MACSI report highlights thousands in misspending

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Former members of the executive committee of the Metis Addictions Council of Saskatchewan Inc. (MACSI) misspent thousands of dollars in provincial funding that should have went to operation of the organization, says a report by Saskatchewan's provincial auditor.

The report, prepared by Fred Wendel and released by the province Oct. 29, states that between June 2001 and February 2004 funding received by MACSI from Saskatchewan Health "was not used appropriately, was not fully accounted for, and was not properly disposed of in accordance with the terms and conditions of the funding agreements."

The beginning of this period of questionable spending coincides with the decision of MASCI's newly appointed board of directors to take cheque-signing authority away from management and give it to the board chair and three other board members-the non-profit organization's four person executive committee. A few months later the board gave the executive committee authority to perform management duties. With this change the executive committee was in a position where it could both initiate expenditures and sign the cheques to pay for them.

Among the questionable spending outlined in the report was the payment of $321,000 to four contractors for renovations and repairs to MACSI's treatment centres. Of the total amount, only $189,000 went to pay for work that was actually done. The remaining $132,00 was paid out, but no work was done in return for payment. The auditor's review showed no evidence any of these expenditures received board approval and no evidence of the work going out for tender. Three of the four contractors weren't licensed businesses and there is no evidence any of the three actually did any work. The cheques to these unlicensed contractors were made out to individuals rather than to companies, with the board chair being one of the individuals receiving payment.

The report also points to questionable payments made to the board members for contractual services, honorariums and reimbursements for travel expenses. From 2001 through to 2004, the board chair received $162,087, the vice-chair $61,202, the secretary, $62, 507 and the treasurer $74,417. There was no record of the board approval any of the contracts for which the executive members were paid.

Wendel also calls into question the mileage costs claimed by the board chair in 2003 and 2004. In 2003, the chair was reimbursed $34,140 for travelling 100,973 km, while in 2004 he received $52,436 for 149,650 km.

"If the chair travelled every day of the year, he would have needed to drive an average of 410 km each day to accumulate the $149,650 km driven for the year ended March 31, 2004," the auditor states in the report. The vehicles driven by the chair to rack up this alleged mileage were leased by MACSI, with the organization paying for fuel, maintenance and repairs.

Other questionable spending included MACSI's leasing of a vehicle then assigning the vehicle to an employee of the Metis Employment and Training of Saskatchewan Inc., another organization operated by the Metis Nation-Saskatchewan but quite independent of MACSI, and the chair obtaining two corporate credit cards in his own name and using the cards for personal items, including vet bills, furniture, home repairs and a $314 cash advance at a casino.

This type of questionable spending continued, the provincial auditor states, until Saskatchewan Health relieved the board of their duties on Feb. 18, 2004. An interim board was then put in place, with Ray Laliberte, treasurer of the board of governors of the Gabriel Dumont Institute and Don Axtell, director of strategic development with the Crown Investments Corporation, as co-chairs. Metis Elder Michael Maurice and Shan Landry, vice-president of primary health for the Saskatoon Health Region, rounded out the interim board, which was given a one-year mandate.

An interim executive director, Dorothea Warren, associate executive direcor of Saskatchewan Community Resources and Employment's Child and Family Services division, was also appointed.

The auditor's report found fault with both the processes in place within MACSI and within Saskatchewan Health, stating MACSI didn't maintain the necessary records or have the proper rules and procedures in place to prevent misappropriation of funds while the provincial department didn't have the necessary processes in place to oversee MACSI operations to ensure all public money was spent wisely and on what it was intended for. The department also failed to "take prompt and appropriate action to remedy significant problems it knew, or should have known, about MACSI operations" until 2003, when it began receiving complaints that money was being misspent.

The provincial auditor makes 13 recommendations in his report, eight giving the MACSI board guidance in setting up policies and procedures to ensure this type of thing doesn't re-occur, and five to be implemented by the province. According to the province's response to the report, many of the recommendations have already been implemented or are in the process of being implemented.

The report calls for the authority and responsibility of the MACSI board and senior management to be clearly defined and for regular performance evaluations of all senior managers. Creation of a performance assessment process for the board is also recommended, along with development of business and financial plans, codes of conduct, conflict of interest policies and ways to ensure these policies are being adhered to.

Recommendations for the province include more careful monitoring of community-based organizations and changing its processes so it can respond more quickly to problems that may arise.

Fred Wendel also recommends that the department work with MACSI to determine exactly how much money the former executive committee owes the organization and make attempts to recover the money.

The report doesn't refer o any of the former board members by name, but according to information received from Saskatchewan Health, correspondence from MACSI and public records on file at the corporations branch show that during the period covered by the auditor's report Albert Delaire was the board chair, MaryAnne Gagnon was co-chair, Walter Schoenthal was treasurer and Henry Cummings was secretary. Three of these four names-Delaire, Gagnon and Cummings-also appear on another list, that of the new Provincial Metis Council which, although not officially recognized by the Saskatchewan government because of concerns about election regularities, was sworn in on Oct. 7.

A forensic audit of the MACSI books was ordered by Saskatchewan Health and, before the audit was completed, a decision was made to turn the file over to the RCMP commercial crime unit. The files were turned over on Sept. 1. That investigation is ongoing.