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Contractors sifting millions from school contracts: AG - Metro US

Contractors sifting millions from school contracts: AG

Two companies have found a trick to pocket millions of taxpayer dollars for taking money from one level of government and handing it to another.

While much of the attention around yesterday’s auditor general’s report swirled around MLA expenses, it also revealed deep problems with the province’s P3 schools.

Nova Scotia has 39 public-private partnership schools that companies are paid to operate. In two cases, companies then sub-contracted the schools back to regional school boards for less money.

The difference they keep is estimated be to be $52 million over 20 years, for essentially being a middleman between two levels of government.

“In my opinion, the department has not met its duty to taxpayers or to students to manage the contracts appropriately,” said auditor general Jacques Lapointe.

The education department disagreed with the report, saying the payment structure is designed to compensate the companies for building the schools.

In one case, the contractor did not pass on a cost-of-living increase from the province to the Strait Regional School Board. This went undetected until the auditor general’s staff pointed out the $700,000 gap.

“If not detected by us, we found nothing to suggest the board would have discovered this error,” Lapointe said. “The losses would have continued to climb to the end of the contract.”

In another case, the Cape Breton-Victoria Regional School Board had higher cost overruns in operating the schools. The $251,000 shortfall was essentially paid by taxpayers twice, the report notes, as it was given to the contractor but also had to be made up from other areas of the board.

The report examined 31 P3 schools in total and deemed safeguards to ensure contract standards were met as “wholly inadequate.”

In some cases, contractor employees had not had child-abuse registry checks, criminal-record checks, or first-aid training.

The contracts run for 20 years, with most at about the halfway point.

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