News Releases

News Release - Manitoba

November 1, 2018

MANITOBA GOVERNMENT FIXING FLAWED HIRING PROCESSES



The Manitoba government is taking steps to ensure its hiring processes reflect and uphold the principles of merit, equity and fairness, Finance Minister Scott Fielding, minister responsible for the Civil Service, announced today.  The province is also working to ensure its employees pay their fair share of income tax and contribute equitably to government-sponsored group benefit programs such as the Canada Pension Plan and Employment Insurance.

“Since we formed government, a number of concerning employment arrangements came to our attention,” said Fielding.  “In response, we initiated a review to ensure the public interest is protected.”

The review found a number of serious irregularities relating to interchange agreements, which are employment arrangements between government and external organizations, such as businesses or non-profit organizations.

The review examined agreements entered into in 2015 and early 2016.  Its findings include the following:
•    Offers of employment, in the form of interchange agreements, had been extended to five people outside of the normal hiring process and without proper approvals having been obtained.  Those agreements presented gaps in openness and transparency in the hiring process.
•    Payments to external agencies of $222,000 for 2015-16 and $81,000 for 2016-17 were not disclosed in the schedule of public sector compensation payments Public Accounts, as required pursuant to The Financial Administration Act.
•    Conflict of interest declarations were not obtained in most cases.  In one instance, there was a failure to declare a conflict of interest arising from shareholdings in a company that had previously provided contracted services to the government.

The review also found the treatment of  interchange agreements may not have complied with the Canada Revenue Agency’s (CRA) ‘self-employed contractors’ directives, creating financial risk for government.  In instances where an employer fails to deduct the required Canada Pension Plan contributions or Employment Insurance premiums, the employer is required to pay both the employer’s share and the employee’s share of any amounts owing, plus penalties and interest.

“Rules were broken under the previous government,” said Fielding.  “Hiring processes were not respected, and income tax and other contributions may not have been deducted as they should have been.  We sought advice from the Canada Revenue Agency and are taking steps to ensure these abuses never happen again.”

These steps include over 35 improvements that are either implemented or underway including new policies, procedures, contract templates, checklists, additional monitoring and approval processes.  An internal electronic tip line has also been created to enable staff who feel pressured to circumvent or ignore critical internal controls, or who witness such occurrences, to express their concerns.  These improvements focus in particular on contract approval and hiring practices, disclosure of conflicts of interest, and compliance with CRA rules with regard to employer-employee relationships.

Fielding confirmed the government will be filing documentation to ensure previously filed Public Accounts reports accurately reflect the compensation and payments identified in the review.

He also confirmed that steps are being taken to expand the review into the broader summary government including Crown corporations, health authorities and educational institutions.

“What happened prior to our government coming into office is unacceptable and we are taking steps to prevent a similar situation from arising in the future,” said Fielding.  “We will treat our employees fairly, within CRA rules and in accordance with competitive hiring practices and transparency.  We will always follow the law and act in the public interest.”

To view a copy of the review visit:
www.gov.mb.ca/finance/publications/pubs/interchange-and-secondment-agreements.pdf.

To view the updated Public Accounts visit: www.gov.mb.ca/finance/publications/pubs/annualreports/pubacct_2_18.pdf.

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