Absence of fraud risk programs at Site C: Auditor General’s report


FORT ST. JOHN, BC – Site C has not yet implemented a fraud risk management program, according to a recent report released by the Office of the Auditor General of British Columbia.

In the audit, British Columbia Auditor General Michael Pickup said the Global Infrastructure Anti-Corruption Center warns that the risk of fraud increases with the size and complexity of large infrastructure projects, as it becomes more difficult to compare costs and detect corruption.

According to the report, BC Hydro should implement its new fraud risk policy, provide fraud risk management training, conduct regular fraud risk assessments, develop a fraud investigation procedure and assess the effectiveness of the fraud risk program on a regular basis.

BC Hydro accepted all of the recommendations made by the bureau, the report said.

Fraud risk management assesses the risks of fraud within an organization and then develops an anti-fraud program that stops this activity before it occurs.

“Enhancing the existing risk management at Site C with strong fraud risk management could strengthen the anti-fraud culture and benefit other projects,” said Michael Pickup, Auditor General. “It could also bolster BC Hydro’s reputation as a prudent builder and supplier of hydroelectric power.

The audit started in December 2014 and ended in January 2022, and the audit report was published on April 26, 2022.

The report notes that no fraud risk management responsibility has been assigned to any BC Hydro officer and that few employees have received fraud risk management training.

The report indicates that BC Hydro has already put in place some elements of fraud risk management, such as a code of conduct policy, an ethics office and an anonymous report line.

The utility also has audit departments to investigate allegations of fraud related to accounting and auditing matters, but there is a risk that these may not be sufficient.

Prior to this audit, BC Hydro had not conducted any fraud risk assessments on Site C, and they drafted the first fraud risk assessment as this audit progressed, the report said.

The Auditor General says that the absence of assessments increases the risk of ignoring possible threats of fraud.

The Site C Dam is the largest and most expensive infrastructure project in the province’s history, with a construction cost of $16 billion.

The full audit can be viewed below:

With files from The Canadian Press

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