Auditor General: BC Hydro Can Improve Fraud Risk Management at $16B Site C Project


BC Hydro has not established a fraud risk management program for the Site C dam and hydroelectric power project, although it has some elements in place, a new report from the Office of the Auditor General concludes.

The office makes five recommendations to improve fraud risk management for the Site C project, focusing on the implementation of investigative policies and procedures, staff training, regular reviews and the evaluation of the ‘efficiency.

Site C is the largest and most expensive infrastructure project in British Columbia’s history, with an estimated cost of $16 billion. According to the Global Infrastructure Anti-Corruption Center, the risk of fraud increases with the size and complexity of large infrastructure projects, as it becomes more difficult to benchmark costs and detect corrupt practices.

“Fraud can be costly, both financially and reputationally, so effective fraud risk management is essential,” Auditor General Michael Pickup said Tuesday. “The good news is that there are many ways to identify and respond to fraud risk and it starts with designing and implementing a comprehensive fraud risk management program.”

The audit report calls on BC Hydro to fully implement the Fraud Risk Policy it introduced for Site C in January 2022 and provide fraud training to all staff.

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

“Enhancing the existing risk management at Site C with strong fraud risk management could strengthen the anti-fraud culture and benefit other projects,” Pickup said. “It could also bolster BC Hydro’s reputation as a prudent builder and supplier of hydroelectric power.

The audit did not investigate or search for fraud at Site C and did not include any aspect of the project unrelated to fraud risk management.

Site C, on the Peace River in northeastern British Columbia, is expected to be completed in 2025, and BC Hydro says it will provide enough electricity to power 450,000 homes a year.


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