AHS EXPENSES A SCARY SIGHT
“All this, it seems to me, is part of the rampant spread of entitlement in management levels.”
Alberta’s auditor general says the $12.7-billion provincial health authority must address gaps in its controls for expenses that saw taxpayers on the hook for a private flight, pricey hotel rooms and gift shop toys, books and clothes charged to a corporate card without proper paperwork or cost analyses.
Merwan Saher said his audit found Alberta Health Services “has work to do” when it comes to justifying the millions of dollars in expenses its staff spend each month.
“An effective control framework ensures that public servants do not subsidize the government — or reward themselves at public expense,” stated Saher’s report, released on Tuesday.
“It also enables AHS’s board to show and publicly state that AHS expenses are incurred only for business reasons, with proper consideration of economy and efficiency — in other words, that AHS expenses are cost effective.”
AHS acting chief financial officer Deborah Rhodes said the medical authority is committed to making the best use of public dollars and has already begun making changes to its spending policies.
That’s meant, for example, making sure supporting paperwork is filed in the same place as expenses, and improving the health authority’s education and training materials, she said.
“AHS has put a lot of significant emphasis on this issue over the last number of months. I believe we’ve made a number of very significant improvements,” Rhodes said.
AHS and Health Minister Fred Horne called for the audit after concerns were raised last summer about health executive spending in the wake of scrutiny around former AHS finance boss Allaudin Merali’s $350,000 in claims from his time as CFO at the former Capital Health Authority.
In December, AHS released an external audit that found some of the spending wasn’t fully documented and within the rules of the day, though Merali later released a statement saying every expense was justified.
Saher’s report found AHS, which employs roughly 100,000 people and is responsible for delivering health care in the province, spent about $100 million in expenses during a 17-month period examined by the auditor general.
Speaking to reporters in Edmonton Tuesday, Saher said while AHS is the Alberta’s largest provincial agency, his message on proper expense oversight extends to the entire public service.
But opposition leaders heaped criticism on the health superboard, saying lax oversight of expenses comes at the cost of Alberta patients.
“They need to start cutting and some heads need to roll among the senior management team who is allowing this blatant abuse of taxpayer dollars,” said Wildrose Leader Danielle Smith.
“They’ve demonstrated time and time and time again they have no
They need to start cutting and some heads need to roll among the senior management team …
WILDROSE LEADER DANIELLE SMITH
respect for taxpayer dollars,” she added.
Smith said the cost of $100 million in expenses could eliminate cataract waiting lists, pay for 7,000 hip replacements, or clear the system logjam keeping elderly hospital patients from long-term care beds.
Liberal Leader Raj Sherman contended the government is in “constant reaction mode,” and only responds to spending criticism once it’s already “busted” for wrongdoing.
Among the cases raised in Saher’s report were AHS staff gift shop purchases of toys, clothes, food, books, tickets and video games.
The provincial watchdog pointed out the spending could be appropriate under the health authority’s policies, but employees must include documents with their reason for the spending.
In another example, an AHS employee flew to an Alberta location in a personal plane, without making the business case for not taking a commercial flight.
Further, the publicly funded Carewest long-term care facilities that bought Calgary Flames season tickets and Stampede passes should have documented up front the purchases were resold to staff and residents, he said.
Saher urged AHS managers to look for opportunities to save Albertans money, such as negotiating a rate with a particular hotel chain to avoid the price swings ranging from $89 to $279 a night in the same city.
Health executives should also do a better job booking flights, he said, noting trips between Edmonton and Calgary ranged from $253 to $1,206.
According to Rhodes, AHS’s accounts payable and procurement systems were fully consolidated in February 2011 and the health superboard is now analyzing how to make best use of its purchasing power.
She noted in some cases raised in the report, the supporting documents existed, but were filed with a different department than the expense slips.
As for the private plane trip, Rhodes said the move allowed the physician to travel to northern Alberta and spend an extended period of time there in a number of commu- nities — amounting to a reasonable expense, albeit one that hadn’t been reviewed recently.
AHS is expected to have the recommended changes complete by the end of February, she said, while a new travel, hospitality and hosting policy in place since last October acts on many of Saher’s recommendations.
Horne said travel and accommodation tabs are a normal part of doing business, but AHS must account for each public dollar it spends.
“Alberta Health Services is putting safeguards in place that will make sure expense and travel claims are appropriate and handled with a high level of transparency and accountability,” he said.
Saher’s report looked at 256 expense claims, 213 monthly purchasing card statements and 142 travel invoices.
It found that board and senior staff claims amounted to less than one per cent of the $100 million.
The person with the highest total dollar amount was reimbursed for more than $150,000 of expenses, including conference fees and travel expenses for other staff. Saher didn’t name the employee, saying only the staff member wasn’t the CEO or a senior executive.