This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide.
In a section of its 2020 Report – Volume 1 entitled “Additional Oversight of Firearms and Ammunition Purchases Needed”, Saskatchewan’s Auditor General found that the Ministry of Highways and Infrastructure failed to properly oversee the purchase of firearms and ammunition bought by its new highway patrol operation. As the report noted, since August 2017, the government “bought equipment (e.g., firearms, helmets) and supplies (e.g., ammunition) totalling about $700,000 to support its expanded highway patrol activities.” However, the Auditor General found that this spending included unauthorized equipment purchases, the improper use of purchasing cards, and unclear spending oversight rules:
The Ministry’s delegation of authority policy (which sets out the type and size of purchase staff are authorized to make) gives Directors within the Ministry the authority to make purchases of goods or services up to $200,000. Neither the Ministry’s delegation of authority policies nor other policies explicitly restrict which staff have the authority to buy firearms and/or ammunition, or require additional oversight or review of these purchases.
While the Ministry has authority to possess firearms or restricted weapons in the course of the Highway Patrol’s duties, the Ministry did not document a business need to buy certain types of firearms and weapons given the Highway Patrol’s role as a first responder in emergency situations. We found the Ministry owns various firearms and other weapons that are not included in The Municipal Police Equipment Regulations, 1991 (Saskatchewan). This includes three nine-millimetre pistols, two fully automatic rifles, one AR-10 carbine, and 12 suppressors (silencers). The Ministry advises us legislation allows the Ministry to possess these firearms and weapons for training purposes even though it cannot use them in its highway patrol duties. We also found the Ministry possesses a shotgun even though the Deputy Minister specifically directed staff not to purchase any shotguns. Management indicated it has not deployed any of these items for operational use, and all are in locked storage.
More specifically, the report found that purchasing cards (referred to as p-cards in the decision) were improperly used to make questionable purchases of unauthorized equipment with inadequate monitoring:
The Ministry’s further investigation into p-card purchases of the Highway Patrol identified questionable purchases that did not have sufficient support to demonstrate business need or alignment with the Ministry’s first responder responsibilities. Questionable purchases included purchases of certain firearms and ammunition, suppressors (silencers), drug test kits, a drone, and a high power rifle scope.
The use of p-cards is a decentralized purchase method with fewer controls over the authorization of purchases. Having clear policies that restrict who can buy regulated items like firearms and ammunition (e.g., require additional approvals or limiting these types of purchases to a few individuals), and restrict how employees can buy them (e.g., disallowing use of p-cards, requiring the use of a purchase order) would assist in overseeing purchases of regulated goods, and reduce the risk of buying unauthorized or inappropriate items.
In fact, the Auditor General found that the Ministry failed to properly track its purchased inventory, including acquired ammunition, since it relied on a spreadsheet that could be accessed by multiple individuals and amended without proper controls:
The Ministry of Highways and Infrastructure does not sufficiently track regulated equipment (e.g., firearms, ammunition, and accessories such as gun belts and protective gear used to carry out its highway patrol activities). It has not formally assigned to staff responsibilities for tracking related equipment (e.g., keeping an accurate, up-to-date listing), or for periodically confirming the existence and location of such items. The expansion of the Ministry’s Highway Patrol activities resulted in a need for different and more equipment some of which is sensitive (e.g., firearms, ammunition). At March 2019, the Ministry uses spreadsheets to track highway-patrol equipment purchases like firearms, and accessories (e.g., gun belts and protective gear). The spreadsheets list details about individual items such as current location or the individual to whom the Ministry assigned the item. We found various staff within the Highway Patrol had the ability to make changes to information on this spreadsheet.
When the Ministry assigns firearms to its officers, officers are to sign a standard sign-out form to take responsibility for the equipment. The Ministry maintains the signed forms. In addition, the Ministry expects officers to immediately report missing equipment. In July and August of 2019, the Ministry assessed the accuracy of the Highway Patrol equipment spreadsheet. This was the first assessment since the purchases of equipment, which began on or about April 2018. To assess the accuracy, the Ministry compared purchases of Highway Patrol items to items listed on the spreadsheet, and located each of the items.
The Ministry identified a number of inaccuracies in the spreadsheet (e.g., pieces of equipment not with individuals noted on the listing, equipment not included on listing). The items not with the individuals noted on the listing included combat helmets, communication equipment, and a drone. The Ministry followed up these discrepancies and located all but two pieces of equipment (i.e., communication equipment). It had purchased the communication equipment in March 2019 for just over $6,000. Upon further investigation, the Ministry determined it had not received the equipment. In January 2020, it received a credit from the supplier for the amount it had paid.
The sensitive and portable nature of regulated Highway Patrol equipment (e.g., firearms, ammunition) increases the importance of keeping track of them and their use. Without processes such as periodic inventory checks or counts, and restricting who can make changes to equipment tracking records, the Ministry risks being held liable for misplaced or lost items used for inappropriate purposes. Also, the Ministry risks incurring loss of public money if items go missing.
These widely reported audit findings resulted in the government’s dismissal of its highway patrol chief, who in turn initiated legal proceedings against the government for wrongful termination. As this case study illustrates, government purchasing practices are subject to intense audit and media scrutiny. To better avoid downstream difficulties, government institutions would be well served by establishing proper purchasing oversight practices and ensuring that those practices are put in place whenever new operational areas are created.
