Audit shows Site C can improve fraud risk management

FORT ST. JOHN, B.C.—A recent audit of the Site C Dam project in B.C. shows room for improvement when it comes to fraud risk.

The report from the office of the auditor general showed BC Hydro has not established a fraud risk management program for the Site C dam and hydroelectric energy project, although it has some elements in place.

The office made five recommendations to improve fraud risk management for the project, focusing on implementing policy and investigation procedures, staff training, regular assessments and evaluating effectiveness.

The province noted Site C is the largest and most expensive infrastructure project in B.C.’s history, with an estimated cost of $16 billion. Officials added the Global Infrastructure Anti-Corruption Centre says fraud risk increases with the size and complexity of large infrastructure projects because it becomes harder to compare costs and detect corrupt practices.

“Fraud can be costly, financially and reputationally, so effective fraud risk management is essential,” said Michael Pickup, auditor general, in a statement. “The good news is that there are many ways to identify and respond to fraud risk and it starts by designing and implementing a comprehensive fraud-risk management program.”

The audit report recommended that BC Hydro fully implement the fraud risk policy it introduced for Site C in January 2022, and to provide fraud training to all staff.

In addition, the report stated that BC Hydro did not perform fraud risk assessments for Site C until after the audit began, and the report recommends it conduct regular assessments in the future.

“Enhancing existing risk management at Site C with robust fraud risk management could strengthen anti-fraud culture and benefit other projects,” Pickup said. “It could also support BC Hydro’s reputation as a careful builder and provider of hydroelectric energy.”

The audit’s scope did not include investigating or looking for instances of fraud at Site C and did not include any aspects of the project unrelated to fraud risk management.

Site C, on the Peace River in northeastern B.C., is scheduled for completion in 2025, and BC Hydro says it will supply enough electricity to power 450,000 homes annually.