BC’s Auditor General says BC Hydro has no program to manage the risk of fraud at the Site C hydroelectric megaproject on the Peace River.
Site C is the largest public infrastructure project in the province’s history, with an estimated current cost of $16 billion, nearly double the original price. Experts say the risk of fraud increases with the size and complexity of a project.
“Fraud can be costly, both financially and reputationally. Effective fraud risk management is therefore essential,” said Michael Pickup, Auditor General.
Pickup said that while BC Hydro had fraud-mitigating controls in place, they weren’t sufficient to address evolving fraud threats.
Work on the dam near Fort St. John in northeastern British Columbia began in 2015 and construction is expected to be completed in 2025. About $8 billion has already been spent on the project.
The report says BC Hydro only started planning for a fraud risk policy once the audit was underway in 2021. It said the organization does not have a written policy on fraud.
Hydro’s board has committed to adopting a fraud risk policy on 12 January 2022. Previously, no senior utility executive had responsibility for fraud risk management. It is now entrusted to BC Hydro’s chief financial officer, David Wong.
“We do not condone fraud as an organization and earlier this year we implemented a new fraud risk policy at BC Hydro which formalizes our fraud risk management program,” Wong said in a statement. communicated. “We are confident that our existing measures – along with the Auditor General’s recommendations – provide a strong fraud risk management program at BC Hydro.
The audit made five recommendations, which BC Hydro accepted:
- Implement its new fraud risk policy.
- Provide training on fraud risk management.
- Perform regular fraud risk assessments.
- Develop a fraud investigation procedure.
- Regularly assess the effectiveness of the fraud risk management program
The audit did not investigate the fraud at site C.