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External audit of Niagara Parks Commission needed, former GM says

Oak Hall, the headquarters of the Niagara Parks Commission.

Peter Power/The Globe and Mail/Peter Power/The Globe and Mail

A former top bureaucrat at the Niagara Parks Commission told investigators in 2008 about backroom deals, botched projects, distorted construction bids and "a severe lack of policies and procedures" at the Ontario government agency.

Robert Tytaneck, of St. Catharines, Ont., said he spent three hours telling a pair of investigators about problems he encountered as general manager of the Crown agency between 1995 and 1998. While some concerns appear to have been addressed through recent changes, Mr. Tytaneck told The Globe and Mail that only an exhaustive external audit or a police investigation can address lingering allegations of impropriety.

The government has promised an internal Finance Ministry audit of management expenses and recent procurement in response to Globe and Mail revelations of $400,000 in travel spending by a parks executive, and complaints about financial irregularities that Liberal MPPs received as far back as 2005.

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Mr. Tytaneck called an internal government audit "unacceptable" and a "conflict of interest," and said an independent firm should conduct the probe, though he wonders if the province has the stomach for it.

"I can guarantee you, in the end, it's going to be a message that the government doesn't want to see or hear," Mr. Tytaneck said.

But the government disagrees that an independent probe is necessary, insisting it is taking "a responsible approach," according to spokesman Mukunthan Paramalingham. "We have full confidence in the Ministry of Finance's objectivity and expertise."

The commission, which manages parkland at Niagara Falls, has faced heightened scrutiny since it approved an untendered lease for the Maid of the Mist tour boat operation in 2008. The decision, since overturned and tendered by the province, prompted a complaint to Ontario's Integrity Commissioner and a related probe in which Mr. Tytaneck and others were interviewed.

An ongoing Globe and Mail investigation has since uncovered $400,000 in travel spending by a parks executive; personal connections between a commission member and parks contractors; previous audits critical of governance and business practices; and an alleged forgery by a parks employee that arose during the same Integrity Commission complaint probe.

Mr. Tytaneck's comments mirrored questions raised in the Ontario legislature for the second straight day Wednesday, as the New Democrats pressed Premier Dalton McGuinty to account for the Liberal government's oversight of Canada's signature tourist attraction.

"When did the Premier himself first hear about possible financial improprieties at the Niagara Parks Commission?" Peter Kormos, MPP for Welland, asked. "When will the Premier call in the Auditor-General, and maybe even the police, to get to the bottom of these [allegations]"

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Mr. McGuinty deferred to Tourism Minister Michael Chan, who spoke of "moving forward" with an overhaul of the agency's governance and business practices, led by Fay Booker, an auditing expert he named in May to chair the commission's politically appointed board. Mr. Chan removed four members of that board Monday and replaced them with senior bureaucrats who will help Ms. Booker rebuild.

Still, Mr. Tytaneck said "there's a lot of tough work and a lot of tough sledding ahead to turn this thing around" given what he encountered at the agency and what he has seen since then.

He told the provincial investigators there was "no business acumen applied to investment and operations", despite the agency's mandate to support itself through attractions, gift shops, golf courses and other ventures. Capital projects were undertaken without proper planning and costs often "spiralled out of control" and were hidden by allocating them to other departments.

"[The]Parks' history of project mismanagement is well known in the construction industry," he said in the statement to provincial investigators, adding that "construction companies know they can bid at less than cost, knowing well they can make it up with revised work orders" once a project is under way.

Integrity Commissioner Lynn Morrison said she had found no wrongdoing as a result of the investigation, but she recommended audits of governance and procurement. The governance audit, conducted by KPMG, was critical in several areas but was released to The Globe with several sections blacked out. The procurement audit, conducted by the Finance Ministry, was more positive in tone, but listed numerous shortcomings in business practices.

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