Health P.E.I. pays special attention to executive salary levels in developing new leadership model

Health P.E.I. is working to rebuild public trust as it develops a new senior leadership model that includes new executive salary levels, the agency's CEO told MLAs on the province's public accounts committee Tuesday.

This comes after the province's auditor general found a number of senior executives were being paid at levels never approved by the province's Treasury Board, the board of Health P.E.I. or the minister of health and wellness.

The AG's report found five senior executives were being paid tens of thousands of dollars more than they should have been, based on salary classification levels set by the P.E.I. Public Service Commission.

Three other executives were working in roles where no classification level had been set.

Speaking before the committee, Health P.E.I. CEO Melanie Fraser said internal controls were bypassed with executives signing off on each other's salaries, but that "the executives who were responsible for circumventing the rules are no longer with the organization."

And she said a new executive leadership structure — with salary levels approved by government — would be in place by the start of the new fiscal year on April 1.

"We will reasonably benchmark our salaries to local comparators and to compensation that's developed and approved with government," Fraser said.

"It's important to me that we rebuild the public's trust. These events result in a loss of public trust."

Fraser's predecessor, Dr. Michael Gardam, was CEO during the time period that was the subject of the auditor general's investigation. Gardam told CBC News when the report was released that if he hadn't increased salaries for the positions in question, he would have risked losing staff to other provinces.

Fraser said Health P.E.I. is currently in a transition phase and has brought in several interim executives while finalizing its new leadership structure.

"Once that's approved, we have made the commitment to openly and transparently recruit into each executive position for Health P.E.I.," Fraser told the committee.

She said that recruitment would happen early in the new fiscal year.

Changing the culture

Since the report was released, Fraser said, Health P.E.I. has been working to implement all of the auditor general's recommendations.

One of them is that Health P.E.I. should seek approval from the health minister and Treasury Board for future employment contracts. This is the process she plans to follow in recruiting for the new executive positions.

Fraser said the agency has also been working to strengthen accountability and transparency. One of the main goals is to create a culture where employees feel comfortable reporting concerns without fear of repercussions.

"We spend a lot of time training and teaching people about just culture, but at the end of the day we had a small number of executives that behaved inappropriately under this circumstance related to their own compensation," she said.

"What I'm trying to do is create a culture of accountability and transparency, and that takes time. So we have our internal controls, we have our governance, but this boils down to culture."

Diane Griffin, chair of Health P.E.I.'s board, also spoke to the committee. The board receives regular operational reports from the CEO.

Griffin said since Fraser took over as CEO, communication and transparency has "improved radically" between the board and executive leadership, as well as with other stakeholders.

"Now we have good collaboration with the department, better collaboration than ever before with the medical society and other unions that are involved, and that has to do with the CEO and the tune that she presents of collaboration," Griffin said.

Other salary irregularities found

During the course of the audit, Fraser said additional payroll irregularities were detected beyond those already flagged by the auditor general.

"I immediately contacted the auditor general to request his assistance... undertaking a review of those irregularities, and that field work is underway right now," she said.

Fraser said Health P.E.I. is committed to completing all of the recommendations in the auditor general's report by the end of the fiscal year.