The program to recycle thousands of tonnes of winter sand trumpeted for years by the city as a money-saver is under review following a scathing audit that says it's not working.

About 80 per cent of the sand scooped off the roads and sidewalks each spring is reused the following season.

But whether the city is actually reaping the $2.5 million of savings each year it hoped is questionable, said city auditor David Wiun in a report released Thursday.

It's the result of a "very loose paper trail," said city manager Linda Cochrane, who also spoke to the auditor's broader concerns that the program has been mismanaged.

"For as much as it might have cost us more, we might have saved even more," Cochrane said. "That's the sad part about this.

'Very embarrassing'

"We can't give you with any certainty the savings or the lack of savings on this and that's very embarrassing."

The Winter Street Recycling and Mixing Program was introduced in 2005 amid increasing environmental regulations. The transportation and public works committee of the day said it would be cheaper for the city to recycle the sand than dispose of it a landfill.

The city has spent about $74 million on the program to date.

The city contracts the Edmonton Waste Management Centre of Excellence to run the program, but the audit found the terms of the contracts were poorly defined.

"Ambiguous terms in the contracts and failure to question the contractor's interpretation of certain contractual terms have exposed the city to additional costs," the audit said.

It should be investigated more fully to determine whether it was just sloppiness or whether there was actual fraud involved - Mayor Don Iveson

Mayor Don Iveson was a city councillor in 2012 when the transportation and infrastructure committee reported back that the program was working.

"I have to tell you first and foremost that I'm furious with the findings of the auditor, particularly the news that results were reported in 2012 to the transportation and infrastructure committee of council that simply cannot be validated because the evidence behind them doesn't exist," Iveson said.

"There may have been some benefits, but that wasn't being monitored appropriately."

The audit found there may have been cheaper alternatives to the finely ground rock being mixed with the sand and that the permits weren't in place at the mixing facility.

"Clearly there was a failure when it comes to oversight and accountability and project management somewhere within that part of the transportation unit of the city," Iveson said.

Cochrane said there are still unanswered questions and she has spoken with Wiun about the city's next steps.

'So many things that don't add up'

"He's very comfortable that he's reached as far as he can go. In fact, he's not calling for a forensic audit," she said. "But there are so many things that don't add up."

Iveson said he thinks further investigation is needed.

"The primary accountability system didn't work here, which is that management responsible was reporting things to council that were frankly not true and that's infuriating, absolutely infuriating. If those people still worked here, they would stop working here," Iveson said.

"It should be investigated more fully to determine whether it was just sloppiness or whether there was actual fraud involved."

Cochrane said sand will still be applied to roads and sidewalks over the winter, but when the current contract for the winter sand program expires on Dec. 31, staff will present council with options.

Cochrane said sand recycling will likely be one of them, but not the only one.

roberta.bell@cbc.ca

@roberta__bell