When auditor general Sheila Fraser investigated Farm Credit Canada in 2007, she found a well-run crown corporation that was a leading player in the farm lending field.
“In our opinion, based on the criteria we established for the examination, there is a reasonable assurance that there were no significant deficiencies in the systems and practices we examined,” she wrote.
However, she also found areas in which management style and performance seemed informal and not up to standard for a crown corporation.
For example, the corporation issued a sole-source contract to an American firm for staff training without making a business case to the board of directors.
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“Good contracting practices were not followed in this case,” she wrote.
When the corporation decided in 2006 to contract with a company to manage its venture capital investments, managers recommended a company that would be run by two former FCC employees who would resign to create the project.
Fraser said the board of directors was not informed of alternative options, potential risks or the business plan for the venture.
“Farm Credit Canada should demonstrate due diligence in awarding contracts and provide the opportunity for others to provide such goods and services,” she wrote.
FCC said it agreed.
On pay and benefit issues, the auditor general found that FCC employees and management often had better deals than employees of comparable companies and crown corporations.
She raised an eyebrow about “significant retention bonus agreements” created for 10 employees, including six vice-presidents, who were rewarded for agreeing to stay on the job during the transition to new president Greg Stewart several years ago.
Executive level bonuses ranged from 30 to 46 percent of salary.
As well, employee recognition programs that flew selected employees to all-expense-paid trips in the United States could be difficult to justify and could tarnish the corporation’s reputation, Fraser said.
