Government & policy
“Brown envelope” probe expected to
last a year
WINNIPEG – The investigation into
the Winnipeg Regional Health Authority’s controversial “brown-envelope”
policy – the practice of accepting additional money, equipment and gifts
as part of a contract – will likely take more than a year, as thousands
of financial transactions must be examined.
According to a report in the Winnipeg Free Press, investigators spent
the last few weeks reviewing the WRHA’s financial statements dating back
to 2000 in an attempt to draft a plan and focus the audit.
Manitoba’s auditor general, Carol Bellringer, said the number of
transactions is huge, and it will be difficult to determine whether
extra benefits influenced bids without analyzing a large sample.
Bellringer said there’s a need to review the WRHA’s procurement policy
and that it’s possible changes could occur as the audit progresses and
problems are flagged.
Bellringer launched an immediate audit into WRHA’s “value-added” several
weeks ago after a Free Press investigation revealed the WRHA accepted
more than $20 million in money, equipment and gifts handed over in brown
envelopes from medical suppliers who won contracts in the region since
While WRHA officials defend the policy as a way to limit the influence
of medical suppliers, some critics have commented that the practice of
“brown envelopes” is unethical and that no extra payments or gifts
should be associated with a contract.
Bellringer said most organizations require that any extras suppliers
offer are outlined in a bid proposal, but the WRHA keeps “value-added”
funds and other benefits separate. They maintain the sealed brown
envelopes are not opened until after the contract has been awarded to
limit their influence.
WRHA officials will not provide a detailed breakdown of which medical
supply companies provided funds, equipment, or other gifts once it was
awarded a contract, or how the money was spent. The province’s largest
health authority maintains that no staff personally benefited from the
extras connected to successful bids.
Documents show the WRHA received more than $2.2 million in unrestricted
money from suppliers. It was allocated to other accounts as an extra
source of funding. The WRHA has also accepted more than $17.9 million in
other funds put towards research, equipment and hospital programs at the
discretion of the medical supply company, including thousands of dollars
that went toward equipment and operating costs of surgery and critical
Several restricted and unrestricted grants from medical suppliers put
toward operating and equipment costs of various departments extend until
2011. Bellringer said she’ll be speaking with WRHA and government
officials as the audit progresses and is already asking questions about
how government contracts are awarded in other areas and departments.