Forensic audit of GTH land deal needed to clear the air, says expert

A forensic accounting expert is surprised the Saskatchewan government hasn't ordered a forensic audit of the Global Transportation Hub land deal in light of the revelations contained in the provincial auditor's June report.

Marc Tassé said the report does a good job of highlighting a wide range of problems but it doesn't explain why they were allowed to happen. He says it's "unusual" that the government has left it at that, when so many questions remain unanswered.

I would really ask to have a forensic audit done in order just to clear up all kinds of allegations or suspicions that people might have.- Marc Tassé , instructor at University of Ottawa

"Did it result from mismanagement? Did it result from conflict of interest? Did it result from people trying to get their own benefits from it?" asked Tassé , an instructor at the Canadian Centre for Excellence in Anti-corruption at the University of Ottawa.

"I would really ask to have a forensic audit done in order just to clear up all kinds of allegations or suspicions that people might have," said Tassé.

CBC's iTeam has had similar questions and has continued to push for answers. Over the past few months, the iTeam has examined the auditor's report, a series of documents obtained through access to information and interviews with many of the key players.

• Government paid too much for GTH land: Sask. provincial auditor

• Provincial auditor's report: GTH and highways ministry land deals 

That has allowed CBC to piece together a never-before-seen picture of the much-discussed GTH land deal. Starting this weekend, the iTeam will begin rolling out a series of behind-the-scenes stories, with new revelations about the controversial transactions.

Forensic audit needed to discover why there were so many problems, says expert

Saskatchewan's Provincial Auditor Judy Ferguson said she conducted a process audit aimed learning if the GTH had appropriate processes and followed them.

She found the answer was no on both counts.

"They'd didn't have them when they were buying these lands," Ferguson told CBC in an interview.

Her report also acknowledges that it was not a forensic audit.

Tassé said Ferguson's report raises enough questions to warrant one.

"When we read it, it raises concern to say, 'You know what? Maybe there should be a forensic audit to really clear it out.' Because right now the perception that it gives is, 'Wow. There must have been someone who benefit[ted] from it.'"

According to the Government of Canada, forensic audits are "designed to identify and gather evidence to support or deny an assessment of possible irregularities, including the misappropriation of funds or assets, reported fraud or specific allegations on the part of a recipient or an individual."

A 'very scathing' audit

In February, Premier Brad Wall asked Ferguson to investigate the GTH land deal after CBC broke the story of the controversial transactions.

• Timeline: History of puzzling Regina land transactions uncovered by iTeam

A Regina developer made about $5 million when he sold 204 acres to the GTH for two to three times more than government appraisals said it was worth.

Ferguson's report concluded that the GTH:

• Did not have formal policies or processes for buying land.
• Did not have experience buying land.
• Did not prepare business cases for major land acquisitions.
• Did not have a clear land acquisition strategy.
• Did not keep key documentation.
• Had an actively involved minister and "unique board governance."
• Bought the land "at a significantly higher price and not in a financially responsible manner."

"When you read a report like that you'll go like, 'Oh my god. Is it possible?' said Tassé.

"You say, 'Am I reading it correctly?' You try to read it a second time. You say, 'Wow.'"

Ken Rasmussen, University of Regina professor at the school of public policy, said the report  is "very scathing on both the minister, the board, the management of the Global Transportation Hub."

"There was almost nothing here that would reflect any kind of common business practice," Rasmussen said. "This was really bad management and bad use of their authority and bad structure of the board and the hiring of people who clearly didn't know what they were supposed to do."

He said one of the auditor's most surprising findings was a lack of documentation of this multi-million dollar transaction.

"She couldn't even follow the paper trail because there wasn't a paper trail. I think that's a pretty devastating critique for any public entity."

Premier admits mistakes, defends Boyd

In a media scrum after the release of the report, on June 30, Premier Brad Wall acknowledged that the GTH and cabinet had made some mistakes and accepted the auditor's recommendations.

But Wall also defended Bill Boyd who was the minister responsible for the GTH and chair of its board when the transactions occurred. Wall pointed out that in the auditor's news release, she said she "did not find evidence of conflicts of interest, or indications of fraud or wrongdoing by the GTH management or board of directors."

Wall said not only has Boyd done nothing wrong but he has done a lot of good in Saskatchewan in his role as Minister of the Economy.

"This is why, frankly, he has the support of members on this side of the House. He has the support of the people of Kindersley. And dare I say, as representative of the government's growth plan and economic agenda, he has the support of the people of the province."

In an interview shortly after CBC first broke the story of the GTH land deal Boyd said, "I feel that I have done absolutely nothing inappropriate in any way whatsoever."

He sued CBC for its reporting on the GTH land deal, claiming CBC's "allegations in the stories were untrue, misleading and incorrect and were intended to convey… that Boyd had committed or was involved in unlawful conduct."

Coming soon: The GTH land deal that you've never heard of — and Bill Boyd won't talk about