Nova Scotia's auditor general says the RCMP should investigate irregularities he uncovered in an audit of the province's controversial immigration mentorship program.

Jacques Lapointe released the first part of his report in June, which found the program that put immigrants into six-month work mentorships failed to screen employers properly or keep track of millions of dollars in fees paid by immigrants.

In the second part of the report, released Wednesday, Lapointe said he came across "a number of matters that appeared irregular" in the finances of the program.

In his report, Lapointe called for the RCMP to investigate several transactions made under the program.

Lawyers' fees in program questioned

One of those transactions involves payments made to a Halifax-area lawyer, who the report said received $116,000 in payments between May 2, 2003, and March 20, 2008.

The lawyer received those fees for services supposedly rendered as part of the program, the report said, despite immigrant "nominees" saying he had never done any work on their behalf.

The lawyer later returned just under $80,000, but held some of the money for 59 months before returning it, the report said.

In the report, Lapointe called the return of the fees "irregular" and said the lawyer's receipt of the fees was "inappropriate."

"Some of the nominees never met the lawyer or only met him for a few minutes and noted he was not involved in preparing their immigration application files," said the report.

"He accepted payments ranging from $18,000 to $20,000 related to these nominees. In light of the nominees' comments, it is not clear what services these payments were intended to cover."

The report said the immigrants were told the legal assistance was "a free service.... We have referred this matter to the RCMP for their review."

Under the program, immigrants paid an entrance fee of $130,500, with $100,000 used to secure an internship with a business. Immigrants, in turn, were to be paid at least $20,000 for their services.

RCMP should investigate Cornwallis: report

In another key finding, the Lapointe report recommended that the company responsible for administering the program, Cornwallis Financial Corp., be subject to further investigation by the RCMP.

The report said Cornwallis had ties to individuals or companies who would have profited from the fees paid to the program by nominees, which warrants more investigation.

The Cornwallis group was involved with recruiting both potential nominees and mentors to the program.

Lapointe also said in the report that more than half of the companies examined should not have been involved in the program because they were not qualified to provide mentorships.

The report found that 24 of the 41 firms approved to hire immigrants under the program "did not meet the established criteria."

"According to the criteria, they should not have been approved, or have received payments under the nominee program," said the report.

Lapointe also said two companies involved in the program were owned by the same individual. That matter has also been referred to the RCMP.

Steele slams program

Later Wednesday, Lapointe discussed his report in an appearance before the legislature's public accounts committee.

MLA Graham Steele, an NDP member of the committee, said the deficiencies of the program listed in the report are "stunning."

Steele likened the findings of the report to "a feeding frenzy where a bunch of people smelled money and took shameless advantage of immigrants to this province. And to the shame of the government, they allowed it to happen."

Steele said the Conservative government is to blame for allowing a poorly designed program to take flight.

Dozens of immigrants complained that their experience with the program was woefully inadequate, with many employers either giving nominees menial jobs or simply asking them to show up, collect their paycheques and go home.

Immigration Minister Len Goucher defended the program Wednesday, saying it had served its purpose by attracting 400 immigrants to the province.

The immigrants also got what they wanted, even though they did not all receive everything they had been promised, he said.

Later, Premier Rodney MacDonald conceded there were problems with the nominee program.

"The fact that we are providing the funds back [to some immigrants] indicates the program was obviously flawed and, of course, we apologize," he said.

With files from the Canadian Press