Auditor General Denise Hanrahan has submitted the first of two audit reports into operations at Nalcor Energy, which was tabled in the legislature today.

The audit finds that Nalcor did not always ensure the best possible use of public money, particularly as it relates to the management of discretionary expenses and the use of embedded contractors for the management of Muskrat Falls.

Hanrahan says by not aligning policies covering discretionary expenses with government policy whenever possible, Nalcor incurred excess expenses.

She found that while Nalcor generally approved expenses appropriately and stayed within its approved budget in most categories of discretionary expenses between 2013 and 2018, there were differences in Nalcor’s reimbursement rates compared to other provincial government entitlements. That’s something that led to friction within the public service. As an example, Hanrahan pointed to Nalcor’s in-province travel reimbursements which were 34 per cent higher than what government rates would allow.

She also raised concerns about Nalcor’s Conflict of Interest policies, which did not provide guidance on accepting post-employment contracts—something that is inconsistent with government policy.

Hanrahan also found that Nalcor did not have policies or procedures that required officials to evaluate the cost-effectiveness of hiring employees directly versus hiring contractors. There were also inconsistencies with respect to the management of embedded contractors.