolve the issue.

“She is taking all of the appropriate steps to hold anybody to account in the case of alleged wrongdoing, but also to ensure that this kind of circumstance can never be allowed to happen again,” LeBlanc said.

Conservative Leader Pierre Poilievre said the RCMP should investigate whether criminal activity occurred in the contracting arrangements.

Certain employees and contractors have had their cases referred to the RCMP by CBSA, which has launched an investigation into the mismanagement of the ArriveCan app.

“We want the truth to come out and we want the police’s findings to be complete and public, so that Canadians know about all the corruption and mismanagement in the Trudeau government,” he told reporters.

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Poilievre also pledged to cut back on outside consultants if he forms government and save money by letting the public servants do the work at a cheaper cost.

NDP MP Blake Desjarlais said the ArriveCan debacle is the result of “decades of underfunding” to the public service which has left it needing to subcontract some of the work to private companies.

“It puts them in a position where they can very clearly overcharge Canadians,” said Desjarlais.

The Parliamentary Budget Officer has found that the size of the federal public service expanded by 15 per cent from 2015 to 2021, while spending on federal workers rose from $39.6 billion to $60.7 billion over the same period.

National Post
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