Ministry overlooked substantial SAAQclic expenses, reports suggest
Fresh Take:
The SAAQ left out crucial recurring expenditures associated with SAAQclic in a presentation aimed at ministers Eric Caire and Francois Bonnardel last June. Vincent Larin from our site reports that during a grueling hearing, ex-finance vice-president Yves Frenette faced questions about the ongoing costs related to the Société de l'assurance automobile du Québec's (SAAQ) digital transformation, known as the CASA program. Initially budgeted at $263.9 million, this money was expected to sustain the program's maintenance costs, or the "exploitation phase," until 2027.
However, as exposed by the Quebec Auditor General (VGQ) in February, these funds were actually utilized to fund the development of SAAQclic when its costs skyrocketed in 2020. Meanwhile, the CASA management, including former vice-president Karl Malenfant, contended that the total project cost ballooned to merely $682 million, slightly above the initial budget of $638 million. Yet, Frenette admitted this sum was distorted since "the recurrence is not there." It only represented the "realization" cost of CASA.
Prosecutor Marie-Claude Sarrazin argued that for a fair comparison, "apples with apples," both figures must be presented throughout the project's lifespan. The $682 million figure was represented as the "total budget" of CASA in a presentation to the offices of the Minister of Transport and the Minister of Cybersecurity and Digital Transformation in June 2022.
These positions were respectively held by François Bonnardel and Eric Caire at the time. This presentation, dubbed as "napperon," was unveiled during the Gallant Commission's hearing. It remains unclear who crafted this document, but a pictogram prominently featured was a frequent signature of Karl Malenfant, according to the testimony of former SAAQ internal verification director Daniel Pelletier.
By June 2022, the SAAQ estimated the total project cost to be around $945 million, including recurring costs, admitted Frenette, a number akin to what the VGQ will publish in its report. Moreover, the values of the contracts of the firms hired for the project, SAP and LGS, were still inspected as $458 million, its original amount, on the "napperon." However, the CASA management was about to petition the board of directors for a $222 million supplement.
The "napperon" mentions a "contractual strategy is underway to complete the work without impacting the project budget of $682 million." Frenette explained this as "more contracts," signaling ongoing negotiations or additional costs. To decipher this, Frenette clarified that new contracts meant further expenses for the project.
- The mismatched portrayal of the CASA program's total budget in the "napperon" presentation, initially stated as $682 million, may have overlooked or underestimated the actual recurring costs in the transport industry, potentially impacting finance and business decisions within the SAAQ.
- In light of the escalating costs associated with the CASA program, the presentation to Ministers Francois Bonnardel and Eric Caire regarding the SAAQ's digital transformation may have failed to accurately represent the ongoing expenses related to the industry, finance, and business aspects of the program, including the maintenance costs of SAAQclic.
