TORONTO -- The scandal at Ornge may have been prevented if the governing Liberals had allowed Ontario's ombudsman to scrutinize the troubled air ambulance service, watchdog Andre Marin said Tuesday.

His office received 17 complaints about Ornge since 2005 -- including the alleged misuse of funds -- but didn't have the authority to investigate them, he said. Now the publicly funded organization is under a criminal investigation for financial irregularities.

"One of the roles of the ombudsman is to serve as a barometer before tragedy of some kind strikes: financial tragedy, human tragedy," he said following the release of his annual report.

"I can't tell you the Ornge scandal would not have happened with our oversight. What I can tell you is it may not have happened, and we may have been able to barometer what was going on before it exploded and mushroomed."

Ornge, which receives about $150 million a year from the province, is "crying out for independent oversight" even though the auditor general has already released his own scathing report, Marin said.

The Liberals have introduced legislation to improve oversight of Ornge, but it doesn't give Marin jurisdiction over the agency.

The ombudsman, who rarely minces words, said he raised it with the government but was told it's "not in the cards."

"You have to ask yourself: what possible public policy reason would be to continue to protect Ornge against us having the ability to scrutinize its operations?" Marin said to reporters.

"Can you find a better example of a public body that, just like a fish, is rotting from the head down? How much more do you want to go? What more do you need?"

The government must allow him to oversee the province's hospitals as well to prevent similar abuses of the public's trust, he said.

"Hospitals remain shielded from oversight like some kind of medieval fortress, as do the Ornge helicopters that land there," Marin said. "I think Ontarians deserve stronger oversight, greater transparency for both."

Marin also sounded the alarm over the cash-strapped government's budget bill, which contains changes that would allow for more privatization of public services.

That threatens to remove those public services from his scrutiny, he said.

All that's required is a simple amendment that would keep those services under his jurisdiction, Marin said. But his suggestion was rejected last week, leaving the province in a catch-22 where services can be privatized without independent oversight.

Other agencies that operate commercially, such as the Ontario Lottery and Gaming Corp., have benefited from his recommendations, Marin said.

"So it's unfortunate we're in a situation now being on the eve of regressing," he said.

Marin's appeal for more oversight comes as all three parties at Queen's Park battle it out over the contentious budget bill.

The New Democrats failed to win amendments that they say would have provided more oversight of the privatization of ServiceOntario, prompting them to risk the Liberals' wrath by trying to kill that section of the bill.

Marin said his office received 18,500 complaints over the past year, up 27 per cent from the previous year.

One of the biggest revelations in this year's report is the existence of thousands of "ghost driver's licences" by the Ministry of Transportation, Marin said.

If a driver can't produce a licence when they're stopped by police for a driving offence or collision, the ministry creates a dummy or "master" licence record to store the information about the offence.

There are more than 36,000 dummy licences created each year, which are supposed to be matched up with the official licence or any future application for a licence.

But that's not happening, which means there are tens of thousands of drivers on Ontario roads who have two licences, Marin said. One drunk driver continued to drive for years because the ministry failed to match his licence with the dummy one that registered his conviction.

"How many tens or possibly hundred of thousands of drivers do we have out there driving, and they appear to be legitimate on the face of it, yet they are a threat to public safety" he said. "And that is an issue that needs to be fixed."