Nova Scotia

Development agency short on financial controls

A forensic audit of the now-defunct South West Shore Development Authority shows the agency had little outside supervision over its spending, and its CEO racked up large expense claims.

Audit shows SWSDA CEO's expenses in hundreds of thousands

Economic and Rural Development and Tourism Minister Percy Paris said he will pass an audit of SWSDA on to the RCMP. (CBC)

Economic and Rural Development and Tourism Minister Percy Paris said he's not alleging wrongdoing, but he will pass a forensic audit of the South West Shore Development Authority on to the RCMP.

"I'm certainly not of a legal mind. I'm not an RCMP officer nor am I a lawyer. But we think that under the circumstances ... it's only appropriate that we share this with the RCMP," said Paris.

A forensic audit of the now-defunct agency shows it had little outside supervision over its spending, and its CEO racked up large expense claims.

That despite the fact a board made up of local politicians was supposed to oversee its operations.

SWSDA ceased to exist two years ago, after the province withdrew its funding. It left behind $2.3 million in debts.

The detailed audit shows the development authority got plenty of money from federal, provincial and municipal governments, mainly for projects to boost the local economy.

But over a seven-year period the company lost almost $800,000.

Paris ordered the $245,000 audit to find out where the money went.

"The end result of where the money ended up? I don't know," he said.

Auditors at Ernst & Young say the board didn't have enough information to carry out its duties. And the report says that lack of information made it difficult for managers to handle day-to-day operations.

The money-losing agency also had ineffective controls over its own expenditures, according to the auditors.

The report focuses on the expenses of CEO Frank Anderson.

Over a seven-year period, he collected $44,000 in monthly travel allowances, and claimed more than $50,000 in meals. Overall, he racked up $271,000 in travel expenses. The report says the auditors couldn't find any evidence any of those expenses were approved by the board.

Paris said he isn't willing to comment on Anderson's time as CEO.

"Because of legal implications I will, you know, I would rather not answer that."

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