IWK Health Centre’s chief financial officer on paid leave in wake of expense scandal

A photo of Stephen D'Arcy who is now on paid leave as part of a decision by the IWK's board of directors. IWK Health Centre

The IWK Health Centre’s chief financial officer (CFO) is now on a paid leave of absence in the wake of the findings of an independent report detailing that the organization’s former president and CEO Tracy Kitch, owes more than $22,000 in “potentially personal” expenses.

The leave of absence, a joint decision by CFO Stephen D’Arcy and the organization’s board of directors, was made public on Monday along with a number of updates regarding the IWK’s plans going forward.

READ MORE: President and CEO of IWK Health Centre in Halifax leaving organization

“We take very seriously the trust placed in us as we oversee this organization,” wrote Karen Hutt, chair of the IWK Board of Directors, in a press release on Monday.

“We have begun to implement the review’s recommendations and I want to reaffirm a pledge I made a few weeks ago; that we will go beyond this report and take whatever steps are needed to ensure all policies and procedures regarding the IWK’s financial systems and management oversight are both effective and in full compliance.”

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Among the details released, the board has announced that they have reached out to the province’s auditor general to see if he can independently assess whether his office should perform an audit of their business practices.

The IWK board also announced that they are now undertaking a fraud assessment and contacted the provincial Internal Audit Centre so they can conduct an internal audit of the IWK.

Organizations respond

Jennifer Gillivan, CEO of the IWK Foundation, said in a statement that the organization has confidence in the work of the IWK Health Centre Board.

“The Maritime community can be confident that their donations to the IWK Foundation support the most urgent care priorities of the IWK, not the day to day operations of the Health Centre,” wrote Gillivan.

“Those urgent care priorities include equipment, programs, research… and the IWK Kids’ Rehabilitation Centre.”

Randy Delorey, Minister of Health, declined to be interviewed for this story but in an emailed statement said he remained confident in the IWK board.

“The Board has completed an independent audit of the CEO’s expenses and is now embarking on an external review of broader financial controls. The Board’s actions to date show it is taking this issue seriously and that it is committed to improving financial controls and practices,” said Delorey.

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The Nova Scotia NDP issued a response on Monday to what they call an ongoing expense scandal.

“The thousands of Nova Scotians who are waiting for family doctors, facing long waitlists for mental health, or worried about local services closing, are already losing faith in the management of our health care system,” wrote Tammy Martin, the NDP Health and Wellness spokesperson.

“With the CFO of the IWK going on paid leave, and the Board of Directors reaching out to the Auditor General for further investigations, what is the Minister of Health doing to ensure our health care system is not mismanaged?”

Insufficient support for expenses

Kitch resigned Aug. 23 for what the chairwoman of the hospital’s board described as personal reasons.

The review of Kitch’s expenses was ordered by the IWK Health Centre’s board of directors because of apparent discrepancies.

The review by Grant Thornton covers expenses reported between August 2014 – when she started at the IWK after a stint as an executive vice-president at Toronto’s Mount Sinai Hospital – and June 2017.

READ MORE: Former CEO of Halifax children’s hospital still owes more than $22,000: report

The accounting firm said its review of corporate credit card transactions, expense claims, and other costs identified $47,273.32 of potentially personal expenses, of which $25,009.28 has been reimbursed.

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“In many instances, the support for these expenses was not sufficient for us to determine the business reason, or appropriate approval may not have been documented,” the report said.

It said there were “significant delays” in the submission of claims, which limited the hospital’s ability to identify potential issues.

The IWK declined to provide an interview to Global News citing that the issue is a “board matter.”

— With files from The Canadian Press

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