City auditor reports overcharging issues on traffic sign contract

A city watchdog renews calls for tougher controls on city contracts after his office found that the company hired to maintain Toronto street signs was spending a quarter of its billable hours driving for research panels to be repaired.

In a report to the city’s Audit Committee on Monday, Auditor General Beverly Romeo-Beehler detailed complaints dating back to 2016 about contracts the city signed worth millions.

Although she found no evidence of deliberate overcharging by the company contracted to carry out the work, she recommended that the city’s transportation department improve its oversight to avoid unnecessary expenses.

Com. Stephen Holyday (Ward 2, Etobicoke Centre), who chairs the audit committee, said the auditor’s findings fit a trend « we’ve seen time and time again » that the city isn’t doing well enough the management of its contracts.

He cited as the most egregious example the auditor’s previous investigations into the city’s forestry contracts, which revealed work crews visiting malls and cafes while claiming to be tending to trees, costing the municipality $2.6 million a year in lost productivity.

Holyday said exterior work like sign and tree maintenance can be difficult for the city to track, and « if we’re going to contract out those services, we have to be diligent in monitoring how those services are going. » .

“The auditor found repeatedly that we could do better,” he said.

In its report, Romeo-Beehler did not name the company that holds the road sign contract. But other city documents indicate that Guild Electric Ltd. has been awarded successive contracts for the works since 2014.

Under their terms, the company is responsible for installing signage on major roads and highways in Toronto and ensuring that they are properly posted and maintained in good condition.

Guild’s most recent contract started in 2020 and was expected to cost the city up to $9.7 million in its first two years. It included $1 million for signaling work and $7.8 million for the installation of devices as part of the Vision Zero road safety plan, plus taxes.

Guild also won the city’s two previous sign contracts, which together were worth more than $10 million between 2014 and 2019.

According to the Auditor General’s report, her office received a complaint in December 2021 alleging, among other things, that Guild was spending too much time on « off-site travel. » The term refers to the time crews spend patrolling roads looking for traffic signs that need fixing.

Although patrols are a requirement of the contract, the auditor found that the amount charged by the company – about 26.5% of its total billable hours – « seems high ».

The auditor recommended the city take steps to ensure “vendor time accountability,” including having the company document the streets it patrols.

She concluded that the other allegations in the complaint were without merit.

The company did not return a request for comment for this story.

The city has already received complaints about Guild contracts. According to the auditor’s report, in 2016, someone contacted the city’s fraud and waste hotline to allege that the company was overcharging and that the transportation division was not doing enough for the company. ‘to prevent.

A subsequent report completed by the city’s internal audit division in 2017 concluded « there was a risk of overcharging and it may not be detected » by existing protocols.

This review also found no evidence of deliberate overcharging, but documented 777 cases over two years in which a worker billed for more hours in a day than was contracted.

It turned out that many of these cases were the result of data entry errors, but the internal audit division recommended that the city strengthen its oversight of the contract, including finding a way to better track contractors’ time. workers and developing systems to verify the work of the company. completed.

The Department of Transportation agreed to implement the recommendations by the second half of 2018. But according to the most recent report, as of this year, some of the recommendations had still not been implemented.

“It is imperative that the division follow through,” the Romeo-Beehler report says, and better oversight “should be formally incorporated” into the division’s standard operating procedures.

She said better controls are especially important because the city is expected to issue a new traffic sign contract this year.

Ben Spurr is a Toronto reporter who covers city hall and municipal politics for the Star. Contact him by email at or follow him on Twitter: @BenSpurr


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