The Office of the Auditor General will be asked by NWT politicians to scrutinize the finances behind the building of Yellowknife’s new Stanton Territorial Hospital.
MLAs in a depleted chamber passed a motion by nine votes to four on Wednesday to request the audit. The final decision on what to audit rests with interim auditor general Sylvain Ricard.
Construction of the new Stanton was a public-private partnership (or P3) costing $350 million for the initial build. The territory is paying contractors $18 million annually for three decades to cover building maintenance.
It is considered to be, at least in financial terms, the largest capital project the NWT has ever undertaken.
Problems with staffing and building malfunctions have dogged the hospital since it opened last May. The NWT government says contractors, not the territory, are responsible for the cost of putting things right.
However, Thebacha MLA Frieda Martselos – introducing the motion on Wednesday – said auditing the hospital’s construction would “ensure public funds are being used for the right reasons.”
“Not enough attention was paid to the detail of this agreement,” Martselos said. “When politicians sign off on these types of agreements, these projects can and will have a major impact, both on the people of the NWT and our government.
“Accountability and transparency are extremely important when dealing with public money.”
The motion asks the auditor general to inspect the project’s costs, its long-term financial implications for the NWT, whether the project complied with financial policies and legislation, and a range of other matters, including “any other factors that, in the auditor general’s opinion, are relevant.”
Frame Lake MLA Kevin O’Reilly, supporting the motion, said: “This is clearly a request a number of regular MLAs are going to support. It’s really important that we do a lessons-learned retrospective of the NWT’s largest project ever.”
‘Only positive reviews’
The Office of the Auditor General is no stranger to the hospital’s construction, finance minister Caroline Wawzonek said, appearing to argue a full audit of the project was not necessary.
“Accountability and transparency is fundamental, it’s critical. This project has gone through quite tremendous financial reporting,” said Wawzonek. (O’Reilly had agreed there was “full financial reporting” throughout, which he said had been “clear and transparent.”)
Wawzonek said the auditor general’s office had already studied the project’s financial reporting every year and found it to be accurate, while a full review of the final costs, also involving the auditor general’s office, is already scheduled.
“I’m confident it will have a very thorough review and many questions will be asked,” said Wawzonek. “To date, the Office of the Auditor General has been involved and provided only positive reviews of all financial aspects of the project.”
Wawzonek said the initial build of the hospital, for which $350 million was budgeted, came in “roughly $1,000 over its budget estimate … a very positive return.”
“I acknowledge there has been much discussion of the functioning of the building,” she said. “There has been action taken immediately by the GNWT … and we’ve already addressed more than once, here, the work being done to be engaged, take action, and ensure partners on the project are taking responsible action.
“It is a complex contract but it is actively being monitored.”
All four cabinet members in the House voted against the motion. Two of them, Shane Thompson and RJ Simpson, were regular MLAs on the other side of the House during the period the hospital was built.
Premier Caroline Cochrane, health minister Diane Thom, and industry minister Katrina Nokleby were absent.
All nine regular MLAs in the House supported the motion, ensuring it carried. Ron Bonnetrouge was absent and Jackson Lafferty had earlier been expelled following his refusal to apologize for remarks found to be in contravention of legislature rules.
A similar audit was conducted in 2011 on the subject of the Deh Cho Bridge, another NWT P3 project.