Three federal government agencies failed to follow good management practices in the contracting, development, and implementation of the $59.5 million ArriveCAN application, Canada’s auditor general said today.
As a result, concluded Auditor General Karen Hogan, it did not deliver the best value for taxpayer dollars spent.
But Hogan also said the lack of documentation makes it almost impossible to find out the exact cost of all the work paid for the app.
Canada Border Services Agency, the Public Health Agency of Canada, and Public Services and Procurement Canada were faulted by Hogan in the report filed in Parliament this morning.
The application was created in 2020 to digitally collect traveller contact and health information when they entered Canada during the COVID‑19 pandemic, so information could easily be presented to border authorities. The audit estimated that the ArriveCAN application cost approximately $59.5 million but emphasized that the exact cost was impossible to calculate because of the Canada Border Services Agency’s poor financial record keeping.
“The agency’s decision to continue relying on external resources throughout the application’s development, launch and updates, beyond the initial pandemic crisis, increased costs and brings into question the value achieved for money spent,” the auditor general’s office said in a statement.
The lack of documentation and controls extended to contracting practices, the statement says. The audit found that the Canada Border Services Agency’s “disregard for policies, controls, and transparency in the contracting process limited opportunities for competition and undermined value for money. There was little documentation to support how and why a company called GC Strategies was awarded the initial ArriveCAN contract through a non‑competitive process.”
GC Strategies is an IT staffing company — that is, it hires, or subcontracts, developers to do work for organizations it contracts with.
The report says evidence shows GC Strategies was involved in setting the requirements that the Canada Border Services Agency later used to tender a competitive contract.
The audit found that Canada Border Services Agency managed contracts poorly, which raised concerns about value for money. Essential information, such as clear deliverables and required qualifications, was missing from contracts. Canada Border Services Agency routinely approved and paid invoices that contained little or no details on the work completed.
“Public servants must always be transparent and accountable to Canadians for their use of public funds”, said Hogan. “Many questions that Parliamentarians and Canadians are asking cannot be answered. The lack of information to support ArriveCAN spending and decisions has compromised accountability.”
The report says
- 18 per cent of invoices submitted by contractors that Hogan’s office tested did not provide enough information to determine whether expenses related to ArriveCAN or another information technology project. This made it impossible to accurately attribute costs to projects;
- the AG’s office estimated that the average per diem cost for the ArriveCAN external resources was $1,090, whereas the average daily cost for equivalent IT positions in the Government of Canada was $675. The Canada Border Services Agency continued to rely on external resources, increasing the cost of the application;
- between April 2020 and October 2022, the Canada Border Services Agency released 177 versions of ArriveCAN, with often little to no documentation of testing. In one update, in June 2022, around 10,000 travelers were wrongly instructed to quarantine.
As a result of that incident, the federal Privacy Commissioner found that the Canada Border Services Agency (CBSA) contravened the Privacy Act by not taking all reasonable steps to ensure that information about individuals recorded in the app was accurate;
- there was no formal agreement between the Public Health Agency of Canada and the Canada Border Services Agency from April 2020 to July 2021 to clarify roles and responsibilities, the report says. “Each agency believed that its counterpart was responsible for establishing a governance structure. In our view, the Public Health Agency of Canada, as the business owner, was responsible for establishing the governance structure.
“As a result of the missing governance structure, good project management practices were not developed and implemented,” the report says. “For example, the Public Health Agency of Canada did not develop project objectives and goals, budgets and cost estimates, assessments of resource needs, or risk management activities.” It was only in July 2021, when a letter of intent was signed, that responsibilities for funding the development, implementation, management, and support of ArriveCAN was clarified; - the AG’s office found no evidence to show that some Canada Border Services Agency employees complied with the agency’s Code of Conduct by disclosing that they had been invited to dinners and other activities by contractors;
- one reason the cost of the app went up: The Canada Border Services Agency added a digital customs and immigration declaration form into the ArriveCAN application at a cost of about $6.2 million, to replace a paper-based system. The new digital declaration form remained in use after government requirements to collect travellers’ contact and health information stopped in October 2022.
The Canada Border Services Agency was responsible for developing and managing the ArriveCAN application on the basis of the Public Health Agency of Canada’s health requirements. These requirements were implemented to meet Covid-19 emergency orders. The Public Health Agency of Canada assists the federal Minister of Health. The agency was the business owner of ArriveCAN until April 1, 2022. Public Services and Procurement Canada is the government’s central purchasing and contracting authority, and was responsible for issuing and administering contracts on the agencies’ behalf when the contract value exceeded their delegated authority to procure.
While the Treasury Board of Canada Secretariat introduced some flexibility into the procurement and contract processes during the pandemic to achieve results quickly, the report notes, it still required government organizations to demonstrate due diligence and controls around expenditures and to document their decisions.
Hogan recommends:
- the Canada Border Services Agency maintain accurate financial records by correctly allocating expenses to projects. To better support these actions, the agency should work with contractors to obtain invoices that accurately detail the work completed by each resource by project, contract, and task authorization;
- the Canada Border Services Agency and the Public Health Agency of Canada fully document interactions with potential contractors and the reasons for decisions made during non‑competitive procurement processes and should put in place a process to ensure compliance with the requirements of the contracting policies;
- the Canada Border Services Agency should ensure that potential bidders are not involved in developing or preparing any part of a request for proposal, and should put in place controls that will prevent this from occurring.
In response to the AG report, the government issued a statement admitting there were “unacceptable gaps in management processes.”
CBSA has already created an Executive Procurement Review Committee to approve contracts and task authorizations, the government said, “which is already providing additional oversight on all contracting activities, focusing on delivering value for money.” CBSA has also established a procurement centre of expertise to help employees fully understand their obligations and authorities. The agency also now requires employees to disclose all interactions with potential vendors.
Public Services and Procurement Canada “will continue to strengthen all aspects of the federal procurement regime and will use the findings from this report to improve the way the Government of Canada does business with its suppliers,” the statement says. New measures have already been added to ensure that tasks and deliverables are clearly defined in professional services contracts, the government says, and the policy and guidance documentation used by procurement officials to ensure consistency has been updated.