There is no way of determining if all the money meant to be spent on children in child protection services was actually spent on them, an audit has found.

Jane MacAdam - custom

Cash payments in child protection services were not well documented, says P.E.I. Auditor General Jane MacAdam (CBC)

The findings were part of Auditor General Jane MacAdam’s annual report, tabled in the legislature Wednesday. She found internal accounting controls to be inadequate.

MacAdam performed the audit at the request of the government. Normally, the auditor general chooses what areas she will investigate.

“We did note there were some unusual payments that were made,” MacAdam told the media lockup Wednesday.

The province has about 250 children in care, and spends about $3 million in direct care for them. The Department of Community Services requested the audit because it had noted a large number of cheques issued to staff in the Summerside office.

The auditor general's office could not find sufficient documentation to show that money paid to foster parents and group home administrators - to provide things like clothing, entertainment, toys for children in their care - was actually spent on the children.

There were also cases where foster parents were returning cash to department staff when it wasn't spent on a child, but in some of those cases there was no evidence the money was ever deposited back into the government account, where MacAdam said it should have gone.

She said the overall lack of financial control created an environment where fraud could have taken place, but added her's was not a fraud investigation.

"Any time there's internal control weaknesses there's potential for funds to be unaccounted for," said MacAdam.

This file was forwarded to the office of the attorney general in August 2013 but it decided not to investigate further. The province has made some changes in the way money for children in care is handled.

While the audit focused on the Summerside office, MacAdam said many of her findings pertain to child protection services province-wide.