OTTAWA - The prime minister's own department has been repeatedly breaking the rules for issuing government contracts.

Almost a third of the contracts awarded by the Privy Council Office have been "retroactive," that is, they were drawn up only after the work or service had started.

"There is some risk associated with the relatively high number of contracts issued for work that has already begun, i.e., after the fact," says a newly released audit.

Auditors examined a sample of 70 contracts from the 2,200 the Privy Council Office signed in the 18-month period ending June 2009. The value of all the contracts was $31 million; no dollar figure was given for the sample.

Twenty-nine per cent of the sample contracts were created retroactively, contrary to Treasury Board rules that were toughened by the Federal Accountability Act, implemented after the Conservatives came to power in 2006.

Many were valued at less than $5,000, but one was for unspecified "professional services" worth $95,000. Auditors also noted two amendments to contracts were made after the additional work had begun.

The findings of the report, dated Feb. 17 this year, parallel those in another Privy Council Office audit also completed in February.

The internal probe of the massive legal bill for the inquiry into Brian Mulroney's dealings with Karlheinz Schreiber found officials improperly "backdated" approvals for lawyers' expenses that went over budget. Costs of the Oliphant Commission were at least $16 million, mostly for lawyers' fees.

The latest audit also found a sole-source contract that was not justified. Its value and purpose were not disclosed in the report.

And investigators raised questions about the mandatory posting of contracts on the Privy Council Office website, a requirement imposed on all departments in 2004 by the previous Liberal government of Paul Martin.

Two contracts in a sample of 18 that were required to be posted never appeared on the website. And two others were posted much later than the time frame set by Treasury Board.

A spokeswoman for Privy Council Office says all recommendations from the audit were quickly implemented.

The latest findings of rule-breaking show that contract problems have persisted since 2003, when a similar audit chided Privy Council for improper sole-sourcing and sloppy documentation.

Drawing on a sample of 39 contracts from 2002-2003, investigators found that in about half of them, nothing had been signed before work actually began.

A PCO official said at the time that the problems had been fixed and that "procurement processes are being conducted in accordance with all Treasury Board policies."