Consultant Charged with Fraudulent Billing of Canadian Government
Event summary
- Andrew McDermott and his company, AM Government Consulting Inc., have been charged with two counts of fraud over $5,000.
- The alleged fraudulent activity occurred between May 2020 and June 2022, involving overbilling on multiple Shared Services Canada contracts.
- Public Services and Procurement Canada (PSPC) initiated an investigation in the summer of 2021, leading to the RCMP involvement.
- The consultant is accused of submitting fraudulent timesheets and failing to remit HST collected to the Canada Revenue Agency (CRA).
The big picture
This incident underscores the ongoing challenge of ensuring accountability and transparency in government procurement, particularly when relying on external consultants. The scale of potential overbilling, coupled with the failure to remit HST, points to a breakdown in internal controls and oversight mechanisms. The case could trigger broader audits of government contracts and consultant billing practices, potentially impacting the consulting sector and Shared Services Canada’s operations.
What we're watching
- Contract Oversight
- Increased scrutiny of government contracting practices and consultant billing is likely, potentially impacting margins for firms operating in this space. PSPC's safeguards will be under review.
- Compliance Costs
- The case highlights the potential for significant compliance costs and legal liabilities for consultants working with the Canadian government, requiring more rigorous internal controls.
- Shared Services Risk
- The involvement of Shared Services Canada contracts suggests systemic vulnerabilities within the shared services model, which could prompt a re-evaluation of its structure and oversight.