Then in
November, 2016 Terry Paddon – with no evident change in those resources -
suddenly got energized. He told the media he now planned “to take a look at
Nalcor Energy (and) possibly Muskrat Falls."
The focus of
the A-G has to be sharp and precise. In this instance to investigate the
allegations of estimate falsification of Muskrat Falls.
In its
Mission Statement the A-G’s Office states:
"As
legislative auditors, we audit financial statements and other accountability
documents, evaluate management practices and control systems, and determine
compliance with legislative and other authorities.
Our purpose
is to promote accountability and encourage positive change in the stewardship,
management and use of public resources".
Contrary to
the stated “Mission” there has not been any response from the Office of the A-G
on anything.
 |
| Auditor General, Terry Paddon |
There is
nothing wrong with the stated role of the A-G’s Office. It’s just that a megaproject is not in its
league.
Bear in mind
that it took the A-G nearly five months after Nalcor CEO hiked the project
costs to $11.4 billion - and termed it a “boondoggle” – before he showed any
interest.
In addition,
a former senior Nalcor engineer – through this Blog and the CBC – levelled some
of the most egregious allegations ever directed towards any arm of the Government -
including deception and falsification of project and budget estimates.
In response,
there has not been a peep from the A-G’s Office. Not even in consequence of CEO
Stan Marshall having kicked responsibility for these activities to the camp of
a very narrow senior group.
If not the
A-G, on what institution is the public supposed to depend?
The A-G
ought to have noticed that the government, through Minister Siobhan Coady,
‘used’ him and his undefined plan to “look” at Nalcor as a means of delaying consideration of
a forensic audit of the Muskrat Falls’ estimates.
In a
sensible world – one where integrity in government is paramount –
the A-G would step up by making it impossible for Premier Ball to engage in pretense –
simply by telling the public how his plans have matured since taking on the
Nalcor file.
A skilful A-G
would tell the Premier that he need not worry – that he (the A-G) intends to pursue
a forensic audit.
Recent
comments to this scribe by the former Nalcor engineer give further clarification
to why the A-G ought to disclose his position. Said the anonymous engineer:
A forensic audit is orders of
magnitude more complex than a commercial audit that most people are familiar
with. To perform an forensic audit the group has to have a very high skill
level in high tech tools such as - mathematical methods and simulations, large
databases of unit prices by location, productivity statistics, familiarity with
logistics, construction methods, indirect costs and a whole host of other
attributes.
It will be extremely unlikely that
the AG's team will have such skills.
Much of the problems at Muskrat Falls
is due to the senior Management not having a clue. Stan Marshall himself has
said so in Anthony Germain's interview with the Nalcor CEO. The AG's report
cannot, and must never be, the basis for a decision on the forensic audit.
What could
be clearer?
A good
starting point for the forensic audit will be the statements made by the Nalcor
CEO in his interview with the CBC This
gives a very sharp and undiluted focus.
Comments
by Stan Marshall – CBC Interview
Indeed,
the anonymous engineer (AE) was good enough to make the following comments (shown in
red below) in response to Stan Marshall’s (SM) comments to CBC’s Anthony Germain:
SM: Initial
cost projections were "generally way too low"...
AE: Then find
out who made them and who approved them. This is very easy to do. Check the
Project Approval Documentation.
SM: "I
don't think the thing ever would have been built at the estimates they had
given at the time. They were just unrealistic."
AE: This
statement implies that the estimates were deliberately understated due to a
policy decision made by Nalcor to secure project approval.
SM: I
don’t know who was responsible.
AE: Just see whose signature is there on the
“Authorization to Proceed” documentation.
AM: Whether they came from
my predecessor, whether they came from the Confederation Building, I have no
idea…don't know who made the ultimate decisions before my time"
AE: Once again check the
signatures on the “Authorization to Proceed” documentation.
CBC: As for the current
$11.7-billion estimate for Muskrat Falls, Stan Marshall says that number is
solid.
AE: No. This is incorrect. The $
11.7 billion comes from the EY Interim Report dated April 2016. The final
report is not out yet – one year later. This is most unusual. Cost increases
will be inevitable.
In
conclusion, there is absolutely no reason why the A-G cannot or would not conduct
a forensic audit. The “Mission Statement” requires him to do so. Now, all he
has to do is hire the requisite skills.
Indeed, anything
short of a full forensic audit will be a serious dereliction of duty.
