01/12/2012 10:43 EST | Updated 03/13/2012 05:12 EDT

New Brunswick auditor general critical of school deal signed by Graham Liberals

FREDERICTON - New Brunswick's former Liberal government proceeded with a public-private partnership to build two schools without a proper evaluation and the legislature's approval, the province's auditor general said Thursday.

Kim MacPherson said she found no evidence the government did a formal analysis before it decided in 2008 to build Eleanor W. Graham Middle School in Rexton and Moncton North School.

She said the analysis was only done after the government announced its decision, adding that the contracts were signed before the projects were included in capital estimates.

"The legislative assembly had no opportunity to debate the commitment in advance of the decision being made," she told the legislature as she released an annual report.

"In our view, government should obtain approval of the legislature through the budget process before a multi-year P3 contract is signed."

MacPherson said under the agreement, the province will make annual payments of $5.1 million over 30 years to cover the construction, operation and maintenance of the schools.

Donald Arseneault, the Liberal finance critic, was a member of the previous Liberal government that signed the deal. He declined to explain why the government didn't do an analysis before signing it.

He said the government was trying to address a need with limited funds.

"If you have a crumbling school then you have to act on it, and maybe sometimes you don't have the funds immediately to enter into that new construction," he said.

"You have to look at creative ways how you do that, and P3s is one model we had to look at."

MacPherson said while a subsequent government analysis indicated building the schools under the public-private partnership was the best value for taxpayers, she disagrees.

She said the province could have saved $1.7 million in total had it contracted out the construction of the schools but took responsibility for their operation and maintenance.

However, she noted that the schools were built on time and on budget, and even using her numbers, the government may have still gone with a public-private partnership.