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Alberta

Audit of supervised consumption site in Lethbridge uncovers $1.6 million unaccounted for

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6 minute read

From the Province of Alberta

ARCHES audit finds serious financial mismanagement

Senior executive made $342,943 in 2019

The province has released the audit of the ARCHES supervised consumption site in Lethbridge and as a result of its findings, will be ending its grant funding agreement with the organization.

The independent accounting firm Deloitte conducted a grant expenditure audit after the Alberta government learned of possible financial irregularities within the ARCHES organization.

The review substantiated allegations of asset and funding misappropriation, non-compliance with grant agreements, and inappropriate governance and organizational operations. The ARCHES organization was found to have seriously mismanaged taxpayer funds meant for the most vulnerable in our society.

“It is disturbing and extremely disappointing to me that taxpayer funds allocated to this organization in order to serve the most vulnerable in Lethbridge would be used for European conferences, expenses for retreats, entertainment and gift cards. Our government will not stand idly by while millions in taxpayer funds are missing or misappropriated.”

Jason Luan, Associate Minister of Mental Health and Addictions
Below is a summary of the audit’s findings:

$1,617,094 unaccounted for due to missing documentation for expenditures from 2017 to 2018.
$13,000 of interest off ARCHES bank accounts was used to fund parties, staff retreats, entertainment and gift cards.
A senior executive’s compensation totalled $342,943 for calendar year 2019. This includes $70,672 in overtime for fiscal year 2019-20. The grant agreement allows for a salary of $80,000.
The Everyone Comes Together (ECT) program staff salaries and benefits also exceeded the amount allocated by the grant agreement by $16,000.
The number of ARCHES employees is greater than allowed by the grant agreement. ARCHES maintained up to 126 employees. However, the exact number could not be verified.
$4,301 spent on European travel for management to attend a conference in Portugal.
Thousands of dollars in unverifiable travel expenses, including trips charged to company credit cards but not recorded in the ledger.
A senior executive’s family member was hired, earning $9,900. The auditors could not locate a resume or personnel file to verify any qualifications.
$7,557 for management retreats, including meals and mileage where documentation for spending was unclear.
The grant agreement requires the organization to maintain the funding received from Alberta Health within a separate bank account; however, the audit revealed that it was comingled with other funding sources. As a result of ARCHES comingling their accounts, the auditors could not verify thousands of dollars of expenses.
Proper personal conflict of interest declarations were not recorded when related individuals or vendors were hired or utilized.
Vendors were repeatedly secured in secrecy with a lack of transparency and accountability.
No petty cash reconciliations have been completed.
$1,129 was used to buy gift cards for board members for The Keg, iTunes, Boston Pizza, Earls, Gap, Shell, Chapters, Cineplex, Amazon, Starbuck’s, Tim Hortons, MasterCard, and Bath and Bodyworks. The expense was recorded as “Gift cards – Board Members.”
$2,100 was spent on gift cards to The Oil Changer – a business owned by a senior executive’s spouse.
$2,205 was spent on a television with no receipt documentation to support the purchase.
The auditors were unable to complete the grant expenditure review in respect to all allegations received or provide a complete financial value attributable to each allegation, due to the state of ARCHES’ records and the related outstanding documents.

Due to missing funds and unverifiable transactions, as well as allegations, which could not be investigated in the scope of this audit, government will consult with law enforcement to determine whether further investigation is warranted.

To ensure people struggling with addiction can continue to receive services, government has asked Alberta Health Services to set up a temporary mobile overdose prevention site in Lethbridge with the goal of seamlessly transitioning services. Government will also be adding three recovery coaches to the region to assist in expediting individuals into treatment.

Quick facts

ARCHES has received more than $14.4 million in taxpayer dollars over the past two years.
In June, government announced an additional $4 million over four years to expand access to the virtual opioid dependency program to allow Albertans to use telehealth technology to access treatment for opioid use disorder.
Also announced was the opioid agonist therapy gap coverage program to cover the costs of medications to treat opioid use disorder for Albertans waiting to receive coverage through a supplementary health benefit plan.
As part of the $140-million mental health and addiction commitment to create 4,000 spaces, government has announced additional treatment spaces at Poundmaker’s Lodge Treatment Centres, Sunrise Healing Lodge, Fresh Start Recovery Centre, Thorpe Recovery Centre, and the Blood Tribe Bringing the Spirit Home detox centre.

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Alberta

Alberta adds 700 enforcers to stop COVID-19 rule-breakers as hospitalizations climb

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CALGARY — Alberta is giving 700 more peace officers the power to enforce COVID-19 restrictions as hospitalizations for the virus continue to climb in the province. 

“We are not asking these officers to stop cold their day-to-day priorities or to harass responsible Albertans going about their everyday lives,” Justice Minister Kaycee Madu said Friday, as Alberta reported 1,227 new COVID-19 cases and nine more deaths. 

Police officers and health inspectors also have the ability to enforce the rules. 

Federal data shows that as of Friday, Alberta had the highest seven-day infection rate in Canada with 209 cases per 100,000 people. 

Alberta has 405 COVID-19 patients in hospital, including 86 in intensive care. A week ago, there were 55 patients in intensive care with COVID-19. 

Postponing surgeries is one of the ways the province is freeing up space to accommodate more people severely ill with the virus. 

New measures came into effect Friday to help blunt the spike in cases. Private indoor social gatherings are banned, capacity limits have been imposed on stores and students between grades 7 and 12 switch to remote learning on Monday. 

Fines for breaking the rules range from $1,000 to $100,000 in extreme cases that make it to court. 

When asked whether there would be crackdowns on anti-mask rallies, Madu said police will make independent decisions. 

“But as minister of justice, my expectation is that those who are in violation of the measures that we have put in place would have to be held accountable.”

Alberta’s chief medical officer of health, Dr. Deena Hinshaw, said she is disappointed to hear about Alberta Health Services inspectors being verbally abused. 

“Nobody deserves that, least of all the people who are working to keep all of us safe,” she said. 

This report by The Canadian Press was first published Nov. 27, 2020. 

Lauren Krugel, The Canadian Press

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Alberta

Growth investing needed as pandemic wanes, says former BoC governor David Dodge

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LAKE LOUISE, Alta. — Former Bank of Canada governor David Dodge says Canada must shift its attention to investing for economic growth as the world recovers from the COVID-19 pandemic downturn over the next few years.

In an online presentation at the virtual Bennett Jones Lake Louise World Cup Business Forum, the former central bank chief said Canadian governments and businesses will have to continue to borrow money in 2021 and 2022.

But he added borrowing of $400 billion to date this year for the federal government and $100 billion for the provinces — about 20 per cent of Canadian GDP — should be reduced going forward and directed to growth areas rather than “consumption,” as has been the case to date.

The business forum is normally held in Lake Louise, Alta., in conjunction with World Cup alpine ski races, but both the races and the in-person conference were called off this year because of the pandemic.

Dodge says he’s expecting about 3.9 per cent economic growth in Canada in 2021, assuming vaccines are widely available after the second quarter, and 1.9 per cent in 2022. 

He says the pace of growth should return to 2019 levels by the spring of 2022, but national output will still be three per cent lower than it would have been without COVID-19.

Dodge said a key challenge for Canada going forward is to continue to develop its technology expertise to compete with the growing influence of China.

“COVID has accelerated the transformation to a truly digital world and to Asia as it’s epicentre,” he said.

“Canada can thrive in this world as long as Canadian businesses, workers and governments work together and focus on investing in the future, not in preserving the past.”

This report by The Canadian Press was first published Nov. 27, 2020.

The Canadian Press

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