Lavish expenses spark exit
AHS exec entitled to payout after three months on job
The head of finances at Alberta Health Services has suddenly exited the organization after it was revealed he charged taxpayers for lavish expenses including work on his Mercedes-Benz, butler service and opera tickets in years past.
The departure of AHS chief f i nancial off i cer Allaudin Merali was disclosed in a hastily scheduled news conference in Calgary on Wednesday.
The announcement came hours before a media outlet was set to broadcast a story with details about Merali’s $346,208 in expenses from his time as CFO at the former Capital Health Region in Edmonton between 2005 and 2008.
“The expense records being released today put AHS and Mr. Merali in a difficult position,” acting chief executive Chris Mazurkewich told reporters. “We were concerned that it would detract from his ability to act as CFO, and we’ve taken difficult but necessary steps to ensure public confidence.”
Mazurkewich would not say whether Merali resigned or was asked to leave.
“The employment contract has been terminated, as mutually agreed upon.”
The announcement comes just three months after Merali was hired by AHS, but Merali will still receive a severance package, although the details have yet to be finalized.
“Our standard contract for executives is a one-year payout,” Mazurkewich said in response to questions about the severance.
Merali’s annual base salary was $425,000.
Liberal health critic David Swann said the circumstances surrounding Merali’s departure raise bigger questions about how the health superboard manages its finances.
Premier Alison Redford needs to order a sweeping forensic audit of AHS to get to the bottom of “gross mismanagement of public funds, of which this is a tiny symptom,” to restore trust in the public body, Swann said.
The Wildrose party called the expense claims “lavish.” MLA Jeff Wilson charged that while AHS makes decisions that hurt patients — such as closing the Little Bow Continuing Care Centre for dementia sufferers in Carmangay — the board is also making the wrong hires for its top positions.
“The person who’s been in charge of the finances and who is given the top job to look after the dollars that are being spent in our health-care system — which is broken — is clearly unable to manage that,” said Wilson.
AHS said Merali was not available to comment.
The medical superboard said Merali filed 146 expense claims totalling $346,208 between January 2005 and August 2008 when he was CFO with the former Capital Health Region.
In 2007, Merali was paid an annual salary of $487,000 at Capital Health. But he still claimed a number of bigticket expenses in Edmonton, including:
$321 for two butlers for five hours of work at a “Dr. Merali dinner” in 2005;
$220 for dinner with (then health policy consultant) Fred Horne, at Jack’s Grill in 2005;
$27 for black ink from a jewelry store;
A pair of $82 tickets to the Edmonton Opera’s Carmen in 2007;
$2,303.60 for the installation of a car phone in July 2006, and the same month, $524.86 at a Mercedes-Benz dealership for repairs;
A $1,598.54 dinner for a group at La Spiga in 2005;
$28.58 for two six-packs of Tiger Beer for a 2007 “Dinner at home;” and
$1.98 for a bottle of water at Victoria airport in 2005.
While Merali was CFO at Capital Health, the region’s auditing practices were criticized by the auditor general in 2004, 2005 and 2006.
The region was overstating its liabilities to hide the true state of its finances, the auditor general said.
Merali made the claims under Capital Health former CEO Sheila Weatherill, who personally signed most of the expense claims.
Reached by telephone, Weatherill, who now sits on the board for Alberta Health Services, said she was on vacation and couldn’t comment.
Merali lost his job at Capital Health in August 2008 when the province folded all of its health regions into one superboard. In 2008and2009, Merali worked in Ontario and was one of the consultants named in the province’s ehealth spending controversy.
According to media reports at the time, Merali was paid $2,750 per day, plus a $75 per diem for his consulting work on the project. On top of per diem, he billed the province $14.95 for a daily beverage during a six-day stay at Toronto’s Fairmont Royal York hotel.
Merali’s bills averaged $76,000 a month in January through March 2009, Ontario media reported.
On Wednesday, Mazurkewich said they knew about the issues that arose while Merali worked in Ontario, but did not know about the expenses while he worked at Capital Health.
In the coming weeks, the AHS will begin publicly posting records of paid expenses for its CEO and executive and senior vice-presidents who report directly to the chief executive.
They will also ask auditor general Merwan Saher to review their policies and practices, and provide advice as to how they can be improved.
On Wednesday, an auditor general spokeswoman said she couldn’t comment on whether the Merali expenses had been brought to the office’s attention.