Statement from Board Chair Stephen Lockwood on executive expenses
December 13, 2012
EDMONTON – As I indicated earlier this year, information related to expense claims in the former health regions and those of current Alberta Health Services (AHS) executives is being made available either through previously approved audits or requests under the Freedom of Information and Protection of Privacy Act (FOIPP).
On December 3, AHS began publicly posting expense reports for executives and Board members. They are now being posted monthly and include the expense reports for members of the AHS Board, the President and CEO, direct reports to the CEO, senior staff members at the Senior Vice President level and above, as well as Zone Medical Directors, Chief Medical Officers, the Ethics and Compliance Officer, the Chief Audit Executive, and the Chief of Staff.
On October 15, AHS implemented a new, comprehensive travel, hospitality and hosting policy, which adopted the provincial government policy released earlier this year. Yesterday, the AHS Board received the Ernst &Young external audit of expenses claimed by former Capital Health Chief Financial Officer Allaudin Merali, and an internal audit, conducted at the request of four Alberta Health Services executives who were, at that time, executives with the former Calgary Health Region. The Ernst & Young audit was done at the direction of Health Minister Fred Horne and the internal audit was done at the request of the executives involved to clear the air and to address any outstanding questions.
The internal audit of the four AHS executives found that the policies and practices of the former Region were not always clear and the auditor classified $5,100, or 2.2 per cent of a total of $234,948 in expenses claimed over the four-year period, as non-compliant with policy.
The number and type of the non-compliant expenses leads me to believe that these claims were inadvertent and unintentional.
I have reviewed all of the expense claims classified as non-compliant with each of these executives. Those I was uncomfortable with have been or will be reimbursed. The balance I am satisfied were appropriate.
The individual amounts and the types of expenses claimed suggest that policies and practices at the time should have been tighter and clearer, but that the individuals concerned filed expense claims with the information they had available following the standards and expectations of the time.
I would be concerned if I thought these expense claims were more than oversights or clerical mistakes. Consequently, in my mind, the integrity of these executives is not in question.
Expenses where compliance was not determinable may well have been reasonable and appropriate at the time. I cannot speculate on the policies, practices and decisions of the former Regions. What I can say is that what may or may not have been acceptable then is not necessarily acceptable today. That is simply an observation that standards and expectations have changed and that AHS is expected to meet the highest standards today.
I will not be commenting on the external audit conducted by Ernst & Young. AHS today is not accountable for decisions made before Alberta Health Services was created. That said, going forward, I anticipate that AHS processes may in the future need to be even more clear and standardized as we continue to fine-tune our policies and processes. We will look to the Auditor General for guidance and act accordingly.
External audit of the expense claims of former Capital Health CFO Allaudin Merali As I indicated, I will not comment on the Ernst & Young external audit. However, I can address three issues raised in the Ernst & Young report concerning Alberta Health Services.
I am advised that the reasons for the discrepancies in amounts reported ($368,819 as contrasted with $346,208 reported by AHS in August in responding to an earlier FOIPP request) are likely related to the double counting of expenses or addition errors in the initial release, combined with the fact that the scope of the review conducted by Ernst & Young was broader than the scope of the FOIPP request, and therefore included expenses that were not included in the earlier FOIPP release. Additional records were found or provided by Mr. Merali during Ernst & Young’s review. No records that were responsive to the FOIPP request were withheld.
We have asked Mr. Merali for permission to release the additional expenses he provided to the external auditors and that permission has been provided. We will be releasing these records as soon as possible.
With respect to locating the policies of the former Regions, those detailed policies are no longer readily available because Capital Health no longer exists. AHS has not kept detailed records of the policies of the former Regions. This makes determining what happened in the past more difficult.
As I have said from the outset, when I became Chair of the Alberta Health Services Board in September this year, our priority and responsibility is for health care in Alberta today and the future, which will remain our focus. I believe that’s what Albertans want, need and expect.
- News Release
- Internal and External Expense Audit Reports
- Board and Executive Monthly Expense Reports
- Updated FOIPP releases
- Reimbursements Update (January 9, 2013)