Not holding back
N.S. auditor slams lack of oversight, financial controls at IWK hospital
A new report by Nova Scotia’s auditor general slams the lack of oversight and financial management by the board of the IWK Health Centre in Halifax. Michael Pickup says he was shocked to see the “extent and severity of weakness in basic financial management controls” at the largest children’s hospital in Atlantic Canada.
Pickup’s report says the IWK’s board of directors did not create a culture that promoted accountability for the functioning of internal controls.
“The lack of adequate oversight by the board and management significantly increases the risk of fraud, theft, unauthorized transactions, inefficient spending and wasted money which the IWK Health Centre could have used for other organizational priorities,” states the report, released Tuesday.
It found the board and management “did not create an expectation to report and investigate fraud” and didn’t have a fraud policy in place.
The report also found 78 per cent of board and executive travel and other expenses paid did not comply with policies, including 32 instances where expenses were inappropriately approved. As well, 12 of 14 board expenses were approved by management but not the board and nine of the expenses had no receipts.
The report came after Pickup said he would conduct the audit in the summer of 2017. An expense scandal eventually claimed the jobs of two executives; CEO Tracy Kitch and chief financial officer Stephen D’Arcy.
In October, police charged the two former executives with fraud and breach of trust.
Kitch faces charges of fraud over $5,000 and breach of trust, while D’Arcy faces charges of breach of trust, unauthorized use of computer and mischief to data. Both are scheduled to appear in Halifax provincial court on Dec. 20.