A gap in transparency has allowed millions of dollars in taxpayer-funded contracts to be awarded to friends and allies of political operatives in Ontario without the checks, balances and disclosures that accompany a public tendering process.

A Globe and Mail review has found a pattern of payments, about which little information is available, involving a tight circle of advisers that surrounded former premier Dalton McGuinty during his time in office. Among them were payments of more than $50,000 in the same year to two different companies in the name of the former premier's campaign director; money repeatedly directed to a high-profile strategist through his then-wife's business; and more than $300,000 paid to a former chief of staff shortly after he was pushed out of his job.

While there is no indication that any of the transactions were illegitimate, the lack of transparency makes it difficult to determine what services were provided at taxpayers' expense.

During The Globe's review, sources who previously worked as senior political staff said they were offered "top-ups" to their salaries through contracts that would never have to be made public.

The Globe review follows a criminal probe that helped bring to light the fact that nearly $160,000 in public funds were paid through a numbered company to Peter Faist, the boyfriend of a deputy chief of staff to Mr. McGuinty, for IT services that police believe led to the destruction of government records. (Mr. Faist was not the subject of the investigation, and police have not accused him of any wrongdoing.) Multiple sources told The Globe and Mail the contract was not an isolated incident.

Such arrangements have been hidden from view because they have been paid out of legislative funds given to each party for spending on the needs of their caucuses, which are not subject to freedom-of-information rules or other transparency measures that apply to government expenditures. Nor are they subject to conflict-of-interest rules.

Through a formula unique to Ontario, "caucus appropriations" are distributed to government and opposition parties proportionate to how many seats in the legislature they hold, and are intended for research, communication and administrative services. But there are virtually no checks on how that money, which amounts to about $5.5-million annually, is spent.

A similar situation exists with the "global budgets" given to MPPs primarily for their office and staffing needs, which vary slightly depending on the size of their ridings, but tend to be about $300,000 each. When members do not need to use their entire budgets, they are able to pool them together with their colleagues – in some cases effectively adding them to the funds for caucus. That adds to the money entrusted to a select few officials in the premier's or leader's office, with minimal accountability.

When contracts awarded with that money are worth less than $50,000, as most are, they are all but impossible to track. It is with contracts below that threshold, sources say, that salary top-ups were offered.

However, payments to an individual or company that total more than $50,000 in any given year are listed on Ontario's public accounts – albeit with no information about what they are for.

Public accounts for 2013-14, the first year in which Kathleen Wynne was in the premier's office, have not yet been released. However, by reviewing the public accounts from 2003-04 through 2012-13, and speaking with sources in or around government during that time, The Globe and Mail has gained insight into how the funds were spent during Mr. McGuinty's time in office.