Interior Health’s spending reined in

Interior Health has tightened spending controls, says the agency’s new chairman, after an internal audit revealed lax oversight of the board of directors’ expense claims.

Auditors found meals reimbursed without detailed receipts, and hotels and dinners that cost far more than allowed by policy, according to a report obtained by The Herald through a freedom of information request.

The probe examined $155,000 in compensation and $108,000 in expenses for the nine-person board of directors during the nine months ended Dec. 31, 2015.

“Overall, the majority of board compensation and expense payments tested complied with policy,” concluded the report, which nonetheless drew attention to a handful of “low risk” findings.

The first anomaly was mileage claims that were automatically generated based on directors’ home addresses and approved for payment without directors signing off as required by policy to confirm the travel actually took place.

“If the director was already in the city where the meeting will occur or on personal travel in another location, there is some risk they might be paid for travel that did not occur,” the report noted.

The second anomaly concerned costs for meals and hotels that exceeded what was allowed by policy.

The audit flagged 11 reimbursed hotel stays that averaged $275 per night, nearly double the $150 before taxes that was permitted without pre-approval.

It also highlighted a catered dinner event for 25 people that cost $54 a head before taxes and tip, more than the $50 allowed by policy for an entire day’s worth of meals while on IH business.

Finally, the audit team found 17 meal claims averaging $30 each had been approved without itemized receipts.

“Without an itemized receipt, it is not possible to confirm that expenses were compliant and, for example, did not include alcohol purchases,” the report stated.

Although the audit didn’t raise any concerns about directors’ pay, it did recommend they move to an hourly rate for attending board meetings.

At the time, they were paid for half a day if meetings ran less than four hours or a full day if they went longer.

“For example, a director attended five hours of meetings, but was paid a full day’s pay,” the report explained, noting that sticking to an hourly rate of $62.50 would have saved Interior Health $3,000 in just one month during the audit period.

That recommendation has since been put into practice, according to John O’Fee, a Kamloops lawyer who joined the board in July 2016 and became chairman three months later.

Directors have also “slightly revised” the board’s policy manual twice to comply with other recommendations, including requiring an itemized receipt for any purchase over $5, and are “taking steps” to reduce hotel costs.

“For example, IH board directors will be staying at a hotel near the airport for this year’s Union of B.C. Municipalities meetings in Vancouver, specifically to avoid the high cost of hotels downtown during this conference,” O’Fee said in a statement.

He went on to note the board ordered the audit to ensure it was using public funds responsibly, and has cut its own budget by 10 per cent over five years to $369,000 for 2017-18.

Interior Health’s board meetings are held five times annually in Kelowna and attended by directors from as far away as Williams Lake and Cranbrook.

Boards of all six B.C. health authorities are appointed by the provincial government.