N.S. school contracts costing millions: audit

Nova Scotia's Department of Education is failing taxpayers in the management of its public-private partnership contracts with more than two dozen schools, the province's auditor general says.

In a report released Wednesday, Jacques Lapointe concluded the department's handling of the contracts is costing the province millions of dollars more than necessary.

"In this matter, the Department of Education is failing its duty to taxpayers, as well as to large numbers of the very students it purports to serve," he said.

Nova Scotia has contracts with three private-sector developers that manage, operate and maintain 31 schools in the province. Under the public-private partnership contracts signed in 1999, the schools were leased to the companies for about 20 years.

Lapointe's report said two of the developers subcontracted some of their responsibilities to the regional school boards.

"These subcontracts effectively transfer the risks for the operation and maintenance of the schools — assumed by the developers in the service contracts — back to the government," the report says.

Lapointe said the regional school boards were delivering the services at a lower cost than what was paid to the developers — a difference of about $52 million over the 20-year life of the contracts.

"The added value to taxpayers in these arrangements is questionable," he said.

Darrell Youden, the executive director of corporate policy for the Department of Education, said the assertions made by the auditor general are misleading.

"What we're paying from the province to the developer includes more than just the caretaking and the day-to-day maintenance," he said. "There's the long-term maintenance, there's completion of payment for the building itself."

School boards criticized

Lapointe was also critical of the three schools boards getting paid to clean and maintain their public-private partnership schools: the Strait Regional School Board, the Cape Breton-Victoria Regional School Board and the Chignecto-Central Regional School Board.

"Our audit discovered instances in which boards were underpaid," Lapointe told reporters. "In one case, the Strait Regional Board did not receive cost-of-living increases paid to the developer by the Department of Education."

The report concluded that regional school boards must do a better job of ensuring that they receive all the money that is owed to them by the developers.

"These will result in significant financial recoveries for the boards," the report states.

Jack Beaton, the superintendent of schools for the Strait Regional School Board, disputed the auditor general's claims.

"We're not out money at all as a result of that," he told CBC News. "To put it simply, we're not paying more to clean and maintain those buildings than we're getting from the developer."