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Federal auditors to examine 2010 Winter Olympics construction budget

A month after chipping in an extra $55 million to the Vancouver Olympics' stretched construction budget, Ottawa has ordered an audit of the 2010 Games organizing committee to see how federal tax dollars are being spent.

A contract tender was posted quietly at the beginning of this week by Department of Canadian Heritage, which handles the federal contribution to the Games, including $290 million for building Olympic venues.

The call for tenders says the audit is aimed at providing the department's Olympic secretariat with the assurance that VANOC, as the organizing committee is called, has adequate and effective management controls, risk-management frameworks and overall governance structures.

It also wants to ensure that money provided was used for the intended purpose and recommend improvements in the way the committee and the department manage the mammoth venture.

Canadian Heritage spokesman Len Westerberg said it is a routine compliance audit required for any group that receives federal funds and was not prompted by clamour from critics that VANOC had lost control of its spending.

``Nothing caused it, it's part of the agreement,'' Westerberg said Thursday from Ottawa. ``It's a basic, preliminary due-diligence step.''

The audit, with a budget of $76,000, will cover the fiscal years starting April 1, 2003, the year Vancouver won the 2010 Games, to last March 31.

It covers only Ottawa's funding for venue construction, not the $552-million total contribution, which includes $187 million for security, immigration and other services.

British Columbia taxpayers matched the federal contribution to building Olympic venues and the province's overall spending on the Games has also come under fire.

The head of the organizing committee said the impending audit is neither unusual nor unexpected.

``The federal government audits every project,'' chief executive John Furlong said after addressing an aviation conference devoted to the impact of the Games. ``We see this as a positive thing.''

Furlong said VANOC has been subject to previous federal and provincial audits, as well as those conducted by its own independent auditor.

In fact, Westerberg said this is the first federal audit of the organizing committee.

``There will likely be further audits in the years to come based on the department's annual audit plan and whatever the risk assessment that we can carry out from our corporate review,'' he said.

This review is not a sign Ottawa is losing confidence in the committee, Furlong said.

``I think it would be completely unreasonable to think that the federal government wouldn't want to see the results of the money and what we've done with the money,'' he said.

The Canadian Taxpayers' Federation said it is pleased with the planned audit but B.C. director Sarah McIntyre suggested a joint review covering all government contributions makes more sense.

``Perhaps even better would be to have one auditor look after all of VANOC's decisions with respect to public dollars and come up with a comprehensive report for taxpayers, not just one at the federal level and provincial level,'' she said.

Last month, B.C. auditor general Arn van Iersel issued an audit that put the total cost of the Games to Canadians at $2.5 billion _$1.5 billion picked up by British Columbians _ when all Olympic-related spending was factored in.

And in August, Partnerships B.C., an arm of the Ministry of Economic Development that oversees the Olympics, released a due-diligence report that raised some questions about VANOC's approach to budgeting and recommended changes.

The sprawling Olympic venture has been under a microscope and subject to criticism almost since the applause died down in the Prague hall where Vancouver's winning bid was announced on July 2, 2003.

Beyond the historical opponents who see the Games as a waste of money, others have warned that Vancouver's booming construction market will seriously inflate the cost.

That prediction came true last year when Furlong was forced to ask Ottawa and Victoria for an extra $110 million over the original $470 million tabbed for venue construction to cover rising labour and materials costs.

The province agreed on condition the federal government matched the extra funding.

The former Liberal government fell before a decision was made but Conservative Prime Minister Stephen Harper came to Vancouver on Aug. 30 to announce the Tories were on the Olympic team.

But Harper warned VANOC not to put its hand out again.

Furlong told the B.C. Aviation Council conference in suburban Richmond on Thursday that VANOC is a huge enterprise that eventually will employ 30,000 people, 25,000 of them volunteers. There are 53 separate functions to be co-ordinated within the committee.

``There is a lot of pressure and we are being watched closely, as we should be,'' he said.

The conference went on to discuss airport security for the Games but reporters were barred from the session at the request of the RCMP and military, a council spokesman said.


© The Canadian Press, 2007

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End: Federal auditors to examine 2010 Winter Olympics construction budget
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