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Home > News & Events > News Releases > News Release Archive > 2012 News Releases > Board Chair Stephen Lockwood addresses executive expenses

Board Chair Stephen Lockwood addresses executive expenses

September 13, 2012

GRANDE PRAIRIE – There has been a great deal of rumour and speculation in recent weeks about what is and is not being reviewed with respect to executive expenses. After discussions with our Board yesterday and earlier today I would like to now clear the air.

First, as requested by Health Minister Fred Horne, an external audit firm has been contracted by Alberta Health Services to conduct an independent audit of executive travel expenses and related expense for the years 2005 through 2008, claimed by Mr. Merali, a former CFO of Capital Health.

The audit will determine if those expenses were in compliance with the policies of Capital Health in place at the time. Minister Horne has requested the report be made public when it is complete, and it will be.

Second, we have received a number of requests for information under the Freedom of Information and Protection of Privacy Act and we will make that information publicly available as contemplated by the Act, and within the timelines required under the Act.

This information will be made available on AHS' website.

Third, our CEO Dr. Chris Eagle, and our executives currently serving at Alberta Health Services who report to Dr. Eagle, and who were employed in the former Calgary Health Region, have requested, and the Board has agreed to, an internal audit of their expenses from 2005 through 2008.

That is the same timeframe as the independent audit. They have asked that the report be made public. The Board accepted and welcomes that request. The audit will answer the question, were their expenses within policy?

In their words, our Executive leaders have told us they want to live up to the AHS value of transparency, and to assure patients and staff of AHS that our leadership's integrity – and in turn the integrity of AHS – is not in question.

This is extremely important to our leaders, to me personally, and to our Board. Speculation and innuendo is unfair, we believe it is unwarranted, and it is undermining confidence in our health system. The records will be reviewed and the report publicly released.

Our leaders have the Board’s unqualified support and we recognize and respect their concerns.

Fourth, beyond the actions I have described, Alberta Health Services does not contemplate hiring auditors to expand or extend reviews into other former Regions or other health entities. In light of rapidly rising costs, we are not prepared at this time to expand the scope of this work or leave it open-ended.

Let me put this into perspective. For the current external audit, and the first few weeks of responding to the numerous FOIPP requests alone, we have spent over $200,000 and that figure is climbing. (To put that in context, that’s equivalent to 14 hip surgeries.)

The final cost will exceed that amount and those dollars will be lost to health care forever.

We will, of course, respond to all requests under FOIPP. But we will not redirect health dollars to reviewing any further expense claims in organizations that no longer exist.

The question is this: What is most important to Albertans? In my opinion, it is to use taxpayers’ health dollars to improve health care today.

There is no benefit to health care today in expanding the assessment of policies that are no longer applicable. There is no action we can take to recover those expenses.

For that reason, when the records that have been requested are released in accordance with the Act, we will not be commenting.

We can and will, however, talk about what our Board is doing with respect to Alberta Health Services here and now, which is our responsibility.

We can, and have, taken action. Which brings us to today’s Board meeting.

Effective today, we have adopted the province’s new travel and expense policy. We will begin communicating with our staff and physicians today, the first stage in our adoption of an expanded expense policy at Alberta Health Services.

AHS executive expenses will be posted online monthly, again using the new travel and expense protocols announced by Premier Redford last week.

We will post all expense records for Board members, Executive members, and the direct reports to Executives.

The Board will annually review and publish the total expenses of executives as part of its annual review of financial statements.

And we will build into the current expense reporting process a series of thresholds that automatically trigger reviews.

We have a good policy today, but it can be better.

The bottom line is that whether it’s $1 or $100 dollars, all leaders are accountable, they will be held accountable, and they are expected to track every health dollar used for expenses.

Those actions are immediate.

And finally, I am here today to personally apologize to all of the residents of this great province for monies that may have been spent by any predecessor organization of AHS on expenses not related to health care in Alberta.

For any of you surprised don't be. I accepted the position of Chair of AHS and that comes with responsibility. I believe this is my time to stand up and be accountable.

I believe, as a public official in health care, that Albertans expect accountability, and that they want it to come from those of us directly involved in health care.

Although we and our organization are in no way responsible for the actions of our predecessors, we are responsible today for ensuring the public trust, and I am genuinely sorry that we are at the point where we must rebuild that trust.

I apologize without hesitation, because I recognize that the public expects us to take that step and to move forward.

We have much to be proud of and we have good leaders who care deeply about our health delivery system. I intend in my time as Chair to bring closure to past events and to move forward. That starts right now.

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