Minister says audit reveals irregularities
AMHERST – Nova Scotia’s rural and economic development minister feels his government has no choice but to call on the RCMP to investigate the financial affairs of Cumberland County’s former development agency.
“As a means to be accountable Nova Scotians and in light of the fact the audit does identify some irregularities and raises some question about improper accounting procedures we though it would be, as part of our due diligence and being responsible, to refer the matter to the RCMP and leave to their investigation to determine if any further action needs to be taken,” Michel Samson said in an interview Thursday with the Amherst News.
Samson said he doesn’t want to speculate about whether charges will come out of the RCMP investigation, adding he will leave it up to them to make those decisions. He said the file was just handed over to the police and it will take some time for the investigation to be completed.
“It is going to be significant task for them and it may take a bit of time before that’s completed,” the minister said.
Samson’s comments come as auditors PricewaterhouseCoopers have completed their independent forensic examination of the Cumberland Regional Development Authority’s financial transactions between 2007-08 and 2011-12.
The auditors found gaps in controls and governance at CRDA and the Department of Economic Development Tourism during the four-year period examined. Samson said he’s disappointed in the report’s findings and said government has already begun making changes to ensure they don’t happen again.
The 700-page report contains the firm's findings and recommendations for improving the authority's governance, financial oversight and project management, processes at the department level, and the evolution from regional development authorities to regional enterprise networks.
The forensic examination was one of the recommendations of a report on the regional development authority from the Office of the Ombudsman in August 2012.
The ombudsman, Dwight Bishop, investigated the development authority after receiving complaints from two former employees who claimed they were dismissed after disclosing concerns to the board about alleged wrongdoings that were taking place.
Bishop found questionable accounting practices were taking place with a lack of oversight at the development agency. His findings appear to be backed up by the forensic examination.
“It’s disappointing anytime that you see the use of public funds may not have been done in an appropriate or accountable fashion and I’m looking forward to implementing some of the changes that were identified in the report,” the minister said. “Knowing CRDA no longer exists, our department knows it has taken great strides in assuring accountability for taxpayers and our government has initiated numerous changes as well.”
With the creation of new regional enterprise networks, Samson said the lessons learned from CRDA and other development agencies will be put in place. For one, the minister said, the new RENs will require an independent, accredited firm to audit their financial statements and as a condition of project funding all projects will have to have separate bank accounts.
“There will be regular financial reports given to their boards and the province of Nova Scotia and the board of governors of these organizations will be receiving governance training on a regular basis,” Samson said. “The terms of reference and responsibilities will be provided in writing and approved annually by the board. There’s no question we have learned from these instances and we’re going to put every safeguard possible in place with these regional enterprise networks to ensure there is proper transparency and accountability for taxpayers’ dollars.”
Now that the forensic examination has been completed, the minister said the development authority will officially be wound down. The minister is not sure what creditors there are remaining, but added all the other development agencies have had their affairs completed.