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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 2000.

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 care.

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.