OC Transpo Audit Reveals Systemic Failures in Overtime Governance

Ottawa’s municipal transit agency, OC Transpo, faces significant operational scrutiny following an audit that identified widespread deficiencies in the management and oversight of overtime expenditures. Auditor General Nathalie Gougeon released findings on November 2, 2026, indicating that the agency lacks the necessary documentation and automated controls to justify millions in annual labor costs.

The City of Ottawa reported total overtime costs of $61.7 million in 2024, followed by $70.3 million in 2025. OC Transpo accounted for nearly half of these expenditures, with the audit covering the two-year period ending December 31, 2025. Gougeon identified that the reliance on manual tracking systems creates substantial risks for administrative error and prevents the city from demonstrating value for money.

The audit revealed that 50 percent of sampled employees exceeded the 130-hour threshold within a bi-weekly pay period, raising concerns regarding Hours of Service compliance. While the report did not identify widespread regulatory violations in the sample, the high frequency of extended shifts underscores the reliance on overtime to mitigate staffing shortages. Maintenance staff, in particular, showed a 23 percent violation rate regarding Hours of Service, while 37 percent of this cohort exceeded the 130-hour limit.

Supervisory oversight remains a primary point of failure, as the audit found that 26 percent of maintenance workers and five percent of bus operators lacked documented approval for overtime hours. Discrepancies between SAP-recorded payments and actual hours worked were also noted among seven percent of rail operators. These gaps indicate that current approval workflows fail to enforce the necessary internal controls required for public sector financial accountability.

Gougeon recommended that General Manager Rick Leary mandate formal documentation for all overtime rationales to ensure compliance with seniority-based distribution rules. The report emphasizes that the current decentralized and manual booking approach must be replaced by an integrated, automated system. Such a transition would allow for proactive monitoring of labor limits and reduce the administrative burden currently placed on supervisors.

The audit highlights a fundamental disconnect between operational requirements and the digital infrastructure supporting workforce management. By failing to leverage system-based triggers, the agency remains vulnerable to non-compliance and inefficient resource allocation. The recommendation to automate booking across all service areas serves as a technical imperative to stabilize the agency’s labor operations.

The reliance on legacy manual processes at OC Transpo demonstrates the inherent risks of maintaining complex, high-volume labor schedules without centralized orchestration. Enterprise leaders should view this as a cautionary case study on the necessity of digitizing human capital management to ensure regulatory adherence. Without robust system-level controls, organizations operating in high-compliance environments struggle to maintain visibility into their most significant variable costs.

The current SAP implementation at the agency appears to function as a passive ledger rather than an active governance tool, failing to enforce real-time constraints on overtime eligibility. Architects must prioritize the integration of automated validation protocols that cross-reference shift data against collective agreement limits before payment processing. This shift requires moving away from post-hoc manual approvals toward a system-enforced workflow that prevents unauthorized overtime at the point of entry.

Implementing an automated scheduling architecture requires more than just software updates; it demands a fundamental redesign of how labor data flows through the enterprise stack. The agency must define clear data governance standards for seniority-based shift allocation to ensure that the system logic aligns with contractual obligations. By embedding these rules into the core scheduling engine, the agency can reduce the reliance on human intervention and mitigate the risk of systemic payroll errors.

The audit committee is scheduled to review these findings on Tuesday, marking the start of a likely multi-year effort to modernize the agency’s payroll and scheduling architecture. Future oversight will focus on whether the agency successfully implements automated validation protocols to replace current manual timesheet approvals. Stakeholders should monitor the timeline for these technical upgrades as a benchmark for operational reform and the potential for broader digital transformation across municipal departments.