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Alberta

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

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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

Calfrac Well Services reports Q4 profit due to debt settlement gain

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CALGARY — Calfrac Well Services Ltd. reported a fourth-quarter profit of $125.9 million, boosted by a gain on the settlement of debt.

The oilfield services company says the profit for the quarter ended Dec. 31 amounted to $2.19 per diluted share.

The result included a $226.3-million gain on the settlement of debt and a $54.2-million deferred income tax expense.

Calfrac posted a net loss of $49.4 million or $17.07 per share diluted in the fourth quarter of 2019 when it had fewer shares outstanding.

Revenue totalled $180.7 million, down from $317.1 million a year earlier.

Calfrac underwent a recapitalization plan late last year that saw holders of its senior unsecured notes swap debt for shares, leaving existing shareholders with a reduced stake in the company.

This report by The Canadian Press was first published March 4, 2021.

Companies in this story: (TSX:CFW)

The Canadian Press

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Alberta

Alberta pastor charged with breaking COVID-19 health orders to appeal bail conditions

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EDMONTON — An Alberta pastor accused of holding Sunday services that violated COVID-19 rules is to appeal his bail conditions today.

James Coates with GraceLife Church, west of Edmonton, has been in jail for just over two weeks.

Coates is charged with violating Alberta’s Public Health Act and with breaking a promise to abide by conditions of his bail release, which is a Criminal Code offence.

The church has been holding services that officials say break public-health orders on attendance, masking and distancing.

A judge has ordered Coates to go to trial in May.

A lawyer with the Justice Centre for Constitutional Freedoms is representing the pastor.

The group says the lawyer will argue that his client’s imprisonment and the charge he faces violate his charter freedoms of conscience, religion, association and peaceful assembly.

The judge is also to hear a statement from Coates’s wife about the effect the pastor’s imprisonment has had on his family and community members.

“Charter freedoms do not disappear because the government declares regular church services to be outlawed, while allowing hundreds of people to fill their local Walmarts,” Justice Centre president John Carpay said in a statement.

“Pastor Coates is a peaceful Christian minister. The justice of the peace should not have required him to violate his conscience and effectively stop pastoring his church as a condition to be released. This is a miscarriage of justice.”

The church has continued to hold services, even though Coates is in jail. Many gathered again on the weekend as RCMP and Alberta Health Services monitored the situation.

“Observations were again made that the church held a service beyond the designated capacity,” the Mounties said in a news release.

“The Parkland RCMP remain engaged in continued consultations with several partner agencies to determine the most productive course of action in relation to the church.”

Police fined the church $1,200 in December and a closure order was issued in January.

Coates had been addressing the province’s health restrictions in his sermons. He told worshippers that governments exist as instruments of God and there should be unfettered freedom of worship.

This report by The Canadian Press was first published March 4, 2021

Fakiha Baig, The Canadian Press

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