Funding Irregularities Referred To RCMP, Canada

Main Category: Public Health
Article Date: 19 Aug 2007 - 2:00 PDT

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Health Canada released a summary audit report on the Anishinaabe Mino-Ayaawin (AMA), an incorporated organization created in 1997 to organize and deliver health services on behalf of seven Interlake communities in Manitoba.

In 2000, staff at Health Canada identified funding irregularities related to contribution agreements with AMA. As a result, Health Canada commenced an initial audit of the AMA. Concerns raised in the initial audit of the 1998 - 2001 period led to subsequent audits which covered the period of 2001 - 2005.

The audits questioned expenditures of $6.4 million of the total funding of $56.9 million that were spent on the delivery of health services during this period. $1.7 million was recovered through the audit process.

"We have referred the findings of these audits to the RCMP, and are pursuing civil action against AMA," said Health Minister Tony Clement. "This audit report indicates that in the past, Health Canada did not have sufficient financial controls in place on its contribution agreements with AMA. We have taken steps to correct this and are determined to use every available option at our disposal to recover any unjustified expenditure of public funds."

Throughout the extensive audit process, Health Canada's primary concern has been the uninterrupted provision of essential health services to a very vulnerable population. Agreements with AMA were terminated shortly after the audit reports were received in 2004; alternative health service provisions were put in place at the time of termination.

Upon becoming aware of funding irregularities with AMA, Health Canada took immediate action:

-- A full financial audit covering the period from 1998 to 2001 was ordered;
-- The results of the audit were referred to the RCMP;
-- A management review was launched, which led to the recovery of $1.7 million;
-- Civil action was launched against AMA, including a Pending Litigation Order (lien) against a building in Winnipeg;
-- Further audits of the period from 2001 to 2005 were undertaken.

Systemically, Health Canada has taken numerous steps to improve its management of contribution agreements. Standard contribution agreements have now been strengthened to ensure they are based on well-defined proposals with clear objectives and conditions, and impose stricter requirements with respect to accountability, bookkeeping and reporting.

"Canada's New Government continues to build a culture of accountability and strong management through the new Federal Accountability Act, while ensuring the department's health programs continue to provide necessary health services to First Nations and Inuit clients," said Minister Clement.

The summary report can be found on Health Canada's Web site.

http://www.hc-sc.gc.ca