September 19, 2017 1:49 pm
Updated: September 19, 2017 6:12 pm

IWK expense scandal: N.S. auditor general to investigate, provide information to police

As the fallout to the IWK expense scandal continues, Nova Scotia’s auditor general says he’ll conduct financial and performance audits of the IWK’s book and practices. Marieke Walsh brings us the latest.


Nova Scotia’s auditor general says he’ll conduct financial and performance audits of the IWK’s book and practices.

Michael Pickup also said he’d turn over all the information his office has to police “for their consideration on any possible legal matters.”

The decision by Pickup comes in the wake of an ongoing expense scandal gripping one of Atlantic Canada’s premier hospitals.

Tracy Kitch, the IWK’s chief executive officer, has resigned and the hospital’s chief financial officer, Stephen D’Arcy, is now on paid leave after it was discovered by an independent audit that Kitch had billed the hospital $47,273.32 in personal expenses or for expenses that weren’t properly justified.

“I am gravely concerned with the ineffectiveness of financial controls and lack of rigour in financial management as publicly reported by the IWK in recent weeks,” said Pickup in a statement on Tuesday.

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READ MORE: In ongoing expense scandal, province comes to defence of IWK board

Last week, both Minister of Health Randy Delorey and Premier Stephen McNeil came to the defence of the IWK’s board, even as an independent audit by Grant Thornton showed it didn’t follow expense protocols when vetting and approving Kitch’s bills.

“These are very competent people who have stepped up in a public way,” McNeil said on Sept. 14. “If there are changes that are required I have all the confidence in them to make those changes.”

In an interview on Tuesday afternoon, Health Minister Randy Delorey said the news of the auditor general investigations and the information being referred to police shows “progress” is being made and he commended the board for taking action “when information came to their attention.”

“This board is doing exactly what we would expect of a board governing a public entity to do when they become aware of a situation like this,” he said.

But the opposition is calling on the government to do more. The Progressive Conservatives say the governing Liberals should appoint someone to oversee the board, and the NDP say the government needs to promise accountability once the investigations are complete.

WATCH: IWK Health Centre’s chief financial officer on paid leave after expense scandal

Karen Hutt, Chair of the IWK board, said that the board was previously advised that there wasn’t an appearance of criminal intent in Kitch’s expenses. But she said referring the case to the police was always an option.

“It’s a logical thing for us to be doing,” she said. “Its just one more way that we can get comfortable that we really have exhausted all possible options to make sure that we have the information that we need.”

Pickup says he expects that the audit will cover aspects of oversight, financial management and controls on expenditures. He said he hopes to have the audits done by the spring.

No one has asked board to resign: Board chair

Asked repeatedly whether anyone on the board should resign because of the expense scandal and the gaps in oversight, Hutt wouldn’t answer the question directly.

But she said no one has asked the board to resign. Pressed on whether she or past chair Bob Hanf should step down, she said the board is doing its best.

“Bob and any other chair was doing the best job that they could at the time, they were acting on a basis of trust that existed between the board and through management,” she said.

“We believe that the board is doing a very good job of reacting to a situation and we are working hard to make sure that this doesn’t happen again.”

Delorey said the specific actions by the board will be part of the auditor general’s review and the government will wait to see what information is brought to light from those audits. But he reiterated his confidence in the board’s chair and said he’s “satisfied with the steps that the board has been taking.”

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