Controversial consulting contract has saved taxpayers $45M, deputy minister says

A consulting contract criticized by the auditor general two years ago has now saved provincial taxpayers $45 million, according to the Department of Social Development.

The department's deputy minister, Eric Beaulieu, told a committee of MLAs that the work by Ernst & Young has achieved its goal. 

In 2017, Auditor General Kim MacPherson criticized the department for paying the consultants $13 million for work that had only produced savings of $10 million.

The fact that Ernst & Young saw their contract extended showed "a culture of complacency" at the department and "a very troubling disregard" for how contracts should be signed and monitored.

But Beaulieu used an appearance at the public accounts committee of the legislature to say the savings from the work have continued to pile up since then.

"At the point in time the auditor general finished that report, you're correct, the savings were $11 million," he said. "As of today, they're $45 [million]. The savings accumulate every single year, and I think that's important to say."

The original contract for "productivity and process improvement" was signed in 2013 under the Progressive Conservative government of David Alward and was extended in 2015 by the Liberals under Brian Gallant.

MacPherson said in her audit that Ernst & Young "was paid regardless of whether or not government implemented and achieved the savings solutions identified." 

She said the consultants were supposed to find $47 million in savings but had only achieved $10 million as of June 2016.

The audit criticized other ways the contract was handled, including that the firm was allowed to evaluate its own progress and was paid based on "anticipated" savings, not real ones.

The audit also concluded the PC government was wrong in 2013 when it used an "emergency" exemption to award the contract without a tender. The province said the emergency was a need to quickly achieve aggressive deficit-reduction targets.

During his committee appearance Beaulieu jokingly referred to MacPherson's audit as "my favourite report from the auditor general," noting that she told him of the investigation on his second day on the job as deputy minister.

He commented on the report in response to People's Alliance Leader Kris Austin, who was questioning a three-year, $75 million federal government pilot project on senior care in New Brunswick.

Austin expressed doubts about whether the expense would improve quality of life for seniors and pointed to the Ernst & Young contract as another example of wasted money.

"I've seen this so much in government over the years," he said. "I've seen these boondoggles so many times." 

Beaulieu used Austin's mention of Ernst & Young to say the contract had now saved $45 million, close to its goal.

"Were there issues with that contract?" he asked. "No doubt about it. We acknowledge there were issues. Have we gotten benefits out of it over time? Yes we have."

Green Leader David Coon also raised the Ernst & Young contract, asking if the department has acted on the recommendations MacPherson made in her 2017 audit. Beaulieu said it has.