PC government ended hotel discount membership at cost of $632K

The Blaine Higgs government cancelled its membership in a federal hotel-rate program to save $14,850 — a decision that led to estimated higher travel expense costs of $632,169 per year, according to New Brunswick's auditor general.

Paul Martin said in his new report that the government pulled out of the Government of Canada accommodation directory program in January 2023 without properly analyzing the potential costs.

The current employee travel policy "does not reflect prudent fiscal management," said the audit, presented Tuesday morning to the legislature's public accounts committee.

The federal program gave New Brunswick civil servants access to a directory of hotels that offer discounted government rates.

It also gave them mechanisms to use if they were over-charged or if the hotel rooms were "sub-par," the report said.

But officials told Martin's audit team the program "did not meet the expected value" and the return on investment for the $14,850 membership fee "was deemed insufficient due to the lack of demonstrated evidence of cost savings or measurable benefits."

Officials didn't review hotel expense claims to see how often civil servants were using government rates in the directory and didn't analyze whether the province was saving money, Martin reported.

In fact, he continued, the cancellation eliminated potential savings of $479,484 in travel costs by departmental staff and district education council employees, an amount 32 times greater than the cost of staying in the federal program.

He estimated regional health authorities missed out on an additional $152,685 in possible savings because the discounted rates were no longer available.

New Brunswick government policy requires employees booking hotel rooms to seek government employee rates or discounted rates, whichever is lower.

But Martin's audit said many discount rates listed on hotel websites are the government rates for which provincial civil servants are no longer eligible.

The new policy "lacks clarity and could be misinterpreted," he said.

Martin reported on one trip where seven employees stayed four to six nights at a conference in Barcelona at a total hotel cost of $19,346, missing out on potential savings of $7,304 because they didn't have access to the government rates.

On another trip to Phoenix, Ariz., four employees expensed an average nightly rate of $567 for five nights, despite nearby hotels having a government rate of $168 available — for a total of $6,665 in missed potential savings, he concluded.