A new report released on Friday says the city could have saved $ 24 million over the past five years if the terms of the deal with the contractors that specified that they would not receive an uptime payment in addition to the payment for actual working hours had been applied. The report also found that the city spent an estimated $ 7.1 million in overpayments to contractors for work not performed as required during the same period.
That’s about 7.5%. 100 of the $ 411 million the city spent on winter road maintenance over those five years.
Auditor General Beverly Romeo-Beehler also found that the city could do a much better job of tracking the work being done using available GPS technology.
In a random sample of 850 vehicles contracted between November 2018 and January 2020, 227 did not have GPS data, either because the GPS units were malfunctioning or the vehicles were operating without them.
“As a result, we were unable to verify whether the service levels were being met by these vehicles or whether the contractor payments for these audit samples were correct, and neither was management,” Romeo-Beehler wrote. .
When GPS data was available, transportation service personnel typically did not use it to verify that work was completed as recorded by contractors, according to the report.
Additionally, the Romeo-Beehler team found that several contractors did not consistently meet service targets and that Transportation Services staff did not properly manage contracts.
“For example, we found that many contractors had excessive downtime, started their shifts late, claimed more hours than worked, and operated without a working GPS device. As a result, service levels approved by the board may not be achieved, ”the report said.
One contractor claimed more hours than he actually worked 44 times during the audit period, while another took 32 excessively long breaks.
According to city figures, $ 47 million of the city’s roughly $ 90 million annual snow removal budget is spent on contractor uptime payments to keep those contractors available when it snows.
The auditor found other problems with the city’s road maintenance program, such as salt application errors and inefficient manual processes, but was not able to quantify the cost of these problems. the city.
Responding to the report on Friday, Mayor John Tory said he read the report with interest and added that it was a good example of highlighting the value of having an Auditor General.
“I think that’s exactly why you have an audit committee and an audit process, is to identify this stuff,” Tory told reporters at a press conference. “I can assure you that I am looking for every penny under every couch cushion we have in this city hall. We found over $ 500 million in savings because we had to do it during the pandemic and we will continue to do so and this is another great example of where I am sure we could find more.
The report comes at a time when the city is struggling to balance its books, after being hit hard by the COVID-19 pandemic. While the federal government has come to the table to help cities, Toronto already estimates a deficit of about $ 1.5 billion for the next fiscal year.
The report includes 22 recommendations for improving the city’s road maintenance program.
The Auditor General is requesting that contractual requirements be clarified with respect to responsibilities and timelines, reporting and resolving GPS issues, reasonable downtime and damages.
She also calls on the city to take full advantage of GPS technology to monitor its workflow and modernize its processes, as well as better verification of contractors’ work before payment and standardize the contract tracking process.
The current winter road maintenance contract was signed in 2015.
Romeo-Beehler pointed out that with two years left in the current contract cycle, the city could save around $ 9.6 million if the express terms of the contract’s reserve provisions were enforced. However, she said city lawyers should review the contract.
The report is expected to be submitted to the city’s audit committee on October 23.