Two former IWK Health Centre executives charged in financial mismanagement investigation

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WATCH: Two of the former top executives of the region's largest children's hospital have been charged with fraud and breach of trust, more than a year after an expense scandal rocked the IWK. Alicia Draus reports – Oct 23, 2018

Two former executives of the IWK Health Centre in Halifax have been charged in a financial mismanagement investigation.

Halifax Regional police say Tracy Kitch, 57, of Oakville, Ont., and Stephen D’Arcy, 55, of Toronto were arrested in Ontario Tuesday morning.

The IWK board of directors filed a complaint with Halifax Regional Police on Sept. 20, 2017, and the investigation was taken over by the financial crime unit of the Integrated Criminal Investigation Division.

READ MORE: IWK CFO Stephen D’Arcy resigns in wake of expense scandal

Kitch, who resigned from her role as CEO of the children’s hospital in August 2017, is charged with fraud over $5,000 and breach of trust.

D’Arcy, the former CFO, faces charges of breach of trust, unauthorized use of a computer and mischief to data.

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READ MORE: Halifax police receive official complaint of financial mismanagement at IWK

The investigation was launched after it was revealed Kitch had charged $47,273.32 in personal expenses on her corporate credit card.

A file photo of Tracy Kitch at a speaking event. File/ Global News

An independent report revealed charges included $26,463.80 for flight pass usage, $4,636.55 for mobile data overages, $4,474.34 for taxis, $1,580.31 for hotel-related costs, $394.75 for meals, and $161.40 in iTunes charges.

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In the wake of the findings of the independent report, D’Arcy was put on paid leave in September 2017. He would later resign.

A photo of Stephen D’Arcy. IWK Health Centre

The IWK said in October 2017 it was set to file a legal claim against Kitch for the remaining funds it was owed. The IWK would later confirm Kitch had reimbursed the hospital fully.

In a statement Tuesday, IWK board of directors chair Karen Hutt said they are “pleased” with the development.

“One year ago the IWK board of directors asked Halifax Regional Police to investigate the matter of past CEO Tracy Kitch’s travel and hospitality expenses in relation to the findings of the board-commissioned Grant Thornton audit report,” she wrote.

“We have just been informed that Halifax Regional Police have laid criminal charges against former CEO Tracy Kitch and former CFO Stephen D’Arcy. We are pleased this matter is moving forward. As it is now before the courts we will not be commenting further.”

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Nova Scotia Auditor General Michael Pickup is currently working on an audit of the IWK Health Centre’s finances, as a result of the scandal. That report is expected Dec. 11.

Kitch and D’Arcy are both scheduled to appear in Halifax Provincial Court on Dec. 20.

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