B.C.'s First Nations Heath Authority under fire from auditor general

B.C.'s First Nations Health Authority is under fire from Canada's auditor general for gaps in its recruiting, compensation and conflict of interest policies.

Auditor General Michael Ferguson was acting on anonymous tips his office had received

Auditor General Michael Ferguson speaks at a news conference in Ottawa on Tuesday, April 28, 2015 following the tabling of his spring report to Parliament. (Adrian Wyld/Canadian Press)

B.C.'s first Nations Health Authority is under fire from Canada's auditor general for gaps in its recruiting, compensation and conflict of interest policies.

The concerns were outlined by Auditor General Michael Ferguson in his report which was released on Tuesday. Ferguson was acting on tips his office had received.

"We conducted this audit in response to an anonymous document we received, making allegations against the authority in relation to its accountability and transparency," said Ferguson.

While the report found that overall "the First Nations Health Authority had established an accountability and governance framework to guide its operations and to promote transparency and accountability," Ferguson still had several areas of concern.

"We found gaps in the policies we examined, pertaining to conflict of interest, recruitment, personnel security, administrative investigations, financial information and disclosure, and employee relocation. We also found that the authority's guidance on implementing these policies was limited," said the report.

The report noted the health authority had been through a transition period of rapid growth as it established itself. The First Nations Health Authority took over planning, designing, managing, and funding the delivery of First Nations health programs across British Columbia in October 2013, growing from less than 50 employees in 2009 to almost 500 employees in 2015, including the transfer of about 200 employees from Health Canada in 2013.

"This transition involved merging different organizational cultures and information technology and financial management systems, and establishing an accountability and governance framework that reflected its expanded and increasingly complex operations," noted the report.

Undocumented qualifications

In order to examine allegations of improper hiring processes, the report reviewed 14 personnel files of managers working within the authority, to determine whether there was evidence that the most qualified candidates had been hired in each case.

Specifically only three of the 14 positions were posted publicly, and there was evidence only six of the candidates hired possessed the required qualifications, only two had the required education, and only three had the required background checks performed.

"We found that evidence was limited, in most of these files, to demonstrate that the most qualified candidate was the one hired," concluded the report.

The report concluded guidelines on how to assess candidates for positions and how to document those decisions was limited.

"It did not specify how to determine the most qualified candidate, nor did it specify in what situations external (instead of internal) recruitment should be pursued. This type of guidance is required to support the fairness and competency considerations expected of organizations that are publicly funded."

Further conclusions

The report detailed several other areas of concern.

While the report found the health authority complied with its policy on conflict of interest, "it did not require new employees to formally declare whether they had conflicts of interest. Nor did it require existing employees to periodically declare whether they had conflicts of interest.

"There was also gaps in criminal record checks for employees working with vulnerable people, the report noted. "The policy did not contain provisions for ensuring that security clearances were updated periodically."

It also found the policies did not specify under what circumstances complainants' supervisors (as opposed to others) should carry out investigations.

"This guidance would be needed to help support the objectivity of investigations. Furthermore, the policy did not specify the type of documentation needed to demonstrate that investigations had been properly carried out. Such guidance is important, because it would help to protect the organization and prevent repercussions for people who raise allegations in good faith."

There was also a lack of guidelines for compensation for senior executives.

"We also found that justifications for the considerable variation in allowances provided in senior management employment agreements were not documented."

"The Relocation Policy set out relocation allowances for employees, but not for senior executives. Guidelines on the amounts that can be reimbursed to senior executives would help to ensure fairness and consistency in how they are compensated."

It also found the policies did not require the authority to disclose the amounts spent on professional and service contracts, hospitality and travel, and salaries for senior officials.

"We noted that the authority posted board members' remuneration, audited financial statements, and annual reports and service plans, but not amounts spent on professional and service contracts, hospitality and travel, and senior executives' salaries."

Health authority agrees with findings

In its response, which was included in the report, the health authority agreed with all of the auditor general's findings and promised to review its policies.

When it came to recruiting staff, the health authority defended its hiring practices at the time.

"The First Nations Health Authority recruited the required staff to the best of its abilities through an initial policy framework in order to meet the aggressive time frames required to successfully achieve this unique transfer, the first of its kind in Canada," said the response.

"The authority is now undertaking further work to improve its policies in the area of recruitment and selection that target the most qualified candidates, including enhancements to procedures and documentation."