Province's confidence in IWK board unshaken despite expense probe
Jean Laroche | CBC News | Posted: September 14, 2017 7:34 PM | Last Updated: September 14, 2017
Hospital claws back more than $11K to pay down former CEO Tracy Kitch's debt
Nova Scotia Premier Stephen McNeil and his Minister of Health, Randy Delorey, are both standing behind members of the IWK Health Centre's board of directors, despite the fact that the province's auditor general is assessing the board's practices.
A CBC News investigation earlier this summer revealed the former CEO of the children's hospital claimed thousands of dollars in personal expenses without proper scrutiny.
"We have very good people on that board who are managing large corporations," McNeil told reporters after meeting with his cabinet Thursday.
"I don't know all members of the board. I certainly know members of the board who have been working very hard and diligently to make sure that this institution, which has been the hallmark for Atlantic Canada in providing children's health and women's health, continues to be that way."
Nothing criminal, premier believes
That support extends to the ability of the board to manage the current situation, despite the fact that what the board did or didn't do is part of auditor general's assessment.
The board has also engaged the province's internal audit centre to help create an internal audit program at the hospital.
Former IWK CEO Tracy Kitch charged personal expenses to her corporate credit card unnoticed for years.
Those charges included $26,000 for air travel, $4,600 for overusing data on her mobile device, $4,400 for taxis, $2,600 for relocation costs, $1,900 for car rentals and $1,500 for hotel and related costs. The personal expenses date from October 2014 to June 30 of this year.
Still owes money
An independent report prepared for the board by Grant Thornton showed Kitch still owed $22,000 of the $47,000 in charges deemed potentially personal.
On Thursday, a hospital spokesperson said the outstanding amount has gone down.
"I can confirm that $11,677.45 was recovered by the health centre today through deductions from the former CEO's accrued vacation pay," Nick Cox said in an email.
"As mentioned, the board expects the balance owed by the end of the month."
McNeil was critical of some of that spending.
"It's pretty clear that some of them were inappropriate and I don't think there was anything criminally wrong.
"From what I've seen so far, what I've read, I don't see that," he said when pressed by a reporter about what has led him to that conclusion. "That's my opinion on that, but we'll see. If there is, I'm sure someone will deal with it."
As for the board of directors, McNeil had nothing but praise.
"These are very competent people who have stepped up in a public way to support an institution that matters to this province and to this region and if there are changes that are required I have all the confidence in them to make those changes."
Health Minister responds
Randy Delorey echoed that support.
"The situation and the way that the board and the chair … have been handling the situation has been appropriate."
Asked repeatedly for his assessment of what went wrong, Delorey consistently steered the conversation away from the past, instead focusing on the board's reaction once CBC News broke the story.
"The chair and board stepped in to take ownership and direct control over it," he said. "They reached out to an independent audit firm to come in and conduct that review of that situation."
Independent audit
That report by the accounting firm Grant Thornton showed Kitch billed a total of $47,000 in expenses deemed to be personal during her time as CEO.
The review also highlighted that Kitch's record-keeping lacked detail. For example, 10 of 31 credit card expense claims she submitted had no documented evidence of board chair approval.
More than half — 17 of 31 — credit card expense reports prepared were not signed by the CEO, and Kitch did not sign two of the seven expense claims either.
On top of that, auditors reported the board did not approve all of the CEO's expenses, which it is supposed to do.
Board members in part to blame
Opposition party members suggested board members bear some of the blame for improper oversight.
"Look, who is running the store here?" PC Leader Jamie Baillie asked rhetorically. "Nova Scotians need to hear their Minister of Health say that this bothers him, that he's upset, that he will get to the bottom of it. But he is not doing that. He is passing the buck."
New Democrat MLA Tammy Martin called it a "spending scandal" and said the Minister of Health should be looking at who might be responsible for the misuse of funds.
"Oh dear Lord, of course somebody should be held accountable!" said the Cape Breton Centre representative. "This is taxpayers' money."
Asked if what has happened has shaken the public's confidence in the IWK, Premier Stephen McNeil said he hoped not.
"I don't believe so, but time will tell," said McNeil. "That's one of my concerns."
This is the first time since the CEO resigned last month that McNeil and Delorey have made themselves available to answer questions about the situation.