Ontario's auditor general said Wednesday that many hospitals abuse the use of consultants and often offer sole-source contracts, including one $700,000 deal contracted out without considering lower bids.

Jim McCarter told reporters he couldn't believe such behaviour was going on in the wake of the eHealth Ontario spending scandal, one also rooted in the abuse of expense accounts and sole-sourced contracts.

"If you spend money like it was your own, you're going to make sure you get value for money," he said. "We just saw too many instances where that was not apparent, especially at the LHINs (local integrated health networks) and the hospitals."

As one example, a hospital consultant being paid $275,000 per year sought reimbursement for $7,000. The items for which he billed included:

  • a $7,000 Christmas lunch
  • foreign exchange fees
  • a "salary bonus"

He also ran up a $1,200 bill at a Chicago hotel, made a $500 phone call from his room and $3,500 for five nights in Singapore.

In a second example, a person got hired as a $240,000 per year hospital consultant one month after leaving there. His pay went up by $100,000 annually.

Progressive Conservative Leader Tim Hudak pounced on these new revelations.

"Things have gotten so bad in Dalton McGuinty's government that even his scandals are having sequels," he said. "This is eHealth 2.0."

NDP Leader Andrea Horwath also attacked the Liberals in the legislature, saying, "If this government can't find money to support women dealing with breast cancer, why can they find $2,500 to fly consultants to Singapore and buy them drinks?"

Health Minister Deb Matthews told reporters: "I'm not afraid to say I'm really sorry that this has gone on."

Details

McCarter said that Ontario's hospitals, local health networks and the Ministry of Health don't properly monitor the fees paid to consultants hired to lobby the government for more tax dollars.

A review by the auditor general released Wednesday found the health-care sector follows most, but not all, of the government's established directives on hiring consultants.

McCarter found they often hire consultants without a bidding process and allow contracts to frequently go over budget.

"We acknowledge that consultants can play an important role in the health-care sector," McCarter said in a statement. "But we found far too many examples where consultants were engaged on a sole-sourced basis, where significant increases in the initial fee estimate and follow-on work were repeatedly awarded, where there was inadequate oversight to ensure consultants delivered on time and on budget, and where billings for fees and expenses were not properly monitored and supported."

The province asked McCarter to investigate the rest of Ontario's health-care sector after he released a report on eHealth last year, finding the agency meant to create electronic health records had spent $1 billion and had little to show for it.

According to the audit, the Ministry of Health and Long-Term Care has spent a total of $223.7 million on consultants since 2007. The audit noted that the Ministry complied with most, but not all, of its policies on consulting services.

The three Local Health Integration Networks (LHIN) visited by the audit each spent between $224,000 and $1.4 million on consultants each year, and were "improving" on how closely they followed their requirements, the review said.

Ontario's 11 remaining LHINs are to be reviewed by the end of the 2013-14 fiscal year.

Auditors selected 16 hospitals to review and found half of those hired consultants to lobby governments for more funding. Those eight hospitals spend more than $1.6 million on paying such consultants.

Matthews said the Ontario government will introduce legislation that would ban hospitals from using private consultants to lobby for public funds and force senior executives to sign off in advance on any travel spending by consultants.

Further, senior executives will be required to post expenses online and follow mandatory procurement rules.

While Matthews said she would introduce the legislation Wednesday, there was no date given for when the bill might pass.

With a report from CTV Toronto's Paul Bliss and files from The Canadian Press