External audit finds only half Merali’s expenses allowable
An external audit into expenses claimed by a former Alberta Health Services executive found only half of the $370,000 he billed — for spending on fine dining, car repairs and international travel — at a past health region job were fully documented and within the rules of the day.
The Ernst and Young report, released Thursday, determined about $5,600 of the spending Allaudin Merali billed while chief financial officer of Capital Health Authority between 2005 and 2008 shouldn’t have been expensed.
But the auditors said they weren’t given proper receipts for a further $103,000 of the reimbursed bills that were signed off on, and $73,000 related to spending where the appropriate policies were either unavailable or “indeterminable.”
AHS also released an internal audit Thursday, probing $235,000 in past spending of four AHS executives: president and CEO Dr. Chris Eagle, chief medical officer Dr. David Megran, executive vice-president Bill Trafford and chief of staff Patti Grier.
About $11,000 either shouldn’t have been claimed or the internal AHS auditors couldn’t tell whether or not they should have been covered under a past policy.
Superboard chairman Stephen Lockwood said he’s discussed the expenses with the four current executives and is “completely satisfied” with the claims, saying the small amount and type of non-compliant bills indicate they were “inadvertent and unintentional.”
“I have no question in my mind as to the integrity of any of our executives,” he told reporters following an AHS board meeting in Edmonton.
The internal audit found $5,100 in questionable expenses that ranged from $6 parking errors to $221 hotel reservation cancellation fees, and included more than $2,000 in taxi claims to and from home.
A further $6,300, related to expenses the internal auditors couldn’t find appropriate policies for, include more than $3,000 for alcohol and gifts.
Lockwood said he left it up to each of the four AHS executives to decide how much — if anything — they wanted to reimburse.
AHS wasn’t able to provide the tally of paid-back spending late Thursday.
The health superboard has been blasted over spending of its top brass, past and present, in recent months.
The first controversy erupted after $350,000 in Merali’s claims from his old Capital Health job in Edmonton were made public in August.
After a deluge of freedom of information requests for executive spending, the four AHS executives— who worked at the Calgary Health Region before it was amalgamated into the superboard four years ago — requested an internal audit be done on their spending.
The audit covered expenses between 2005 and 2008.
Meanwhile, Lockwood said he hasn’t discussed the thirdparty audit with Merali, and doesn’t intend to, since the former finance boss is no longer employed by AHS.
When Merali’s expense account from his old Capital Health job became public in August, he left his new job as AHS chief financial officer.
Documents showed Merali submitted expense claims for a range of pricey dinners at highend restaurants such as Ruth’s Chris Steak House, La Spiga and Hardware Grill.
The third-party audit, ordered by Health Minister Fred Horne, examined the $370,000 overall tab billed by Merali — about $22,000 more than previously reported by AHS.
The Ernst and Young probe showed Merali billed $2,300 to have a Bluetooth phone kit installed in his car. He also charged $1,405 worth of mileage during a time period in which he received a monthly car allowance.
Other expenses the auditor deemed non-compliant included $2,043 he signed off on himself, contrary to Capital Health policies in place after December 2005. It also revealed a $594 flight expensed for Merali’s wife. According to the report, Merali told investigators this was an error and that he paid for his own personal flight on that trip. But documents provided do not support that claim, according to auditors.
After Merali departed AHS this summer, top health officials, including Horne, said that while they were outraged over the expenses, they seemed to be within the health region’s policies at the time.
But Wildrose health critic Heather Forsyth said the government has mishandled the expense issue from the start.
All improper expenditures should be reimbursed, she said. “I think Albertans would expect them to pay it back. Any other citizen in this province would be expected to pay it back,” said Forsyth.
Since October, AHS officials have been required to abide by a new expense policy that mirrors the province’s rules around travel, hospitality and hosting that strengthened existing rules.