P.E.I. auditor general's office raises multiple issues with mental health non-profit

The Office of the Auditor General of P.E.I. is raising multiple red flags around the operation of a non-profit organization set up to distribute millions of dollars in provincially funded mental health grants.

The P.E.I. Alliance for Mental Well-Being was announced by the Dennis King government in its 2021 throne speech.

The organization launched later that year with an annual operating budget of $1 million. It has since doled out millions more in community grants, all funded by the P.E.I. Department of Health and Wellness. 

The alliance was established to help the provincial government promote the mental health of Islanders, states a report from the auditor general's office released Tuesday. 

"Grant funding was provided through taxpayer dollars, so it is important for government to ensure the public funds were used as intended," it reads. 

In the report, the office of the auditor general said that as of the end of the 2022-23 fiscal year, the alliance had amassed a surplus of $569,000 in government funding that hadn't been awarded to grant applicants, with no requirement that the organization return the money, or that it be deducted from future funding cycles. 

Despite the surplus, the Department of Health asked for and received an extra $500,000 in funding for the alliance from the P.E.I. Treasury Board in March 2023, saying the money was needed to respond to a high volume of funding applications.

The report said the agreement with the province for the extra funding didn't specify whether the money should go toward grants or operational expenses.

Unclear why some projects turned down

According to the report, the alliance awarded 46 grants worth $5.4 million through its first three funding cycles, while turning down 67 applications worth $12.7 million.

The report found some applications that scored highly in assessments and qualified for funding were turned down, and that those applications were not included in the lists of funding-ready projects provided to the alliance's board for approval.

The list provided to the board in early 2023 contained only nine of 31 funding-ready projects, and the report said there was no rationale documented as to why the other 22 projects were excluded.

Conflicts of interest

The report also highlighted the lack of policy to identify conflicts of interest among staff, and said it identified two cases where board members should have declared potential conflicts and removed themselves from grant decisions, but no conflicts were documented.

In one case, a grant was awarded to an organization of which a member of the board was a founder, but no longer an active volunteer.

In another case, the alliance provided a grant to an organization whose board included the spouse of a member of the alliance's board.

"We're all from P.E.I. It's a small area, everyone knows everyone. It's especially important that when you're giving out money that's fully funded by taxpayers that you are not having undue influence on where that money goes," said Sheri Griffin, the assistant auditor general.   

She said the office is not suggesting that's what happened, but those processes need to be in place to safeguard against the possibility. 

Not enough documentation

The report also raised issues with a lack of documentation from both the alliance and the Department of Health and Wellness. 

The report found the government did not have performance indicators in place to be able to evaluate the effectiveness of the funding provided.

It also found the alliance lacked documentation to show whether groups that received funding used the money for eligible expenses, or returned unspent funds. 

The department could also not show documentation that any of the progress reports it received from the alliance were reviewed. 

Department and alliance respond

The report made four recommendations to the Department of Health and Wellness, all of which the department agreed with in its response. 

The recommendations — including documenting reviews of the alliance's progress reports and adding a clause about what to do with unused funds — will be in place for the next funding agreement, the department said.

The report also made 13 recommendations to the alliance. In its response, the alliance stated that all but three of those recommendations have already been put into place following discussions with the auditor general's office.

The remaining three recommendations deal with conflict-of-interest issues. The alliance said that it disagreed with the requirement for all employees, board members and peer reviewers to disclose their private interests in full. 

"Our approach aligns with standard practices for non-governmental organizations, focusing on the disclosure of specific conflicts rather than comprehensive private interests," the alliance stated in its response to the report. 

"This method maintains the privacy of our employees while ensuring that any relevant conflicts are transparently managed."

CBC reached out to the alliance and the Department of Health and Wellness requesting interviews, but none were provided in time for publication.