TORONTO - Ontario's ombudsman says the lack of accountability at government agencies underscores a systemic failure that cannot be ignored.

Andre Marin says Ontario's recent troubles show that arms-length agencies can become monsters wreaking untold havoc on their creators.

He says the government must learn from previous mistakes at agencies like eHealth Ontario and the Ontario Lottery and Gaming Corp. to avoid further costs to taxpayers and erosion of services.

The OLG's fall from grace, he says, is a cautionary tale that should be mandatory reading for all government agencies.

The Liberals have ordered a sweeping review to root out spending abuses at government agencies following revelations of unacceptable expenses at the OLG.

Marin spoke to the Economic Club of Canada about restoring public trust in agencies and says they must be held to the same standard of transparency and oversight as the government itself.

The province is currently dealing with a scathing report into the months-long scandal at eHealth, an agency set up to bring health records online that sent millions of dollars out the door in untendered contracts.

Premier Dalton McGuinty has dismissed Opposition calls for an inquiry into the $1 billion spent for a system that's years away from completion, but has vowed to implement the auditor's recommendations and promised to do better in the future.

The government became embroiled in a lawsuit over the dismal of the chief executive officer of the OLG -- another agency awaiting a report from the auditor general.

Marin did his own investigation into the OLG in 2007, accusing unscrupulous retailers of collecting tens of millions of dollars in "dishonest" winnings -- and the lottery corporation of letting them get away with it.

Last week, the government also released an internal audit of Cancer Care Ontario that said the agency violated its tendering rules on consulting contracts, a claim disputed by the agency.