Internal audit reveals serious problems at CanNor

An internal audit found CanNor violated almost every financial management rule since its creation in 2009.

Audit says agency broke almost every financial management rule since its creation

An internal audit has found the Canadian Northern Economic Development Agency, or CanNor, violated almost every financial management rule since its creation in 2009.

Prime Minister Stephen Harper created the federal agency to develop Canada's North. It manages about $75 million dollars a year.

In March, the comptroller general identified issues with CanNor. In a report, the comptroller noted the agency did not establish a financial management framework, which it is supposed to do according to its mandate. This means that it violated almost every one of these basic rules when it came to expense control, tendering contracts, credit card usage, travel and hospitality to its guests.

Jean-François Savard is a professor at the national school of public administration in Gatineau, Que., who specializes in aboriginal and northern affairs. Speaking to Radio-Canada, Savard says the situation is worrying.

5 chief financial officers in 2 years

"These regulations are meant to ensure that public funds are well-managed, that there is no fraud, that there is no misuse of public funds," Savard said. "So, if those rules are not respected, it begs the question, 'what money has been well-spent?'"

Radio-Canada also learned the agency is now on its fifth chief financial officer, even though it was only created two years ago. Savard says this is an unusual turnover rate.

"It's very high, that is to say that there is a situation which is posing a problem, and which makes people prefer to leave than to stay," Savard said.

The agency was first led by Nicole Jauvin. She retired this summer and has since been rehired by health minister Leona Aglukkaq to temporarily advise the office on CanNor, at a salary of more than $200,000 a year.

Aglukkaq says she is looking forward to reading the final audit report when it is complete.

"It is a concern and … these are recommendations, these are internal audits that are done on a regular basis on any agency or any government department and I can assure you that the organization and the officials will be working to address the recommendations that were identified and to take corrective actions," she said at a press conference in Ottawa Thursday.

The minister responsible for CanNor, Leona Aglukkaq, responds to questions about the agency's financial audit at a press conference in Ottawa Thursday.

The minister added she hired Jauvin to help with the transition, and they are currently searching for her permanent replacement since she did retired.

"It’s important to have continuity and she’s continuing to provide assistance to us and I believe it’s until middle of this month to allow transition from her departure to a new person," said Aglukkaq.