Nova Scotia's auditor general was answering more questions on Wednesday about his report on the IWK's financial management.
A day after he delivered his report and took questions from the media, auditor general Michael Pickup appeared before the public accounts committee so MLAs could query him on how the children’s hospital that serves the Maritimes was able to manage its books so poorly.
“I think it did start at the top,” Pickup said in reference to the IWK’s board of directors.
Progressive Conservative MLA Tim Halman is one of the opposition members on the committee.
“Do you think it's fair for the minister and the premier to indicate that they have full confidence in the board, when we know since 2014 that there were major issues that needed to be addressed?” Halman asked Pickup.
“I know nothing in terms of reporting to ministers or others in terms of the state of controls,” Pickup said. “That doesn't surprise me, because I'm not sure the board themselves were aware of the state of internal controls.”
His audit found a troubling trend of weak financial oversight at the IWK.
The hospital’s board, he says, wasn't carrying out the proper checks and balances on payroll, human resources, and procurement.
The IWK board oversees a $300 million-a-year budget and its members are volunteers. Two are appointed by government, but everyone else is elected by a board sub-committee that determines the skills that are required and then that person's name goes to the entire board for approval.
This includes volunteers from P.E.I. and New Brunswick as well.
“If you sign up to be a board member, and you're going to be a board member, you know what you're facing,” Pickup said.
There are now calls for formal training so board members know and understand what they’re getting into.
Hutt says the board made the mistake of placing too much trust in the leadership.
“I can't discard the importance of the relationship of trust that exists between any board and its senior leaders,” said Hutt, who is Nova Scotia Power’s president and chief executive officer. “You ask a question, you get an answer, we have a bias to believe that we're getting the truth, and we're now understanding that that wasn't always the case.”
Hutt says things are changing. New policies deal with fraud and fraud risk assessment.
IWK Foundation president Jennifer Gillivan assures their oversight is completely separate from the hospital’s.
“A huge thank you to all our donors who stood by us and who are standing by us right now,” Gillivan said. “They can be confident we do manage our money separately and we have very strict policies and processes.”
Pickup will do the IWK's financial audit next year -- something he calls a high-risk audit.
“I think frankly they have a lot of work to be done,” Pickup said.
In the 2016/17 fiscal year, New Brunswick paid over $15 million for services provided by the IWK.
Nova Scotia Health Minister Randy Delorey wasn't available to answer further questions on this,
Former board chairs Phil Otto and Robert Hanf have also not responded to requests for comment.
On Thursday, Dec. 20, former CEO Tracy Kitch and former chief financial officer Stephen D’Arcy are expected to appear in Halifax Provincial Court to answer to the charges against them.
With files from CTV Atlantic’s Laura Brown.
