Oversight

IWK officials questioned on financial control policies

Board chair and new CEO say hospital’s control over expenses and management has improved

IWK Health Centre executives say they are addressing internal problems following a financial scandal involving two former executives.

Board chair Karen Hutt and new CEO Krista Jangaard were questioned by the standing committee on public accounts Wednesday. MLAs wanted answers on what the pair was doing to fix what the auditor general called a “poor IWK board performance.”

Last fall, former CEO Tracy Kitch was charged with fraud and breach of trust. Meanwhile, former chief financial officer Stephen D’Arcy was charged with breach of trust, unauthorized use of a computer and mischief to data.

PC MLA Tim Halman expressed doubts throughout Wednesday’s meeting.

“Why should Nova Scotians believe an organization that failed should be capable of fixing these issues themselves?” he said. He also suggested later in the meeting that IWK’s board neglected to act quickly enough due to “group think.”

“The reality is we weren’t without policies,” Hutt said in response. “We’re now in a position where we look back at that and we say, ‘was it sufficient?’ It certainly wasn’t.”

An investigative report by CBC News in 2017 raised questions about Kitch’s spending. Later, an independent investigation by accounting firm Grant Thornton revealed Kitch billed up to $47,000 of potentially personal expenses to the hospital.

In his report from December, Auditor General Michael Pickup criticized how IWK oversaw its finances. He found they lacked adequate documentation and transaction approval, as well as proper policies on fraud and hospitality. Several recommendations were made, including updating the board’s governance policy and creating clear internal expense policies.

Hutt said the hospital has improved transparency regarding company expenses, reworked their risk management framework and added a new whistleblower line that can be used by both staff and non-personnel.

Most of the Pickup report’s recommendations will be met by March, she said. The remaining one — the ongoing observation of how the new internal controls are performing — should be complete by early next year.

“It’s remarkable where we are,” said Hutt, regarding collaborating with the auditor general team to resolve the problems. “We never, ever want to deal with this again.”

Jangaard also told the committee that IWK employees remain committed and services remain effective.

“What has happened every single day throughout this entire thing is that our physicians, our nurses have come to work every single day and doing the very best job they can for patients,” said Jangaard. “They are also heavily invested on how they can do that work better.”

Amanda Whitewood, the IWK’s chief operating officer, was not at the meeting because of illness. The committee agreed to continue the discussion with her at a later date.